UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER~~MARCH 3031, ~~2022~~ 2023

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

Commission File Number: 333-131736

COMMONWEALTH INCOME & GROWTH FUND VI

(Exact name of registrant as specified in its charter)

Pennsylvania		20-4115433
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
(State or other jurisdictionof incorporation or organization)		(I.R.S. EmployerIdentification Number)

4532 US Highway 19 North

Suite 200

New Port Richey, FL ~~34652~~33652

(Address, including zip code, of principal executive offices)

(800) 249-3700

(Registrant’s telephone number including area code)

Indicate by check mark whether the registrant (i) 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, and (ii) has been subject to such filing requirements for the past 90 days: Yes ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes ☒ NO ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company.)		Emerging growth company	☐

Indicate by check mark whether the registrant is an emerging growth company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

FORM 10-Q

~~SEPTEMBER~~March 3031, ~~2022~~2023

TABLE OF CONTENTS

PART I
Item 1.	Financial Statements	3	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	12	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15	19
Item 4.	Controls and Procedures	15	19
PART II
Item 1.	~~Commitments~~Legal ~~and Contingencies~~Proceedings	16	20
Item 2.	Legal Proceedings		20
Item 1A.	Risk Factors
Item 2A.	Risk Factors		21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3.	~~Unregistered~~Defaults ~~Sales~~Upon ofSenior ~~Equity~~ Securities ~~and Use of Proceeds~~	16	22
Item 4.	~~Defaults~~Mine ~~Upon~~Safety ~~Senior Securities~~Disclosures	16	22
Item 5.	~~Mine~~Other ~~Safety Disclosures~~Information	16	22
Item 6.	~~Other Information~~Exhibits	17	22
Item 7.	Exhibits		22

Table of Contents

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

Commonwealth Income & Growth Fund VI
Condensed Balance Sheets
Condensed Balance Sheets(unaudited)
(unaudited)
	March 31,			December 31,
	September 30,			December 31,
	2023			2022
	2022			2021
ASSETS
Cash and cash equivalents	$	-		$	~~25,372~~-
Lease income receivable, net of reserve of approximately $105,000 at both September 30, 2022 and December 31, 2021, respectively		51,337			18,589
Lease income receivable, net of reserve of approximately $81,000 and $105,000 at March 31, 2023 and December 31, 2022, respectively		17,548			32,453
Other receivables, net of reserve of approximately $15,000 at September 30, 2022 and December 31, 2021, respectively		25,178			25,178
Other receivables		25,178			25,178
Prepaid expenses		41,~~168~~157			14,~~127~~094
		80,683			70,266
Assets Current		43,883			61,725
Equipment, at cost		3,~~125~~232,~~635~~378			3,~~027~~232,~~181~~428
Accumulated depreciation		(23,~~953~~008,~~204~~298	)		(2,~~894~~985,~~524~~073	)
		172,430			132,657
Property Plant and equipment		224,080			247,355
Equipment acquisition costs and deferred expenses, net of accumulated amortization of approximately $6,000 and $4,000 at September 30, 2022 and December 31, 2021, respectively		7,962			5,851
Equipment acquisition costs and deferred expenses, net of accumulated amortization of approximately $9,000 and $8,000 at March 31, 2023 and December 31, 2022, respectively		9,268			10,517
Total Assets	$	~~261~~277,~~075~~231		$	~~208~~319,~~774~~597
LIABILITIES AND PARTNERS' DEFICIT
LIABILITIES
Accounts payable	$	~~171~~78,~~865~~971		$	9990,~~152~~617
Accounts payable, CIGF, Inc., net		~~233~~434,~~825~~842			~~151~~384,~~505~~658
Accounts Payable - CCC		51,111			44,063
Accounts Payable - CCC, Inc - related parties, net		15,513			65,517
Unearned lease income		1316,~~981~~950			1831,~~259~~645
Notes payable		7177,~~891~~016			3787,~~356~~730
Total Liabilities		~~542~~623,~~675~~292			~~350~~660,~~335~~167
COMMITMENTS AND CONTINGENCIES
PARTNERS' DEFICIT
General Partner		1,000			1,000
Limited Partners		(~~282~~347,~~601~~061	)		(~~142~~341,~~561~~570	)
Total Partners' Deficit		(~~281~~346,~~601~~061	)		(~~141~~340,~~561~~570	)
Total Liabilities and Partners' Deficit	$	~~261~~277,~~075~~231		$	~~208~~319,~~774~~597
see accompanying notes to condensed financial statements
See accompanying notes to these condensed financial statements

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Commonwealth Income & Growth Fund VI
Condensed Statements of Operations
(unaudited)
	Three Months Ended						Nine Months Ended
	Three months ended March 31,
	September 30,						September 30,
	2023			2022
	2022			2021			2022			2021
Revenue
Revenue
Lease	$	53,144		$	33,415
Lease	$	38,129		$	37,910		$	96,547		$	155,624
Interest and other		22			-
Interest and other		31			4,371			199			4,408
Sales and property taxes		1,877			927
Sales and property taxes		3,317			1,826			5,532			9,165
Gain on sale of equipment		-			8,153
Gain on sale of equipment		-			9,643			10,996			19,923
Total revenue and gain on sale of equipment		55,043			42,495
Total revenue and gain on sale of equipment		41,477			53,741			113,274			189,120
Expenses
Expenses
Operating, excluding depreciation		55,118			49,974
Operating, excluding depreciation		60,696			52,367			188,032			213,494
Equipment management fee, General Partner		1,623			-
Equipment management fee, General Partner		1,976			1,896			3,561			7,782
Interest		1,164			409
Interest		1,084			487			1,866			1,851
Depreciation		23,225			15,913
Depreciation		19,500			25,472			52,467			99,245
Amortization of equipment acquisition costs and deferred expenses		1,248			577
Amortization of equipment acquisition costs
Sales and property taxes		1,877			927
and deferred expenses		799			566			1,855			2,576
Bad debt Expense (Recovery)		(23,721	)		-
Sales and property taxes		3,317			1,826			5,532			9,165
Total expenses		60,534			67,800
Impairment Expense		-			5,643			-			5,643
Net loss	$	(5,491	)	$	(25,305	)
Loss on sale of computer equipment		2,800			-			-			-
Net loss allocated to Limited Partners	$	(5,491	)	$	(25,305	)
Total expenses		90,172			88,257			253,313			339,756
Net loss per equivalent Limited Partnership unit	$	(0.00	)	$	(0.01	)
Net Loss	$	(48,695	)	$	(34,516	)	$	(140,039	)	$	(150,636	)
Weighted average number of equivalent Limited Partnership units outstanding during the period		1,732,607			1,732,607
Net loss allocated to Limited Partners	$	(48,695	)	$	(34,516	)	$	(140,039	)	$	(150,636	)
See accompanying notes to these condensed financial statements
Net loss per equivalent Limited Partnership unit	$	(0.03	)	$	(0.02	)	$	(0.08	)	$	(0.09	)
Weighted average number of equivalent Limited
Partnership units outstanding during the period		1,732,607			1,738,833			1,732,607			1,739,978
see accompanying notes to condensed financial statements

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Commonwealth Income & Growth Fund VI
Condensed Statement of Partners' Deficit
For the nine months ended September 30, 2022 and 2021
For the three months ended March 31, 2023 and 2022
(unaudited)
	General		Limited
	Partner		Partner		General		Limited
	Units		Units		Partner		Partners			Total
Balance, January 1, 2022		50		1,732,607	$	1,000	$	(142,562	)	$	(141,562	)
Balance, January 1, 2023		50		1,732,607	$	1,000	$	(341,570	)	$	(340,570	)
Net loss		-		-		-		(5,491	)		(5,491	)
Balance, March 31, 2023		50		1,732,607	$	1,000	$	(347,061	)	$	(346,061	)
	General		Limited
	Partner		Partner		General		Limited
	Units		Units		Partner		Partners			Total
Balance, January 1, 2022		50		1,732,607	$	1,000	$	(142,561	)	$	(141,562	)
Net loss		-		-		-		(25,305	)		(25,305	)
Balance, March 31, 2022		50		1,732,607	$	1,000	$	(167,~~867~~866	)	$	(166,867	)
Net loss		-		-		-		(66,039	)		(66,039	)
See accompanying notes to these condensed financial statements
Balance, June 30, 2022		50		1,732,607	$	1,000	$	(233,906	)	$	(232,906	)
Net loss		-		-		-		(48,695	)		(48,695	)
Balance, September 30, 2022		50		1,732,607	$	1,000	$	(282,601	)	$	(281,601	)

	General		Limited
	Partner		Partner			General		Limited
	Units		Units			Partner		Partners			Total
Balance, January 1, 2021		50		1,741,754		$	1,000	$	114,434		$	115,434
Net loss		-		-			-		(80,743	)		(80,743	)
Balance, March 31, 2021		50		1,741,754		$	1,000	$	33,691		$	34,691
Net loss		-		-			-		(35,378	)		(35,378	)
Balance, June 30, 2021		50		1,741,754		$	1,000	$	(1,687	)	$	(687	)
Net loss		-		-			-		(34,516	)		(34,516	)
Redemptions		-		(3,897	)		-		-			-
Balance, September 30, 2021		50		1,737,857		$	1,000	$	(36,202	)	$	(35,203	)
see accompanying notes to condensed financial statements

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Commonwealth Income & Growth Fund VI
Condensed Statements of Cash Flows
(unaudited)
	Nine months ended
	Three months ended March 31,
	September 30,
	2023			2022
	2022			2021
Net cash used in operating activities	$	-		$	(5,696	)
Net cash (used in) provided by operating activities	$	9,745		$	(231	)
Cash flows from investing activities
Capital expenditures		(36,505	)		(37,248	)
Net proceeds from the sale of equipment		-			2,510
Equipment acquisition fees paid to General Partner		(3,464	)		(1,490	)
Net cash provided by investing activities		-			2,510
Net proceeds from the sale of equipment		5,353			26,566
Net used in by investing activities		(34,616	)		(12,172	)
Cash flows from financing activities
Equipment acquisition finance fee		(501	)		-
Redemptions		-			-
Net cash used in financing activities		~~(501~~-	)		-
Net decrease in cash and cash equivalents		(25,372	)		(12,403	)
Net (decrease) increase in cash and cash equivalents		-			(3,186	)
Cash and cash equivalents, beginning of the period		25,372			36,178
Cash and cash equivalents at beginning of the period		-			25,372
Cash and cash equivalents, end of the period	$	-		$	23,775
Cash and cash equivalents at end of the period	$	-		$	22,185
see accompanying notes to condensed financial statements
See accompanying notes to these condensed financial statements

Table of Contents

NOTES TO CONDENSED FINANCIAL STATEMENTS

1. Business

Commonwealth Income & Growth Fund VI (~~“CIGF6” or~~ the “Partnership” ~~or the “Fund”~~) is a limited partnership organized in the Commonwealth of Pennsylvania on January 6, 2006. The Partnership offered for sale up to 2,500,000 units of ~~the~~ limited partnership interest at the purchase price of $20 per unit (the “offering”). The Partnership reached the minimum amount in escrow and commenced operations on May 10, 2007. The offering terminated on March 6, 2009 with 1,810,311 units sold for a total of approximately $36,000,000 in limited partner contributions.

The Partnership used the proceeds of the offering to acquire, own and lease various types of computer information technology equipment and other similar capital equipment, which ~~will~~is be leased primarily to U.S. corporations and institutions. Commonwealth Capital Corp. (“CCC”), on behalf of the Partnership and other affiliated partnerships, acquires computer equipment subject to associated debt obligations and lease agreements and allocates a participation in the cost, debt and lease revenue to the various partnerships ~~that it manages~~ based on certain risk factors.

The Partnership’s General Partner is Commonwealth Income & Growth Fund, Inc. (the “General Partner”), a Pennsylvania corporation which is an indirect wholly owned subsidiary of CCC. CCC is a member of the Institute for Portfolio Alternatives (“IPA”) and the Equipment Leasing and Finance Association (“ELFA”). By proxy vote of the Limited Partners at shareholders meeting that was held on September 4, 2018, the term of the fund was extended to a termination date of December 31, 2023.

Liquidity and Going Concern

For the quarter ended ~~September~~March 3031, ~~2022~~2023, the Partnership ~~incurred~~did anot ~~negative~~generate any cash flow from operations. At ~~September~~March 3031, ~~2022~~2023, the Partnership has a working capital deficit of approximately $~~462~~579,000. Such factors raise substantial doubt about the Partnership’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The General Partner agreed to forgo distributions and allocations of net income owed to it, and suspended limited partner distributions. The General Partner will continue to waive certain fees and may defer certain related party payables owed to the Partnership in an effort to further increase the Partnership’s cash flow. Additionally, the Partnership will seek to enhance portfolio returns and maximize cash flow through the use of leveraged lease transactions: the acquisition of lease equipment through financing. The Partnership may also attempt to obtain additional funds by disposing of or refinancing equipment, or by borrowing within its permissible limits. However, at this time, it is uncertain as to whether the General Partner’s plans will be successful.

2. Summary of Significant Accounting Policies

Basis of Presentation

The financial information presented as of any date other than December 31, ~~2021~~2022 has been prepared from the books and records without audit. The following unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Financial information as of December 31, ~~2021~~2022 has been derived from the audited financial statements of the Partnership, but does not include all disclosures required by generally accepted accounting principles to be included in audited financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial information for the periods indicated, have been included. Operating results for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023 are not necessarily indicative of financial results that may be expected for the full year ended December 31, ~~2022~~2023.

7 Table of Contents

Disclosure of Fair Value Financial Instruments

Estimated fair value was determined by management using available market information and appropriate valuation methodologies. However, judgment was necessary to interpret market data and develop estimated fair value. Receivables, accounts payable and accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values as of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022 due to the short-term nature of these financial instruments.

The Partnership’s long-term debt consists of notes payable, which are secured by specific equipment and are nonrecourse liabilities of the Partnership. The estimated fair value of this debt at ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022 approximates the carrying value of these instruments, due to the interest rates on the debt approximating current market interest rates. The Partnership classifies the fair value of its notes payable within Level 2 of the valuation hierarchy based on the observable inputs used to estimate fair value.

Table of Contents

Cash and cash equivalents

At ~~September~~March 3031, ~~2022~~2023, cash and cash equivalents were held in one account maintained at one financial institution with an aggregate balance of approximately $400. Bank accounts are federally insured up to $250,000 by the FDIC. At ~~September~~March 3031, ~~2022~~2023, the total cash balance was as follows:

At September 30, 2022	Balance
At March 31, 2023	Balance
Total bank balance	$	400
FDIC insured		(400	)
Uninsured amount	$	-

The Partnership believes it mitigates the risk of holding uninsured deposits by only depositing funds with major financial institutions. The Partnership has not experienced any losses in our accounts, and believes it is not exposed to any significant credit risk. The amounts in such accounts will fluctuate throughout ~~2022~~2023 due to many factors, including cash receipts, equipment acquisitions, interest rates and distributions to limited partners.

~~Recent Accounting Pronouncements Not Yet Adopted~~Reclassification

Certain reclassifications were made to the reported amounts in these condensed financial statements as of December 31, 2022 to conform to the presentation as of March 31, 2023.

Recent Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This standard establishes an impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which is intended to result in a timelier recognition of losses. Under the CECL model, entities will estimate credit losses over the entire contractual term of the instrument (considering estimated prepayments, but not expected extensions or modifications) from the date of initial recognition of the financial instrument. Measurement of expected credit losses are to be based on relevant forecasts that affect collectability. The scope of financial assets within the CECL methodology is broad and includes trade receivables from certain revenue transactions and certain off-balance sheet credit exposures. Different components of the guidance require modified retrospective or prospective adoption.

In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses. ASU 2018-19 clarifies that receivables arising from operating leases are not within the scope of the credit losses standard. Instead, entities would need to apply other U.S. GAAP, namely Topic 842 (Leases), to account for changes in the collectability assessment for operating leases. Other than operating lease receivables, Partnership trade receivables include receivables from finance leases and equipment sales. Under Topic 606 (Revenue from Contracts with Customers), revenue is recognized when, among other criteria, it is probable that the entity will collect the consideration to which it is entitled for goods or services transferred to a customer. At the point that finance lease receivables are recorded, they become subject to the CECL model and estimates of expected credit losses over their contractual life will be required to be recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts. Trade receivables derived from equipment sales are of short duration and there is not a material difference between incurred losses and expected losses.

In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which amends and clarifies several provisions of Topic 326. In May 2019, the FASB issued ASU 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief, which amends Topic 326 to allow the fair value option to be elected for certain financial instruments upon adoption. ASU 2019-10 extended the effective date of ASU 2016-13 for the Partnership until fiscal year beginning after December 15, 2022.

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In ~~April~~March ~~2019~~2022, the FASB issued ASU ~~2019~~No. 2022-0402, ~~Codification~~Financial ~~Improvements~~Instruments to– Credit Losses (Topic 326), ~~Financial~~Troubled ~~Instruments-Credit~~Debt ~~Losses~~Restructurings and Vintage Disclosures. The amendments in this Update eliminate the accounting guidance for (Troubled Debt Restructurings (TDRs) by creditors in Subtopic 310-40, ~~Topic~~Receivables—Troubled ~~815~~Debt Restructurings by Creditors, ~~Derivatives~~while enhancing disclosure requirements for certain loan refinancings and ~~Hedging~~restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and ~~Topic~~measurement ~~825,~~guidance ~~Financial~~for ~~Instruments~~TDRs, ~~which~~an ~~amends~~entity must apply the loan refinancing and ~~clarifies~~restructuring ~~several~~guidance ~~provisions~~in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of ~~Topic~~an ~~326~~existing loan. InFor ~~May~~public ~~2019~~business entities, the ~~FASB~~amendments ~~issued~~in ~~ASU~~this ~~2019~~Update require that an entity disclose current-05period gross writeoffs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments-—Credit Losses—Measured ~~(Topic~~at ~~326):~~Amortized ~~Targeted~~Cost. ~~Transition~~For ~~Relief,~~entities ~~which~~that ~~amends~~have ~~Topic~~adopted ~~326~~the toamendments ~~allow~~in Update 2016-13, the ~~fair~~amendments ~~value~~in ~~option~~this toUpdate beare ~~elected~~effective for ~~certain~~fiscal ~~financial~~years ~~instruments~~beginning ~~upon~~after ~~adoption~~December 15, 2022, including interim periods within those fiscal years. ~~ASU~~For ~~2019-10~~entities ~~extended~~that ~~the~~have ~~effective~~not ~~date~~yet ofadopted ~~ASU~~the amendments in Update 2016-13, the effective dates for the ~~Partnership~~amendments ~~until~~in ~~December~~this ~~15,~~Update ~~2022.~~are ~~While~~the wesame ~~continue~~as tothe ~~evaluate~~effective ~~the~~dates in Update 2016-13. The Partnership adopted this new guidance, including the subsequent updates to Topic 326, weon doJanuary ~~not~~1, ~~anticipate~~2023 ~~that~~and the adoption ~~will~~did not have a material impact onto ~~the~~its ~~Partnership~~ financial ~~statements and related disclosures~~statement. For the ~~nine~~three months ended ~~September~~March 3031, ~~2022 and 2021~~2023, Partnership finance lease revenue subject to CECL represented less than 1% of total lease revenue.

3. Information Technology, Medical Technology, Telecommunications Technology, Inventory Management and Other Business-Essential Capital Equipment (“Equipment”)

The Partnership is the lessor of equipment under leases with periods that generally will range from 12 to 48 months. In general, associated costs such as repairs and maintenance, insurance and property taxes are paid by the lessee.

Gains or losses from the sale of equipment are recognized when the lease is modified and terminated concurrently. Gain ~~(loss)~~ from sale of equipment included in lease revenue for the three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021 was approximately $(3,000) and $10,000, respectively. Gain from sale of equipment included in revenue for the nine months ended September 30,~~ 2022 ~~and 2021,~~ was approximately $~~11,000~~0 and $208,000, respectively.

CCC, on behalf of the Partnership and on behalf of other affiliated companies and partnerships (“partnerships”), acquires equipment subject to associated debt obligations and lease agreements and allocates a participation in the cost, debt and lease revenue to the various companies based on certain risk factors.

The Partnership’s share of the cost of the equipment in which it participates with other partnerships at ~~September~~March 3031, ~~2022~~2023 was approximately $2,~~501~~469,000 and is included in the Partnership’s equipment on its balance sheet. The total cost of the equipment shared by the Partnership with other partnerships at ~~September~~March 3031, ~~2022~~2023 was approximately $8,~~899~~936,000. The Partnership’s share of the outstanding debt associated with this equipment at ~~September~~March 3031, ~~2022~~2023 was approximately $4456,000 and is included in the Partnership’s notes payable on its balance sheet. The total outstanding debt related to the equipment shared by the Partnership at ~~September~~March 3031, ~~2022~~2023 was approximately $~~110~~199,000.

The Partnership’s share of the cost of the equipment in which it participates with other partnerships at December 31, ~~2021~~2022 was approximately $2,~~359~~588,000 and is included in the Partnership’s equipment on its balance sheet. The total cost of the equipment shared by the Partnership with other partnerships at December 31, ~~2021~~2022 was approximately $89,~~544~~175,000. The Partnership’s share of the outstanding debt associated with this equipment at December 31, ~~2021~~2022 was approximately $063,000 and is included in the Partnership’s notes payable on its balance sheet. The total outstanding debt related to the equipment shared by the Partnership at December 31, ~~2021~~2022 was approximately $0221,000.

~~The~~As ~~following~~the isPartnership aand ~~schedule~~the other programs managed by the General Partner increase their overall portfolio size, opportunities for shared participation are expected to continue. Sharing in the acquisition of ~~approximate~~a ~~future~~lease ~~minimum~~portfolio ~~rentals~~gives onthe ~~non-cancellable~~Partnership ~~operating~~an ~~leases:~~opportunity to acquire additional assets and revenue streams, while allowing the Partnership to remain diversified and reducing its overall risk with respect to one portfolio. Thus, total shared equipment and related debt should continue throughout 2023 as the Partnership continues to acquire equipment for its portfolio.

Periods Ended December 31,	Amount
Three months ended December 31, 2022	$	17,000
Year Ended December 31, 2023		64,000
Year Ended December 31, 2024		41,000
Year Ended December 31, 2025		9,000
	$	131,000

The following is a schedule of approximate future minimum rentals on non-cancelable operating leases:

The Partnership is scheduled to terminate on December 31, 2023. CCC will assume the rights to the remaining active leases and their related remaining revenue stream through their termination.

Periods Ended December 31,	Amount
Nine months ended December 31, 2023	$	65,000
Year ended December 31, 2024		64,000
Year ended December 31, 2025		22,000
Year ended December 31, 2026		6,000
Year ended December 31, 2027		3,000
	$	160,000

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The Partnership is scheduled to terminate on December 31, 2023. CCC will assume the rights to the remaining active leases and their related remaining revenue stream through their termination.

4. Related Party Transactions

Receivables/Payables

As of ~~September~~March 3031, ~~2022,~~2023 and December 31, ~~2021~~2022, the Company’s related party receivables and payables are short term, unsecured and non-interest bearing.

Nine months ended September 30,	2022		2021
Three months ended March 31,	2023		2022
Reimbursable expenses
The General Partner and its affiliates are entitled to reimbursement by the Partnership for the cost of goods, supplies or services obtained and used by the General Partner in connection with the administration and operation of the Partnership from third parties unaffiliated with the General Partner. In addition, the General Partner and its affiliates are entitled to reimbursement of certain expenses incurred by the General Partner and its affiliates in connection with the administration and operation of the Partnership. For the nine months ended September 30, 2022 and 2021, the Partnership was charged approximately $75,000 and $86,000 in Other LP expense, respectively.	$	136,000	$	206,000
The General Partner and its affiliates are entitled to reimbursement by the Partnership for the cost of goods, supplies or services obtained and used by the General Partner in connection with the administration and operation of the Partnership from third parties unaffiliated with the General Partner. In addition, the General Partner and its affiliates are entitled to reimbursement of certain expenses incurred by the General Partner and its affiliates in connection with the administration and operation of the Partnership. For the three months ended March 31, 2023 and 2022, the Partnership was charged approximately $25,000 and $24,000 in Other LP expense, respectively.	$	38,000	$	48,000
Equipment acquisition fee
The General Partner earned an equipment acquisition fee of 4% of the purchase price of each item of equipment purchased as compensation for the negotiation of the acquisition of the equipment and lease thereof or sale under a conditional sales contract.	$	~~3,000~~-	$	~~1,500~~-
Equipment management fee
The general partner is entitled to be paid a monthly fee equal to the lesser of (a) the fees which would be charged by an independent third party in the same geographic market for similar services and equipment or (b) the sum of (i) two percent of gross lease revenues attributable to equipment subject to full payout net leases which contain net lease provisions and (ii) five percent of the gross lease revenues attributable to equipment subject to operating leases. Our general partner, based on its experience in the equipment leasing industry and current dealings with others in the industry, will use its business judgment to determine if a given fee is competitive, reasonable and customary. The amount of the fee will depend upon the amount of equipment we manage, which in turn will depend upon the amount we raise in this offering. Reductions in market rates for similar services would also reduce the amount of this fee we will receive.	$	3,600	$	8,000
Equipment liquidation fee
Also referred to as a "resale fee." With respect to each item of equipment sold by the general partner, we will pay a fee equal to the lesser of (i) 50% of the competitive equipment sale commission or (ii) three percent of the sales price of the equipment. The payment of this fee is subordinated to the receipt by the limited partners of (i) a return of their capital contributions and a 10% per annum cumulative return, compounded daily, on adjusted capital contributions and (ii) the net disposition proceeds from such sale in accordance with the partnership agreement. Our general partner, based on its experience in the equipment leasing industry and current dealings with others in the industry, uses its business judgment to determine if a given sales commission is competitive, reasonable and customary. Such fee will be reduced to the extent any liquidation or resale fees are paid to unaffiliated parties. The amount of such fees will depend upon the sale price of equipment sold. Sale prices will vary depending upon the type, age and condition of equipment sold. The shorter the terms of our leases, the more often we may sell equipment, which will increase liquidation fees we receive.	$	163	$	136

The General Partner is entitled to be paid a monthly fee equal to the lesser of (a) the fees which would be charged by an independent third party in the same geographic market for similar services and equipment or (b) the sum of (i) two percent of gross lease revenues attributable to equipment subject to full payout net leases which contain net lease provisions and (ii) five percent of the gross lease revenues attributable to equipment subject to operating leases. The General Partner, based on its experience in the equipment leasing industry and current dealings with others in the industry, will use its business judgment to determine if a given fee is competitive, reasonable and customary. The amount of the fee will depend upon the amount of equipment the Partnership manages. Reductions in market rates for similar services would also reduce the amount of this fee.	$	2,000	$	2,000
Equipment liquidation fee
Also referred to as a "resale fee." With respect to each item of equipment sold by the General Partner, the Partnership will pay a fee equal to the lesser of (i) 50% of the competitive equipment sale commission or (ii) three percent of the sales price of the equipment. The payment of this fee is subordinated to the receipt by the limited partners of (i) a return of their capital contributions and a 10% per annum cumulative return, compounded daily, on adjusted capital contributions and (ii) the net disposition proceeds from such sale in accordance with the partnership agreement. The General Partner, based on its experience in the equipment leasing industry and current dealings with others in the industry, uses its business judgment to determine if a given sales commission is competitive, reasonable and customary. Such fee will be reduced to the extent any liquidation or resale fees are paid to unaffiliated parties. The amount of such fees will depend upon the sale price of equipment sold. Sale prices will vary depending upon the type, age and condition of equipment sold. The shorter the terms of the Partnership’s leases, the more often the Partnership may sell equipment, which will increase liquidation fees.	$	-	$	78

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5. Notes Payable

Notes payable consisted of the following approximate amounts:

	September 30, 2022		December 31, 2021
	March 31,2023		December 31,2022
Installment note payable to bank; interest rate of 4.14%, due in monthly installments of $705, including interest, with final payment in August 2024		1612,000		2114,000
Installment note payable to bank; interest rate of 5.00%, due in monthly installments of $493, including interest, with final payment in November 2024		129,000		1611,000
Installment note payable to bank; interest rate of 6.21%, due in monthly installments of $2,213, including interest, with final payment in June 2024		44,000		-
Installment note payable to bank; interest rate of 6.21%, due in monthly installments of $2,213.44, including interest, with final payment in June 2024		32,000		38,000
	$	72,000	$	36,000
Installment note payable to bank; interest rate of 5.50%, due in monthly installments of $531, including interest, with final payment in May 2027		24,000		25,000
	$	77,000	$	88,000

The notes are secured by specific equipment with a carrying value of approximately $~~104~~113,000 and are nonrecourse liabilities of the Partnership. As such, the notes do not contain any financial debt covenants with which wethe Partnership must comply on either an annual or quarterly basis. Aggregate approximate maturities of notes payable for each of the periods subsequent to ~~September~~March 3031, ~~2022~~2023 are as follows:

	Amount
Three months ended December 31, 2022	$	10,000
Nine months ended December 31, 2023	$	33,000
Year ended December 31, 2023		38,000
Year ended December 31, 2024		29,000
Year ended December 31, 2024		24,000
Year ended December 31, 2025		6,000
	$	72,000
Year ended December 31, 2026		6,000
Year ended December 31, 2027		3,000
	$	77,000

The Partnership is scheduled to terminate on December 31, 2023. CCC will assume the obligation and rights to the remaining notes payable and its related secured equipment as described above through their termination.

6. Supplemental Cash Flow Information

No interest or principal on notes payable was paid by the Partnership during ~~2022~~2023 and ~~2021~~2022 because direct payment was made by lessee to the bank in lieu of collection of lease income and payment of interest and principal by the Partnership.

Other noncash activities included in the determination of net loss are as follows:

Nine months ended September 30,	2022		2021
Three months ended March 31,	2023		2022
Lease revenue net of interest expense on notes payable realized as a result of direct payment of principal by lessee to bank	$	1611,000	$	283,000

During the nine months ended September 30, 2022 and 2021, the Partnership wrote-off fully amortized acquisition and finance fees of approximately $0 and $12,000, respectively.

7. Commitments and Contingencies

COVID-19 Pandemic

The amount of revenue recognized and the pattern of revenue recognition may be impacted by COVID-19. In December 2019, a strain of coronavirus was reported to have surfaced in Wuhan, China, and has spread globally, and on March 12, 2020, the World Health Organization (“WHO”) declared COVID-19 to be a pandemic. In an effort to contain and mitigate the spread of COVID-19, many countries, including the United States, have imposed unprecedented restrictions on travel, quarantines, and other public health safety measures. Such government-imposed precautionary measures may have been relaxed in certain countries or states, but there is no assurance that more strict measures will be put in place again due to a resurgence in COVID-19 cases. In addition, the COVID-19 virus and other infectious diseases could result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, resulting in an economic downturn that could impact the Company’s business, financial condition, and results of operations. The pattern of revenue recognition may change for delays in rendering services.

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In periods ended subsequent to the outbreak of COVID-19, the impact on expected credit losses and future cash flow projections used in impairment testing will need to be considered.

The Partnership continues to evaluate whether adjustments to the financial statements are required or whether additional disclosures are necessary. In its leasing business, the Partnership is always subject to credit losses as it relates to a customer’s ability to make timely rental payments. The impact of COVID-19 may contribute to risk of non-performance, where a customer may experience financial difficulty and may delay in making timely payments.

The Partnership recognizes impairment of receivables and loans when losses are incurred, which is when it is probable that an entity will be unable to collect all amounts due according to the contractual terms of the arrangement. Impairment is measured based on the present value of expected future cash flows discounted at a receivable’s or a loan’s effective interest rate, except that, as a practical expedient, impairment can be measured based on a receivable’s or a loans’ observable market price or the fair value of the underlying collateral.

The Partnership believes its estimate of expected losses have been recognized based on historical experience, current conditions, and reasonable forecasts. The impacts of COVID-19 may necessitate additional adjustments in future forecasts of expected losses.

Although the Partnership cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if the pandemic continues, it may have a material adverse effect on the Partnership’s results of future operations, financial position, and liquidity in fiscal year 2022 and beyond.

FINRA

On May 3, 2013, the FINRA Department of Enforcement filed a complaint naming Commonwealth Capital Securities Corp. (“CCSC”) and the owner of the firm, Kimberly Springsteen-Abbott, as respondents; however, on October 22, 2013, FINRA filed an amended complaint that dropped the allegations against CCSC and reduced the scope of the allegations against Ms. Springsteen-Abbott. The sole remaining charge was that Ms. Springsteen-Abbott had approved the misallocation of some expenses to certain Funds. Management believes that the expenses at issue include amounts that were proper and that were properly allocated to Funds, and also identified a smaller number of expenses that had been allocated in error, but were adjusted and repaid to the affected Funds when they were identified in 2012. During the period in question, Commonwealth Capital Corp. (“CCC”) and Ms. Springsteen-Abbott provided important financial support to the Funds, voluntarily absorbed expenses and voluntarily waived fees in amounts aggregating in excess of any questioned allocations. A Hearing Panel ruled on March 30, 2015, that Ms. Springsteen-Abbott should be barred from the securities industry because the Panel concluded that she allegedly misallocated approximately $208,000 of expenses involving certain Funds over the course of three years. As such, management had already at that time reallocated back approximately $151,225 of the $208,000 (in allegedly misallocated expenses) to the affected funds, which was fully documented, as good faith payments for the benefit of those Income Funds.

The decision of the Hearing Panel was stayed when it was appealed to FINRA's National Adjudicatory Council (the “NAC”) pursuant to FINRA Rule 9311. The NAC issued a decision that upheld the lower panel’s ruling and the bar took effect on August 23, 2016. Ms. Springsteen-Abbott appealed the NAC’s decision to the U.S. Securities and Exchange Commission (the “SEC”). On March 31, 2017, the SEC criticized that decision as so flawed that the SEC could not even review it, and remanded the matter back to FINRA for further consideration consistent with the SEC’s remand, but did not suggest any view as to a particular outcome.

On July 21, 2017, FINRA reduced the list of 1,840 items totaling $208,000 to a remaining list of 87 items totaling $36,226 (which includes approximately $30,000 of continuing education expenses for personnel providing services to the Funds), and reduced the proposed fine from $100,000 to $50,000, but reaffirmed its position on the bar from the securities industry. Respondents promptly appealed FINRA’s revised ruling to the SEC. All the requested or allowed briefs have been filed with the SEC. Despite offering no additional evidence or legal reasoning from when SEC originally remanded this matter (for FINRA’s opinion being an unreviewably flawed opinion), the SEC upheld FINRA’s new order on February 7, 2020 as to the bar; however, FINRA’s fine was voided. Ms. Springsteen-Abbott has filed a Petition for Review in the United States Court of Appeals for the District of Columbia Circuit to review a final order entered against her by the U.S. Securities and Exchange Commission. On February 26, 2021, the United States Court of Appeals for the District of Columbia Circuit, made their ruling. They dismissed in part and denied in part Ms. Springsteen-Abbott’s petition. This was regardless of CCC’s good faith reimbursements made many years ago of the questioned expense items of $208,000 (due to improper documentation), initially claimed misallocations by FINRA, even prior to FINRA’s reducing its final claim to $36,226.

Prior to the original appeal to the SEC, Ms. Springsteen-Abbott discovered CCC’s required documentation of these items for FINRA review, which FINRA refused to consider, despite such efforts the District Court upheld the bar, despite admittingly not addressing her “due process” rights, for legal administrative procedural reasons. However, given the SEC’s prior removal of FINRA’s fine and the District Court upholding that removal, the General Partner anticipates that this ruling will not result in any material financial impact to the Funds.

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

FORWARD LOOKING STATEMENTS

This section, as well as other portions of this document, includes certain forward-looking statements about our business and our prospects, tax treatment of certain transactions and accounting matters, sales of securities, expenses, cash flows, distributions, investments and operating and capital requirements. Such forward-looking statements include, but are not limited to: acquisition policies of our general partner; the nature of present and future leases; provisions for uncollectible accounts; the strength and sustainability of the U.S. economy; the continued difficulties in the credit markets and their impact on the economy in general; and the level of future cash flow, debt levels, revenues, operating expenses, amortization and depreciation expenses. You can identify those statements by the use of words such as “could,” “should,” “would,” “may,” “will,” “project,” “believe,” “anticipate,” “expect,” “plan,” “estimate,” “forecast,” “potential,” “intend,” “continue” and “contemplate,” as well as similar words and expressions.

Actual results may differ materially from those in any forward-looking statements because any such statements involve risks and uncertainties and are subject to change based upon various important factors, including, but not limited to, nationwide economic, financial, political and regulatory conditions; the health of debt and equity markets, including interest rates and credit quality; the level and nature of spending in the information, medical and telecommunications technologies markets; and the effect of competitive financing alternatives and lease pricing.

Readers are also directed to other risks and uncertainties discussed in other documents we file with the SEC, including, without limitation, those discussed in Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022 filed with the SEC. We undertake no obligation to update or revise any forward-looking information, whether as a result of new information, future developments or otherwise.

INDUSTRY OVERVIEW

We invest in various types of domestic information technology equipment leases located solely within the United States. Our investment objective is to acquire primarily high technology equipment. We believe that dealing in high technology equipment is particularly advantageous due to a robust aftermarket. Information technology has developed rapidly in recent years and is expected to continue to do so. Technological advances have permitted reductions in the cost of computer processing capacity, speed, and utility. In the future, the rate and nature of equipment development may cause equipment to become obsolete more rapidly. In an effort to mitigate this risk our portfolio manager attempts to diversify our fund through the acquisition of different types of equipment, staggered lease maturities, various lessees, and businesses located throughout the U.S., and industries served.

technology equipment is particularly advantageous due to a robust aftermarket. Information technology has developed rapidly in recent years and is expected to continue to do so. Technological advances have permitted reductions in the cost of computer processing capacity, speed, and utility. In the future, the rate and nature of equipment development may cause equipment to become obsolete more rapidly. In an effort to mitigate this risk our portfolio manager attempts to diversify our fund through the acquisition of different types of equipment, staggered lease maturities, various lessees, and businesses located throughout the U.S., and industries served.

We also acquire high technology medical, telecommunications and inventory management equipment. Our General Partner seeks to maintain an appropriate balance and diversity in the types of equipment acquired. The market for high technology medical equipment is growing each year. Generally, this type of equipment has a longer useful life. This allows for increased re-marketability, if it is returned before its economic or announcement cycle is depleted.

13The ~~Table~~Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity from 25 companies representing a cross section of ~~Contents~~the $1 trillion equipment finance sector, showed their overall new business volume for March was $10.4 billion, down 2 percent year-over-year from new business volume in March 2022. Volume was up 32 percent from $7.9 billion in February. Year-to-date, cumulative new business volume was up 4 percent compared to 2022.

~~The Equipment~~Receivables ~~Leasing~~over ~~and~~30 ~~Finance~~days ~~Association’s (ELFA) Monthly~~were ~~Leasing~~1.9 ~~and Finance Index (MLFI-25)~~percent, ~~which~~up ~~reports economic activity~~ from 251.8 ~~companies~~percent ~~representing~~the aprevious ~~cross~~month ~~section~~and ofup ~~the~~from $1.5 ~~trillion~~percent ~~equipment~~in ~~finance~~the ~~sector,~~same ~~showed~~period ~~their~~in ~~overall~~2022. ~~new~~Charge-offs ~~business~~were ~~volume for September was $10~~0.232 ~~billion~~percent, upunchanged ~~11 percent year-over-year~~ from ~~new~~the ~~business~~previous ~~volume~~month inand ~~September 2021. Volume was~~ up ~~16 percent~~ from $80.810 ~~billion~~percent in ~~August.~~the ~~Year~~year-~~to-date,~~earlier ~~cumulative new business volume was up nearly 6 percent compared to 2021~~period.

~~Receivables~~Credit ~~over~~approvals 30totaled ~~days were 1~~75.~~5 percent~~3, ~~unchanged from the previous month and~~ down from 175.67 percent in ~~the same period in 2021~~February. ~~Charge-offs~~Total ~~were~~headcount ~~0.17~~for ~~percent,~~equipment ~~unchanged~~finance ~~from~~companies ~~the~~was ~~previous month and~~ down ~~from 0~~4.356 percent ~~in the~~ year-~~earlier period~~over-year.

~~Credit~~Separately, ~~approvals~~the ~~totaled~~Equipment ~~77.3~~Leasing ~~percent,~~& upFinance ~~from~~Foundation’s ~~75.2~~Monthly ~~percent~~Confidence inIndex ~~August.~~(MCI-EFI) ~~Total~~in ~~headcount~~April ~~for~~is ~~equipment~~47.0, ~~finance~~a ~~companies~~decrease ~~was~~from ~~down~~the ~~2.4~~March ~~percent~~index ~~year-over-year~~of 50.3.

~~Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in October is 45, a decrease from the September index of 48.7.~~ ELFA President and CEO Ralph Petta said, “~~Third~~While ~~quarter~~originations ~~new~~for ~~business~~the ~~volume~~month are strong—in the ~~over-$1~~face ~~trillion~~of ~~equipment~~a ~~finance~~persistently ~~industry~~high isinterest ~~exceptionally~~rate ~~strong,~~and ~~providing~~inflationary ~~fresh~~environment—the ~~evidence~~metrics that ~~the~~bear ~~economic~~monitoring ~~contraction~~deal ~~projected~~with byportfolio ~~many~~quality. ~~economists~~Delinquencies ~~has~~and ~~not~~losses ~~yet~~are ~~arrived. Another~~up ~~data~~compared ~~point~~to ~~supporting~~the ~~this~~same ~~relatively~~period ~~benign~~last ~~economic~~year, ~~scenario~~indicating isa ~~extremely~~potential ~~low~~softness ~~delinquencies,~~in ~~indicating~~the economy that ~~end~~is ~~users~~making ofit ~~commercial~~more ~~equipment~~difficult ~~continue~~for lessees to ~~make~~honor ~~on-time~~their ~~payments~~lease toand ~~their~~financing ~~finance providers~~obligations.”

~~Hollis~~Linda ~~Bufferd~~Redding, ~~CEO~~Head of Equipment Finance, ~~Star~~J.P. ~~Hill~~Morgan ~~Financial~~Commercial ~~LLC~~Banking, said, “Despite continued ~~challenges~~economic ~~in the supply chain~~uncertainty, ~~inflationary pressures and~~ rising interest rates and other challenges, the ~~industry~~equipment ~~and~~finance ~~our~~industry ~~finance~~remains ~~company~~resilient, ~~continue~~as toseen ~~grow.~~in ~~Like~~the ~~our~~increase ~~peers,~~in wecumulative ~~have~~new ~~continued~~business ~~expectations~~volume ~~for~~in the ~~balance~~first ofquarter. ~~2022,~~The asindustry ~~end-users~~continues ~~plan~~to ~~for~~demonstrate ~~year-end~~its ~~capital~~viability ~~acquisitions.~~throughout ~~Charge-offs~~economic ~~and~~cycles, ~~delinquencies~~as ~~remain~~there atis ~~historic~~a ~~lows.~~consistent ~~The~~need ~~probability~~for companies of ~~continued~~all ~~Fed~~industries ~~interest~~and ~~rate~~sizes ~~increases~~to oninvest ~~the~~in ~~horizon~~equipment. ~~creates~~Times ~~some~~of economic uncertainty, ~~but~~can weeven ~~are~~create ~~seeing~~unique ~~increased~~opportunities ~~demand~~ for ~~fixed~~the ~~rate~~equipment ~~leases~~finance ~~and~~industry, ~~loans~~as toits ~~support~~flexible ~~our~~solutions ~~clients’~~can ~~capital~~allow ~~expenditures.~~businesses ~~With~~to anpreserve ~~eye~~strong onliquidity ~~global~~and ~~economic~~cash ~~disruptions,~~positions Iwhen amthey ~~cautiously~~need ~~optimistic~~them most.”

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Our business is directly impacted by factors such as economic, political, and market conditions, broad trends in industry and finance, legislative and regulatory changes, changes in government monetary and fiscal policies, and inflation, all of which are beyond our control. Given these circumstances, we believe companies overall, will continue to increasingly turn to leasing, as a financing solution. It is our belief that companies lease business-essential equipment because leasing can provide many benefits to a company. The number one benefit of leasing that we see is that there is no large outlay of cash required. Therefore, companies can preserve their working capital, lease equipment, which is an expense item, have the flexibility to upgrade the equipment when needed, and have no risk of obsolescence. Because we expect leasing to remain an attractive financing solution for American businesses during the next 12 months, we feel that our ability to increase our portfolio size and leasing revenues during that period will remain strong.

We, at Commonwealth, are currently operating business as usual (with our employees working remotely). We may see a slowdown on new equipment acquisition decisions from Corporate Lessees until the crisis is resolved and businesses can resume their normal operation. We have no way of knowing what this period of time will be. We will keep our investors informed of subsequent events. For information relating to COVID-19 and the overall effects, as expressed by Ralph Petta, President of ELFA (The Equipment Leasing & Finance Association), please refer to elfaonline.org.

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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We believe that our critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements. See Note 2 to our condensed financial statements included herein for a discussion of recent accounting pronouncements.

LEASE INCOME RECEIVABLE

Lease income receivable includes current lease income receivable net of allowances for uncollectible amounts, if any. The Partnership monitors lease income receivable to ensure timely and accurate payment by lessees. The Partnership’s Lease Relations department is responsible for monitoring lease income receivable and, as necessary, resolving outstanding invoices.

The Partnership reviews a customer’s credit history before extending credit. When the analysis indicates that the probability of full collection is unlikely, the Partnership may establish an allowance for uncollectible lease income receivable based upon the credit risk of specific customers, historical trends and other information. The Partnership writes off its lease income receivable when it determines that it is uncollectible and all economically sensible means of recovery have been exhausted.

REVENUE RECOGNITION

The Partnership is principally engaged in business of leasing equipment. Ancillary to the Partnership’s principal equipment leasing business, the Partnership also sells certain equipment and may offer certain services to support its customers.

The Partnership’s lease transactions are principally accounted for under Topic 842 on January 1, 2019. Prior to Topic 842, the Partnership accounted for these transactions under Topic 840, Leases (“Topic 840”). Lease revenue includes revenue generated from leasing equipment to customers, including re-rent revenue, and is recognized as either on a straight line basis or using the effective interest method over the length of the lease contract, if such lease is either an operating lease or finance lease, respectively.

The Partnership’s sale of equipment along with certain services provided to customers is recognized under ASC Topic 606, Revenue from Contracts with Customers, (“Topic 606”), which was adopted on January 1, 2018. Prior to adoption of Topic 606, the Partnership recognized these transactions under ASC Topic 605, Revenue Recognized, and (“Topic 605”). The Partnership recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration the Partnership expects to be entitled to in exchange for such products or services.

Through ~~September~~March 3031, ~~2022~~2023, the Partnership’s lease portfolio consisted of operating leases. For operating leases, lease revenue is recognized on a straight-line basis in accordance with the terms of the lease agreement.

Upon the end of the lease term, if the lessee has not met the return conditions as set out in the lease, the Partnership is entitled in certain cases to additional compensation from the lessee. The Partnership’s accounting policy for recording such payments is to treat them as revenue.

Gains or losses from sales of leased and off-lease equipment are recorded on a net basis in the Partnership’s Statement of Operations. Gains from the sale of equipment resulting from early buyouts are recognized when the lease is modified and terminated concurrently. Our leases do not contain any step-rent provisions or escalation clauses nor are lease revenues adjusted based on any index.

Partnership’s accounting policy for sales and property taxes collected from the lessees are recorded in the current period as gross revenues and expenses.

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LONG-LIVED ASSETS

Depreciation on technology and inventory management equipment for financial statement purposes is based on the straight-line method estimated generally over useful lives of two to five years. Once an asset comes off lease or is released, the Partnership reassesses the useful life of an asset.

The Partnership evaluates its long-lived assets when events or circumstances indicate that the value of the asset may not be recoverable. The Partnership determines whether impairment exists by estimating the undiscounted cash flows to be generated by each asset. If the estimated undiscounted cash flows are less than the carrying value of the asset then impairment exists. The amount of the impairment is determined based on the difference between the carrying value and the fair value. Fair value is determined based on estimated discounted cash flows to be generated by the asset, third party appraisals or comparable sales of similar assets, as applicable, based on asset type.

Residual values are determined by management and are calculated using information from both internal and external sources, as well as other economic indicators.

LIQUIDITY AND CAPITAL RESOURCES

Sources and Uses of Cash

~~Our~~The Partnership did not have a primary ~~sources~~source of cash for the ~~nine~~three months ended ~~September~~March 3031, ~~2022, was net proceeds from the sale of equipment of approximately $5,000 and net cash provided by operating activities of approximately $10,000~~2023. Our primary ~~sources~~source of cash for the ~~nine~~three months ended ~~September~~March 3031, ~~2021,~~2022 was cash provided by net proceeds from the sale of computer equipment of approximately $273,000.

~~Our~~Cash ~~primary~~was ~~uses~~used ofin ~~cash~~operating activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 ~~was~~of ~~capital~~approximately ~~expenditures~~$0, inwhich ~~investing~~includes ~~activities~~net loss of approximately $375,~~000~~500 and ~~equipment~~depreciation ~~acquisition~~and ~~fees~~amortization ~~paid~~expenses ~~to the GP~~ of approximately $324,000. Other ~~and~~noncash ~~finance~~activities ~~fees~~ included in the determination of operating activities include direct payments to banks by lessees of approximately $~~500~~11,000. ~~For~~Cash was used in operating activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2021,~~2022 ~~our primary uses~~ of ~~cash~~approximately ~~was~~$6,000, ~~cash~~which ~~used~~includes innet ~~operating~~loss ~~activities~~ of approximately $~~200~~25,000 ~~capital~~and ~~expenditures~~depreciation inand ~~investing~~amortization ~~activities~~expenses of approximately $3716,000. Other ~~and~~noncash ~~equipment~~activities ~~acquisition~~included ~~fees~~in ~~paid~~the determination of operating activities include direct payments to ~~the~~banks GPby lessees of approximately $13,000.

Cash was provided by operating activities for the nine months ended September 30, 2022 of approximately $10,000, which includes net loss of approximately $140,000 and depreciation and amortization expenses of approximately $54,000. Other noncash activities included in the determination of net income include direct payments to banks by lessees of approximately $16,000. Cash was used in operating activities for the nine months ended September 30, 2021 of approximately $200, which includes net loss of approximately $151,000 and depreciation and amortization expenses of approximately $102,000. Other noncash activities included in the determination of net income include direct payments to banks by lessees of approximately $28,000.

When we acquire equipment for the equipment portfolio, operating expenses may increase, but because of our investment strategy of leasing equipment primarily through triple-net leases, we avoid operating expenses related to equipment maintenance or taxes.

CCC, on our behalf and on behalf of other affiliated partnerships, acquires equipment subject to associated debt obligations and lease revenue and allocates a participation in the cost, debt and lease revenue to the various partnerships based on certain risk factors.

We consider cash equivalents to be highly liquid investments with an original maturity of 90 days or less.

At September 30, 2022	Balance
At March 31, 2023	Balance
Total bank balance	$	400
FDIC insured		(400	)
Uninsured amount	$	-

16The ~~Table~~Partnership believes it mitigates the risk of ~~Contents~~holding uninsured deposits by only depositing funds with major financial institutions. The Partnership has not experienced any losses in our accounts, and believes it is not exposed to any significant credit risk. The amounts in such accounts will fluctuate throughout 2023 due to many factors, including cash receipts, equipment acquisitions, interest rates and distributions to limited partners.

The Partnership’s ~~believes~~investment itstrategy ~~mitigates the risk~~ of ~~holding~~acquiring ~~uninsured~~equipment ~~deposits~~and bygenerally ~~only~~leasing ~~depositing~~it ~~funds~~under ~~with~~triple-net ~~major~~leases ~~financial~~to ~~institutions.~~operators ~~The~~who ~~Partnership~~generally ~~has~~meet ~~not~~specified ~~experienced~~financial ~~any~~standards ~~losses~~minimizes in our ~~accounts,~~operating ~~and~~expenses. As ~~believes~~of itMarch is31, ~~not~~2023, ~~exposed~~the toPartnership ~~any~~had ~~significant~~future ~~credit~~minimum ~~risk.~~rentals ~~The~~on ~~amounts~~operating inleases ~~such~~of ~~accounts~~approximately ~~will~~$65,000 ~~fluctuate~~for ~~throughout~~the ~~2022~~balance ~~due~~of tothe ~~many~~year ~~factors,~~ending ~~including~~December ~~cash receipts~~31, ~~equipment~~2023 ~~acquisitions, interest rates~~ and ~~distributions~~approximately to$95,000 ~~limited partners~~thereafter.

~~The~~As ~~Partnership’s investment strategy~~ of ~~acquiring~~March ~~equipment~~31, ~~and~~2023, ~~generally~~our ~~leasing it under triple~~non-~~net~~recourse ~~leases~~debt towas ~~operators~~approximately ~~who~~$77,000 ~~generally~~with ~~meet~~interest ~~specified~~rates ~~financial~~ranging ~~standards~~from ~~minimizes~~4.14% ~~our~~to ~~operating expenses~~6.21% Asand ofwill ~~September~~be ~~30,~~payable ~~2022,~~through ~~the~~May 2027. The Partnership ~~had~~is ~~future~~scheduled ~~minimum~~to ~~rentals~~terminate on ~~non-cancelable~~December ~~operating~~31, ~~leases~~2023. CCC ofwill ~~approximately~~assume ~~$17,000~~the ~~for~~obligation ~~the~~and ~~balance~~rights ofto the ~~year~~remaining ~~ending~~notes ~~December~~payable ~~31,~~and ~~2022~~its ~~and~~related ~~approximately~~secured ~~$114,000~~equipment ~~thereafter~~through their termination.

As of September 30, 2022, our non-recourse debt was approximately $72,000 with interest rates ranging from 4.14% to 6.21% and will be payable through November 2024. The Partnership is scheduled to terminate on December 31, 2023. CCC will assume the obligation and rights to the remaining notes payable and its related secured equipment through their termination.

The Partnership was originally scheduled to end its operational phase on December 31, 2018. During the year ended December 31, 2018, the operational phase was officially extended to December 31, 2021 through an investor proxy vote. The Partnership is expected to terminate on December 31, 2023.

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RESULTS OF OPERATIONS

Three ~~Months~~months ~~Ended~~ended ~~September~~March 3031, ~~2022~~2023 compared to ~~Three~~three ~~Months~~months ~~Ended~~ended ~~September~~March 3031, ~~2021~~2022

Lease Revenue

~~Lease~~Our lease revenue ~~remained~~increased ~~constant~~to at approximately $3853,000 for the three months ended ~~September~~March 3031, ~~2022~~2023, ~~and~~from approximately $3833,000 for the three months ended ~~September~~March 3031, ~~2021~~2022. The Partnership had 1114 and 1412 active operating leases for the three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, respectively. This increase in lease revenue is primarily due to a lower number of lease agreements ending versus new lease agreements being acquired. Management expects to add new leases to the Partnership’s portfolio throughout ~~2022~~2023, primarily through debt financing.

Sale of Equipment

For the three months ended ~~September~~March 3031, ~~2022~~2023, the Partnership sold fully depreciated equipment with a net book value of approximately $0 for a net gain of approximately $~~3,000~~0. This compares to the three months ended ~~September~~March 3031, ~~2021~~2022, when the Partnership sold fully depreciated equipment with a net book value of approximately $0 for a net gain of approximately $108,000.

Operating Expenses

Our operating expenses, excluding depreciation, primarily consist of accounting and legal fees, outside service fees and reimbursement of expenses to CCC for administration and operation of the Partnership. These expenses increased to approximately $6155,000 for the three months ended ~~September~~March 3031, ~~2022~~2023, from approximately $5250,000 for the three months ended ~~September~~March 3031, ~~2021~~2022. This increase is primarily attributable to an increase in accounting fees of approximately $1112,000, ~~an increase in IT expenses of approximately $4,000~~ and ~~an increase in “Other LP” expenses charged by CCC for the administration of the Partnership of approximately $3,000, partially offset by~~ a decrease in temporary services expenses of approximately $86,000.

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Equipment Management Fees

We pay an equipment management fee to our general partner for managing our equipment portfolio. The equipment management fee is approximately 5% of the gross lease revenue attributable to equipment that is subject to operating leases and approximately 2% of the gross lease revenue attributable to equipment that is subject to direct financing leases. The equipment management fee ~~remained~~was ~~constant at~~ approximately $2,000 for the three months ended ~~September~~March 3031, ~~2022~~2023 and approximately $2,000 for the three months ended ~~September~~March 3031, ~~2021.~~2022, which is consistent with the lease revenue.

Depreciation and Amortization Expense

Depreciation and amortization expenses consist of depreciation on equipment and amortization of equipment acquisition fees. These expenses ~~decreased~~increased to approximately $2024,000 for the three months ended ~~September~~March 3031, ~~2022~~2023, from approximately $2616,000 for the three months ended ~~September~~March 3031, ~~2021~~2022. This ~~decrease~~increase was due to the ~~higher~~lower frequency in the termination of leases and equipment being fully depreciated as compared to the acquisition of new leases for the three months ended ~~September~~March 3031, ~~2022~~2023.

Net Loss

For the three months ended ~~September~~March 3031, ~~2022~~2023, we recognized revenue of approximately $4155,000 and expenses of approximately $9060,~~000,~~500 resulting in net loss of approximately $495,~~000~~500. For the three months ended ~~September~~March 3031, ~~2021~~2022, we recognized revenue of approximately $5442,~~000~~500 and expenses of approximately $8867,~~000,~~800 resulting in net loss of approximately $3525,000. This change in net loss is due to the changes in revenue and expenses as described above.

Nine Months Ended September 30, 2022 compared to Nine Months Ended September 30, 2021

Lease Revenue

Our lease revenue decreased to approximately $97,000 for the nine months ended September 30, 2022, from approximately $156,000 for the nine months ended September 30, 2021. The Partnership had 11 and 21 active operating leases for the nine months ended September 30, 2022 and 2021. This decrease in lease revenue is primarily due to the termination of existing lease agreements with higher rental rates. Management expects to add new leases to the Partnership’s portfolio throughout 2022, primarily through debt financing.

Sale of Equipment

For the nine months ended September 30, 2022, the Partnership sold equipment with net book value of approximately $0 and net gain of approximately $10,000. This compared to the nine months ended September 30, 2021, the Partnership sold equipment with net book value of approximately $7,000 for a net gain of approximately $20,000.

Operating Expenses

Our operating expenses, excluding depreciation, primarily consist of accounting and legal fees, outside service fees and reimbursement of expenses to CCC for administration and operation of the Partnership. These expenses decreased to approximately $188,000 for the nine months ended September 30, 2022, from approximately $213,000 for the nine months ended September 30, 2021. This decrease is primarily attributable to a decrease in accounting fees of approximately $15,000, a decrease in “Other LP” expenses charged by CCC for the administration of the Partnership of approximately $12,000 and a decrease in recruiting fees of approximately $5,000, partially offset by an increase in IT expenses of approximately $7,000.

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Equipment Management Fees

We pay an equipment management fee to our general partner for managing our equipment portfolio. The equipment management fee is approximately 5% of the gross lease revenue attributable to equipment that is subject to operating leases and approximately 2% of the gross lease revenue attributable to equipment that is subject to direct financing leases. The equipment management fee decreased to approximately $4,000 for the nine months ended September 30, 2021 from approximately $8,000 for the nine months ended September 30, 2021. This decrease is consistent with the overall decrease in lease revenue.

Depreciation and Amortization Expense

Depreciation and amortization expenses consist of depreciation on equipment and amortization of equipment acquisition fees. These expenses decreased to approximately $54,000 for the nine months ended September 30, 2022, from approximately $102,000 for the nine months ended September 30, 2021. This decrease was due to the higher frequency in the termination of leases and equipment being fully depreciated as compared to the acquisition of new leases for the nine months ended September 30, 2022.

Net Loss

For the nine months ended September 30, 2022, we recognized revenue of approximately $113,000 and expenses of approximately $253,000, resulting in net loss of approximately $140,000. For the nine months ended September 30, 2021, we recognized revenue of approximately $189,000 and expenses of approximately $340,000, resulting in net loss of approximately $151,000. This change in net loss is due to the changes in revenue and expenses as described above.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

N/A

Item 4. Controls and Procedures

~~Our~~The Company’s management, ~~under the supervision and~~ with the participation of the ~~General Partner~~Company’s ~~Chief~~Principal Executive Officer and Principal Financial and Accounting Officer, has evaluated the effectiveness of ~~our~~the Company’s disclosure controls and procedures ~~related~~(as tosuch ~~our~~term ~~reporting~~is defined in Rules 13a-15(e) and ~~disclosure~~15d-15(e) ~~obligations~~under the Exchange Act) as of the end of the period covered by this Quarterly Report ~~on Form 10-Q~~. Based on such evaluation, the ~~General Partner~~Company’s ~~Chief~~Principal Executive Officer and Principal Financial and Accounting Officer have concluded that, as of ~~September~~the ~~30,~~end ~~2022~~of such period covered by this Quarterly Report, ~~our~~the Company’s disclosure controls and procedures ~~are~~were temporarily rendered non-effective into ~~ensuring~~provide reasonable assurance that information ~~relating~~that toit ~~us which~~ is required to bedisclose ~~disclosed~~ in ~~our periodic~~ reports ~~filed~~that ~~or submitted under~~ the ~~Securities~~Company ~~Exchange~~files ~~Act~~with ofthe ~~1934~~SEC is ~~(a)~~ recorded, processed, summarized and reported within the time periods specified inby the ~~Securities and~~ Exchange ~~Commission’s~~Act rules and ~~forms,~~regulations ~~and~~due ~~(b) accumulated and communicated~~ to ~~management, including~~ the ~~General~~reasons ~~Partner’s~~set ~~Chief~~forth ~~Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure~~below. There were no changes in the Partnership’s internal control over financial reporting during the fiscal quarter ended September 30, 2022 that have materially affected or are reasonably likely to materially affect its internal control over financial reporting.

19During ~~Table~~the period covered by this report, management determined the filing delay of ~~Contents~~financial information for the period was a result of a contractual dispute with a third-party financial vendor which provides information necessary for completion of audit process for the filing of the 10K, which thereby resulted in the delay of the 10Q. Specifically, we were unable to conduct a timely reconciliation of all accounts until resolution of the aforesaid dispute. As a result, we have concluded that our internal control over financial reporting was not effective for this period. We have taken steps to remediate this issue and improve our internal control over financial reporting. However, we cannot assure you that these steps will be successful or that we will not identify additional material weaknesses in the future.

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Part II: OTHER INFORMATION

Item 1. ~~Commitments~~Legal ~~and Contingencies~~Proceedings

N/A

Item 2. Legal Proceedings

FINRA

On July 21, 2017, FINRA reduced the list of 1,840 items totaling $208,000 to a remaining list of 87 items totaling $36,226 (which includes approximately $30,000 of continuing education expenses for personnel providing services to the Funds), and reduced the proposed fine from $100,000 to $50,000, but reaffirmed its position on the bar from the securities industry. Respondents promptly appealed FINRA’s revised ruling to the SEC. All the requested or allowed briefs have been filed with the SEC. Despite offering no additional evidence or legal reasoning from when SEC originally remanded this matter (for FINRA’s opinion being an unreviewably flawed opinion), the SEC upheld FINRA’s new order on February 7, 2020 as to the bar; however, ~~but eliminated~~ FINRA’s ~~proposed~~ fine was voided. Ms. Springsteen-Abbott has filed a Petition for Review in the United States Court of Appeals for the District of Columbia Circuit to review a final order entered against her by the U.S. Securities and Exchange Commission. On February 26, 2021, the United States Court of Appeals for the District of Columbia Circuit, made their ruling. They dismissed in part and denied in part Ms. Springsteen-Abbott’s petition. This was regardless of CCC’s good faith reimbursements made many years ago of the questioned expense items of $208,000 (due to improper documentation), initially claimed misallocations by FINRA, even prior to FINRA’s reducing its final claim to $36,226.

20Item ~~Table~~2. Unregistered Sales of ~~Contents~~Equity Securities and Use of Proceeds

Item 2A. Risk Factors

COVID-19 Pandemic

In periods ended subsequent to the outbreak of COVID-19, the impact on expected credit losses and future cash flow projections used in impairment testing will need to be considered.

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Item 3. Unregistered Sales of Equity Securities and Use of Proceeds

N/A

Item 43. Defaults Upon Senior Securities

N/A

Item 54. Mine Safety Disclosures

N/A

Item 65. Other Information

NONE

Item 76. Exhibits

31.1	RULE 15d-14(a) CERTIFICATION OF CHIEF EXECUTIVE OFFICER
31.2	RULE 15d-14(a) CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
32.1	SECTION 1350 CERTIFICATION OF CHIEF EXECUTIVE OFFICER
32.2	SECTION 1350 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

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SIGNATURES

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

COMMONWEALTH INCOME & GROWTH FUND VI BY: COMMONWEALTH INCOME & GROWTH FUND, INC., General Partner

November 29, 2022	By:	/s/ Kimberly A. Springsteen-Abbott
Date		Kimberly A. Springsteen-Abbott
		Chief Executive OfficerCommonwealth Income & Growth Fund, Inc.

Filing Compare · Commonwealth Income & Growth Fund VI