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 or

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

Commission File Number: 333-156357

COMMONWEALTH INCOME & GROWTH FUND VII, LP

(Exact name of registrant as specified in its charter)

Pennsylvania		26-3733264
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

4532 US Highway 19

Suite 200

New Port Richey, FL 34652(Address, including zip code, of principal executive offices)

(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 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 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~~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~~ Yes ☐ NO No ☒

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

FORM 10-Q

~~SEPTEMBER~~MARCH 3031, ~~2022~~2023

TABLE OF CONTENTS

PART I
Item 1.	Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1615
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2221
Item 4.	Controls and Procedures	2221
PART II
Item 1.	Commitments and Contingencies	2322
Item 2.	Legal Proceedings	2322
Item 2A.	Risk Factors	24
Item 3.	Unregistered Sales of Equity Securities and Use of Proceeds	2522
Item 4.	Defaults Upon Senior Securities	2522
Item 5.	Mine Safety Disclosures	2522
Item 6.	Other Information	2522
Item 7.	Exhibits	2623

Table of Contents

Part I. FINANCIAL INFORMATION

Part I. FINANCIAL INFORMATION
Item 1. Financial Statements

Commonwealth Income & Growth Fund VII
Condensed Balance Sheets (unaudited)

	March 31,			December 31,
	2023			2022
ASSETS
Cash and cash equivalents	$	-		$	-
Lease income receivable, net of reserve of approximately $318,000 at March 31, 2023 and December 31, 2022		414,547			396,829
Accounts receivable, Commonwealth Capital Corp, net of accounts payable of approximately $354,000 and $319,000 at March 31, 2023 and December 31, 2022, respectively		1,226,319			1,145,764
Other receivables, net of reserve of approximately $305,000 at March 31, 2023 and December 31, 2022, respectively		3,245			8,144
Prepaid expenses		3,105			5,550
		1,647,216			1,556,287

Net investment in finance leases		21,876			24,604

Investment in COF 2		348,822			366,539

Equipment, at cost		12,549,702			12,796,472
Accumulated depreciation		(11,750,676	)		(11,928,245	)
		799,026			868,227

Equipment acquisition costs and deferred expenses, net of accumulated amortization of approximately $5,000 and $20,000 at March 31, 2023 and December 31, 2022, respectively		31,327			35,743
Total Assets	$	2,848,268		$	2,851,401

LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Accounts payable	$	133,096		$	148,584
Accounts payable, CIGF, Inc.		844,489			720,835
Unearned lease income		67,786			48,796
Notes payable		359,066			408,073
Total Liabilities		1,404,437			1,326,287

COMMITMENTS AND CONTINGENCIES
PARTNERS' CAPITAL

General Partner		1,050			1,050
Limited Partners		1,442,781			1,524,064
Total Partners' Capital		1,443,831			1,525,114
Total Liabilities and Partners' Capital	$	2,848,268		$	2,851,401

The accompanying notes are an integral part of these financial statements

~~Item~~3 1.Table ~~Financial~~of ~~Statements~~Contents

Commonwealth Income & Growth Fund VII
Condensed Balance Sheets(unaudited)
Condensed Statements of Operations
	September 30,			December 31,
(unaudited)
	2022			2021
	Three Months Ended March 31,
ASSETS
	2023			2022
Cash and cash equivalents	$	-		$	4,424
Revenue
Lease income receivable, net of reserve of approximately $624,000 and $283,000 at September 30, 2022 and December 31, 2021, respectively		341,905			188,540
Lease	$	127,496		$	198,987
Accounts receivable, Commonwealth Capital Corp, net of accounts payable of approximately $260,000 and $100,000 at September 30, 2022 and December 31, 2021, respectively		1,135,911			1,167,860
Interest and other		21,421			4,241
Other receivables, net of reserve of approximately $305,000 at September 30, 2022 and December 31, 2021, respectively		3,245			3,245
Sales and property taxes		4,140			11,822
Prepaid expenses		5,803			4,337
Gain on sale of equipment		14,163			3,936
		1,486,864			1,368,406
Total revenue and gain on sale of equipment		167,220			218,986
Net investment in Finance leases		27,508			35,775
Expenses
Investment in COF 2		476,200			546,939
Operating, excluding depreciation and amortization		134,231			77,623
Equipment, at cost		12,350,671			12,891,552
Equipment management fee, General Partner		12,575			10,010
Accumulated depreciation		(11,830,972	)		(12,431,814	)
Interest		6,225			1,276
		519,699			459,738
Depreciation		69,200			101,065
Equipment acquisition costs and deferred expenses, net of accumulated amortization of approximately $15,000 and $147,000 at September 30, 2022 and December 31, 2021, respectively		21,631			7,427
Amortization of equipment acquisition costs and deferred expenses		4,415			1,477
Total Assets	$	2,531,902		$	2,418,285
Sales and property taxes		4,140			11,822
LIABILITIES AND PARTNERS' CAPITAL
Total expenses		230,786			203,273
LIABILITIES
Other Loss
Accounts payable	$	167,377		$	259,651
Loss on investment in COF 2		(17,717	)		(23,391	)
Accounts payable, CIGF, Inc.		556,542			195,241
Total other loss		(17,717	)		(23,391	)
Unearned lease income		46,711			28,891
Net Loss	$	(81,283	)	$	(7,678	)
Notes payable		197,560			121,090
Net loss allocated to Limited Partners	$	(81,283	)	$	(7,678	)
Total Liabilities		968,190			604,873
Net loss per equivalent Limited Partnership unit	$	(0.05	)	$	(0.01	)
COMMITMENTS AND CONTINGENCIES
Weighted average number of equivalent limited
PARTNERS' CAPITAL
partnership units outstanding during the year		1,528,035			1,529,785
General Partner		1,050			1,050
The accompanying notes are an integral part of these financial statements
Limited Partners		1,562,662			1,812,362
Total Partners' Capital		1,563,712			1,813,412
Total Liabilities and Partners' Capital	$	2,531,902		$	2,418,285

~~see~~4 ~~accompanying~~Table ~~notes~~of ~~to condensed financial statements~~Contents

3 Table of Contents

Commonwealth Income & Growth Fund VII

Condensed Statement of Partners' Capital

For the three months ended March 31, 2023 and 2022

(unaudited)

General

Limited

Partner

General

Limited

Units

Partner

Partners

Total

Balance, January 1, 2023

1,528,035

1,050

1,524,064

1,525,114

Net loss

(81,283

)

(81,283

)

Balance, March 31, 2023

1,528,035

1,050

1,442,781

1,443,831

General

Limited

Partner

General

Limited

Units

Partner

Partners

Total

Balance, January 1, 2022

1,529,785

1,050

1,768,362

1,769,412

Net loss

(7,678

)

(7,678

)

Balance, March 31, 2022

1,529,785

1,050

1,760,684

1,761,734

The accompanying notes are an integral part of these financial statements

Commonwealth Income & Growth Fund VII
Condensed Statements of Operations
(unaudited)
	Three Months Ended						Nine Months Ended
	Ended September 30,						Ended September 30,
	2022			2021			2022			2021
Revenue
Lease	$	142,036		$	343,627		$	503,421		$	998,156
Interest and other		771			5,282			5,304			12,977
Sales and property taxes		10,748			28,225			32,938			58,779
Gain on sale of equipment		73,211			6,448			128,054			69,914
Total revenue and gain on sale of equipment		226,766			383,582			669,717			1,139,826
Expenses
Operating, excluding depreciation and amortization		101,693			128,070			339,202			462,307
Equipment management fee, General Partner		7,162			17,242			25,261			50,090
Interest		3,393			1,917			5,746			10,450
Depreciation		125,393			222,574			344,966			796,926
Amortization of equipment acquisition costs and deferred expenses		4,215			3,717			7,669			20,266
Sales and property taxes		10,748			28,225			32,938			58,779
Bad debt expense		-			-			93,207			-
Total expenses		252,604			401,745			848,989			1,398,818
Other Loss
Loss in investment in COF 2		(21,804	)		(7,305	)		(70,739	)		(42,479	)
Total other loss		(21,804	)		(7,305	)		(70,739	)		(42,479	)
Net loss	$	(47,642	)	$	(25,468	)	$	(250,011	)	$	(301,471	)
Net loss allocated to Limited Partners	$	(47,642	)	$	(25,468	)	$	(250,011	)	$	(301,474	)
Net loss per equivalent Limited Partnership unit	$	(0.03	)	$	(0.02	)	$	(0.16	)	$	(0.20	)
Weighted average number of equivalent Limited Partnership units outstanding during the period		1,529,285			1,533,035			1,529,342			1,534,761

Table of Contents

see accompanying notes to condensed financial statements

Commonwealth Income & Growth Fund VII
Condensed Statements of Cash Flows
(unaudited)

	Three Months Ended March 31,
	2023			2022

Net cash (used in) provided by operating activities	$	(14,163	)	$	158,976

Cash flows from investing activities
Capital expenditures		-			(166,380	)
Net proceeds from the sale of equipment		14,163			2,980
Net cash provided by (used in) investing activities		14,163			(163,400	)

Cash flows from financing activities
Redemptions		-			-
Net cash used in financing activities		-			-

Net decrease in cash and cash equivalents		-			(4,424	)

Cash and cash equivalents beginning of period		-			4,424

Cash and cash equivalents end of period	$	-		$	-

The accompanying notes are an integral part of these financial statements

46 Table of Contents

Commonwealth Income & Growth Fund VII
Condensed Statement of Partners' Capital
For the three, six and nine months ended September 30, 2022 and 2021
(unaudited)
	General		Limited
	Partner		Partner			General		Limited
	Units		Units			Partner		Partners			Total
Balance, January 1, 2022		50		1,529,785		$	1,050	$	1,812,362		$	1,813,412
Net loss		-		-			-		(7,678	)		(7,678	)
Balance, March 31, 2022		50		1,529,785		$	1,050	$	1,804,684		$	1,805,734
Net loss		-		-			-		(194,381	)		(194,381	)
Redemptions		-		(500	)		-		-			-
Balance, June 30, 2022		50		1,529,285		$	1,050	$	1,610,303		$	1,611,353
Net loss		-		-			-		(47,642	)		(47,642	)
Balance, September 30, 2022		50		1,529,285		$	1,050	$	1,562,661		$	1,563,711

NOTES TO CONDENSED FINANCIAL STATEMENTS

	General		Limited
	Partner		Partner			General		Limited
	Units		Units			Partner		Partners			Total
Balance, January 1, 2021		50		1,537,535		$	1,050	$	2,263,079		$	2,264,129
Net income		-		-			-		(146,849	)		(146,849	)
Redemptions		-		(4,500	)		-		(37,467	)		(37,467	)
Balance, March 31, 2021		50		1,533,035		$	1,050	$	2,078,763		$	2,079,813
Net loss		-		-			-		(129,154	)		(129,154	)
Balance, June 30, 2021		50		1,533,035		$	1,050	$	1,949,609		$	1,950,659
Net loss		-		-			-		(25,468	)		(25,468	)
Balance, September 30, 2021		50		1,533,035		$	1,050	$	1,924,141		$	1,925,191

1. Business

~~see~~Commonwealth ~~accompanying~~Income ~~notes~~& Growth Fund VII, LP (the “Partnership”) is a limited partnership organized in the Commonwealth of Pennsylvania on November 14, 2008. The Partnership offered for sale up to ~~condensed~~2,500,000 ~~financial~~units ~~statements~~of 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 March 31, 2010. The offering terminated on November 22, 2011 with 1,572,900 units sold for a total of approximately $31,432,000 in limited partner contributions.

5The ~~Table~~Partnership uses the proceeds of ~~Contents~~the offering to acquire, own and lease various types of computer information technology equipment and other similar capital equipment, which is 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 based on certain risk factors.

Commonwealth Income & Growth Fund VII
Condensed Statements of Cash Flow
(unaudited)
	Nine Months
	Ended September 30,
	2022			2021
Net cash provided by (used in) operating activities	$	142,009		$	(565,557	)
Cash flows from investing activities
Capital Expenditures		(262,761	)		(39,439	)
Equipment acquisition fees paid to General Partner		(13,514	)		3,409
Net proceeds from the sale of equipment		133,214			194,562
Net cash provided by investing activities	$	(143,061	)	$	158,532
Cash flows from financing activities
Redemptions		-			(37,467	)
Debt placement fee paid to the General Partner		(3,372	)		-
Net cash used in financing activities	$	(3,372	)	$	(37,467	)
Net decrease in cash and cash equivalents		(4,424	)		(444,492	)
Cash and cash equivalents, beginning of period		4,424			495,494
Cash and cash equivalents, end of period	$	-		$	51,002

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”). Approximately ten years after the commencement of operations, the Partnership intends to sell or otherwise dispose of all of its equipment, make final distributions to partners, and to dissolve. Unless sooner terminated or extended pursuant to the terms of its Limited Partnership Agreement (the “Agreement”), the Partnership will continue until December 31, 2026.

~~see~~2. ~~accompanying~~Summary ~~notes~~of toSignificant ~~condensed~~Accounting ~~financial statements~~Policies

6Basis ~~Table~~ of ~~Contents~~Presentation

~~NOTES~~The TOunaudited ~~CONDENSED~~condensed ~~FINANCIAL~~financial ~~STATEMENTS~~statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Financial information as of December 31, 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 months ended March 31, 2023 are not necessarily indicative of financial results that may be expected for the full year ended December 31, 2023.

1.Equity ~~Business~~Method Investment

~~Commonwealth~~The ~~Income~~Partnership &accounts ~~Growth~~for ~~Fund~~its ~~VII,~~investment LPin ~~(the~~Commonwealth Opportunity Fund 2 (“~~Partnership~~COF2”) isunder athe ~~limited~~equity ~~partnership~~method ~~organized~~ in ~~the~~accordance ~~Commonwealth~~with ofAccounting ~~Pennsylvania~~Standards onCodification ~~November~~(“ASC”) ~~14, 2008~~323. Under ~~The~~the ~~Partnership~~equity ~~offered~~method, ~~for~~the ~~sale~~Partnership uprecords toits ~~2,500,000~~proportionate ~~units~~share of ~~limited~~COF ~~partnership~~2’s ~~interest~~net atincome ~~the~~(loss). Capital ~~purchase~~contributions ~~price~~to, ofdistributions ~~$20~~from ~~per~~and ~~unit~~net ~~(the~~income ~~“offering”~~(loss). ~~The~~of ~~Partnership~~COF2 ~~reached~~are recorded in accordance with the ~~minimum~~terms ~~amount~~of inthe ~~escrow~~governing ~~and~~documents. ~~commenced~~An ~~operations~~allocation onof ~~March~~net ~~31,~~income ~~2010.~~(loss) ~~The~~may ~~offering~~differ ~~terminated~~from onthe ~~November~~stated ~~22,~~ownership ~~2011~~percentage ~~with~~interest ~~1,572,900~~in ~~units~~such ~~sold~~entity ~~for~~as a ~~total~~result of ~~approximately~~distributions ~~$31~~and allocation formulas,~~432~~ if any,~~000~~ as described in ~~limited~~such ~~partner~~governing ~~contributions~~documents.

~~The~~7 ~~Partnership~~Table ~~uses the proceeds~~ of the offering to acquire, own and lease various types of computer information technology equipment and other similar capital equipment, which is 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 based on certain risk factors.Contents

~~The~~Disclosure ~~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~~Fair isValue ~~a member~~ of ~~the~~Financial Institute for Portfolio Alternatives (“IPA”) and the Equipment Leasing and Finance Association (“ELFA”). Approximately ten years after the commencement of operations, the Partnership intends to sell or otherwise dispose of all of its equipment, make final distributions to partners, and to dissolve. Unless sooner terminated or extended pursuant to the terms of its Limited Partnership Agreement (the “Agreement”), the Partnership will continue until December 31, 2026. Instruments

2Estimated fair value was determined by management using available market information and appropriate valuation methodologies. ~~Summary~~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 ~~Significant~~March ~~Accounting~~31, ~~Policies~~2023 and December 31, 2022 due to the short-term nature of these financial instruments.

~~Basis~~The Partnership’s long-term debt consists of ~~Presentation~~notes payable, which are secured by specific equipment and are nonrecourse liabilities of the Partnership. The estimated fair value of this debt at March 31, 2023 and December 31, 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.

~~The~~Cash ~~unaudited condensed financial statements have been prepared pursuant to the rules~~ and ~~regulations~~cash of the Securities and Exchange Commission. Financial information as of December 31, 2021 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 30, 2022 are not necessarily indicative of financial results that may be expected for the full year ended December 31, 2022.equivalents

~~Equity~~The ~~Method~~Partnership ~~Investment~~considers cash equivalents to be highly liquid investments with the original maturity dates of 90 days or less.

~~The~~At ~~Partnership~~March ~~accounts~~31, ~~for~~2023, ~~its~~cash ~~investment~~and incash ~~COF2~~equivalents ~~under~~was ~~the~~held ~~equity method~~ in ~~accordance~~one ~~with~~bank ~~Accounting~~account ~~Standards~~maintained ~~Codification~~at ~~(“ASC”)~~one ~~323. Under~~financial ~~the~~institution ~~equity~~with ~~method,~~an ~~the~~aggregate ~~Partnership~~balance ~~records its proportionate share~~ of ~~the~~approximately ~~Fund’s net income (loss)~~$200. ~~Capital~~ ~~contributions,~~Bank ~~distributions~~accounts ~~and net income (loss) of such entities~~ are ~~recorded~~federally ininsured ~~accordance~~up ~~with~~to ~~the~~$250,000 ~~terms~~by of the ~~governing documents~~FDIC. At AnMarch ~~allocation~~31, of2023, ~~net income (loss) may differ from~~ the ~~stated~~total ~~ownership~~cash ~~percentage~~bank ~~interest~~balance inwas ~~such entity~~ as ~~a result of distributions and allocation formulas, if any, as described in such governing documents.~~follows:

7 Table of Contents

*At March 31, 2023*	*Balance*
Total bank balance	$	200
FDIC insured		(200	)
Uninsured amount	$	-

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

~~Estimated~~Recent ~~fair~~Accounting 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 30, 2022 and December 31, 2021 due to the short-term nature of these financial instruments.Pronouncements

~~The~~In ~~Partnership’s~~June ~~long~~2016, the FASB issued Accounting Standards Update (“ASU”) 2016-~~term~~13, ~~debt~~Financial ~~consists~~Instruments - Credit Losses (Topic 326): Measurement of ~~notes~~Credit ~~payable,~~Losses ~~which~~on ~~are~~Financial ~~secured~~Instruments by(“ASU ~~specific~~2016-13”). ~~equipment~~This ~~and~~standard ~~are~~establishes ~~nonrecourse~~an ~~liabilities~~impairment ofmodel (known as the ~~Partnership~~current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. ~~The~~Under ~~estimated~~the ~~fair~~new ~~value~~guidance, ofan ~~this~~entity ~~debt~~recognizes atas ~~September~~an 30allowance its estimate of expected credit losses, ~~2022~~which ~~and~~is ~~December~~intended 31to result in a timelier recognition of losses. Under the CECL model, ~~2021~~entities ~~approximates~~will estimate credit losses over the ~~carrying~~entire ~~value~~contractual term of ~~these~~the ~~instruments~~instrument (considering estimated prepayments, ~~due~~but tonot expected extensions or modifications) from the ~~interest~~date ~~rates~~of oninitial recognition of the ~~debt~~financial ~~approximating~~instrument. ~~current~~Measurement ~~market~~of ~~interest~~expected ~~rates~~credit losses are to be based on relevant forecasts that affect collectability. The ~~Partnership~~scope ~~classifies~~of financial assets within the ~~fair~~CECL ~~value~~methodology ofis ~~its~~broad ~~notes~~and ~~payable~~includes ~~within~~trade ~~Level~~receivables 2from ofcertain ~~the~~revenue ~~valuation~~transactions ~~hierarchy~~and ~~based~~certain onoff-balance sheet credit exposures. Different components of the ~~observable~~guidance ~~inputs~~require ~~used~~modified toretrospective ~~estimate~~or ~~fair~~prospective ~~value~~adoption.

~~Cash~~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 ~~cash~~equipment ~~equivalents~~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.

We8 ~~consider~~Table ~~cash equivalents to be highly liquid investments with the original maturity dates~~ of ~~90 days or less.~~Contents

AtIn ~~September~~April 302019, ~~2022~~the FASB issued ASU 2019-04, ~~cash~~Codification ~~and~~Improvements ~~cash~~to ~~equivalents~~Topic ~~was~~326, ~~held~~Financial inInstruments-Credit ~~one~~Losses, ~~bank~~Topic ~~account~~815, ~~maintained~~Derivatives atand ~~one~~Hedging, ~~financial~~and ~~institution~~Topic ~~with~~825, anFinancial ~~aggregate~~Instruments, ~~balance~~which amends and clarifies several provisions of ~~approximately~~Topic ~~$4,000~~326. ~~Bank~~In ~~accounts~~May ~~are~~2019, ~~federally~~the ~~insured~~FASB upissued toASU ~~$250~~2019-05,~~000~~ byFinancial ~~the~~Instruments-Credit ~~FDIC.~~Losses At(Topic ~~September~~326): ~~30,~~Targeted ~~2022~~Transition Relief, which amends Topic 326 to allow the ~~total~~fair ~~cash~~value ~~bank~~option ~~balance~~to ~~was~~be aselected ~~follows:~~for certain financial instruments upon adoption. ASU 2019-10 extended the effective date of ASU 2016-13 until fiscal year beginning after December 15, 2022.

At September 30, 2022	Balance
Total bank balance	$	4,000
FDIC insured		(4,000	)
Uninsured amount	$	-

In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. The amendments in this Update eliminate the accounting guidance for (Troubled Debt Restructurings (TDRs) by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan. For public business entities, the amendments in this Update require that an entity disclose current-period 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 at Amortized Cost. For entities that have adopted the amendments in Update 2016-13, the amendments in this Update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. For entities that have not yet adopted the amendments in Update 2016-13, the effective dates for the amendments in this Update are the same as the effective dates in Update 2016-13. The Partnership adopted this new guidance, including the subsequent updates to Topic 326 on January 1, 2023 and the adoption did not have a material impact to its financial statement upon adoption. For the three months ended March 31, 2023, the Partnership’s finance lease revenue subject to CECL represented less than 1% of total lease revenue.

~~The Partnership believes it mitigates the risk of holding uninsured deposits by only depositing funds with major financial institutions~~3. ~~The~~Information ~~Partnership has not experienced any losses in our accounts~~Technology, ~~and~~Medical ~~believes it is not exposed to any significant credit risk. The amount in its accounts will fluctuate throughout 2022 due to many factors~~Technology, ~~including~~Telecommunications ~~cash receipts~~Technology, ~~equipment~~Inventory ~~acquisitions,~~Management ~~interest rates~~ and ~~distributions~~Other toBusiness-Essential ~~limited~~Capital ~~partners.~~Equipment (“Equipment”)

~~Recent~~The ~~Accounting~~Partnership ~~Pronouncements~~is ~~Not~~the ~~Yet~~lessor ~~Adopted~~of equipment under operating 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.

~~In June 2016~~CCC, ~~the~~on ~~FASB~~behalf ~~issued~~of ~~Accounting~~the ~~Standards~~Partnership ~~Update~~and ~~(“ASU”)~~on ~~2016-13,~~behalf ~~Financial Instruments - Credit Losses (Topic 326): Measurement~~ of ~~Credit~~other ~~Losses~~affiliated oncompanies ~~Financial~~and ~~Instruments~~partnerships (“~~ASU 2016-13~~partnerships”)~~. 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~~, anacquires ~~entity~~equipment ~~recognizes~~subject asto anassociated ~~allowance~~debt ~~its~~obligations ~~estimate~~and oflease ~~expected~~agreements ~~credit~~and ~~losses,~~allocates ~~which~~a isparticipation ~~intended to result~~ in ~~a timelier recognition of losses. Under~~ the ~~CECL model~~cost, ~~entities~~debt ~~will~~and ~~estimate~~lease ~~credit~~revenue ~~losses~~to ~~over~~ the ~~entire~~various ~~contractual~~companies 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~~risk ~~transactions and certain off-balance sheet credit exposures~~factors. ~~Different components of the guidance require modified retrospective or prospective adoption.~~

InThe ~~November~~Partnership’s ~~2018,~~share ~~the~~of ~~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~~cost of the ~~credit~~equipment ~~losses~~in ~~standard.~~which ~~Instead,~~it ~~entities~~participates ~~would~~with ~~need~~other topartnerships ~~apply~~at ~~other~~March ~~U.S. GAAP~~31, ~~namely~~2023 ~~Topic~~was ~~842~~approximately ~~(Leases)~~$10,527,000 toand ~~account~~is ~~for~~included ~~changes~~ in the ~~collectability~~Partnership’s ~~assessment~~equipment ~~for~~on ~~operating~~its ~~leases~~balance sheet. ~~Other~~The ~~than operating lease receivables,~~ Partnership’s ~~trade~~share ~~receivables~~of ~~include~~the ~~receivables~~outstanding ~~from~~debt ~~finance~~associated ~~leases~~with ~~and~~this equipment ~~sales.~~at ~~Under~~March ~~Topic 606 (Revenue from Contracts with Customers)~~31, ~~revenue~~2023 iswas ~~recognized~~approximately ~~when~~$94,000 ~~among~~and ~~other criteria, it~~ is ~~probable~~included ~~that~~in the ~~entity~~Partnership’s ~~will~~notes ~~collect~~payable ~~the~~on ~~consideration~~its tobalance ~~which~~sheet. itThe istotal ~~entitled~~cost ~~for~~of ~~goods or services transferred to a customer. At~~ the ~~point~~equipment ~~that~~shared ~~finance~~by ~~lease receivables are recorded, they become subject to~~ the ~~CECL~~Partnership ~~model~~with ~~and~~other ~~estimates~~partnerships ~~of expected credit losses over their contractual life will be required to be recorded~~ at ~~inception~~March ~~based~~31, on2023 ~~historical~~was ~~information,~~approximately ~~current conditions~~$24,408,000. ~~and~~The ~~reasonable~~total ~~and~~outstanding ~~supportable~~debt ~~forecasts.~~related ~~Trade~~to ~~receivables~~the ~~derived from~~ equipment ~~sales~~shared ~~are~~by ofthe ~~short~~Partnership ~~duration~~at ~~and~~March ~~there~~31, is2023 ~~not~~was aapproximately ~~material difference between incurred losses and expected losses~~$236,000.

8The ~~Table~~Partnership’s share of ~~Contents~~the cost of the equipment in which it participates with other partnerships at December 31, 2022 was approximately $10,527,000 and is included in the Partnership’s equipment on its balance sheet. The Partnership’s share of the outstanding debt associated with this equipment at December 31, 2022 was approximately $129,000 and is included in the Partnership’s notes payable on its balance sheet. The total cost of the equipment shared by the Partnership with other partnerships at December 31, 2022 was approximately $24,408,000. The total outstanding debt related to the equipment shared by the Partnership at December 31, 2022 was approximately $346,000.

In9 ~~April~~Table 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 December 15, 2022. While the Partnership continues to evaluate the new guidance, including the subsequent updates to Topic 326, it does not anticipate that adoption will have a material impact on the Partnership’s financial statements and related disclosures. For the nine months ended September 30, 2022, the Partnership’s finance lease revenue subject to CECL represented less than 1% of total lease revenue.Contents

3.As ~~Information~~the ~~Technology~~Partnership and the other programs managed by the General Partner increase their overall portfolio size, ~~Medical~~opportunities ~~Technology~~for shared participation are expected to continue. Sharing in the acquisition of a lease portfolio gives the fund an opportunity to acquire additional assets and revenue streams, ~~Telecommunications~~while ~~Technology~~allowing the fund to remain diversified and reducing its overall risk with respect to one portfolio. As additional investment opportunities arise during 2023, ~~Inventory~~the ~~Management~~Partnership expects total shared equipment and ~~Other~~related ~~Business-Essential~~debt ~~Capital~~to ~~Equipment~~trend ~~(“Equipment”)~~higher as the Partnership builds its portfolio.

The ~~Partnership~~following is ~~the~~a ~~lessor~~schedule of ~~equipment~~approximate ~~under~~future ~~operating~~minimum ~~leases~~rentals ~~with~~on ~~periods~~operating ~~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.~~leases:

Gains or losses from the sale of equipment are recognized when the lease is modified and terminated concurrently. Gain from sale of equipment included in revenue for the three months ended September 30, 2022 was approximately $73,000. Gain from sale of equipment included in revenue for the three months ended September 30, 2021 was approximately $6,000. Gain from sale of equipment included in revenue for the nine months ended September 30, 2022 and 2021 was $128,000 and $70,000, respectively.

*Periods Ended December 31,*	Amount
Nine months ended December 31, 2023		195,000
Year Ended December 31, 2024		209,000
Year Ended December 31, 2025		115,000
Year Ended December 31, 2026		59,000
Year Ended December 31, 2027		54,000
	$	632,000

~~CCC,~~Finance 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.Leases:

The ~~Partnership’s~~following ~~share~~lists of the ~~cost~~components of the ~~equipment~~net ininvestment ~~which it participates with other partnerships at September 30, 2022 was approximately $10,453,000 and is included~~ in ~~the~~finance Partnership’s equipment on its balance sheet. The Partnership’s share of the outstanding debt associated with this equipment at September 30, 2022 was approximately $164,000 and is included in the Partnership’s notes payable on its balance sheet. The total cost of the equipment shared by the Partnership with other partnerships at September 30, 2022 was approximately $24,261,000. The total outstanding debt related to the equipment shared by the Partnership at September 30, 2022 was approximately $456,000.leases:

The Partnership’s share of the cost of the equipment in which it participates with other partnerships at December 31, 2021 was approximately $10,115,911 and is included in the Partnership’s equipment on its balance sheet. The Partnership’s share of the outstanding debt associated with this equipment at December 31, 2021 was approximately $76,000 and is included in the Partnership’s notes payable on its balance sheet. The total cost of the equipment shared by the Partnership with other partnerships at December 31, 2021 was approximately $23,449,000. The total outstanding debt related to the equipment shared by the Partnership at December 31, 2021 was approximately $305,000.

*At March 31,*	March 31, 2023		December 31, 2022
Carrying value of lease receivable	$	19,000	$	22,000
Estimated residual value of leased equipment (unguaranteed)		2,500		2,000
Initial direct costs - finance leases		-		-
Net investment in finance leases	$	21,500	$	24,000

AsThe Partnership assesses credit risk for all of its customers, including those that lease under finance leases. This credit risk is assessed using an internally developed model which incorporates credit scores from third party providers and the Partnership’s own customer risk ratings and ~~the~~is ~~other~~periodically ~~programs~~reviewed. ~~managed~~The byPartnership’s internal ratings are weighted based on the ~~General~~industry ~~Partner~~that ~~increase~~the ~~their~~customer ~~overall~~operates ~~portfolio~~in. ~~size~~Factors taken into consideration when assessing risk, ~~opportunities~~includes ~~for~~both ~~shared~~general ~~participation~~and ~~are~~industry ~~expected~~specific toqualitative ~~continue~~and quantitative metrics. The ~~Sharing~~Partnership separately takes in ~~the~~to ~~acquisition~~consideration ofpayment ahistory, ~~lease~~open ~~portfolio~~lawsuits, ~~gives~~liens and judgments. Typically, the ~~fund~~Partnership anwill ~~opportunity~~not extend credit to ~~acquire~~a ~~additional~~company ~~assets~~that ~~and~~has ~~revenue~~been ~~streams,~~in ~~while~~business ~~allowing~~for less than 5 years or that has filed for bankruptcy within the ~~fund~~same toperiod. The ~~remain~~Partnership’s ~~diversified~~internally ~~and~~based ~~reducing~~model ~~its~~may ~~overall~~classify a company as high risk ~~with~~based ~~respect~~on toits ~~one~~analysis ~~portfolio~~of their audited financial statements and their payment history. As ~~additional~~Additional ~~investment~~considerations ~~opportunities~~of ~~arise~~high ~~during~~risk ~~2022,~~may ~~the~~include ~~Partnership~~history ~~expects~~of ~~total~~late ~~shared~~payments, ~~equipment~~open lawsuits and ~~related~~liens ~~debt~~or tojudgments. ~~trend~~In ~~higher~~an aseffort to mitigate risk, the Partnership ~~builds~~typically ~~its~~requires ~~portfolio~~deposits from those in this category.

9A ~~Table~~reserve for credit losses is deemed necessary when payment has not been received for one or more months of ~~Contents~~receivables due on the equipment held under finance leases. At the end of each period, management evaluates the open receivables due on this equipment and determines the need for a reserve based on payment history and any current factors that would have an impact on payments.

~~The~~10 ~~following~~Table ~~is a schedule~~ of ~~approximate future minimum rentals on non-cancellable operating leases:~~Contents

Periods Ended December 31,	Amount
Three months ended December 31, 2022	$	69,500
Year Ended December 31, 2023		217,000
Year Ended December 31, 2024		147,500
Year Ended December 31, 2025		23,000
	$	457,000

The following table presents the credit risk profile, by creditworthiness category, of our finance lease receivables at March 31, 2023:

Finance Leases:

*Risk Level*	*Percent of Total*
Low	-		%
Moderate-Low	-		%
Moderate	-		%
Moderate-High		100	%
High	-		%
Net finance lease receivable		100	%

~~The~~As ~~following~~of ~~lists~~March 31, 2023 and December 31, 2022, the ~~components~~Partnership determined that it did not have a need for an allowance for uncollectible accounts associated with any of its finance leases, as the ~~net~~customer ~~investment~~payment inhistories ~~direct~~with ~~financing~~the Partnership, associated with these leases:, has been positive.

	September 30, 2022		December 31, 2021
Carrying value of lease receivable	$	27,000	$	33,000
Estimated residual value of leased equipment (unguaranteed)		-		2,000
Net investment in finance leases	$	27,000	$	35,000

CCC, on behalf of the Partnership and on behalf of other affiliated companies and 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 partnerships based on certain risk factors.

The ~~Partnership~~following ~~assesses~~is ~~credit~~a ~~risk~~schedule ~~for all~~ of ~~its~~future ~~customers,~~minimum ~~including~~rentals ~~those~~on ~~that~~non-cancelable ~~lease under~~ finance leases. ~~This~~at ~~credit~~March risk is assessed using an internally developed model which incorporates credit scores from third party providers and the Partnership’s own customer risk ratings and is periodically reviewed. The Partnership’s internal ratings are weighted based on the industry that the customer operates in. When assessing risk31, factors taken into consideration include both general and industry specific qualitative and quantitative metrics. The Partnership separately takes in to consideration payment history, open lawsuits, liens and judgments. Typically, the Partnership will not extend credit to a company that has been in business for less than 5 years or that has filed for bankruptcy within the same period. The Partnership’s internally based model may classify a company as high risk based on the Partnership’s analysis of their audited financial statements and their payment history. Additional considerations of high risk may include history of late payments, open lawsuits and liens or judgments. In an effort to mitigate risk, the Partnership typically requires deposits from those in this category. 2023:

A reserve for credit losses is deemed necessary when payment has not been received for one or more months of receivables due on the equipment held under finance leases. At the end of each period, management evaluates the open receivables due on this equipment and determines the need for a reserve based on payment history and any current factors that would have an impact on payments.

*Periods Ended December 31,*	Amount
Nine months ended December 31, 2023		9,000
Year ended December 31, 2024		11,000
	$	20,000

~~The~~4. ~~following~~Investment ~~table~~in ~~presents~~COF ~~the credit risk profile, by creditworthiness category, of our finance lease receivables at September 30, 2022:~~2

Risk Level	Percent of Total
Low		-	%
Moderate-Low		-	%
Moderate		-	%
Moderate-High		100	%
High		-	%
Net finance lease receivable		100	%

On August 13, 2015, the Partnership purchased 1,648 units for $1,500,000, of COF 2, an affiliate fund of the General Partner. In accordance with the Partnership Agreement, the Partnership is permitted to invest in equipment programs formed by the General Partner or its affiliates. COF 2 is an affiliate program that broke escrow on August 13, 2015. The General Partner believes this action is in the best interests of all the programs. The Partnership accounts for its investment in COF 2 under the equity method in accordance with ASC 323. The Partnership’s net investment in COF 2 at March 31, 2023 and December 31, 2022 was approximately $349,000 and $367,000, respectively (see COF 2 Financial Summary below). During the three months ended March 31, 2023, COF 2 did not declare any distribution to the Partnership.

10 Table of Contents

	March 31,			December 31,
COF 2 Summarized Financial Information	2023			2022
Assets	$	1,689,000		$	1,693,000
Liabilities	$	778,000		$	730,000
Partners' capital	$	911,000		$	963,000
Revenue	$	118,000		$	526,000
Expenses	$	170,000		$	926,000
Net loss	$	(52,000	)	$	(400,000	)

As11 ofTable ~~September 30, 2022, and December 31, 2021, management determined that the Partnership did not have a need for an allowance for uncollectible accounts associated with any~~ of ~~its finance leases, as the customer payment histories with the Partnership, associated with these leases, has been positive.~~Contents

~~CCC,~~5. onRelated ~~behalf~~Party 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.Transactions

~~The following is a schedule of future minimum rentals on non-cancelable finance leases at September 30, 2022:~~Receivables/Payables

	Amount
Three months ended December 31, 2022	$	3,000
2023		12,000
2024		11,000
Total	$	26,000

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

4. Investment in COF 2

*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 three months ended March 31, 2023 and 2022, the Partnership was charged approximately $81,000 and $44,000 in other LP expense, respectively.	$	113,000	$	75,000
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. For the three months ended March 31, 2023 and 2022, the General Partner earned acquisition fees from operating and finance leases of approximately $0 and $0, respectively.	$	-	$	-
Debt Placement Fee
As compensation for arranging term debt to finance our acquisition of equipment, the Partnership will pay the General Partner a fee equal to one percent of such indebtedness; provided, however, that such fee shall be reduced to the extent the Partnership incurs such fees to third parties unaffiliated with the General Partner or the lender with respect to such indebtedness. No such fee will be paid with respect to borrowings from the General Partner or its affiliates. The amount the Partnership borrows, and therefore the amount of the fee, will depend upon interest rates at the time of a loan, and the amount of leverage the Partnership determines is appropriate at the time. Fees will increase as the amount of leverage increases, and as turnover in the portfolio increases and additional equipment is purchased using leverage.	$	-	$	-
Equipment Management Fee
The Partnership pays our General Partner 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 managed. Reductions in market rates for similar services would also reduce the amount of this fee.	$	13,000	$	10,000
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 leases, the more often the Partnership may sell equipment, which will increase liquidation fees.	$	438	$	92

On12 ~~August~~Table ~~13, 2015, the Partnership purchased 1,648 units for $1,500,000,~~ of Commonwealth Opportunity Fund 2 (“COF 2”), an affiliate fund of the General Partner. In accordance with the Partnership Agreement, the Partnership is permitted to invest in equipment Programs formed by the General Partner or its affiliates. COF 2 is an affiliate program that broke escrow on August 13, 2015. The General Partner believes this action is in the best interests of all the Programs. The Partnership accounts for its investment in COF 2 under the equity method in accordance with ASC 323. The Partnership’s net investment in COF 2 at September 30, 2022 and December 31, 2021 was approximately $476,000 and $547,000, respectively (see COF 2 Financial Summary below). During the nine months ended September 30, 2022, COF 2 did not declare any distribution to the Partnership. Contents

	September, 30			December 31,
COF 2 Summarized Financial Information	2022			2021
Assets	$	1,624,000		$	1,847,000
Liabilities	$	339,000		$	356,000
Partners' capital	$	1,285,000		$	1,492,000
Revenue	$	97,000		$	401,000
Expenses	$	161,000		$	606,000
Net income (loss)	$	(64,000	)	$	(205,000	)

6. Notes Payable

11Notes ~~Table~~payable consisted of ~~Contents~~the following approximate amounts:

5. Related Party Transactions

	March 31, 2023		December 31, 2022
Installment note payable to bank; interest at 4.10% due in monthly installments of $5,229, including interest, with final payment in March 2023		-		16,000
Installment note payable to bank; interest at 5.00% due in monthly installments of $1,377, including interest, with final payment in November 2024		26,500		30,000
Installment note payable to bank; interest at 4.65% due in monthly installments of $1,176, including interest, with final payment in March 2024		14,000		17,000
Installment note payable to bank; interest at 4.75% due in monthly installments of $3,527, including interest, with final payment in May 2024		48,000		58,000
Installment note payable to bank; interest at 6.21% due in monthly installments of $2,213, including interest, with final payment in June 2024		32,000		38,000
Installment note payable to bank; interest at 7.10% due in monthly installments of $4,889, including interest, with final payment in November 2027		238,500		249,000
	$	359,000	$	408,000

~~Receivables/Payables~~The notes are secured by specific equipment with a carrying value of approximately $538,000 and are nonrecourse liabilities of the Partnership. As such, the notes do not contain any financial debt covenants with which the Partnership must comply on either an annual or quarterly basis. Aggregate approximate maturities of notes payable for each of the periods subsequent to March 31, 2023 are as follows:

As of September 30, 2022, and December 31, 2021, the Partnership’s related party receivables and payables are short term, unsecured, and non-interest bearing.

	Amount
Nine months ended December 31, 2023		110,000
Year ended December 31, 2024		95,000
Year ended December 31, 2025		49,000
Year ended December 31, 2026		53,000
Year ended December 31, 2027		52,000
	$	359,000

Nine months ended September 30,	2022		2021
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 $177,000 and $265,000 in other LP expense, respectively.	$	268,000	$	440,000
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. For the nine months ended September 30, 2022 and 2021, the General Partner earned acquisition fees from operating and finance leases of approximately $14,000 and $2,000, respectively.	$	14,000	$	2,000
Debt Placement Fee
As compensation for arranging term debt to finance our acquisition of equipment, we will pay the general partner a fee equal to one percent of such indebtedness; provided, however, that such fee shall be reduced to the extent we incur such fees to third parties unaffiliated with the general partner or the lender with respect to such indebtedness. No such fee will be paid with respect to borrowings from the general partner or its affiliates. We intend to initially acquire leases on an all cash basis with the proceeds of this offering, but may borrow funds after the offering proceeds have been invested. The amount we borrow, and therefore the amount of the fee, will depend upon interest rates at the time of a loan, and the amount of leverage we determine is appropriate at the time. Fees will increase as the amount of leverage we use increases, and as turnover in the portfolio increases and additional equipment is purchased using leverage.	$	3,372	$	-
Equipment Management Fee
We pay our general partner 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.	$	25,000	$	50,000
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.	$	4,000	$	6,000

Table of Contents

127. ~~Table~~Supplemental ofCash ~~Contents~~Flow Information

6.No ~~Notes~~interest ~~Payable~~or principal on notes payable was paid by the Partnership during 2023 and 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.

~~Notes~~Other ~~payable~~noncash ~~consisted~~activities ofincluded in the ~~following~~determination ~~approximate~~of ~~amounts~~net loss are as follows:

	September 30,2022		December 31,2021
Three months ended March 31,	2023		2022
Installment note payable to bank; interest at 4.10% due in monthly installments of $5,229, including interest, with final payment in March 2023		31,000		76,000
Lease revenue net of interest expense on notes payable realized as a result of direct payment of principal by lessee to bank	$	49,000	$	19,000
Installment note payable to bank; interest at 5.00% due in monthly installments of $1,377, including interest, with final payment in November 2024		34,000		45,000
Installment note payable to bank; interest at 4.65% due in monthly installments of $1,176, including interest, with final payment in March 2024		20,000		-
Installment note payable to bank; interest at 4.75% due in monthly installments of $3,527, including interest, with final payment in May 2024		68,000		-
Installment note payable to bank; interest at 6.21% due in monthly installments of $2,213, including interest, with final payment in June 2024		44,000		-
	$	197,000	$	121,000

~~The~~During ~~notes~~the ~~are~~three ~~secured~~months byended ~~specific~~March ~~equipment~~31, ~~with~~2023 aand ~~carrying value of approximately $380~~2022,~~000~~ ~~and are nonrecourse liabilities of~~ the Partnership. Aswrote-off ~~such,~~fully ~~the~~amortized ~~notes~~acquisition doand ~~not~~finance ~~contain~~fees ~~any financial debt covenants with which we must comply on either an annual or quarterly basis. Aggregate maturities~~ of ~~notes~~approximately ~~payable for each of the periods subsequent to September 30, 2022 are as follows:~~$0.

	Amount
Three months ended December 31, 2022	$	38,000
Year ended December 31, 2023		110,000
Year ended December 31, 2024		49,000
	$	197,000

Table of Contents

13Item ~~Table~~2: Management’s Discussion and Analysis of ~~Contents~~Financial Condition and Results of Operations

7.FORWARD ~~Supplemental~~LOOKING ~~Cash Flow Information~~STATEMENTS

NoThis ~~interest~~section, oras ~~principal~~well onas ~~notes~~other ~~payable~~portions ~~was~~of ~~paid~~this bydocument, ~~the~~includes ~~Partnership~~certain ~~during~~forward-looking ~~2022~~statements about our business and ~~2021~~our ~~because~~prospects, ~~direct~~tax ~~payment~~treatment ~~was~~of ~~made~~certain bytransactions ~~lessee~~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: ~~the~~acquisition ~~bank~~policies inof ~~lieu~~our general partner; the nature of ~~collection~~present and future leases; provisions for uncollectible accounts; the strength and sustainability of ~~lease~~the ~~income~~U.S. economy; the continued difficulties in the credit markets and ~~payment~~their impact on the economy in general; and the level of ~~interest~~future cash flow, debt levels, revenues, operating expenses, amortization and ~~principal~~depreciation expenses. You can identify those statements by the ~~Partnership~~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.

~~Other~~Actual ~~noncash~~results ~~activities~~may ~~included~~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 ~~determination~~health of ~~net~~debt ~~loss~~and ~~are~~equity asmarkets, ~~follows:~~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.

Nine months ended September 30,		2022				2021
Lease revenue net of interest expense on notes payable realized as a result of direct payment of principal by lessee to bank		$	82,000			$	339,000

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, 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.

~~Noncash~~15 ~~investing~~Table ~~and~~of ~~financing activities include the following:~~Contents

Nine months ended September 30,		2022				2021
Debt assumed in connection with the purchase of equipment		$	158,000			$	-

INDUSTRY OVERVIEW

~~During~~We invest in various types of domestic information technology equipment leases located solely within the ~~nine~~United ~~months~~States. ~~ended~~Our ~~September~~investment 30objective 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, ~~2022~~speed, and ~~2021~~utility. In the future, the ~~Partnership~~rate ~~wrote-off~~and ~~fully~~nature ~~amortized~~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 ~~and~~of ~~finance~~different ~~fees~~types of ~~approximately~~equipment, $0staggered ~~and~~lease ~~$161~~maturities,~~000~~ various lessees, ~~respectively~~and businesses located throughout the U.S., and industries served.

8We also acquire high technology medical, telecommunications and inventory management equipment. ~~Commitments~~Our General Partner seeks to maintain an appropriate balance and ~~Contingencies~~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.

~~COVID~~The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-1925), ~~Pandemic~~which reports economic activity from 25 companies representing a cross section of 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~~Receivables ~~amount~~over of30 ~~revenue~~days ~~recognized~~were ~~and the pattern of revenue recognition may be impacted by COVID-19~~1.9 ~~In December 2019~~percent, aup ~~strain~~from ~~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~~1.8 Inpercent ~~an effort to contain and mitigate~~ the ~~spread~~previous ofmonth ~~COVID-19, many countries, including the United States, have imposed unprecedented restrictions on travel, quarantines,~~ and ~~other~~up ~~public~~from ~~health safety measures~~1.5 ~~Such~~percent ~~government-imposed precautionary measures may have been relaxed~~ in ~~certain~~the ~~countries~~same orperiod ~~states, but there is no assurance that more strict measures will be put~~ in ~~place again due to a resurgence in COVID-19 cases~~2022. ~~In addition, the COVID~~Charge-19offs ~~virus~~were ~~and~~0.32 ~~other infectious diseases could result in a widespread health crisis that could adversely affect the economies and financial markets worldwide~~percent, ~~resulting~~unchanged infrom ~~an economic downturn that could impact~~ the ~~Company’s~~previous ~~business,~~month ~~financial condition,~~ and ~~results~~up offrom ~~operations~~0.10 ~~The~~percent ~~pattern of revenue recognition may change for delays~~ in ~~rendering~~the ~~services~~year-earlier period.

InCredit ~~periods~~approvals ~~ended~~totaled ~~subsequent to the outbreak of COVID-19~~75.3, ~~the~~down ~~impact~~from on75.7 ~~expected~~percent ~~credit~~in ~~losses~~February. ~~and~~Total ~~future~~headcount ~~cash~~for ~~flow~~equipment ~~projections~~finance ~~used~~companies inwas ~~impairment~~down ~~testing~~4.6 ~~will~~percent ~~need to be considered~~year-over-year.

~~The Partnership continues to evaluate whether adjustments to the financial statements are required or whether additional disclosures are necessary. In its leasing business~~Separately, the ~~Partnership~~Equipment isLeasing ~~always~~& ~~subject~~Finance ~~to credit losses as it relates to a customer~~Foundation’s ~~ability~~Monthly toConfidence ~~make~~Index ~~timely rental payments. The impact of COVID~~(MCI-19EFI) ~~may~~in ~~contribute~~April tois ~~risk of non-performance~~47.0, ~~where~~ a ~~customer~~decrease ~~may~~from ~~experience~~the ~~financial~~March ~~difficulty~~index ~~and~~of ~~may delay in making timely payments~~50.3.

14ELFA ~~Table~~President and CEO Ralph Petta said, “While originations for the month are strong—in the face of ~~Contents~~a persistently high interest rate and inflationary environment—the metrics that bear monitoring deal with portfolio quality. Delinquencies and losses are up compared to the same period last year, indicating a potential softness in the economy that is making it more difficult for lessees to honor their lease and financing obligations.”

~~The~~Linda ~~Partnership~~Redding, ~~recognizes~~Head ~~impairment~~ of ~~receivables~~Equipment ~~and~~Finance, ~~loans~~J.P. ~~when~~Morgan ~~losses~~Commercial ~~are~~Banking, ~~incurred~~said, ~~which~~“Despite iscontinued ~~when~~economic ituncertainty, isrising ~~probable~~interest ~~that~~rates anand ~~entity~~other ~~will~~challenges, bethe ~~unable~~equipment tofinance ~~collect~~industry ~~all~~remains ~~amounts~~resilient, ~~due~~as ~~according~~seen toin the ~~contractual~~increase ~~terms~~in ofcumulative new business volume in the ~~arrangement~~first quarter. ~~Impairment~~ isThe ~~measured~~industry ~~based~~continues onto ~~the~~demonstrate ~~present~~its ~~value~~viability ofthroughout ~~expected~~economic ~~future~~cycles, ~~cash~~as ~~flows~~there ~~discounted~~is at a ~~receivable’s~~consistent orneed afor ~~loan’s~~companies ~~effective~~of ~~interest~~all ~~rate,~~industries ~~except~~and ~~that,~~sizes asto ainvest ~~practical~~in ~~expedient,~~equipment. ~~impairment~~Times of economic uncertainty can beeven ~~measured~~create ~~based~~unique onopportunities afor ~~receivable’s~~the orequipment afinance ~~loans’~~industry, ~~observable~~as ~~market~~its ~~price~~flexible orsolutions ~~the~~can ~~fair~~allow ~~value~~businesses ofto ~~the~~preserve ~~underlying~~strong ~~collateral.~~liquidity and cash positions when they need them most.”

~~The~~Our ~~Partnership~~business ~~believes~~is ~~its~~directly ~~estimate~~impacted ofby ~~expected~~factors ~~losses~~such ~~have~~as ~~been~~economic, ~~recognized~~political, ~~based~~and onmarket ~~historical~~conditions, ~~experience~~broad trends in industry and finance, ~~current~~legislative ~~conditions~~and regulatory changes, changes in government monetary and ~~reasonable~~fiscal ~~forecasts~~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 ~~impacts~~number one benefit of ~~COVID-19~~leasing ~~may~~that ~~necessitate~~we ~~additional~~see ~~adjustments~~is inthat ~~future~~there ~~forecasts~~is no large outlay of ~~expected~~cash ~~losses~~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.

~~Although~~16 ~~the~~Table ~~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.Contents

~~FINRA~~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.

OnCRITICAL ~~May~~ACCOUNTING 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.POLICIES

~~The~~Our ~~decision~~discussion and analysis of ~~the~~our ~~Hearing~~financial ~~Panel~~condition ~~was~~and ~~stayed~~results ~~when~~of itoperations ~~was~~are ~~appealed~~based toupon ~~FINRA's~~our ~~National~~financial ~~Adjudicatory~~statements ~~Council~~which ~~(the~~have ~~“NAC”)~~been ~~pursuant~~prepared toin ~~FINRA~~accordance ~~Rule~~with ~~9311~~generally accepted accounting principles in the United States. The ~~NAC~~preparation ~~issued~~of athese ~~decision~~financial ~~that~~statements ~~upheld~~requires ~~the~~us ~~lower~~to ~~panel’s~~make ~~ruling~~estimates and ~~the~~judgments ~~bar~~that ~~took~~affect ~~effect~~the onreported ~~August~~amounts 23of assets, ~~2016. Ms.~~liabilities, ~~Springsteen-Abbott~~revenues ~~appealed~~and ~~the~~expenses. ~~NAC’s~~We ~~decision~~base toour ~~the~~estimates ~~U.S.~~on ~~Securities~~historical experience and ~~Exchange~~on ~~Commission~~various ~~(the~~other ~~“SEC”). On~~assumptions ~~March~~that ~~31,~~are ~~2017,~~believed ~~the~~to ~~SEC~~be ~~criticized~~reasonable ~~that~~under ~~decision~~the ascircumstances, sothe ~~flawed~~results ~~that~~of which form the ~~SEC~~basis ~~could~~for ~~not~~making ~~even~~judgments ~~review~~about ~~it,~~the ~~and~~carrying ~~remanded~~values ~~the~~of ~~matter~~assets ~~back~~and toliabilities ~~FINRA~~that ~~for~~are ~~further~~not ~~consideration~~readily ~~consistent~~apparent ~~with~~from ~~the~~other ~~SEC’s~~sources. ~~remand,~~Actual ~~but~~results ~~did~~may ~~not~~differ ~~suggest~~from ~~any~~these ~~view~~estimates asunder todifferent aassumptions ~~particular~~or ~~outcome~~conditions.

OnWe ~~July~~believe ~~21,~~that ~~2017,~~our ~~FINRA~~critical ~~reduced~~accounting ~~the~~policies ~~list~~affect ofour ~~1,840~~more ~~items~~significant ~~totaling~~judgments ~~$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~~estimates ~~the~~used ~~proposed~~in ~~fine from $100,000 to $50,000, but reaffirmed its position on~~ the ~~bar~~preparation ~~from~~of ~~the~~our ~~securities~~financial ~~industry~~statements. ~~Respondents~~See ~~promptly~~Note ~~appealed~~2 ~~FINRA’s revised ruling~~ to ~~the~~our ~~SEC. All~~condensed ~~the~~financial ~~requested~~statements orincluded ~~allowed~~herein ~~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~~discussion ~~for~~related ~~Review in the United States Court of Appeals for the District of Columbia Circuit~~ to ~~review~~recent aaccounting ~~final order entered against her by the U~~pronouncements.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~~EQUITY toMETHOD 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.INVESTMENT

15The ~~Table~~Partnership accounts for its investment in COF2 under the equity method in accordance with Accounting Standards Codification (“ASC”) 323. Under the equity method, the Partnership records its proportionate share of ~~Contents~~the Fund’s net income (loss). Capital contributions, distributions and net income (loss) of such entities are recorded in accordance with the terms of the governing documents. An allocation of net income (loss) may differ from the stated ownership percentage interest in such entity as a result of distributions and allocation formulas, if any, as described in such governing documents.

~~Item~~LEASE 2:INCOME ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~RECEIVABLE

~~FORWARD~~Lease ~~LOOKING~~income ~~STATEMENTS~~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.

~~This~~The ~~section,~~Partnership asreviews ~~well~~a ascustomer’s ~~other~~credit ~~portions~~history ofbefore ~~this~~extending ~~document,~~credit. ~~includes~~When ~~certain~~the ~~forward-looking~~analysis ~~statements~~indicates ~~about~~that ~~our~~the ~~business~~probability ~~and our prospects, tax treatment~~ of ~~certain~~full ~~transactions~~collection ~~and~~is ~~accounting matters~~unlikely, 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~~Partnership ofmay ~~present~~establish ~~and~~an ~~future~~allowance ~~leases; provisions~~ for uncollectible ~~accounts;~~lease ~~the~~income ~~strength~~receivable ~~and~~based ~~sustainability~~upon of the ~~U.S. economy; the continued difficulties in the~~ credit ~~markets~~risk ~~and their impact on the economy in general; and the level~~ of ~~future~~specific ~~cash flow~~customers, ~~debt~~historical ~~levels,~~trends ~~revenues, operating expenses, amortization~~ and ~~depreciation~~other ~~expenses~~information. ~~You~~The ~~can~~Partnership ~~identify~~writes ~~those~~off ~~statements~~its bylease ~~the~~income ~~use~~receivable ofwhen ~~words~~it ~~such~~determines asthat ~~“could,”~~it ~~“should,”~~is ~~“would,”~~uncollectible ~~“may,” “will,” “project,” “believe,” “anticipate,” “expect,” “plan,” “estimate,” “forecast,” “potential,” “intend,” “continue”~~ and ~~“contemplate,”~~all aseconomically ~~well~~sensible asmeans ~~similar~~of ~~words~~recovery ~~and~~have ~~expressions~~been exhausted.

~~Actual~~REVENUE 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.RECOGNITION

~~Readers~~The ~~are~~Partnership ~~also~~is ~~directed~~principally toengaged ~~other risks and uncertainties discussed~~ in ~~other~~business ~~documents~~of weleasing ~~file with the SEC, including, without limitation, those discussed in Item 1A~~equipment. Ancillary ~~“Risk~~to ~~Factors” of our Annual Report on Form 10-K for~~ the ~~fiscal~~Partnership’s ~~year~~principal ~~ended~~equipment ~~December~~leasing 31business, ~~2021 filed with~~ the ~~SEC.~~Partnership Wealso ~~undertake~~sells nocertain ~~obligation~~equipment toand ~~update~~may oroffer ~~revise~~certain ~~any~~services ~~forward-looking~~to ~~information,~~support ~~whether~~its ~~as a result of new information, future developments or otherwise~~customers.

~~INDUSTRY~~The ~~OVERVIEW~~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.

We17 ~~invest~~Table ~~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.Contents

WeThe ~~also~~Partnership’s ~~acquire~~sale ~~high~~of ~~technology~~equipment ~~medical,~~along ~~telecommunications~~with ~~and~~certain ~~inventory~~services ~~management~~provided ~~equipment.~~to ~~Our~~customers ~~General~~is ~~Partner~~recognized ~~seeks~~under toASC ~~maintain~~Topic an606, ~~appropriate~~Revenue ~~balance~~from ~~and~~Contracts ~~diversity~~with inCustomers, ~~the~~(“Topic ~~types~~606”), ofwhich ~~equipment~~was ~~acquired~~adopted on January 1, 2018. Prior ~~The~~to ~~market~~adoption ~~for~~of ~~high~~Topic ~~technology~~606, ~~medical~~the ~~equipment~~Partnership isrecognized ~~growing~~these ~~each~~transactions ~~year.~~under ~~Generally~~ASC Topic 605, ~~this~~Revenue ~~type~~Recognized, ofand ~~equipment~~(“Topic ~~has~~605”). The Partnership recognizes revenue when it satisfies a ~~longer~~performance ~~useful~~obligation ~~life~~by transferring control over a product or service to a customer. The ~~This~~amount ~~allows~~of ~~for~~revenue ~~increased~~recognized ~~re-marketability,~~reflects ifthe itconsideration isthe ~~returned~~Partnership ~~before~~expects ~~its~~to ~~economic~~be orentitled ~~announcement~~to ~~cycle~~in isexchange ~~depleted~~for such products or services.

16Through ~~Table~~March 31, 2023, the Partnership’s lease portfolio consisted of ~~Contents~~operating leases and finance leases. For operating leases, lease revenue is recognized on a straight-line basis in accordance with the terms of the lease agreement. Finance lease interest income is recorded over the term of the lease using the effective interest method.

~~The Equipment~~Upon ~~Leasing~~the ~~and~~end ~~Finance~~of ~~Association’s (ELFA) Monthly~~the ~~Leasing~~lease ~~and Finance Index (MLFI-25)~~term, ~~which~~if ~~reports~~the ~~economic~~lessee ~~activity~~has ~~from~~not 25met ~~companies representing a cross section of~~ the $1return ~~trillion~~conditions ~~equipment~~as ~~finance~~set ~~sector,~~out ~~showed~~in ~~their~~the ~~overall new business volume for September was $10.2 billion~~lease, upthe 11Partnership ~~percent~~is ~~year-over-year~~entitled ~~from new business volume~~ in ~~September~~certain ~~2021.~~cases ~~Volume~~to ~~was~~additional upcompensation ~~16 percent~~ from ~~$8.8~~the ~~billion in August~~lessee. ~~Year-to-date,~~The ~~cumulative~~Partnership’s ~~new~~accounting ~~business~~policy ~~volume~~for ~~was~~recording upsuch ~~nearly~~payments 6is ~~percent~~to ~~compared~~treat tothem ~~2021~~as revenue.

~~Receivables~~Gains ~~over~~or 30losses ~~days~~from ~~were~~sales ~~1.5~~of ~~percent,~~leased ~~unchanged~~and ~~from~~off-lease ~~the~~equipment ~~previous~~are ~~month~~recorded ~~and~~on ~~down~~a ~~from~~net ~~1.6~~basis ~~percent~~ in the ~~same~~Partnership’s ~~period~~Statement inof ~~2021~~Operations. Gains ~~Charge-offs~~from ~~were~~the ~~0.17~~termination ~~percent,~~of ~~unchanged~~leases ~~from~~are recognized when the ~~previous~~lease ~~month~~is modified and ~~down~~terminated ~~from 0~~concurrently.35 ~~percent~~Our inleases ~~the~~do ~~year~~not contain any step-~~earlier~~rent ~~period~~provisions or escalation clauses nor are lease revenues adjusted based on any index.

~~Credit~~Partnership’s ~~approvals~~accounting ~~totaled~~policy ~~77.3~~for ~~percent,~~sales upand ~~from~~property ~~75.2~~taxes ~~percent~~collected infrom ~~August.~~the ~~Total~~lessees ~~headcount~~are ~~for~~recorded ~~equipment~~in ~~finance~~the ~~companies~~current ~~was~~period ~~down~~as ~~2.4~~gross ~~percent~~revenues ~~year-over-year~~and expenses.

~~Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI~~LONG-~~EFI)~~LIVED ~~in October is 45, a decrease from the September index of 48.7.~~ASSETS

~~ELFA~~Depreciation ~~President~~on technology and ~~CEO~~inventory ~~Ralph~~management ~~Petta said,~~equipment ~~“Third~~for ~~quarter~~financial ~~new~~statement ~~business~~purposes ~~volume~~is inbased on the ~~over~~straight-$1line ~~trillion~~method ~~equipment~~estimated ~~finance~~generally ~~industry~~over isuseful ~~exceptionally~~lives ~~strong,~~of ~~providing~~two ~~fresh~~to ~~evidence~~five ~~that the economic contraction projected by many economists has not yet arrived~~years. ~~Another~~ ~~data~~Once ~~point~~an ~~supporting~~asset ~~this~~comes ~~relatively~~off ~~benign~~lease ~~economic~~or ~~scenario~~ is ~~extremely~~released, ~~low~~the ~~delinquencies,~~Partnership ~~indicating~~reassesses ~~that~~the ~~end~~useful ~~users~~life of ~~commercial~~an ~~equipment continue to make on-time payments to their finance providers~~asset.”

~~Hollis~~The ~~Bufferd,~~Partnership ~~CEO,~~evaluates ~~Star~~its ~~Hill~~long-lived ~~Financial~~assets ~~LLC,~~when ~~said,~~events ~~“Despite~~or ~~continued~~circumstances ~~challenges~~indicate inthat the ~~supply~~value ~~chain,~~of ~~inflationary~~the ~~pressures~~asset ~~and~~may ~~rising~~not ~~interest~~be ~~rates,~~recoverable. ~~the~~The ~~industry~~Partnership ~~and~~determines ~~our~~whether ~~finance~~impairment ~~company~~exists ~~continue~~by toestimating ~~grow.~~the ~~Like~~undiscounted ~~our~~cash ~~peers,~~flows weto ~~have~~be ~~continued~~generated ~~expectations~~by ~~for~~each ~~the~~asset. ~~balance~~If ofthe ~~2022,~~estimated asundiscounted ~~end-users~~cash ~~plan~~flows ~~for~~are ~~year-end~~less ~~capital~~than ~~acquisitions.~~the ~~Charge-offs~~carrying ~~and~~value ~~delinquencies~~of ~~remain~~the atasset ~~historic~~then ~~lows~~impairment exists. The ~~probability~~amount of ~~continued~~the ~~Fed~~impairment ~~interest~~is ~~rate~~determined ~~increases~~based on the ~~horizon~~difference ~~creates~~between ~~some~~the ~~uncertainty,~~carrying ~~but~~value weand ~~are~~the ~~seeing~~fair ~~increased~~value. ~~demand~~Fair ~~for~~value ~~fixed~~is ~~rate~~determined ~~leases~~based ~~and~~on ~~loans~~estimated discounted cash flows to ~~support~~be ~~our~~generated ~~clients’~~by ~~capital~~the ~~expenditures.~~asset, ~~With~~third anparty ~~eye~~appraisals onor ~~global~~comparable ~~economic~~sales ~~disruptions~~of similar assets, Ias amapplicable, ~~cautiously~~based ~~optimistic~~on asset type.”

~~Our~~Residual ~~business~~values isare ~~directly~~determined ~~impacted~~ by ~~factors~~management ~~such as economic, political,~~ and ~~market~~are ~~conditions,~~calculated ~~broad~~using ~~trends~~information infrom ~~industry~~both ~~and~~internal ~~finance, legislative~~ and ~~regulatory~~external ~~changes~~sources, ~~changes~~as inwell ~~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 aother ~~financing~~economic ~~solution~~indicators. 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,~~LIQUIDITY atAND ~~Commonwealth,~~CAPITAL 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.RESOURCES

~~CRITICAL~~Sources ~~ACCOUNTING~~and ~~POLICIES~~Uses of Cash

Our ~~discussion~~primary ~~and~~source ~~analysis~~ of ~~our~~cash ~~financial~~for ~~condition~~the ~~and~~three ~~results~~months ofended ~~operations~~March ~~are~~31, ~~based~~2023, ~~upon~~was ~~our~~net ~~financial~~proceeds ~~statements~~from ~~which have been prepared in accordance with generally accepted accounting principles in~~ the ~~United~~sale ~~States. The preparation~~ of ~~these~~equipment ~~financial statements requires us to make estimates and judgments that affect the reported amounts~~ of ~~assets,~~approximately ~~liabilities~~$14, ~~revenues and expenses~~000. This Wecompares ~~base~~to our ~~estimates~~primary onsources ~~historical~~of ~~experience~~cash ~~and~~for onthe ~~various~~three ~~other~~months ~~assumptions~~ended ~~that~~March ~~are believed to be reasonable under the circumstances~~31, ~~the~~2022 ~~results~~ of ~~which~~cash ~~form~~provided ~~the~~by ~~basis~~net ~~for~~proceeds ~~making~~from ~~judgments about~~ the ~~carrying~~sale ~~values~~ of ~~assets~~equipment ~~and~~of ~~liabilities~~approximately ~~that are not readily apparent from other sources~~$3,000. ~~Actual results may differ from these estimates under different assumptions or conditions.~~

1718 Table of Contents

WeOur ~~believe~~primary ~~that~~use ~~our~~of ~~critical~~cash ~~accounting~~for ~~policies~~the ~~affect~~three ~~our~~months ~~more~~ended ~~significant~~March ~~judgments~~31, ~~and~~2023 ~~estimates~~was cash used in ~~the~~operating ~~preparation~~activities of approximately ~~our financial statements~~$14,000. ~~See~~This ~~Note~~compares 2 to our primary ~~condensed~~use ~~financial~~of ~~statements~~cash ~~included~~for ~~herein~~the ~~for~~three amonths ~~discussion~~ended ~~related~~March to31, ~~recent~~2022 ~~accounting~~of ~~pronouncements~~capital expenditures of approximately $166,000.

~~EQUITY~~Cash ~~METHOD~~used ~~INVESTMENT~~in operating activities for the three months ended March 31, 2023 was approximately $14,000, including a net loss of approximately $81,000 and depreciation and amortization expenses of approximately $74,000. Other noncash activities included in the determination of net loss include direct payments to banks by lessees of approximately $49,000. This compares to cash used in operating activities for the three months ended March 31, 2022, of approximately $159,000, including a net loss of approximately $8,000 and depreciation and amortization expenses of approximately $103,000. Other noncash activities included in the determination of net loss include direct payments to banks by lessees of approximately $19,000.

~~The~~As ~~Partnership~~we ~~accounts~~continue ~~for~~to ~~its~~increase ~~investment in COF2 under~~ the ~~equity~~size ~~method~~of inour ~~accordance~~equipment ~~with~~portfolio, ~~Accounting~~operating ~~Standards~~expenses ~~Codification~~will ~~(“ASC”)~~increase, ~~323. Under~~which ~~the~~reflects ~~equity method,~~ the ~~Partnership~~administrative ~~records~~costs ~~its proportionate share~~ of servicing the ~~Fund’s net income (loss). Capital contributions~~portfolio, ~~distributions~~but ~~and~~because ~~net income (loss)~~ of ~~such~~our ~~entities~~investment ~~are~~strategy ~~recorded in accordance with the terms~~ of ~~the~~leasing ~~governing~~equipment ~~documents.~~primarily Anthrough ~~allocation of~~ triple-net ~~income~~leases, ~~(loss)~~we ~~may~~avoid ~~differ~~operating ~~from~~expenses ~~the~~related ~~stated~~to ~~ownership~~equipment ~~percentage~~maintenance ~~interest~~or ~~in such entity as a result of distributions and allocation formulas, if any, as described in such governing documents~~taxes.

~~LEASE~~CCC, ~~INCOME~~on ~~RECEIVABLE~~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.

~~Lease~~Capital ~~income~~expenditures ~~receivable~~and ~~includes~~distributions ~~current~~are ~~lease~~expected ~~income~~to ~~receivable~~continue ~~net of allowances for uncollectible amounts, if any. The Partnership monitors lease income receivable~~ to ~~ensure~~increase ~~timely~~overall ~~and~~during ~~accurate~~the ~~payment~~remainder byof ~~lessees.~~2023 ~~The~~as ~~Partnership’s~~management ~~Lease~~focuses ~~Relations~~on ~~department~~additional isequipment ~~responsible for monitoring lease income receivable and, as necessary, resolving outstanding invoices~~acquisitions.

~~The~~We ~~Partnership~~consider ~~reviews~~cash aequivalents ~~customer’s~~to ~~credit~~be ~~history~~highly ~~before~~liquid ~~extending~~investments ~~credit.~~with ~~When~~ the ~~analysis~~original ~~indicates~~maturity ~~that~~dates ~~the probability~~ of ~~full~~90 ~~collection~~days isor ~~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~~less. ~~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~~At ~~RECOGNITION~~March 31, 2023, cash and cash equivalents were held in one bank account maintained at one financial institution with an aggregate balance of approximately $200. Bank accounts are federally insured up to $250,000 by the FDIC. At March 31, 2023, the total cash bank balance was as follows:

The Partnership is principally engaged in the 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.

*At March 31, 2023*	*Balance*
Total bank balance	$	200
FDIC insured		(200	)
Uninsured amount	$	-

The Partnership’s ~~lease~~believes ~~transactions~~it ~~are~~mitigates ~~principally~~the ~~accounted~~risk ~~for~~of ~~under~~holding ~~Topic~~uninsured ~~842~~deposits onby ~~January~~only 1,depositing ~~2019. Prior~~funds towith ~~Topic~~major ~~842,~~financial ~~the~~institutions. The Partnership ~~accounted~~has ~~for~~not ~~these~~experienced ~~transactions~~any ~~under~~losses ~~Topic~~in ~~840~~our accounts, ~~Leases~~and ~~(“Topic~~believes ~~840”). Lease~~it ~~revenue~~is ~~includes~~not ~~revenue~~exposed ~~generated from leasing equipment~~ to ~~customers,~~any ~~including~~significant ~~re-rent~~credit ~~revenue,~~risk. ~~and~~The isamount ~~recognized~~in asits ~~either~~account onwill afluctuate ~~straight~~throughout ~~line~~2023 ~~basis~~due orto ~~using~~many ~~the~~factors, ~~effective~~including ~~interest method over~~ the ~~length~~pace of ~~the~~cash ~~lease contract~~receipts, ifequipment ~~such~~acquisitions ~~lease~~and isdistributions ~~either~~to anlimited ~~operating lease or finance lease, respectively~~partners.

~~The~~As ~~Partnership’s sale~~ of ~~equipment~~March ~~along with certain services provided to customers is recognized under ASC Topic 606~~31, ~~Revenue from Contracts with Customers~~2023, ~~(“Topic~~we ~~606”),~~had ~~which~~future ~~was~~minimum ~~adopted~~rentals on ~~January~~operating 1,leases ~~2018. Prior to adoption~~ of ~~Topic~~approximately ~~606~~$195,000 for the ~~Partnership~~balance ~~recognized~~of ~~these~~the ~~transactions~~year ~~under~~ending ~~ASC~~December ~~Topic 605~~31, ~~Revenue~~2023 ~~Recognized,~~ and ~~(“Topic~~approximately ~~605”). The~~$437,000 ~~Partnership recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer~~thereafter. ~~The amount of revenue recognized reflects the consideration the Partnership expects to be entitled to in exchange for such products or services.~~

~~Through~~As ~~September~~of 30March 31, ~~2022~~2023, ~~the~~we ~~Partnership’s~~had ~~lease~~future ~~portfolio~~minimum ~~consisted~~rentals ofon ~~operating~~non-cancelable ~~leases and~~ finance leases. ~~For~~of ~~operating~~approximately ~~leases~~$9,000 ~~lease~~for ~~revenue is recognized on a straight-line basis in accordance with~~ the ~~terms~~balance of the ~~lease~~year ~~agreement. Finance~~ending ~~lease~~December ~~interest~~31, ~~income~~2023 isand ~~recorded~~approximately ~~over~~$11,000 ~~the~~through ~~term of the lease using the effective interest method~~2024.

~~Upon~~As ~~the end~~ of ~~the~~March ~~lease~~31, ~~term~~2023, ifour ~~the~~non-recourse ~~lessee~~debt ~~has~~was ~~not~~approximately ~~met the return conditions as set out in the lease~~$359,000 ~~the~~with ~~Partnership~~interest isrates ~~entitled~~ranging ~~in certain cases to additional compensation~~ from ~~the lessee~~4.10% ~~The~~through ~~Partnership’s~~7.10% ~~accounting~~and ~~policy for recording such payments~~ is topayable ~~treat~~through ~~them~~November ~~as revenue~~2027.

18The ~~Table~~General Partner intends to initiate a proxy vote to investors to extend the operational phase to December 31, 2024. Upon completion of ~~Contents~~its operational phase, it is anticipated that the Partnership will begin its liquidation phase. Assuming the proxy vote is passed, the General Partner intends to fully liquidate or otherwise dispose of all of its equipment, make final distribution to partners, and dissolve on or before December 31, 2026.

~~Gains~~19 orTable ~~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 termination of leases 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.Contents

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

~~LONG-LIVED~~Three ~~ASSETS~~months ended March 31, 2023 compared to three months ended March 31, 2022

~~Depreciation~~Lease 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.Revenue

~~The~~Our ~~Partnership~~lease ~~evaluates~~revenue ~~its~~decreased ~~long-lived~~to ~~assets~~approximately ~~when~~$127,000 ~~events~~for ~~or circumstances indicate that~~ the ~~value~~three ofmonths ~~the~~ended ~~asset~~March ~~may~~31, ~~not~~2023, befrom ~~recoverable.~~approximately ~~The~~$199,000 ~~Partnership~~for ~~determines whether impairment exists by estimating~~ the ~~undiscounted~~three ~~cash~~months ~~flows~~ended toMarch be31, ~~generated by each asset~~2022. The IfPartnership ~~the~~had ~~estimated~~20 ~~undiscounted~~and ~~cash~~20 ~~flows~~active ~~are~~operating ~~less~~leases ~~than~~that ~~the~~generated ~~carrying~~lease ~~value~~revenue offor the ~~asset~~three ~~then~~months ~~impairment~~ended ~~exists.~~March ~~The~~31, ~~amount~~2023 ofand ~~the~~2022, ~~impairment~~respectively. This decrease is ~~determined~~primarily ~~based~~due onto ~~the~~partial ~~difference~~sales ~~between~~of ~~the~~equipment ~~carrying~~despite ~~value~~number ~~and~~of ~~the~~active ~~fair~~leases ~~value~~remaining unchanged. Management ~~Fair~~expects ~~value~~to isadd ~~determined~~new ~~based~~leases ~~on estimated discounted cash flows~~ to beour ~~generated~~portfolio bythroughout the ~~asset,~~remainder ~~third party appraisals or comparable sales~~ of ~~similar assets~~2023, asfunded ~~applicable,~~primarily ~~based~~through ondebt ~~asset type~~financing.

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

~~LIQUIDITY~~For ~~AND~~the ~~CAPITAL~~three ~~RESOURCES~~months ended March 31, 2023, the Partnership sold equipment with net book value of approximately $0 for a net gain of approximately $14,000. For the three months ended March 30, 2022, the Partnership sold equipment with net book value of approximately $0 for a net gain of approximately $3,000.

~~Sources~~Operating ~~and Uses of Cash~~Expenses

Our ~~primary~~operating ~~sources~~expenses, ofexcluding ~~cash~~depreciation, ~~for~~primarily ~~the~~consist ~~nine~~of ~~months~~accounting ~~ended~~and ~~September~~legal 30fees, ~~2022,~~outside ~~were~~service ~~cash~~fees ~~provided~~and byreimbursement ~~operating~~of ~~activities~~expenses to CCC for administration and operation of the Partnership. These expenses increased to approximately $~~142~~134,000 ~~and~~for ~~net~~the ~~proceeds~~three ~~from~~months ~~the~~ended ~~sale~~March of31, ~~equipment~~2023, offrom approximately $~~133~~78,000~~. This~~ ~~compares~~for to the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022. This ~~where~~increase ~~our~~is ~~primary~~primarily ~~sources~~due to an increase in other LP expenses of ~~cash~~approximately ~~were~~$38,000, ~~net~~accounting ~~proceeds~~fees ~~from~~of ~~the~~approximately ~~sale~~$17,000 and temporary services expenses of ~~equipment~~approximately $4,000, partially offset by a decrease in panrtership taxes of approximately $~~195~~3,000.

~~Our~~Equipment ~~primary~~Management uses of cash for the nine months ended September 30, 2022 were capital expenditures in investing activities of approximately $263,000, equipment acquisition fees paid to the General Partner of approximately $14,000 and debt placement fees of approximately $3,000. For the nine months ended September 30, 2021, our primary uses of cash were cash used in operating activities of approximately $566,000, capital expenditures in investing activities of approximately $39,000 and redemptions of approximately $37,000.Fee

~~Cash~~We ~~was~~pay ~~provided~~an byequipment ~~operating~~management ~~activities~~fee ~~for~~to ~~the~~our ~~nine~~general ~~months~~partner ~~ended~~for ~~September~~managing ~~30,~~our ~~2022~~equipment ofportfolio. The ~~approximately~~equipment ~~$142,000,~~management ~~including~~fee ais ~~net~~approximately ~~loss~~5% of ~~approximately~~the ~~$250,000~~gross ~~and~~lease ~~depreciation~~revenue ~~and~~attributable ~~amortization~~to ~~expenses~~equipment ofthat ~~approximately~~is ~~$353,000. Other~~subject ~~noncash~~to ~~activities~~operating ~~included~~leases inand ~~the~~2% ~~determination~~ of ~~net~~the ~~gain~~gross ~~include~~lease ~~direct~~revenue ~~payments~~attributable to ~~banks~~equipment bythat ~~lessees~~is ofsubject ~~approximately $82,000. This compares~~ to ~~the~~finance ~~nine~~leases. The ~~months~~total ~~ended~~equipment ~~September~~management ~~30,~~fee ~~2021~~increased ~~with~~to ~~cash provided by operating activities of~~ approximately $~~566~~13,000, ~~including~~for athe ~~net~~three ~~loss~~months ofended ~~approximately~~March ~~$301~~31,~~000~~ ~~and~~2023 ~~depreciation~~from ~~and amortization expenses of~~ approximately $~~817~~10,000~~. Other~~ ~~noncash~~for ~~activities~~the ~~included~~three inmonths ~~the~~ended ~~determination~~March of31, ~~net~~2022. ~~gain~~This ~~include~~increase ~~direct~~is ~~payments~~due to ~~banks~~prior byperiod ~~lessees~~adjustment ofadjusted ~~approximately~~in ~~$339,000~~the current reporting period.

AsDepreciation weand ~~continue~~Amortization to increase the size of our equipment portfolio, operating expenses will increase, which reflects the administrative costs of servicing the portfolio, but because of our investment strategy of leasing equipment primarily through triple-net leases, we avoid operating expenses related to equipment maintenance or taxes. Expense

19Depreciation ~~Table~~and amortization expenses consist of ~~Contents~~depreciation on equipment and amortization of equipment acquisition fees. These expenses decreased to approximately $74,000 for the three months ended March 31, 2023, from approximately $103,000 for the three months ended March 31, 2022. 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 three months ended March 31, 2023.

~~CCC,~~Net 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.Loss

~~Capital~~For ~~expenditures~~the three months ended March 31, 2023, we recognized revenue of approximately $167,000, expenses of approximately $231,000 and ~~distributions~~other ~~are~~loss ~~expected~~of to$18,000, ~~continue~~resulting toin ~~increase~~net ~~overall~~loss ~~during~~of approximately $81,000. For the ~~remainder~~three ofmonths ended March 31, 2022, aswe ~~management~~recognized ~~focuses~~revenue onof ~~additional~~approximately ~~equipment~~$218,000, ~~acquisitions.~~expenses of approximately $203,000 and other loss of $23,000, resulting in net loss of approximately $8,000.

We20 ~~consider~~Table ~~cash equivalents to be highly liquid investments with the original maturity dates~~ of ~~90 days or less.~~Contents

AtItem ~~September 30, 2022, cash was held in one bank account maintained at one financial institution with an aggregate balance of approximately $4,000~~3. ~~Bank~~Quantitative ~~accounts~~and ~~are~~Qualitative ~~federally~~Disclosures ~~insured~~About upMarket ~~to $250,000. At September 30, 2022, the total cash bank balance was as follows:~~Risk

At September 30, 2022	Balance
Total bank balance	$	4,000
FDIC insured		(4,000	)
Uninsured amount	$	-

N/A

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 amount in its account will fluctuate throughout 2022 due to many factors, including the pace of cash receipts, equipment acquisitions and distributions to limited partners.

As of September 30, 2022, we had future minimum rentals on non-cancelable operating leases of approximately $69,500 for the balance of the year ending December 31, 2022 and approximately $387,500 thereafter.

As of September 30, 2022, we had future minimum rentals on non-cancelable finance leases of approximately $3,000 for the balance of the year ending December 31, 2022 and approximately $23,000 thereafter.

As of September 30, 2022, our non-recourse debt was approximately $197,000 with interest rates ranging from 4.10% through 6.21% and is payable through November 2024.

RESULTS OF OPERATIONS

Three months ended September 30, 2022 compared to three months ended September 30, 2021

Lease Revenue

Our lease revenue decreased to approximately $142,000 for the three months ended September 30, 2022, compared to approximately $344,000 for the three months ended September 30, 2021. The Partnership had 21 and 14 active operating leases that generated lease revenue for the three months ended September 30, 2022 and 2021, respectively. This increase is primarily due to less lease agreements ending versus new lease agreements being acquired. Management expects to add new leases to our portfolio throughout the remainder of 2022, funded primarily through debt financing.

Sale of Equipment

For the three months ended September 30, 2022, the Partnership sold equipment with net book value of approximately $-3,000 for a net gain of approximately $73,000. Compared to the three months ended September 30, 2021, the Partnership sold equipment with net book value of approximately $125,000 for a net gain of approximately $6,000.

20 Table of Contents

Operating Expenses

Equipment Management Fee

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 2% of the gross lease revenue attributable to equipment that is subject to finance leases. The total equipment management fee decreased to approximately $7,000 for the three months ended September 30, 2022, from approximately $17,000 for the three months ended September 30, 2021.

Depreciation and Amortization Expense

Depreciation and amortization expenses consist of depreciation on equipment and amortization of equipment acquisition fees. These expenses decreased to approximately $130,000 for the three months ended September 30, 2022, from approximately $226,000 for the three 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 three months ended September 30, 2022.

Net Loss

For the three months ended September 30, 2022, we recognized revenue of approximately $227,000, expenses of approximately $253,000 and other loss of $22,000, resulting in net loss of approximately $48,000. For the three months ended September 30, 2021, we recognized revenue of approximately $384,000, expenses of approximately $402,000 and other loss of $7,000, resulting in net loss of approximately $25,000. 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 $503,000 for the nine months ended September 30, 2022, from approximately $998,000 for the nine months ended September 30, 2021. The Partnership had 25 and 33 active operating leases that generated lease revenue for the nine months ended September 30, 2022 and 2021, respectively. This decrease is primarily due to more lease agreements ending versus new lease agreements being acquired. Management expects to add new leases to our portfolio throughout the remainder of 2022, funded primarily through debt financing.

Sale of Equipment

For the nine months ended September 30, 2022, the Partnership sold fully depreciated equipment with a net book value of approximately $0 for a net gain of approximately $128,000. For the nine months ended September 30, 2021, the Partnership sold fully depreciated equipment with a net book value of approximately $125,000 for a net gain of approximately $70,000.

21 Table of Contents

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 $339,000 for the nine months ended September 30, 2022, from approximately $462,000 for the nine months ended September 30, 2021. This decrease is primarily due to a reduction in “Other LP” expenses charged by CCC for the administration of the Partnership of approximately $88,000, a decrease in recruiting fees of approximately $16,000, a decrease in accounting fees of approximately $11,000, a decrease in penalty & interest expense of approximately $7,000, a decrease in outside office services expenses of approximately $4,000, a decrease in warehouse/storage/audit expenses of approximately $2,000, a decrease in record retention expenses of approximately $2,000 and a decrease in legal fees of approximately $2,000, partially offset by an increase in temporary services expenses of approximately $10,000.

Equipment Management Fee

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 2% of the gross lease revenue attributable to equipment that is subject to finance leases. The total equipment management fee decreased to approximately $25,000 for the nine months ended September 30, 2022 from approximately $50,000 for the nine months ended September 30, 2021.

Depreciation and Amortization Expense

Depreciation and amortization expenses consist of depreciation on equipment and amortization of equipment acquisition fees. These expenses decreased to approximately $353,000 for the nine months ended September 30, 2022, from approximately $817,000 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 $670,000, expenses of approximately $849,000 and other loss of $71,000, resulting in net loss of approximately $250,000. For the nine months ended September 30, 2021, we recognized revenue of approximately $1,140,000, expenses of approximately $1,399,000 and other loss of $42,000, resulting in net loss of approximately $301,000. 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 third quarter of 2022 that have materially affected or are reasonably likely to materially affect its internal control over financial reporting.

22During ~~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 and Contingencies

N/A

Item 2. Legal Proceedings

~~FINRA~~N/A

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 2A. Risk Factors

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.

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.

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

N/A

Item 4. Defaults Upon Senior Securities

N/A

Item 5. Mine Safety Disclosures

N/A

Item 6. Other Information

NONE

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Item 7. 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 VII, LP
	BY: COMMONWEALTH INCOME & GROWTH FUND, INC., General Partner

December 1, 2022	By:	/s/ Kimberly A. Springsteen-Abbott
October 11, 2023	By: /s/ Kimberly A. Springsteen-Abbott
Date	Kimberly A. Springsteen-Abbott
	Chief Executive Officer And Principal Financial OfficerCommonwealth Income & Growth Fund, Inc.

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Filing Compare · Commonwealth Income & Growth Fund VII, LP