10-Q

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Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

☒Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of  1934.

For the quarterly period ended June 30, 2019

☐Transition Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934.

For the transition period from        to

Commission File number 000‑54931

ATEL 15, LLC

(Exact name of registrant as specified in its charter)

California	45‑1625956
(State or other jurisdiction of Incorporation or organization)	(I. R. S. Employer Identification No.)

The Transamerica Pyramid, 600 Montgomery Street, 9th Floor, San Francisco, California 94111

(Address of principal executive offices)

Registrant’s telephone number, including area code (415) 989‑8800

Securities registered pursuant to section 12(b) of the Act: None

Securities registered pursuant to section 12(g) of the Act: Limited Liability Company Units

Title of each class:	Trading Symbol	Name of each exchange on which registered:
N/A	N/A	N/A

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 files).  Yes ☒  No ☐

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

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

The number of Limited Liability Company Units outstanding as of July 31, 2019 was 6,542,557.

DOCUMENTS INCORPORATED BY REFERENCE

None.

ATEL 15, LLC

Index

Part I.	Financial Information	3
Item 1.	Financial Statements (Unaudited)	3
	Balance Sheets, June 30, 2019 and December 31, 2018	3
	Statements of Income for the three and six months ended June 30, 2019 and 2018	4
	Statements of Changes in Members’ Capital for the three and six months ended June 30, 2019 and 2018	5
	Statements of Cash Flows for the three and six months ended June 30, 2019 and 2018	6
	Notes to the Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 4.	Controls and Procedures	30
Part II.	Other Information	31
Item 1.	Legal Proceedings	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	31

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

ATEL 15, LLC

BALANCE SHEETS

JUNE 30, 2019 AND DECEMBER 31, 2018

(in thousands)

	June 30,		December 31,
	2019		2018
	(Unaudited)
ASSETS
Cash and cash equivalents	$	3,820	$	1,716
Accounts receivable, net		31		75
Due from Managing Member and affiliates		—		1
Investment in securities		320		144
Warrants, fair value		195		376
Equipment under operating leases, net		20,740		22,777
Prepaid expenses and other assets		7		25
Total assets	$	25,113	$	25,114
LIABILITIES AND MEMBERS’ CAPITAL
Accounts payable and accrued liabilities:
Due to Managing Member and affiliates	$	33	$	42
Other		82		463
Non-recourse debt		4,838		1,191
Senior long-term debt		—		2,068
Unearned operating lease income		101		61
Total liabilities		5,054		3,825
Commitments and contingencies
Members’ capital:
Other Members		20,059		21,289
Total Members’ capital		20,059		21,289
Total liabilities and Members’ capital	$	25,113	$	25,114

See accompanying notes.

3

ATEL 15, LLC

STATEMENTS OF INCOME

FOR THE THREE AND SIX MONTHS ENDED

JUNE 30, 2019 AND 2018

(in thousands except units and per unit data)

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Revenues:
Leasing and lending activities:
Operating leases revenue, net	$	1,080	$	1,694	$	2,500	$	3,349
Interest on notes receivable		13		14		27		18
(Loss) gain on sale of operating lease assets and early termination of notes receivable		(6)		(51)		(1)		1,697
Unrealized gain (loss) on investment in securities		5		(48)		8		91
Unrealized loss on fair value adjustment for warrants		(13)		(2)		(13)		(2)
Other		585		140		591		144
Total revenues		1,664		1,747		3,112		5,297
Expenses:
Depreciation of operating lease assets		909		1,094		1,791		2,209
Asset management fees to Managing Member		35		(63)		105		148
Cost reimbursements to Managing Member and/or affiliates		132		220		292		457
Provision for (reversal of) credit losses		23		—		30		(56)
Impairment losses on investment in securities		—		16		—		16
Amortization of initial direct costs		—		16		—		34
Interest expense		34		47		63		113
Professional fees		50		27		130		91
Outside services		16		19		42		56
Taxes on income and franchise fees		121		5		131		7
Freight and shipping		17		—		29		67
Railcar maintenance		9		14		19		22
Other		59		28		104		116
Total expenses		1,405		1,423		2,736		3,280
Net income	$	259	$	324	$	376	$	2,017
Net income:
Managing Member	$	119	$	—	$	120	$	106
Other Members		140		324		256		1,911
	$	259	$	324	$	376	$	2,017
Net income per Limited Liability Company Unit (Other Members)	$	0.02	$	0.05	$	0.04	$	0.29
Weighted average number of Units outstanding		6,542,557		6,542,557		6,542,557		6,545,582

See accompanying notes.

4

ATEL 15, LLC

STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL

FOR THE THREE AND SIX MONTHS ENDED

JUNE 30, 2019 AND 2018

(in thousands except units and per unit data)

(Unaudited)

	Three Months Ended June 30, 2019
	Other Members			Managing
	Units	Amount		Member		Total
Balance March 31, 2019	6,542,557	$	21,398	$	—	$	21,398
Distributions to Other Members ( $0.23 per Unit)	—		(1,479)		—		(1,479)
Distributions to Managing Member	—		—		(119)		(119)
Net income	—		140		119		259
Balance June 30, 2019	6,542,557	$	20,059	$	—	$	20,059
	Six Months Ended June 30, 2019
	Other Members			Managing
	Units	Amount		Member		Total
Balance of December 31, 2018	6,542,557	$	21,289	$	—	$	21,289
Distributions to Other Members ( $0.23 per unit)	—		(1,486)		—		(1,486)
Distributions to Managing Member	—		—		(120)		(120)
Net income	—		256		120		376
Balance June 30, 2019	6,542,557	$	20,059	$	—	$	20,059
	Three Months Ended June 30, 2018
	Other Members			Managing
	Units	Amount		Member		Total
Balance March 31, 2018	6,542,557	$	20,660	$	—	$	20,660
Repurchases of Units	—		(2)		—		(2)
Net income	—		324		—		324
Balance June 30, 2018	6,542,557	$	20,982	$	—	$	20,982
	Six Months Ended June 30, 2018
	Other Members			Managing
	Units	Amount		Member		Total
Balance December 31, 2017	6,557,057	$	20,434	$	—	$	20,434
Repurchases of Units	(14,500)		(60)		—		(60)
Distributions to Other Members ( $0.20 per Unit)	—		(1,303)		—		(1,303)
Distributions to Managing Member	—		—		(106)		(106)
Net income	—		1,911		106		2,017
Balance June 30, 2018	6,542,557	$	20,982	$	—	$	20,982

See accompanying notes.

5

ATEL 15, LLC

STATEMENTS OF CASH FLOWS

FOR THE THREE AND SIX MONTHS ENDED

JUNE 30, 2019 AND 2018

(in thousands)

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Operating activities:
Net income	$	259	$	324	$	376	$	2,017
Adjustment to reconcile net income to cash provided by operating activities:
Loss (gain) on sales of equipment under operating lease		6		51		1		(1,697)
Depreciation of operating lease assets		909		1,094		1,791		2,209
Amortization of initial direct costs		—		16		—		34
Provision for (reversal of) credit losses		23		—		30		(56)
Impairment losses on investment in securities		—		16		—		16
Unrealized (gain) loss on fair value adjustment for investment in securities		(5)		48		(8)		(91)
Unrealized loss on fair value adjustment for warrants		13		2		13		2
Changes in operating assets and liabilities:
Accounts receivable		4		12		14		50
Due from Managing Member and affiliates		—		—		1		—
Prepaid expenses and other assets		7		—		21		(10)
Due to Managing Member and affiliates		(56)		(63)		(9)		(113)
Accrued distributions to Other Members		—		—		—		(615)
Accounts payable, other		(400)		(96)		(381)		(88)
Accrued liabilities, affiliates		—		(27)		—		(243)
Unearned operating lease income		(142)		(156)		40		(65)
Net cash provided by operating activities		618		1,221		1,889		1,350
Investing activities:
Purchase of securities		—		(2)		—		(2)
Proceeds from sales of equipment under operating leases and early termination of notes		50		87		240		4,064
Principal payments received on direct financing leases		2		—		2		—
Principal payments received on notes receivable		—		26		—		61
Net cash provided by investing activities		52		111		242		4,123
Financing activities:
Borrowing under non-recourse debt		4,624		—		4,624		—
Repayments under non-recourse debt		(355)		(901)		(977)		(1,806)
Repayment under credit facility		(2,068)		—		(2,068)		(2,250)
Distributions to Other Members		(1,479)		—		(1,486)		(1,303)
Distributions to Managing Member		(119)		—		(120)		(106)
Repurchases of Units		—		(2)		—		(60)
Net cash provided by (used in) financing activities		603		(903)		(27)		(5,525)
Net increase (decrease) in cash and cash equivalents		1,273		429		2,104		(52)
Cash and cash equivalents at beginning of period		2,547		451		1,716		932
Cash and cash equivalents at end of period	$	3,820	$	880	$	3,820	$	880
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	21	$	37	$	29	$	75
Cash paid during the period for taxes	$	104	$	12	$	121	$	13
Conversion of warrants to equity securities	$	—	$	—	$	168	$	—

See accompanying notes.

6

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Limited Liability Company matters:

ATEL 15, LLC (the “Company” or the “Fund”) was formed under the laws of the state of California on March 4, 2011 for the purpose of raising capital and originating equipment financing transactions and acquiring equipment to engage in equipment leasing and sales activities. The Managing Member of the Company is ATEL Managing Member, LLC (the “Managing Member” or the “Manager”), a Nevada limited liability company. The Managing Member is controlled by ATEL Financial Services (“AFS”), a wholly-owned subsidiary of ATEL Capital Group. The Fund may continue until terminated as provided in the ATEL 15, LLC Amended and Restated Limited Liability Company Operating Agreement dated October 28, 2011 (the “Operating Agreement”). Contributions in the amount of $500 were received as of May 3, 2011, which represented the initial Member’s capital investment. As a limited liability company, the liability of any individual member for the obligations of the Fund is limited to the extent of capital contributions to the Fund by the individual member. The offering of the Company was granted effectiveness by the Securities and Exchange Commission as of October 28, 2011.

As of June 30, 2019, cumulative gross contributions, less rescissions and repurchases (net of distributions paid and allocated syndication costs, as applicable), totaling $66.0 million (inclusive of the $500 initial Member’s capital investment) have been received. As of the same date, 6,542,557 Units were issued and outstanding.

The Company is governed by its Operating Agreement. Pursuant to the terms of the Operating Agreement, the Managing Member and/or its affiliates receives compensation for services rendered and reimbursements for costs incurred on behalf of the Company (See Note 6). The Company is required to maintain reasonable cash reserves for working capital, the repurchase of Units and contingencies. The repurchase of Units is solely at the discretion of the Managing Member.

These unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto contained in the report on Form 10‑K for the year ended December 31, 2018, filed with the Securities and Exchange Commission.

2. Summary of significant accounting policies:

Basis of presentation:

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10‑Q as mandated by the Securities and Exchange Commission. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the Managing Member, necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three and six months ended June 30, 2019 and 2018 are not necessarily indicative of the results to be expected for the full year. Certain prior period amounts may have been reclassified to conform to the current period presentation. These reclassifications had no significant effect on the reported financial position or results of operations.

Footnote and tabular amounts are presented in thousands, except as to Units and per Unit data.

In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after June 30, 2019 until the issuance of the financial statements. No events were noted which would require additional disclosure in the footnotes to the financial statements or adjustments thereto.

7

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Cash and cash equivalents:

Cash and cash equivalents include cash in banks and cash equivalent investments such as U.S. Treasury instruments with original and/or purchased maturities of ninety days or less.

Use of Estimates:

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates. Such estimates primarily relate to the determination of residual values at the end of the lease term and expected future cash flows used for impairment analysis purposes, and determination of the allowance for doubtful accounts and reserve for credit losses on notes receivable.

Segment reporting:

The Company is organized into one operating segment for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment in the United States.

The primary geographic region in which the Company seeks leasing and financing opportunities is North America. All of the Company’s current operating revenues for the three and six months ended June 30, 2019 and 2018, and long-lived tangible assets as of June 30, 2019 and December 31, 2018 relate to customers domiciled in the United States.

Accounts receivable:

Accounts receivable represent the amounts billed under operating and direct financing lease contracts, and notes receivable which are currently due to the Company.

Allowances for doubtful accounts are typically established based upon their aging and historical charge off and collection experience and the creditworthiness of specifically identified lessees and borrowers, and invoiced amounts. Accounts receivable deemed uncollectible are generally charged off against the allowance on a specific identification basis. Recoveries of amounts that were previously written-off are recorded as other income in the period received.

Accounts receivable are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management periodically reviews the creditworthiness of companies with lease or note payments outstanding less than 90 days. Based upon management’s judgment, such leases or notes may be placed in non-accrual status. Leases or notes placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid receivable is probable. Until such time, revenues on operating leases are recognized on a cash basis. All payments received on amounts billed under direct financing leases and notes receivable are applied only against outstanding principal balances.

Financing receivables:

In addition to the allowance established for delinquent accounts receivable, the total allowance related solely to financing receivables also includes anticipated impairment charges on notes receivable and direct financing leases.

8

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Notes are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest when due according to the contractual terms of the note agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest when due. If it is determined that a loan is impaired with regard to scheduled payments, the Company will perform an analysis of the note to determine if an impairment valuation reserve is necessary. This analysis considers the estimated cash flows from the note, or the collateral value of the property underlying the note when note repayment is collateral dependent. Any required valuation reserve is charged to earnings when determined; and notes are charged off to the allowance as they are deemed uncollectible.

The asset underlying a direct financing lease contract is considered impaired if the estimated undiscounted future cash flows of the asset are less than its net book value. The estimated undiscounted future cash flows are the sum of the estimated residual value of the asset at the end of the asset’s expected holding period and estimates of undiscounted future rents. The residual value assumes, among other things, that the asset is utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the market place are disregarded and it is assumed that there is no necessity either to dispose of a significant number of the assets, if held in quantity, simultaneously or to dispose of the asset quickly. Impairment is measured as the difference between the fair value (as determined by a valuation method using discounted estimated future cash flows, third party appraisals or comparable sales of similar assets as applicable based on asset type) of the asset and its carrying value on the measurement date.

Investment in securities:

From time to time, the Company may purchase securities of its borrowers in connection with its lending arrangements.

Purchased securities

The Company’s purchased securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company’s results of operations. The Company’s purchased securities that do not have readily determinable fair values are measured at cost minus impairment, and adjusted for changes in observable prices. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. The Company had $320 thousand and $144 thousand of purchased securities at June 30, 2019 and December 31, 2018, respectively. Based upon the Company’s review of its portfolio, unrealized gains of $5 thousand and $8 thousand were recorded for the respective three and six months ended June 30, 2019, and unrealized losses of $48 thousand  and unrealized gains of $91 were recorded for the respective three and six months ended June 30, 2018.

Warrants

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are reflected at an estimated fair value on the balance sheet, as determined by the Managing Member. As of June 30, 2019 and December 31, 2018, the estimated fair value of the Company’s portfolio of warrants was $195 thousand and $376 thousand, respectively. During the respective three months and six months ended June 30, 2019 and 2018, the Company recorded unrealized losses of $13 thousand and $2 thousand on fair valuation of its warrants.  There was a net exercise of warrants in exchange for securities in the first quarter. No exercises of any kind occurred during the comparative prior year period.

9

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, operating and direct financing lease receivables, notes receivable and accounts receivable. The Company places the majority of its cash deposits in non-interest bearing accounts with financial institutions that have no less than $10 billion in assets. Such deposits are insured up to $250 thousand. The remainder of the Fund’s cash is temporarily invested in U.S. Treasury denominated instruments. The concentration of such deposits and temporary cash investments is not deemed to create a significant risk to the Company. Accounts receivable represent amounts due from in various industries, related to equipment on operating leases.

Equipment under operating leases, net and related revenue recognition:

Equipment subject to operating leases is stated at cost. Depreciation is being recognized on a straight-line method over the terms of the related leases to the equipment’s estimated residual values. Off-lease equipment is generally not subject to depreciation. The Company depreciates all lease assets, in accordance with guidelines consistent with ASC 360‑10‑35‑3, over the periods of the lease terms contained in each asset’s respective lease contract to the estimated residual value at the end of the lease contract. All lease assets are purchased only concurrent with the execution of a lease commitment by the lessee. Thus, the original depreciation period corresponds with the term of the original lease. Once the term of an original lease contract is completed, the subject property is typically sold to the existing user, re-leased to the existing user, or, when off-lease, is held for sale. Assets which are re-leased continue to be depreciated using the terms of the new lease agreements and the estimated residual values at the end of the new lease terms, adjusted downward as necessary. Assets classified as held-for-sale are carried at the lower of carrying amount, or the fair value less cost to sell (ASC 360‑10‑35‑43).

The Company does not use the equipment held in its portfolio, but holds it solely for lease and ultimate sale. In the course of marketing equipment that has come off-lease, management may determine at some point that re-leasing the assets may provide a superior return for investors and would then execute another lease. Upon entering into a new lease contract, management will estimate the residual value once again and resume depreciation. If, and when, the Company, at any time, determines that depreciation in value may have occurred with respect to an asset held-for-sale, the Company would review the value to determine whether a material reduction in value had occurred and recognize any appropriate impairment. All lease assets, including off-lease assets, are subject to the Company’s quarterly impairment analysis, as described below. Maintenance costs associated with the Fund’s portfolio of leased assets are expensed as incurred. Major additions and betterments are capitalized.

Operating lease revenue is recognized on a straight-line basis over the term of the underlying leases. The initial lease terms will vary as to the type of equipment subject to the leases, the needs of the lessees and the terms to be negotiated, but initial leases are generally on terms from 36 to 120 months. The difference between rent received and rental revenue recognized is recorded as unearned operating lease income on the balance sheet. Operating leases are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management considers the equipment underlying the lease contracts for impairment and periodically reviews the credit worthiness of all operating lessees with payments outstanding less than 90 days. Based upon management’s judgment, the related operating leases may be placed on non-accrual status. Leases placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid lease payments is probable. Until such time, revenues are recognized on a cash basis.

10

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Initial direct costs:

With the adoption of ASU No. 2016-02 certain costs associated with the execution of the Company’s leases, which were previously capitalized and amortized over the life of their respective leases, are expensed as incurred. In 2018 and prior, the Company capitalized initial direct costs (“IDC”) associated with the origination of lease assets. IDC includes both internal costs (e.g., the costs of employees’ activities in connection with successful lease originations) and external broker fees incurred with such originations. The costs are amortized on a lease by lease basis based on actual contract term using a straight-line method for operating leases. Upon disposal of the underlying lease assets, both the initial direct costs and the associated accumulated amortization are relieved. Costs related to leases that are not consummated are not eligible for capitalization as initial direct costs and are expensed as acquisition expense.

Per Unit data:

The Company issues only one class of Units, none of which are considered dilutive. Net income and distributions per Unit is based upon the weighted average number of Other Members Units outstanding during the period.

Fair Value:

Fair value measurements and disclosures are based on a fair value hierarchy as determined by significant inputs used to measure fair value. The three levels of inputs within the fair value hierarchy are defined as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuations in which all significant inputs are observable in the market.

Level 3 – Valuation is modeled using significant inputs that are unobservable in the market. These unobservable inputs reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability.

The Company’s valuation policy is determined by members of the Asset Management, Credit and Accounting departments. The Company’s purchased securities registered for public sale with readily determinable fair value are carried at fair value. The Company elected to record equity investments without readily determinable fair values at cost, less impairment, and adjusted for changes in observable prices. Any changes in the basis of these equity investments are reported in current earnings. Whenever possible, the policy is to obtain quoted market prices in active markets to estimate fair values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes, information from third party remarketing agents, third party appraisals of collateral and/or other valuation techniques. These techniques are significantly affected by certain of the Company’s assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. As the Company is responsible for determining fair value, an analysis is performed on prices obtained from third parties. Such analysis is performed by asset management and credit department personnel who are familiar with the Company’s investments in equipment, notes receivable and equity securities of venture companies. The analysis may include a periodic review of price fluctuations and validation of numbers obtained from a specific third party by reference to multiple representative sources.

11

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Recent accounting pronouncements:

In February 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-02, Leases. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases Topic 842: Targeted Improvements.  In December 2018, the FASB issued ASU No. 2018-20, Leases Topic 842, Narrow-Scope Improvements for Lessors. In March 2019, the FASB issued ASU No. 2019-01, Leases: Codification Improvements. Collectively referred to hereafter as ASU No. 2016-02, these standards set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract to control an asset (i.e., lessees and lessors). The Company does not have any non-cancelable leases where it is a lessee.

ASU No. 2016-02 requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. These standards were effective as of January 1, 2019. Upon adoption, the Company applied the package of practical expedients that has allowed the Company to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases and (iii) initial direct costs for any expired or existing leases. Furthermore, the Company applied the optional transition method in ASU No. 2018-11, which has allowed the Company to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the adoption period, although the Company did not have an adjustment. Additionally, the Company’s leases met the criteria in ASU No. 2018-11 to not separate non-lease components from the related lease component; therefore, the accounting for these leases remained largely unchanged from the previous standard. 

The adoption of ASU No. 2016-02 and the related improvements did not have a material impact in the Company’s financial statements. Upon adoption, (i) amounts previously recognized as lessee reimbursements and other income, for the three months ended June 30, 2019, have been classified as lease or financing income, (ii) allowances for bad debts are now recognized as a direct reduction of operating lease income, and (iii) certain costs associated with the execution of the Company’s leases, which were previously capitalized and amortized over the life of their respective leases, are expensed as incurred. Subsequent to January 1, 2019, provisions for credit losses relating to operating leases are now included in lease income in the Company’s financial statements.  Provisions for credit losses prior to January 1, 2019 were previously included in operating expenses in the financial statements and prior periods are not reclassified to conform to the current presentation.

In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments — Credit Losses (Topic 326) (“ASU 2016-13”). The main objective of this Update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. Management is currently evaluating the standard and expects the Update may potentially result in an increase in the allowance for credit losses given the change to estimated losses over the contractual life adjusted for expected prepayments.

12

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

In November 2018, the FASB issued Accounting Standards Update 2018-19, Codification Improvements to Topic 326, Financial Instruments — Credit Losses (“ASU 2018-19”). The new standard clarifies certain aspects of the new current expected credit losses (CECL) impairment model in ASU 2016-13. The amendment clarifies that receivables arising from operating leases are within the scope of ASC 842, rather than ASC 326; however, it will be applicable to the note receivables and direct financing leases, if any. The effective date and transition requirements in this Update are the same as the effective dates and transition requirements in Update 2016-13, as amended by this Update, which is for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Management is currently evaluating the impact of the standard on the financial statements and related disclosure requirements.

In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (“ASU 2018-13”), which amends the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. This ASU modifies disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. Management is currently evaluating the impact of this standard on the financial statements and related disclosure requirements.

3. Notes receivable, net:

The Company has various notes receivables from borrowers who have financed the purchase of equipment through the Company. As of June 30, 2019, the original terms of the notes receivable are 84 to 90 months and bear interest at 18.00% per annum. The notes are secured by the equipment financed. The notes mature in 2020.

As of June 30, 2019, the future minimum payments receivable are as follows (in thousands):

Six months ending December 31, 2019	$	29
Less: portion representing unearned interest income		(29)
Notes receivable, net	$	—

Initial direct costs (“IDC”) amortization expense related to notes receivable and the Company’s operating leases for the three months and six months ended June 30, 2019 and 2018 are as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
IDC amortization – notes receivable	$	—	$	3	$	—	$	6
IDC amortization – lease assets		—		13		—		28
Total	$	—	$	16	$	—	$	34

13

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

4. Allowance for credit losses:

The Company’s allowance for credit losses are as follows (in thousands):

			Valuation
	Allowance for		Adjustments
	Doubtful		on Financing		Total
	Accounts		Receivables		Allowance for
	Operating Leases		Notes Receivable		Credit Losses
Balance December 31, 2017	$	44	$	12	$	56
Reversal of provision for credit losses		(44)		(12)		(56)
Balance June 30, 2018	$	—	$	—	$	—
Balance December 31, 2018	$	—	$	67	$	67
Provision for (reversal of) credit losses		17		13		30
Write-off		—		(80)		(80)
Balance June 30, 2019	$	17	$	—	$	17

The Company’s allowance for credit losses (related solely to financing receivables) and its recorded investment in financing receivables as of June 30, 2019 was zero and December 31, 2018 were as follows (in thousands):

	Notes
December 31, 2018	Receivable
Allowance for credit losses:
Ending balance	$	67
Ending balance: individually evaluated for impairment	$	67
Ending balance: collectively evaluated for impairment	$	—
Financing receivables:
Ending balance	$	—
Ending balance: individually evaluated for impairment	$	—
Ending balance: collectively evaluated for impairment	$	—

The Company evaluates the credit quality of its financing receivables on a scale equivalent to the following quality indicators related to corporate risk profiles:

Pass – Any account whose lessee/debtor, co-lessee/debtor or any guarantor has a credit rating on publicly traded or privately placed debt issues as rated by Moody’s or S&P for either Senior Unsecured debt, Long Term Issuer rating or Issuer rating that are in the tiers of ratings generally recognized by the investment community as constituting an Investment Grade credit rating; or, has been determined by the Manager to be an Investment Grade Equivalent or High Quality Corporate Credit per its Credit Policy or has a Not Rated internal rating by the Manager and the account is not considered by the Chief Credit Officer of the Manager to fall into one of the three risk profiles below.

14

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Special Mention – Any traditional corporate type account with potential weaknesses (e.g. large net losses or major industry downturns) or, any growth capital account that has less than three months of cash as of the end of the calendar quarter to fund their continuing operations. These accounts deserve management’s close attention. If left uncorrected, those potential weaknesses may result in deterioration of the Fund’s receivable at some future date.

Substandard – Any account that is inadequately protected by the current worth and paying capacity of the borrower or of the collateral pledged, if any. Accounts that are so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Fund will sustain some loss as the likelihood of fully collecting all receivables may be questionable if the deficiencies are not corrected. Such accounts are on the Manager’s Credit Watch List.

Doubtful – Any account where the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Accordingly, an account that is so classified is on the Manager’s Credit Watch List, and has been declared in default and the Manager has repossessed, or is attempting to repossess, the equipment it financed. This category includes impaired notes and leases as applicable.

As of June 30, 2019 and December 31, 2018, the Company’s financing receivables and its related investments by credit quality indicator and by class of financing receivables are as follows (excludes initial direct costs) (in thousands):

	Notes Receivable
	June 30,		December 31,
	2019		2018
Pass	$	—	$	—
Special mention		—		—
Substandard		—		—
Doubtful		—		67
Total	$	—	$	67

As of June 30, 2019, there were no impaired investment in financing receivables and as of December 31, 2018, the Company’s impaired investment in financing receivables were as follows (in thousands):

	December 31, 2018
			Unpaid				Average
	Recorded		Principal		Related		Recorded		Interest Income
	Investment		Balance		Allowance		Investment		Recognized
With no related allowance recorded
Notes receivable	$	—	$	—	$	—	$	—	$	—
With an allowance recorded
Notes receivable		67		67		67		—		—
Total	$	67	$	67	$	67	$	—	$	—

As of June 30, 2019, there  were no aged investment in financing  receivables and as of December 31, 2018, investment in financing receivables is aged as follows (in thousands):

													Recorded
											Total		Investment>90
	31‑60 Days		61‑90 Days		Greater Than		Total				Financing		Days and
December 31, 2018	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	67	$	67	$	—

15

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

5. Equipment under operating leases, net:

The Company’s equipment under operating leases, net consists of the following (in thousands):

					Depreciation/
					Amortization
	Balance		Reclassifications		Expense or		Balance
	December 31,		& Additions /		Amortization		June 30,
	2018		Dispositions		of Leases		2019
Equipment under operating leases, net	$	20,277	$	(1,719)	$	(1,791)	$	16,767
Net investment in direct financing leases		5		(5)		—		—
Assets held for sale or lease, net		2,463		1,478		—		3,941
Initial direct costs, net of accumulated amortization of $182 at     June 30, 2019 and $182 at December 31, 2018		32		—		—		32
Total	$	22,777	$	(246)	$	(1,791)	$	20,740

Impairment of equipment under operating leases, net:

Depreciation expense are the following (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Depreciation of operating lease assets	$	909	$	1,094	$	1,791	$	2,209

For the respective three and six months ended June 30, 2019 and 2018, the Company did not record any impairment losses.

Recorded values of the Company’s leased asset portfolio are reviewed each quarter to confirm the reasonableness of established residual values and to determine whether there is indication that an asset impairment might have taken place.

The Company uses a variety of sources and considers many factors in evaluating whether the respective book values of its assets are appropriate. In addition, the Company may direct a residual value review at any time if it becomes aware of issues regarding the ability of a lessee to continue to make payments on its lease contract. An impairment loss is measured and recognized only if the estimated undiscounted future cash flows of the asset are less than their net book value. The estimated undiscounted future cash flows are the sum of the residual value of the asset at the end of the asset’s lease contract and undiscounted future rents from the existing lease contract, if any. The residual value assumes, among other things, that the asset is utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the marketplace are disregarded and it is assumed that there is no necessity either to dispose of a significant number of the assets, if held in quantity, simultaneously or to dispose of the asset quickly. Impairment is measured as the difference between the fair value (as determined by a valuation method using discounted estimated future cash flows, third party appraisals or comparable sales of similar assets as applicable based on asset type) of the asset and its carrying value on the measurement date. Upward adjustments for impairments recognized in prior periods are not made in any circumstances.

The Company utilizes a straight-line depreciation method for equipment in all of the categories currently in its portfolio of lease transactions.IDC amortization expense related to the Company’s operating leases was $0 for both three and six months ended June 30, 2019, and was $16 thousand for both three and six months ended June 30, 2018 (see Note 3).

16

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

All of the Company’s leased property was acquired beginning in December 2011 through April 2015.

Operating leases:

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

	Balance						Balance
	December 31,				Reclassifications		June 30,
	2018		Additions		or Dispositions		2019
Marine vessel	$	19,410	$	—	$	—	$	19,410
Manufacturing		7,836		—		—		7,836
Transportation, rail		7,686		—		(2,591)		5,095
Facility – other		5,084		—		—		5,084
Agriculture		2,112		—				2,112
Construction		2,009		—				2,009
Other		1,983		—		(770)		1,213
		46,120		—		(3,361)		42,759
Less accumulated depreciation		(25,843)		(1,791)		1,642		(25,992)
Total	$	20,277	$	(1,791)	$	(1,719)	$	16,767

The average estimated residual value for assets on operating leases was 20% and 34% on the assets’ original cost on June 30, 2019 and December 31, 2018, respectively. There were no operating leases on non-accrual status as of June 30, 2019 and 2018.

Direct financing leases:

Such amounts are included in other assets, with related revenues reflected on the income statement under other revenues. Direct financing lease amounts, and related disclosures, are immaterial as of and for both the quarter ended June 30, 2019 and the year ended December 31, 2018.

There were no investments in direct financing leases in non-accrual status at June 30, 2019 and December 31, 2018. 

As June 30, 2019, the aggregate amounts of future minimum operating lease payments receivable are as follows ( in thousands):

	Operating
	Leases
Six months ending December 31, 2019	$	1,544
Year ending  December 31, 2020		2,342
2021		2,037
2022		1,902
2023		1,176
2024		254
Thereafter		16
	$	9,271

17

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of June 30, 2019, the respective useful lives of each category of lease assets in the Company’s portfolio are as follows (in years):

Equipment category	Useful Life
Transportation, rail	35 – 50
Marine vessel	20 – 30
Manufacturing	10 – 15
Agriculture	7 – 10
Construction	7 – 10
Facility - other	7 - 10
Other	7 - 10

6. Related party transactions:

The terms of the Operating Agreement provide that the Managing Member and/or affiliates are entitled to receive certain fees for equipment management and resale and for management of the Company.

The Operating Agreement allows for the reimbursement of costs incurred by the Managing Member and/or affiliates for providing administrative services to the Company. Administrative services provided include Company accounting, investor relations, legal counsel and equipment financing documentation. The Managing Member is not reimbursed for services whereby it is entitled to receive a separate fee as compensation for such services, such as management of investments.

Each of AFS and ATEL Leasing Corporation (“ALC”) is a wholly-owned subsidiary of ATEL Capital Group and performs services for the Company. Acquisition services, equipment management, lease administration and asset disposition services are performed by ALC; investor relations, communications and general administrative services are performed by AFS.

Cost reimbursements to the Managing Member or its affiliates are based on its costs incurred in performing administrative services for the Company. These costs are allocated to each managed entity based on certain criteria such as total assets, number of investors or contributed capital based upon the type of cost incurred. The Managing Member believes that the costs reimbursed are the lower of (i) actual costs incurred on behalf of the Company or (ii) the amount the Company would be required to pay independent parties for comparable administrative services in the same geographic location.

During the respective three and six months ended June 30, 2019 and 2018, the Managing Member and/or affiliates earned fees and billed for reimbursements of costs and expenses pursuant to the Operating Agreement as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Administrative costs reimbursed to Managing Member and/or affiliates	$	132	$	220	$	292	$	457
Asset management fees to Managing Member		35		(63)		105		148
	$	167	$	157	$	397	$	605

18

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

7. Non-recourse debt:

At June 30, 2019, non-recourse debt consists of notes payable to financial institutions. The note payments are due in monthly installments. Interest on the notes range from 3.40% to 3.66% per annum. The notes are secured by assignments of lease payments and pledges of assets. At June 30, 2019, gross operating lease rentals and future payments on direct financing leases totaled approximately $5.2 million over the remaining lease terms and the carrying value of the pledged assets is $11.2 million. The notes mature from 2019 through 2024.

The non-recourse debt does not contain any material financial covenants. The debt is secured by a lien granted by the Company to the non-recourse lenders on (and only on) the discounted lease transactions. The lenders have recourse only to the following collateral: the specific leased equipment; the related lease chattel paper; the lease receivables; and proceeds of the foregoing items. The non-recourse obligation is payable solely out of the respective specific security and the Company does not guarantee (nor is the Company otherwise contractually responsible for) the payment of the non-recourse debt as a general obligation or liability of the Company. Although the Company does not have any direct or general liability in connection with the non-recourse debt apart from the security granted, the Company is directly and generally liable and responsible for certain representations, warranties, and covenants made to the lenders, such as warranties as to genuineness of the transaction parties’ signatures, as to the genuineness of the respective lease chattel paper or the transaction as a whole, or as to the Company’s good title to or perfected interest in the secured collateral, as well as similar representations, warranties and covenants typically provided by non-recourse borrowers and customary in the equipment finance industry, and are viewed by such industry as being consistent with non-recourse discount financing obligations. Accordingly, as there are no financial covenants or ratios imposed on the Company in connection with the non-recourse debt, the Company has determined that there are no material covenants with respect to the non-recourse debt that warrant footnote disclosure.

Future minimum payments of non-recourse debt are as follows (in thousands):

	Principal		Interest		Total
Six months ending December 31, 2019	$	770	$	77	$	847
Year ending December 31, 2020		959		123		1,082
Year ending December 31, 2021		946		91		1,037
Year ending December 31, 2022		979		58		1,037
Year ending December 31, 2023		1,012		25		1,037
Year ending December 31, 2024		172		1		173
Total	$	4,838	$	375	$	5,213

8. Senior long-term debt:

As of December 31, 2018, $2.1 million of senior long-term debt consisted of a note payable to a lender. Such debt was utilized during the fourth quarter of 2013 to partially fund the marine vessel and related bareboat charter purchased by the Fund and its affiliate, ATEL 14, LLC. The note bore interest at a fixed-rate of 3.5% per annum, to accrue in arrears on a monthly basis. On May 20, 2019,  a  non-recourse promissory note approximating $9.2 million was executed. The non-recourse promissory note was split evenly between the Fund and its affiliate, ATEL 14, LLC for $4.6 million and were used to pay off the senior long-term debt. The note bore interest at a fixed rate of 3.4% per annum. The non-recourse promissory note is to be serviced by the cash flows generated under a renewed bareboat charter.

19

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

9. Borrowing facilities:

The Company is party to a $75 million revolving credit facility (the “Credit Facility”), with a syndicate of financial institutions as lenders.  Other parties to the Credit Facility include ATEL Capital Group and certain subsidiaries and affiliated funds.  Set to expire on June 30, 2019, the Credit Facility was temporarily extended while an amendment was finalized reducing the availability to $55 million with a scheduled expiration of June 30, 2021. The joint Credit Facility is comprised of a working capital facility, an acquisition facility (the “Acquisition Facility”) and a warehouse facility (the “Warehouse Facility”), the Company and affiliates, and a venture facility.

The lending syndicate providing the Credit Facility has a blanket lien on all of the participant’s assets as collateral for any and all borrowings under the Acquisition Facility, and on a pro-rata basis under the Warehouse Facility. Such Credit Facility includes certain financial covenants.

As of June 30, 2019 and December 31, 2018, the total ATEL Capital Group and subsidiaries and affiliated funds borrowings under the Credit Facility were as follows (in thousands):

	June 30,		December 31,
	2019		2018
Total available under the financing arrangement	$	75,000	$	75,000
Amount borrowed by affiliated partnerships and limited liability companies under the
working capital, acquisition and warehouse facilities		(880)		(2,110)
Total remaining available under the working capital, acquisition and warehouse facilities	$	74,120	$	72,890

The Company and its affiliates paid an annual commitment fee to have access to this line of credit. And, as of June 30, 2019, the Company was in compliance with all material financial covenants, and with all other material conditions of the Credit Facility during the tenure of participation.

The interest rate on the Credit Facility is based on either the LIBOR/Eurocurrency rate of 1‑, 2‑, 3‑ or 6‑month maturity plus a lender designated spread, or the bank’s Prime rate, which re-prices daily. Principal amounts of loans made under the Credit Facility that are prepaid may be re-borrowed on the terms and subject to the conditions set forth under the Credit Facility.

Warehouse facility

To hold the assets under the Warehousing Facility prior to allocation to specific investor programs, a Warehousing Trust must have been entered into by the Company, AFS, ALC, and certain of the affiliated partnerships and limited liability companies.

The Warehousing Trust is used by the Warehouse Facility borrowers to acquire and hold, on a short-term basis, certain lease transactions that meet the investment objectives of each of such entities. Each of the leasing programs sponsored by AFS and ALC is a pro rata participant in the Warehousing Trust, as described below. When a program no longer has a need for short-term financing provided by the Warehousing Facility, it is removed from participation, and as new leasing investment entities are formed by AFS and ALC and commence their acquisition stages, these new entities are added.

20

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

As of June 30, 2019, the investment program participants were ATEL 15, LLC, ATEL 16, LLC and ATEL 17, LLC. Pursuant to the Warehousing Trust, the benefit of the lease transaction assets, and the corresponding liabilities under the Warehouse Facility, inure to each of such entities based upon each entity’s pro-rata share in the Warehousing Trust estate. The “pro-rata share” is calculated as a ratio of the net worth of each entity over the aggregate net worth of all entities benefiting from the Warehousing Trust estate, excepting that the trustees, AFS and ALC, are both jointly and severally liable for the pro-rata portion of the obligations of each of the affiliated limited liability companies participating under the Warehouse Facility.

Transactions are financed through this Warehouse Facility only until the transactions are allocated to a specific program for purchase or are otherwise disposed by AFS and ALC. When a determination is made to allocate the transaction to a specific program for purchase by the program, the purchaser repays the debt associated with the asset, either with cash or by means of proceeds of a draw under the Acquisition Facility, and the asset is removed from the Warehouse Facility collateral, and ownership of the asset and any debt obligation associated with the asset are assumed solely by the purchasing entity.

10. Commitments:

At June 30, 2019, there were no commitments to purchase lease assets and to fund investments in notes receivable.

11. Members’ Capital:

A total of 6,542,557 Units were issued and outstanding at June 30, 2019 , including the 50 Units issued to the initial Member (Managing Member). The Fund was authorized to issue up to 15,000,000 Units in addition to the Units issued to the initial Member.

Distributions to the Other Members for the three and six months ended June 30, 2019 and 2018 were as follows (in thousands, except as to Units and per Unit data):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Distributions declared	$	1,479	$	—	$	1,486	$	1,303
Weighted average number of Units outstanding		6,542,557		6,542,557		6,542,557		6,545,582
Weighted average distributions per Unit	$	0.23	$	—	$	0.23	$	0.20

12. Fair value measurements:

Under applicable accounting standards, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

At June 30, 2019, the Company’s investment in securities and warrants were measured on a recurring basis. At December 31, 2018, only the Company’s warrants were measured on a recurring basis. In addition, certain notes receivable deemed impaired were measured at fair value on a non-recurring basis as of June 30, 2019 and December 31, 2018.

21

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

The measurement methodology is as follows:

Warrants (recurring)

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are carried on the balance sheet at an estimated fair value at the end of the period. The valuation of the warrants was determined using a Black-Scholes formulation of value based upon the stock price(s), the exercise price(s), the volatility of comparable venture companies, time to maturity and a risk free interest rate for the term(s) of the warrant exercise(s). The calculated fair value of the Fund’s warrant portfolio approximated at $195 thousand and $376 thousand at June 30, 2019 and December 31, 2018, respectively. Such valuations are classified within Level 3 of the valuation hierarchy.

The fair value of warrants that were accounted for on a recurring basis classified as Level 3 are as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Fair value of warrants at beginning of period	$	208	$	387	$	376	$	387
Unrealized loss on fair market valuation of warrants		(13)		(2)		(13)		(2)
Warrants converted to securities		—		—		(168)		—
Fair value of warrants at end of period	$	195	$	385	$	195	$	385

Investment securities (recurring)

The Company’s investment securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company’s results of operations. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital.

The fair value of investment securities that were accounted for on a recurring basis as of the three and six months ended June 30, 2019 and classified as Level 1 are as follows (in thousands):

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2019		2018		2019		2018
Fair value of securities at the beginning of period	$	91	$	240	$	101	$	101
Unrealized gains on fair valuation of securities		4		(48)		(6)		91
Fair value of investment securities at the end of period	$	95	$	192	$	95	$	192

Impaired off-lease equipment (non-recurring)

During the three and six months ended June 30, 2019 and 2018, the Company had no recorded fair value adjustments to reduce the cost basis of certain-off lease construction equipment (assets) deemed impaired.

Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the fair value of the impaired lease assets were classified within Level 3 of the valuation hierarchy as the data source utilized for the valuation of such assets reflect significant inputs that are unobservable in the market. Such valuation utilizes a market approach technique and uses inputs that reflect the sales price of similar assets sold by affiliates and/or information from third party remarketing agents not readily available in the market.

22

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Impaired notes receivable (non-recurring)

The fair value of the Company’s notes receivable, when impairment adjustments are required, is estimated using either third party appraisals or estimations of the value of collateral (for collateral dependent loans) or discounted cash flow analyses (by discounting estimated future cash flows) using the effective interest rate contained in the terms of the original loan.

During the six months ended June 30, 2019, the Company recorded fair value adjustment totaling $13 thousand relative to two impaired notes. During the year ended December 31, 2018, the Company recorded fair value adjustments totaling $67 thousand relative to six impaired notes.

The fair value adjustments recorded in both years were non-recurring and were based upon an estimated valuation of underlying collateral. Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the fair value of the impaired notes receivable is classified within Level 3 of the valuation hierarchy. The valuation utilizes a market approach technique and uses inputs from third party appraisers that utilize current market transactions as adjusted for certain factors specific to the underlying collateral.

The following tables summarize the valuation techniques and significant unobservable inputs used for the Company’s recurring fair value calculation categorized as Level 3 in the fair value hierarchy at June 30, 2019 and December 31, 2018:

June 30, 2019
	Valuation	Valuation	Unobservable	Range of
Name	Frequency	Technique	Inputs	Input Values
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.12-  $12.92
			Exercise price	$0.10 - $1,000.00
			Time to maturity (in years)	1.12 - 6.58
			Risk-free interest rate	1.75% - 1.93%
			Annualized volatility	35.36% - 96.59%

December 31, 2018
	Valuation	Valuation	Unobservable	Range of
Name	Frequency	Technique	Inputs	Input Values
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.00 - $9.98
			Exercise price	$0.10 - $1,000.00
			Time to maturity (in years)	1.62 - 7.08
			Risk-free interest rate	2.46% - 2.596%
			Annualized volatility	35.36% - 91.94%

The following disclosure of the estimated fair value of financial instruments is made in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification. Fair value estimates, methods and assumptions, set forth below for the Company’s financial instruments, are made solely to comply with the requirements of the Financial Instruments Topic and should be read in conjunction with the Company’s financial statements and related notes.

23

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

The Company has determined the estimated fair value amounts by using market information and valuation methodologies that it considers appropriate and consistent with the fair value accounting guidance. Considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize or has realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Cash and cash equivalents

The recorded amounts of the Company’s cash and cash equivalents approximate fair value because of the liquidity and short-term maturity of these instruments.

Notes receivable

The fair value of the Company’s notes receivable is generally estimated based upon various methodologies deployed by financial and credit management including, but not limited to, credit analysis, third party appraisal and/or discounted cash flow analysis based upon current market valuation techniques and market rates for similar types of lending arrangements, which may consider adjustments for impaired loans as deemed necessary.

Investment in securities

The Company’s purchased securities registered for public sale with readily determinable fair value are carried at fair value. These investment securities are valued based on their quoted market prices.

Non-recourse and Senior long-term debt

The fair value of the Company’s non-recourse debt is estimated using discounted cash flow analyses, based upon current market borrowing rates for similar types of borrowing arrangements.

Commitments and Contingencies

Management has determined that no recognition for the fair value of the Company’s loan commitments is necessary because their terms are made on a market rate basis and require borrowers to be in compliance with the Company’s credit requirements at the time of funding.

The fair value of contingent liabilities (or guarantees) is not considered material because management believes there has been no event that has occurred wherein a guarantee liability has been incurred or will likely be incurred.

24

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

The following tables present estimated fair values of the Company’s financial instruments in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification at June 30, 2019 and December 31, 2018 (in thousands):

	Fair Value Measurements at June 30, 2019
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	3,820	$	3,820	$	—	$	—	$	3,820
Investment in securities		95		95		—		—		95
Warrants, fair value		195		—		—		195		195
Financial liabilities:
Non-recourse debt		4,838		—		—		4,885		4,885

	Fair Value Measurements at December 31, 2018
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	1,716	$	1,716	$	—	$	—	$	1,716
Investment in securities		127		127		—		—		127
Warrants, fair value		376		—		—		376		376
Financial liabilities:
Non-recourse debt		1,191		—		—		1,187		1,187
Senior long-term debt		2,068		—		—		2,456		2,456

25

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

Statements contained in this Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) and elsewhere in this Form 10-Q, which are not historical facts, may be forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. In particular, economic recession and changes in general economic conditions, including fluctuations in demand for equipment, lease rates, and interest rates, may result in delays in investment and reinvestment, delays in leasing, re-leasing, and disposition of equipment, and reduced returns on invested capital. The Company’s performance is subject to risks relating to lessee and borrower defaults and the creditworthiness of its lessees and borrowers. The Company’s performance is also subject to risks relating to the value of its equipment at the end of its leases, which may be affected by the condition of the equipment, technological obsolescence and the markets for new and used equipment at the end of lease terms. Investors are cautioned not to attribute undue certainty to these forward-looking statements, which speak only as of the date of this Form 10-Q. We undertake no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect the occurrence of unanticipated events, other than as required by law.

Overview

ATEL 15, LLC (the “Company” or the “Fund”) was formed under the laws of the state of California on March 4, 2011 for the purpose of raising capital and originating equipment financing transactions and acquiring equipment to engage in equipment leasing and sales activities. The offering of the Fund was granted effectiveness by the Securities and Exchange Commission as of October 28, 2011.

As of June 30, 2019, cumulative gross contributions, less rescissions and repurchases (net of distributions paid and allocated syndication costs, as applicable), totaling $66.0 million (inclusive of the $500 initial Member’s capital investment) had been received. As of the same date, 6,542,557 Units were issued and outstanding.

Results of Operations

The Fund had net income of $259 thousand and $376 thousand for the three and six months ended June 30, 2019.

Total revenues for the quarter were $1.7 million and a cumulative $3.1 million for the year to date. The main drivers of such revenues were from operating lease rents and a termination settlement in favor of the fund recorded as other income during the second quarter.  Operating lease rents for the quarter were $1.1 million and $2.5 million for the year to date period.  This trend is indicative of a Fund in its operating stage where lease assets mostly continue in revenue generating deployment until scheduled or early lease termination offers an ability for renewal, re-marketing or disposition or disposition of the leased asset.

26

Total operating expenses for the quarter were $1.4 million and a cumulative $2.7 million for the year to date.  The main components of these operating expenses represent depreciation of operating lease assets, cost reimbursements to managing member and/or affiliates, asset management fees to the managing member, railcar maintenance, interest expense and professional fees. Depreciation of operating lease assets for the quarter was $909 thousand and $1.8 million for the year to date period.  This trend is consistent with Fund in its operating stage where lease assets are mostly in service and in the midst of their respective normal useful and depreciable lives.  Cost reimbursements to managing member and/or affiliates were  $132 thousand and $292 thousand for the respective three and six months periods ended June 30, 2019 and were reflective of consistent baseline allocations of common costs among the Fund and its affiliates. Asset management fees to the managing member are calculated based upon gross operating revenues and cash from sale or refinancing of lease assets and, while indicative of the consistency of such relationship, amounted to  $35 thousand and a cumulative $105 thousand for the year to date.  Railcar maintenance charges reflect costs incurred by third party managers in providing for the general upkeep of the Fund’s railcar fleet. Amounts expensed for the quarter $9 thousand and year to date $19 thousand periods represent an expected consistency. Interest expense recorded in non-recourse, as well as the Fund’s participation in a joint credit facility with certain affiliated Funds was incurred to acquire lease assets. Expense amounts incurred as professional fees $50 thousand and $130 thousand for the respective periods represent direct Fund 15 – specific core costs of preparation, printing, filing and distribution of annual Form 1065 tax and shareholder reports on Form K-1.  In addition, such costs also include costs attributable to the annual/quarterly tax preparation, valuation reports and mandated periodic regulatory filings with the SEC.

Regularly scheduled distributions declared and/or paid during the current three-  and  six-month periods totaled both $1.6 million.

Cash balances increased by $1.3 million and $2.1 million during the current quarter and year to date period, respectively. This was mainly the result of the aforementioned items of net income, renewed non-recourse proceeds, gain on sales of lease assets impacted by the proceeds from sales of lease and early termination of notes of $37 thousand and $227 thousand during the respective quarter and year to date periods; and the likewise paydowns of assorted obligations of debt.

Compliance with debt covenants

The Credit Facility includes certain financial and non-financial covenants applicable to each borrower, including the Company. Such covenants include covenants typically found in credit facilities of the size and nature of the Credit Facility, such as accuracy of representations, good standing, absence of liens and material litigation, etc. The Company was in compliance with all applicable covenants under the Credit Facility as of June 30, 2019. The Company considers certain financial covenants to be material to its ongoing use of the Credit Facility and these covenants are described below.

Material financial covenants

Under Credit Facility, the Company is required to maintain a specific tangible net worth, to comply with a leverage ratio and an interest coverage ratio, and to comply with other terms expressed in the Credit Facility, including limitation on the incurrence of additional debt and guaranties, defaults, and delinquencies.

As of June 30, 2019, the material financial covenants are summarized as follows:

Minimum Tangible Net Worth: $10.0 million

Leverage Ratio (leverage to Tangible Net Worth): Not to exceed 1.25 to 1

Collateral Value: Collateral value under the Warehouse Facility must be no less than the outstanding borrowings under that facility

EBITDA to Interest Ratio: Not to be less than 2 to 1 for the four fiscal quarters just ended

27

“EBITDA” is defined under the Credit Facility as, for the relevant period of time (1) gross revenues (all payments from leases and notes receivable) for such period minus (2) expenses deducted in determining net income for such period plus (3) to the extent deducted in determining net income for such period (a) provision for income taxes and (b) interest expense, and (c) depreciation, amortization and other non-cash charges. Extraordinary items and gains or losses on (and proceeds from) sales or dispositions of assets outside of the ordinary course of business are excluded in the calculation of EBITDA. “Tangible Net Worth” is defined as, as of the date of determination, (i) the net worth of the Company, after deducting therefrom (without duplication of deductions) the net book amount of all assets of the Company, after deducting any reserves and other amounts for assets which would be treated as intangibles under accounting principles generally accepted in the United States of America (“GAAP”), and after certain other adjustments permitted under the agreements.

The financial covenants referred to above are applicable to the Company only to the extent that the Company has borrowings outstanding under the Credit Facility. The Company was in compliance with these financial covenants under the Credit Facility with a minimum Tangible Net Worth, leverage ratio and interest coverage ratio, as calculated per the Credit Facility agreement of $20.1 million, 0.24 to 1, and 34.70 to 1, respectively, as of June 30, 2019. As such, as of June 30, 2019, the Company was in compliance with all such material financial covenants.

Reconciliation to GAAP of EBITDA

For purposes of compliance with the Credit Facility covenants, the Company uses a financial calculation of EBITDA, as defined therein, which is a non-GAAP financial performance measure. The EBITDA is utilized by the Company to calculate its debt covenant ratios.

The following is a reconciliation of net loss to EBITDA, as defined in the loan agreement, for the twelve months ended June 30, 2019 (in thousands):

Net income	$	683
Interest expense		139
Depreciation of operating lease assets		3,788
Amortization of IDC		23
Provision ( Reversal of provision ) for credit losses		97
Provision for loss on investment in securities		58
Unrealized gain on fair valuation of warrants		22
Principal payments received on direct financing leases		4
Principal payments received on notes receivable		9
EBITDA (for Credit Facility financial covenant calculation only)	$	4,823

Distributions

The Unitholders of record are entitled to certain distributions as provided under the Operating Agreement. The Company commenced periodic distributions beginning with the month of January 2012. Additional distributions have been made consistently through June 30, 2019.

Cash distributions were made by the Fund to Unitholders of record as of December 31, 2018 and paid through June 30, 2019. Distributions may be characterized for tax, accounting and economic purposes as a return of capital, a return on capital (including escrow interest) or a portion of each. Generally, the portion of each cash distribution by a company which exceeds its net income for the fiscal period would constitute a return of capital.

28

The Fund is required by the terms of its Operating Agreement to distribute the net cash flow generated by its investments in certain minimum amounts during the Reinvestment Period before it can reinvest its operating cash flow in additional portfolio assets. See the discussion in the ATEL 15, LLC Prospectus dated October 28, 2011 (“Prospectus”) under “Income, Losses and Distributions — Reinvestment.” Accordingly, the amount of cash flow from Fund investments distributed to Unitholders will not be available for reinvestment in additional portfolio assets. The cash distributions were based on current and anticipated gross revenues from the leases and loans acquired. During the Fund’s acquisition and operating stages, the Fund may incur short term borrowing to fund regular distributions of such gross revenues to be generated by newly acquired transactions during their respective initial fixed terms. As such, all Fund periodic cash distributions made during these stages have been, and are expected in the future to be, based on the Fund’s actual and anticipated gross revenues to be generated from the binding initial terms of the leases and loans acquired.

As net cash flows from operations are anticipated to fluctuate during the remaining life of the Fund, distributions will only be paid on an annual basis beginning with March of 2018. A distribution equal to 9% of the total original capital contribution was paid in June 2019.  

The remaining amount to be distributed for 2019 will be determined in December 2019 and paid in January 2020. The amount of all future distributions is dependent upon the timing of lease payments, renewals and asset sales, which will vary during the year. The following table summarizes distribution activity for the Fund from inception through June 30, 2019 (in thousands, except as to Units and per Unit data):

														Total		Weighted
		Return of				Distribution				Total				Distribution		Average Units
Distribution Period (1)	Paid	Capital				of Income				Distribution				per Unit(2)		Outstanding(3)
Monthly and quarterly distributions
Oct 2011 – Dec 2011 (Distribution of escrow interest)	Feb 2012 – Jun 2012	$	—			$	—			$	—				n/a	n/a
Jan 2012 – Nov 2012	Feb 2012 – Dec 2012		1,173				—				1,173				0.79	1,476,249
Dec 2012 – Nov 2013	Jan 2013 – Dec 2013		4,191				—				4,191				0.88	4,758,784
Dec 2013 – Nov 2014	Jan 2014 – Dec 2014		5,952				—				5,952				0.90	6,620,428
Dec 2014 – Nov 2015	Jan 2015 – Dec 2015		5,951				—				5,951				0.90	6,612,560
Dec 2015 – Nov 2016	Jan 2016 – Dec 2016		5,934				—				5,934				0.90	6,606,921
Dec 2016 – Nov 2017	Jan 2017 – Dec 2017		5,892				—				5,892				0.90	6,567,800
Dec 2017 – Feb 2018	Jan 2018 – Dec 2018		1,918				—				1,918				0.29	6,554,450
Mar 2018 - Jun 2019	Jan 2019 - Jun 2019		1,486				—				1,486				0.23	6,542,557
		$	32,497			$	—			$	32,497			$	5.79
Source of distributions
Lease and loan payments and sales proceeds received		$	32,497	100.00	%	$	—	0.00	%	$	32,497	100.00	%
Interest Income			—	0.00	%		—	0.00	%		—	0.00	%
Debt against non-cancellable firm term payments on leases and loans			—	0.00	%		—	0.00	%		—	0.00	%
		$	32,497	100.00	%	$	—	0.00	%	$	32,497	100.00	%

(1) Investors may elect to receive their distributions either monthly or quarterly (See "Timing and Method of Distributions" on Page 67 of the Prospectus).

(2) Total distributions per Unit represents the per Unit distribution rate for those units which were outstanding for all of the applicable period.

(3) Balances shown represent weighted average units for the period from January 1, 2012 to November 30, 2012, December 1, 2012 to November 30, 2013, December 1, 2013 to November 30, 2014, December 1, 2014 to November 30, 2015, December 1, 2015 to November 30, 2016, December 1, 2016 to November 30, 2017, December 1, 2017 to February 28, 2019 and March 1, 2018 to June 30, 2019, respectively.

Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies

At June 30, 2019, there were no commitments to purchase lease assets and to fund investments in notes receivable.

Off-Balance Sheet Transactions

None.

Recent Accounting Pronouncements

For information on recent accounting pronouncements, see Note 2 Summary of Significant Accounting Policies.

29

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, the Company evaluates its estimates, which are based upon historical experiences, market trends and financial forecasts, and upon various other assumptions that management believes to be reasonable under the circumstances and at that certain point in time. Actual results may differ, significantly at times, from these estimates under different assumptions or conditions.

The Company’s significant accounting policies are described in its Annual Report on Form 10-K for the year ended December 31, 2018. There have been no material changes to the Company’s significant accounting policies since December 31, 2018.

Item 4. Controls and procedures.

Evaluation of disclosure controls and procedures

The Company’s Managing Member’s Chief Executive Officer, and Executive Vice President and Chief Financial and Operating Officer (“Management”), evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on the evaluation of the Company’s disclosure controls and procedures, the Chief Executive Officer and Executive Vice President and Chief Financial and Operating Officer concluded that as of the end of the period covered by this report, the design and operation of these disclosure controls and procedures were effective.

The Company does not control the financial reporting process, and is solely dependent on the Management of the Managing Member, who is responsible for providing the Company with financial statements in accordance with generally accepted accounting principles in the United States. The Managing Member’s disclosure controls and procedures, as they are applicable to the Company, means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in internal control

There were no changes in the Managing Member’s internal control over financial reporting, as it is applicable to the Company, during the quarter ended June 30, 2019 that have materially affected, or are reasonably likely to materially affect, the Managing Member’s internal control over financial reporting, as it is applicable to the Company.

30

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

In the ordinary course of conducting business, there may be certain claims, suits, and complaints filed against the Managing Member. In the opinion of management, the outcome of such matters, if any, will not have a material impact on the Managing Member’s financial position or results of operations.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

(a)    Documents filed as a part of this report

1.     Financial Statement Schedules

All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.

2.     Other Exhibits

31.1	Certification of Dean L. Cash
31.2	Certification of Paritosh K. Choksi
32.1	Certification Pursuant to 18 U.S.C. section 1350 of Dean L. Cash
32.2	Certification Pursuant to 18 U.S.C. section 1350 of Paritosh K. Choksi
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

31

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.

Date: August 13, 2019

ATEL 15, LLC

(Registrant)

		By:	ATEL Financial Services, LLC
			Managing Member of Registrant
By:	/s/ Dean L. Cash
	Dean L. Cash
	President and Chief Executive Officer of ATEL Financial Services, LLC (Managing Member)
By:	/s/ Paritosh K. Choksi
	Paritosh K. Choksi
	Executive Vice President and Chief Financial Officer and Chief Operating Officer of ATEL Financial Services, LLC (Managing Member)
By:	/s/ Samuel Schussler
	Samuel Schussler
	Senior Vice President and Chief Accounting Officer of ATEL Financial Services, LLC (Managing Member)

32

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dean L. Cash, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of ATEL 15, LLC;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 13, 2019

/s/ Dean L. Cash

Dean L. Cash

Chairman of the Board, President and Chief

Executive Officer of ATEL Managing Member, LLC (Managing Member)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Paritosh K. Choksi, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of ATEL 15, LLC;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 13, 2019

/s/ Paritosh K. Choksi

Paritosh K. Choksi

Director, Executive Vice President and Chief Financial Officer

and Chief Operating Officer of ATEL Managing Member, LLC (Managing Member)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

§906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ATEL 15, LLC (the “Company”) on Form 10-Q for the period ended June  30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dean L. Cash, Chairman of the Board, President and Chief Executive Officer of ATEL Managing Member, LLC, Managing Member of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

1.      The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.      The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 13, 2019

/s/ Dean L. Cash

Dean L. Cash

Chairman of the Board, President and Chief

Executive Officer of ATEL Managing Member, LLC

(Managing Member)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

§906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ATEL 15, LLC (the “Company”) on Form 10-Q for the period ended June  30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Paritosh K. Choksi, Director, Executive Vice President and Chief Financial Officer and Chief Operating Officer of ATEL Managing Member, LLC, Managing Member of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

1.      The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.      The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 13, 2019

/s/ Paritosh K. Choksi

Paritosh K. Choksi

Director, Executive Vice President and Chief

Financial Officer and Chief Operating Officer

of ATEL Managing Member, LLC (Managing Member)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Jul. 31, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Registrant Name	ATEL 15, LLC
Entity Central Index Key	0001519117
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Shell Company	false
Smaller Reporting Company	true
Entity Units Outstanding		6,542,557

XML

Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
ASSETS
Cash and cash equivalents	$ 3,820	$ 1,716
Accounts receivable, net	31	75
Due from Managing Member and affiliates		1
Investment in securities	320	144
Warrants, fair value	195	376
Equipment under operating leases, net	20,740	22,777
Prepaid expenses and other assets	7	25
Total assets	25,113	25,114
Accounts payable and accrued liabilities:
Due to Managing Member and affiliates	33	42
Other	82	463
Non-recourse debt	4,838	1,191
Senior long-term debt		2,068
Unearned operating lease income	101	61
Total liabilities	5,054	3,825
Commitments and contingencies
Members' capital:
Other Members	20,059	21,289
Total Members' capital	20,059	21,289
Total liabilities and Members' capital	$ 25,113	$ 25,114

XML

Statements of Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Leasing and lending activities:
Operating leases revenue, net	$ 1,080	$ 1,694	$ 2,500	$ 3,349
Interest on notes receivable	13	14	27	18
(Loss) gain on sale of operating lease assets and early termination of notes receivable	(6)	(51)	(1)	1,697
Unrealized gain (loss) on investment in securities	5	(48)	8	91
Unrealized loss on fair value adjustment for warrants	(13)	(2)	(13)	(2)
Other	585	140	591	144
Total revenues	1,664	1,747	3,112	5,297
Expenses:
Depreciation of operating lease assets	909	1,094	1,791	2,209
Asset management fees to managing Member	35	(63)	105	148
Cost reimbursements to Managing Member and/or affiliates	132	220	292	457
Provision for (reversal of) credit losses	23		30	(56)
Impairment losses on investment in securities		16		16
Amortization of initial direct costs		16		34
Interest expense	34	47	63	113
Professional fees	50	27	130	91
Outside services	16	19	42	56
Railcar maintenance	9	14	19	22
Taxes on income and franchise fees	121	5	131	7
Freight and shipping	17		29	67
Other	59	28	104	116
Total expenses	1,405	1,423	2,736	3,280
Net income	259	324	376	2,017
Net income:
Managing Member	119		120	106
Other Members	140	324	256	1,911
Net income	$ 259	$ 324	$ 376	$ 2,017
Net income (loss) per Limited Liability Company Unit (Other Members)	$ 0.02	$ 0.05	$ 0.04	$ 0.29
Weighted Average Limited Liability Company Units	6,542,557	6,542,557	6,542,557	6,545,582

XML

Statements of Changes in Members' Capital - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Beginning Balance	$ 21,398	$ 20,660	$ 21,289	$ 20,434
Repurchases of Units		(2)		(60)
Distributions to Other Members	(1,479)		(1,486)	(1,303)
Distributions to Managing Member	(119)		(120)	(106)
Net income	259	324	376	2,017
Ending Balance	$ 20,059	$ 20,982	$ 20,059	$ 20,982
Other Members [Member]
Beginning Balance (in units)	6,542,557	6,542,557	6,542,557	6,557,057
Beginning Balance	$ 21,398	$ 20,660	$ 21,289	$ 20,434
Repurchases of Units (in units)				(14,500)
Repurchases of Units		(2)		$ (60)
Distributions to Other Members	(1,479)		(1,486)	(1,303)
Net income	$ 140	$ 324	$ 256	$ 1,911
Ending Balance (in units)	6,542,557	6,542,557	6,542,557	6,542,557
Ending Balance	$ 20,059	$ 20,982	$ 20,059	$ 20,982
Managing Member [Member]
Distributions to Managing Member	(119)		(120)	(106)
Net income	$ 119		$ 120	$ 106

XML

Statements of Changes in Members' Capital (Parenthetical) - $ / shares	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Jun. 30, 2018
Other Members [Member]
Distributions to Other Members, per unit	$ 0.23	$ 0.23	$ 0.20

XML

Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Operating activities:
Net income	$ 259	$ 324	$ 376	$ 2,017
Adjustment to reconcile net income to cash provided by operating activities:
Loss (gain) on sales of equipment under operating lease	6	51	1	(1,697)
Depreciation of operating lease assets	909	1,094	1,791	2,209
Amortization of initial direct costs		16		34
Provision for (reversal of) credit losses	23		30	(56)
Impairment losses on investment in securities		16		16
Unrealized (gain) loss on fair value adjustment for investment in securities	(5)	48	(8)	(91)
Unrealized loss on fair value adjustment for warrants	13	2	13	2
Changes in operating assets and liabilities:
Accounts receivable	4	12	14	50
Due from Managing Member and affiliates			1
Prepaid expenses and other assets	7		21	(10)
Due to Managing Member and affiliates	(56)	(63)	(9)	(113)
Accrued distributions to Other Members				(615)
Accounts payable, other	(400)	(96)	(381)	(88)
Accrued liabilities, affiliates		(27)		(243)
Unearned operating lease income	(142)	(156)	40	(65)
Net cash provided by operating activities	618	1,221	1,889	1,350
Investing activities:
Purchase of securities		(2)		(2)
Proceeds from sales of equipment under leases and early termination of notes	50	87	240	4,064
Principal payments received on direct financing leases	2		2
Principal payments received on notes receivable		26		61
Net cash provided by investing activities	52	111	242	4,123
Financing activities:
Borrowing under non-recourse debt	4,624		4,624
Repayments under non-recourse debt	(355)	(901)	(977)	(1,806)
Repayment under credit facility	(2,068)		(2,068)	(2,250)
Repurchases of Units		(2)		(60)
Net cash provided by (used in) financing activities	603	(903)	(27)	(5,525)
Net increase (decrease) in cash and cash equivalents	1,273	429	2,104	(52)
Cash and cash equivalents at beginning of period	2,547	451	1,716	932
Cash and cash equivalents at end of period	3,820	880	3,820	880
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	21	37	29	75
Cash paid during the period for taxes	104	12	121	13
Conversion of warrants to equity securities			168
Other Members [Member]
Operating activities:
Net income	140	$ 324	256	1,911
Financing activities:
Distributions to Members	(1,479)		(1,486)	(1,303)
Managing Member [Member]
Operating activities:
Net income	119		120	106
Financing activities:
Distributions to Members	$ (119)		$ (120)	$ (106)

XML

Organization and Limited Liability Company Matters

6 Months Ended

Jun. 30, 2019

Organization and Limited Liability Company Matters [Abstract]

Organization and Limited Liability Company Matters

1. Organization and Limited Liability Company matters:

ATEL 15, LLC (the “Company” or the “Fund”) was formed under the laws of the state of California on March 4, 2011 for the purpose of raising capital and originating equipment financing transactions and acquiring equipment to engage in equipment leasing and sales activities. The Managing Member of the Company is ATEL Managing Member, LLC (the “Managing Member” or the “Manager”), a Nevada limited liability company. The Managing Member is controlled by ATEL Financial Services (“AFS”), a wholly-owned subsidiary of ATEL Capital Group. The Fund may continue until terminated as provided in the ATEL 15, LLC Amended and Restated Limited Liability Company Operating Agreement dated October 28, 2011 (the “Operating Agreement”). Contributions in the amount of $500 were received as of May 3, 2011, which represented the initial Member’s capital investment. As a limited liability company, the liability of any individual member for the obligations of the Fund is limited to the extent of capital contributions to the Fund by the individual member. The offering of the Company was granted effectiveness by the Securities and Exchange Commission as of October 28, 2011.

As of June 30, 2019, cumulative gross contributions, less rescissions and repurchases (net of distributions paid and allocated syndication costs, as applicable), totaling $66.0 million (inclusive of the $500 initial Member’s capital investment) have been received. As of the same date, 6,542,557 Units were issued and outstanding.

The Company is governed by its Operating Agreement. Pursuant to the terms of the Operating Agreement, the Managing Member and/or its affiliates receives compensation for services rendered and reimbursements for costs incurred on behalf of the Company (See Note 6). The Company is required to maintain reasonable cash reserves for working capital, the repurchase of Units and contingencies. The repurchase of Units is solely at the discretion of the Managing Member.

These unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto contained in the report on Form 10‑K for the year ended December 31, 2018, filed with the Securities and Exchange Commission.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2019

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of significant accounting policies:

Basis of presentation:

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10‑Q as mandated by the Securities and Exchange Commission. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the Managing Member, necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three and six months ended June 30, 2019 and 2018 are not necessarily indicative of the results to be expected for the full year. Certain prior period amounts may have been reclassified to conform to the current period presentation. These reclassifications had no significant effect on the reported financial position or results of operations.

Footnote and tabular amounts are presented in thousands, except as to Units and per Unit data.

In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after June 30, 2019 until the issuance of the financial statements. No events were noted which would require additional disclosure in the footnotes to the financial statements or adjustments thereto.

Cash and cash equivalents:

Cash and cash equivalents include cash in banks and cash equivalent investments such as U.S. Treasury instruments with original and/or purchased maturities of ninety days or less.

Use of Estimates:

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates. Such estimates primarily relate to the determination of residual values at the end of the lease term and expected future cash flows used for impairment analysis purposes, and determination of the allowance for doubtful accounts and reserve for credit losses on notes receivable.

Segment reporting:

The Company is organized into one operating segment for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment in the United States.

The primary geographic region in which the Company seeks leasing and financing opportunities is North America. All of the Company’s current operating revenues for the three and six months ended June 30, 2019 and 2018, and long-lived tangible assets as of June 30, 2019 and December 31, 2018 relate to customers domiciled in the United States.

Accounts receivable:

Accounts receivable represent the amounts billed under operating and direct financing lease contracts, and notes receivable which are currently due to the Company.

Allowances for doubtful accounts are typically established based upon their aging and historical charge off and collection experience and the creditworthiness of specifically identified lessees and borrowers, and invoiced amounts. Accounts receivable deemed uncollectible are generally charged off against the allowance on a specific identification basis. Recoveries of amounts that were previously written-off are recorded as other income in the period received.

Accounts receivable are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management periodically reviews the creditworthiness of companies with lease or note payments outstanding less than 90 days. Based upon management’s judgment, such leases or notes may be placed in non-accrual status. Leases or notes placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid receivable is probable. Until such time, revenues on operating leases are recognized on a cash basis. All payments received on amounts billed under direct financing leases and notes receivable are applied only against outstanding principal balances.

Financing receivables:

In addition to the allowance established for delinquent accounts receivable, the total allowance related solely to financing receivables also includes anticipated impairment charges on notes receivable and direct financing leases.

Notes are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest when due according to the contractual terms of the note agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest when due. If it is determined that a loan is impaired with regard to scheduled payments, the Company will perform an analysis of the note to determine if an impairment valuation reserve is necessary. This analysis considers the estimated cash flows from the note, or the collateral value of the property underlying the note when note repayment is collateral dependent. Any required valuation reserve is charged to earnings when determined; and notes are charged off to the allowance as they are deemed uncollectible.

The asset underlying a direct financing lease contract is considered impaired if the estimated undiscounted future cash flows of the asset are less than its net book value. The estimated undiscounted future cash flows are the sum of the estimated residual value of the asset at the end of the asset’s expected holding period and estimates of undiscounted future rents. The residual value assumes, among other things, that the asset is utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the market place are disregarded and it is assumed that there is no necessity either to dispose of a significant number of the assets, if held in quantity, simultaneously or to dispose of the asset quickly. Impairment is measured as the difference between the fair value (as determined by a valuation method using discounted estimated future cash flows, third party appraisals or comparable sales of similar assets as applicable based on asset type) of the asset and its carrying value on the measurement date.

Investment in securities:

From time to time, the Company may purchase securities of its borrowers in connection with its lending arrangements.

Purchased securities

The Company’s purchased securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company’s results of operations. The Company’s purchased securities that do not have readily determinable fair values are measured at cost minus impairment, and adjusted for changes in observable prices. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. The Company had $320 thousand and $144 thousand of purchased securities at June 30, 2019 and December 31, 2018, respectively. Based upon the Company’s review of its portfolio, unrealized gains of $5 thousand and $8 thousand were recorded for the respective three and six months ended June 30, 2019, and unrealized losses of $48 thousand and unrealized gains of $91 were recorded for the respective three and six months ended June 30, 2018.

Warrants

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are reflected at an estimated fair value on the balance sheet, as determined by the Managing Member. As of June 30, 2019 and December 31, 2018, the estimated fair value of the Company’s portfolio of warrants was $195 thousand and $376 thousand, respectively. During the respective three months and six months ended June 30, 2019 and 2018, the Company recorded unrealized losses of $13 thousand and $2 thousand on fair valuation of its warrants. There was a net exercise of warrants in exchange for securities in the first quarter. No exercises of any kind occurred during the comparative prior year period.

Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, operating and direct financing lease receivables, notes receivable and accounts receivable. The Company places the majority of its cash deposits in non-interest bearing accounts with financial institutions that have no less than $10 billion in assets. Such deposits are insured up to $250 thousand. The remainder of the Fund’s cash is temporarily invested in U.S. Treasury denominated instruments. The concentration of such deposits and temporary cash investments is not deemed to create a significant risk to the Company. Accounts receivable represent amounts due from in various industries, related to equipment on operating leases.

Equipment under operating leases, net and related revenue recognition:

Equipment subject to operating leases is stated at cost. Depreciation is being recognized on a straight-line method over the terms of the related leases to the equipment’s estimated residual values. Off-lease equipment is generally not subject to depreciation. The Company depreciates all lease assets, in accordance with guidelines consistent with ASC 360‑10‑35‑3, over the periods of the lease terms contained in each asset’s respective lease contract to the estimated residual value at the end of the lease contract. All lease assets are purchased only concurrent with the execution of a lease commitment by the lessee. Thus, the original depreciation period corresponds with the term of the original lease. Once the term of an original lease contract is completed, the subject property is typically sold to the existing user, re-leased to the existing user, or, when off-lease, is held for sale. Assets which are re-leased continue to be depreciated using the terms of the new lease agreements and the estimated residual values at the end of the new lease terms, adjusted downward as necessary. Assets classified as held-for-sale are carried at the lower of carrying amount, or the fair value less cost to sell (ASC 360‑10‑35‑43).

The Company does not use the equipment held in its portfolio, but holds it solely for lease and ultimate sale. In the course of marketing equipment that has come off-lease, management may determine at some point that re-leasing the assets may provide a superior return for investors and would then execute another lease. Upon entering into a new lease contract, management will estimate the residual value once again and resume depreciation. If, and when, the Company, at any time, determines that depreciation in value may have occurred with respect to an asset held-for-sale, the Company would review the value to determine whether a material reduction in value had occurred and recognize any appropriate impairment. All lease assets, including off-lease assets, are subject to the Company’s quarterly impairment analysis, as described below. Maintenance costs associated with the Fund’s portfolio of leased assets are expensed as incurred. Major additions and betterments are capitalized.

Operating lease revenue is recognized on a straight-line basis over the term of the underlying leases. The initial lease terms will vary as to the type of equipment subject to the leases, the needs of the lessees and the terms to be negotiated, but initial leases are generally on terms from 36 to 120 months. The difference between rent received and rental revenue recognized is recorded as unearned operating lease income on the balance sheet. Operating leases are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management considers the equipment underlying the lease contracts for impairment and periodically reviews the credit worthiness of all operating lessees with payments outstanding less than 90 days. Based upon management’s judgment, the related operating leases may be placed on non-accrual status. Leases placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid lease payments is probable. Until such time, revenues are recognized on a cash basis.

Initial direct costs:

With the adoption of ASU No. 2016-02 certain costs associated with the execution of the Company’s leases, which were previously capitalized and amortized over the life of their respective leases, are expensed as incurred. In 2018 and prior, the Company capitalized initial direct costs (“IDC”) associated with the origination of lease assets. IDC includes both internal costs (e.g., the costs of employees’ activities in connection with successful lease originations) and external broker fees incurred with such originations. The costs are amortized on a lease by lease basis based on actual contract term using a straight-line method for operating leases. Upon disposal of the underlying lease assets, both the initial direct costs and the associated accumulated amortization are relieved. Costs related to leases that are not consummated are not eligible for capitalization as initial direct costs and are expensed as acquisition expense.

Per Unit data:

The Company issues only one class of Units, none of which are considered dilutive. Net income and distributions per Unit is based upon the weighted average number of Other Members Units outstanding during the period.

Fair Value:

Fair value measurements and disclosures are based on a fair value hierarchy as determined by significant inputs used to measure fair value. The three levels of inputs within the fair value hierarchy are defined as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuations in which all significant inputs are observable in the market.

Level 3 – Valuation is modeled using significant inputs that are unobservable in the market. These unobservable inputs reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability.

The Company’s valuation policy is determined by members of the Asset Management, Credit and Accounting departments. The Company’s purchased securities registered for public sale with readily determinable fair value are carried at fair value. The Company elected to record equity investments without readily determinable fair values at cost, less impairment, and adjusted for changes in observable prices. Any changes in the basis of these equity investments are reported in current earnings. Whenever possible, the policy is to obtain quoted market prices in active markets to estimate fair values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes, information from third party remarketing agents, third party appraisals of collateral and/or other valuation techniques. These techniques are significantly affected by certain of the Company’s assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. As the Company is responsible for determining fair value, an analysis is performed on prices obtained from third parties. Such analysis is performed by asset management and credit department personnel who are familiar with the Company’s investments in equipment, notes receivable and equity securities of venture companies. The analysis may include a periodic review of price fluctuations and validation of numbers obtained from a specific third party by reference to multiple representative sources.

Recent accounting pronouncements:

In February 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-02, Leases. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases Topic 842: Targeted Improvements.  In December 2018, the FASB issued ASU No. 2018-20, Leases Topic 842, Narrow-Scope Improvements for Lessors. In March 2019, the FASB issued ASU No. 2019-01, Leases: Codification Improvements. Collectively referred to hereafter as ASU No. 2016-02, these standards set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract to control an asset (i.e., lessees and lessors). The Company does not have any non-cancelable leases where it is a lessee.

ASU No. 2016-02 requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. These standards were effective as of January 1, 2019. Upon adoption, the Company applied the package of practical expedients that has allowed the Company to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases and (iii) initial direct costs for any expired or existing leases. Furthermore, the Company applied the optional transition method in ASU No. 2018-11, which has allowed the Company to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the adoption period, although the Company did not have an adjustment. Additionally, the Company’s leases met the criteria in ASU No. 2018-11 to not separate non-lease components from the related lease component; therefore, the accounting for these leases remained largely unchanged from the previous standard. 

The adoption of ASU No. 2016-02 and the related improvements did not have a material impact in the Company’s financial statements. Upon adoption, (i) amounts previously recognized as lessee reimbursements and other income, for the three months ended June 30, 2019, have been classified as lease or financing income, (ii) allowances for bad debts are now recognized as a direct reduction of operating lease income, and (iii) certain costs associated with the execution of the Company’s leases, which were previously capitalized and amortized over the life of their respective leases, are expensed as incurred. Subsequent to January 1, 2019, provisions for credit losses relating to operating leases are now included in lease income in the Company’s financial statements.  Provisions for credit losses prior to January 1, 2019 were previously included in operating expenses in the financial statements and prior periods are not reclassified to conform to the current presentation.

In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments — Credit Losses (Topic 326) (“ASU 2016-13”). The main objective of this Update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. Management is currently evaluating the standard and expects the Update may potentially result in an increase in the allowance for credit losses given the change to estimated losses over the contractual life adjusted for expected prepayments.

In November 2018, the FASB issued Accounting Standards Update 2018-19, Codification Improvements to Topic 326, Financial Instruments — Credit Losses (“ASU 2018-19”). The new standard clarifies certain aspects of the new current expected credit losses (CECL) impairment model in ASU 2016-13. The amendment clarifies that receivables arising from operating leases are within the scope of ASC 842, rather than ASC 326; however, it will be applicable to the note receivables and direct financing leases, if any. The effective date and transition requirements in this Update are the same as the effective dates and transition requirements in Update 2016-13, as amended by this Update, which is for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Management is currently evaluating the impact of the standard on the financial statements and related disclosure requirements.

In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (“ASU 2018-13”), which amends the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. This ASU modifies disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. Management is currently evaluating the impact of this standard on the financial statements and related disclosure requirements.

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Notes Receivable, Net

6 Months Ended

Jun. 30, 2019

Notes Receivable, Net

Notes Receivable, Net

3. Notes receivable, net:

The Company has various notes receivables from borrowers who have financed the purchase of equipment through the Company. As of June 30, 2019, the original terms of the notes receivable are 84 to 90 months and bear interest at 18.00% per annum. The notes are secured by the equipment financed. The notes mature in 2020.

As of June 30, 2019, the future minimum payments receivable are as follows (in thousands):

Six months ending December 31, 2019	$	29
Less: portion representing unearned interest income		(29)
Notes receivable, net	$	—

Initial direct costs (“IDC”) amortization expense related to notes receivable and the Company’s operating leases for the three months and six months ended June 30, 2019 and 2018 are as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
IDC amortization – notes receivable	$	—	$	3	$	—	$	6
IDC amortization – lease assets		—		13		—		28
Total	$	—	$	16	$	—	$	34

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Allowance for Credit Losses

6 Months Ended

Jun. 30, 2019

Allowance for Credit Losses [Abstract]

Allowance for Credit Losses

4. Allowance for credit losses:

The Company’s allowance for credit losses are as follows (in thousands):

			Valuation
	Allowance for		Adjustments
	Doubtful		on Financing		Total
	Accounts		Receivables		Allowance for
	Operating Leases		Notes Receivable		Credit Losses
Balance December 31, 2017	$	44	$	12	$	56
Reversal of provision for credit losses		(44)		(12)		(56)
Balance June 30, 2018	$	—	$	—	$	—
Balance December 31, 2018	$	—	$	67	$	67
Provision for (reversal of) credit losses		17		13		30
Write-off		—		(80)		(80)
Balance June 30, 2019	$	17	$	—	$	17

The Company’s allowance for credit losses (related solely to financing receivables) and its recorded investment in financing receivables as of June 30, 2019 was zero and December 31, 2018 were as follows (in thousands):

	Notes
December 31, 2018	Receivable
Allowance for credit losses:
Ending balance	$	67
Ending balance: individually evaluated for impairment	$	67
Ending balance: collectively evaluated for impairment	$	—
Financing receivables:
Ending balance	$	—
Ending balance: individually evaluated for impairment	$	—
Ending balance: collectively evaluated for impairment	$	—

The Company evaluates the credit quality of its financing receivables on a scale equivalent to the following quality indicators related to corporate risk profiles:

Pass – Any account whose lessee/debtor, co-lessee/debtor or any guarantor has a credit rating on publicly traded or privately placed debt issues as rated by Moody’s or S&P for either Senior Unsecured debt, Long Term Issuer rating or Issuer rating that are in the tiers of ratings generally recognized by the investment community as constituting an Investment Grade credit rating; or, has been determined by the Manager to be an Investment Grade Equivalent or High Quality Corporate Credit per its Credit Policy or has a Not Rated internal rating by the Manager and the account is not considered by the Chief Credit Officer of the Manager to fall into one of the three risk profiles below.

Special Mention – Any traditional corporate type account with potential weaknesses (e.g. large net losses or major industry downturns) or, any growth capital account that has less than three months of cash as of the end of the calendar quarter to fund their continuing operations. These accounts deserve management’s close attention. If left uncorrected, those potential weaknesses may result in deterioration of the Fund’s receivable at some future date.

Substandard – Any account that is inadequately protected by the current worth and paying capacity of the borrower or of the collateral pledged, if any. Accounts that are so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Fund will sustain some loss as the likelihood of fully collecting all receivables may be questionable if the deficiencies are not corrected. Such accounts are on the Manager’s Credit Watch List.

Doubtful – Any account where the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Accordingly, an account that is so classified is on the Manager’s Credit Watch List, and has been declared in default and the Manager has repossessed, or is attempting to repossess, the equipment it financed. This category includes impaired notes and leases as applicable.

As of June 30, 2019 and December 31, 2018, the Company’s financing receivables and its related investments by credit quality indicator and by class of financing receivables are as follows (excludes initial direct costs) (in thousands):

	Notes Receivable
	June 30,		December 31,
	2019		2018
Pass	$	—	$	—
Special mention		—		—
Substandard		—		—
Doubtful		—		67
Total	$	—	$	67

As of June 30, 2019, there were no impaired investment in financing receivables and as of December 31, 2018, the Company’s impaired investment in financing receivables were as follows (in thousands):

	December 31, 2018
			Unpaid				Average
	Recorded		Principal		Related		Recorded		Interest Income
	Investment		Balance		Allowance		Investment		Recognized
With no related allowance recorded
Notes receivable	$	—	$	—	$	—	$	—	$	—
With an allowance recorded
Notes receivable		67		67		67		—		—
Total	$	67	$	67	$	67	$	—	$	—

As of June 30, 2019, there were no aged investment in financing receivables and as of December 31, 2018, investment in financing receivables is aged as follows (in thousands):

													Recorded
											Total		Investment>90
	31‑60 Days		61‑90 Days		Greater Than		Total				Financing		Days and
December 31, 2018	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	67	$	67	$	—

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Equipment Under Operating Leases, Net

6 Months Ended

Jun. 30, 2019

Equipment Under Operating Leases, Net [Abstract]

Equipment Under Operating Leases, Net

5. Equipment under operating leases, net:

The Company’s equipment under operating leases, net consists of the following (in thousands):

					Depreciation/
					Amortization
	Balance		Reclassifications		Expense or		Balance
	December 31,		& Additions /		Amortization		June 30,
	2018		Dispositions		of Leases		2019
Equipment under operating leases, net	$	20,277	$	(1,719)	$	(1,791)	$	16,767
Net investment in direct financing leases		5		(5)		—		—
Assets held for sale or lease, net		2,463		1,478		—		3,941
Initial direct costs, net of accumulated amortization of $182 at     June 30, 2019 and $182 at December 31, 2018		32		—		—		32
Total	$	22,777	$	(246)	$	(1,791)	$	20,740

Impairment of equipment under operating leases, net:

Depreciation expense are the following (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Depreciation of operating lease assets	$	909	$	1,094	$	1,791	$	2,209

For the respective three and six months ended June 30, 2019 and 2018, the Company did not record any impairment losses.

Recorded values of the Company’s leased asset portfolio are reviewed each quarter to confirm the reasonableness of established residual values and to determine whether there is indication that an asset impairment might have taken place.

The Company uses a variety of sources and considers many factors in evaluating whether the respective book values of its assets are appropriate. In addition, the Company may direct a residual value review at any time if it becomes aware of issues regarding the ability of a lessee to continue to make payments on its lease contract. An impairment loss is measured and recognized only if the estimated undiscounted future cash flows of the asset are less than their net book value. The estimated undiscounted future cash flows are the sum of the residual value of the asset at the end of the asset’s lease contract and undiscounted future rents from the existing lease contract, if any. The residual value assumes, among other things, that the asset is utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the marketplace are disregarded and it is assumed that there is no necessity either to dispose of a significant number of the assets, if held in quantity, simultaneously or to dispose of the asset quickly. Impairment is measured as the difference between the fair value (as determined by a valuation method using discounted estimated future cash flows, third party appraisals or comparable sales of similar assets as applicable based on asset type) of the asset and its carrying value on the measurement date. Upward adjustments for impairments recognized in prior periods are not made in any circumstances.

The Company utilizes a straight-line depreciation method for equipment in all of the categories currently in its portfolio of lease transactions.IDC amortization expense related to the Company’s operating leases was $0 for both three and six months ended June 30, 2019, and was $16 thousand for both three and six months ended June 30, 2018 (see Note 3).

All of the Company’s leased property was acquired beginning in December 2011 through April 2015.

Operating leases:

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

	Balance						Balance
	December 31,				Reclassifications		June 30,
	2018		Additions		or Dispositions		2019
Marine vessel	$	19,410	$	—	$	—	$	19,410
Manufacturing		7,836		—		—		7,836
Transportation, rail		7,686		—		(2,591)		5,095
Facility – other		5,084		—		—		5,084
Agriculture		2,112		—				2,112
Construction		2,009		—				2,009
Other		1,983		—		(770)		1,213
		46,120		—		(3,361)		42,759
Less accumulated depreciation		(25,843)		(1,791)		1,642		(25,992)
Total	$	20,277	$	(1,791)	$	(1,719)	$	16,767

The average estimated residual value for assets on operating leases was 20% and 34% on the assets’ original cost on June 30, 2019 and December 31, 2018, respectively. There were no operating leases on non-accrual status as of June 30, 2019 and 2018.

Direct financing leases:

Such amounts are included in other assets, with related revenues reflected on the income statement under other revenues. Direct financing lease amounts, and related disclosures, are immaterial as of and for both the quarter ended June 30, 2019 and the year ended December 31, 2018.

There were no investments in direct financing leases in non-accrual status at June 30, 2019 and December 31, 2018. 

As June 30, 2019, the aggregate amounts of future minimum operating lease payments receivable are as follows ( in thousands):

	Operating
	Leases
Six months ending December 31, 2019	$	1,544
Year ending  December 31, 2020		2,342
2021		2,037
2022		1,902
2023		1,176
2024		254
Thereafter		16
	$	9,271

The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of June 30, 2019, the respective useful lives of each category of lease assets in the Company’s portfolio are as follows (in years):

Equipment category	Useful Life
Transportation, rail	35 – 50
Marine vessel	20 – 30
Manufacturing	10 – 15
Agriculture	7 – 10
Construction	7 – 10
Facility - other	7 - 10
Other	7 - 10

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Related Party Transactions

6 Months Ended

Jun. 30, 2019

Related Party Transactions [Abstract]

Related Party Transactions

6. Related party transactions:

The terms of the Operating Agreement provide that the Managing Member and/or affiliates are entitled to receive certain fees for equipment management and resale and for management of the Company.

The Operating Agreement allows for the reimbursement of costs incurred by the Managing Member and/or affiliates for providing administrative services to the Company. Administrative services provided include Company accounting, investor relations, legal counsel and equipment financing documentation. The Managing Member is not reimbursed for services whereby it is entitled to receive a separate fee as compensation for such services, such as management of investments.

Each of AFS and ATEL Leasing Corporation (“ALC”) is a wholly-owned subsidiary of ATEL Capital Group and performs services for the Company. Acquisition services, equipment management, lease administration and asset disposition services are performed by ALC; investor relations, communications and general administrative services are performed by AFS.

Cost reimbursements to the Managing Member or its affiliates are based on its costs incurred in performing administrative services for the Company. These costs are allocated to each managed entity based on certain criteria such as total assets, number of investors or contributed capital based upon the type of cost incurred. The Managing Member believes that the costs reimbursed are the lower of (i) actual costs incurred on behalf of the Company or (ii) the amount the Company would be required to pay independent parties for comparable administrative services in the same geographic location.

During the respective three and six months ended June 30, 2019 and 2018, the Managing Member and/or affiliates earned fees and billed for reimbursements of costs and expenses pursuant to the Operating Agreement as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Administrative costs reimbursed to Managing Member and/or affiliates	$	132	$	220	$	292	$	457
Asset management fees to Managing Member		35		(63)		105		148
	$	167	$	157	$	397	$	605

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Non-Recourse Debt

6 Months Ended

Jun. 30, 2019

Non-Recourse Debt [Abstract]

Non-Recourse Debt

7. Non-recourse debt:

At June 30, 2019, non-recourse debt consists of notes payable to financial institutions. The note payments are due in monthly installments. Interest on the notes range from 3.40% to 3.66% per annum. The notes are secured by assignments of lease payments and pledges of assets. At June 30, 2019, gross operating lease rentals and future payments on direct financing leases totaled approximately $5.2 million over the remaining lease terms and the carrying value of the pledged assets is $11.2 million. The notes mature from 2019 through 2024.

The non-recourse debt does not contain any material financial covenants. The debt is secured by a lien granted by the Company to the non-recourse lenders on (and only on) the discounted lease transactions. The lenders have recourse only to the following collateral: the specific leased equipment; the related lease chattel paper; the lease receivables; and proceeds of the foregoing items. The non-recourse obligation is payable solely out of the respective specific security and the Company does not guarantee (nor is the Company otherwise contractually responsible for) the payment of the non-recourse debt as a general obligation or liability of the Company. Although the Company does not have any direct or general liability in connection with the non-recourse debt apart from the security granted, the Company is directly and generally liable and responsible for certain representations, warranties, and covenants made to the lenders, such as warranties as to genuineness of the transaction parties’ signatures, as to the genuineness of the respective lease chattel paper or the transaction as a whole, or as to the Company’s good title to or perfected interest in the secured collateral, as well as similar representations, warranties and covenants typically provided by non-recourse borrowers and customary in the equipment finance industry, and are viewed by such industry as being consistent with non-recourse discount financing obligations. Accordingly, as there are no financial covenants or ratios imposed on the Company in connection with the non-recourse debt, the Company has determined that there are no material covenants with respect to the non-recourse debt that warrant footnote disclosure.

Future minimum payments of non-recourse debt are as follows (in thousands):

	Principal		Interest		Total
Six months ending December 31, 2019	$	770	$	77	$	847
Year ending December 31, 2020		959		123		1,082
Year ending December 31, 2021		946		91		1,037
Year ending December 31, 2022		979		58		1,037
Year ending December 31, 2023		1,012		25		1,037
Year ending December 31, 2024		172		1		173
Total	$	4,838	$	375	$	5,213

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Senior Long-Term Debt

6 Months Ended

Jun. 30, 2019

Senior long-Term Debt [Abstract]

Senior Long-Term Debt

8. Senior long-term debt:

As of December 31, 2018, $2.1 million of senior long-term debt consisted of a note payable to a lender. Such debt was utilized during the fourth quarter of 2013 to partially fund the marine vessel and related bareboat charter purchased by the Fund and its affiliate, ATEL 14, LLC. The note bore interest at a fixed-rate of 3.5% per annum, to accrue in arrears on a monthly basis. On May 20, 2019, a  non-recourse promissory note approximating $9.2 million was executed. The non-recourse promissory note was split evenly between the Fund and its affiliate, ATEL 14, LLC for $4.6 million and were used to pay off the senior long-term debt. The note bore interest at a fixed rate of 3.4% per annum. The non-recourse promissory note is to be serviced by the cash flows generated under a renewed bareboat charter.

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Borrowing Facilities

6 Months Ended

Jun. 30, 2019

Borrowing Facilities [Abstract]

Borrowing Facilities

9. Borrowing facilities:

The Company is party to a $75 million revolving credit facility (the “Credit Facility”), with a syndicate of financial institutions as lenders.  Other parties to the Credit Facility include ATEL Capital Group and certain subsidiaries and affiliated funds.  Set to expire on June 30, 2019, the Credit Facility was temporarily extended while an amendment was finalized reducing the availability to $55 million with a scheduled expiration of June 30, 2021. The joint Credit Facility is comprised of a working capital facility, an acquisition facility (the “Acquisition Facility”) and a warehouse facility (the “Warehouse Facility”), the Company and affiliates, and a venture facility.

The lending syndicate providing the Credit Facility has a blanket lien on all of the participant’s assets as collateral for any and all borrowings under the Acquisition Facility, and on a pro-rata basis under the Warehouse Facility. Such Credit Facility includes certain financial covenants.

As of June 30, 2019 and December 31, 2018, the total ATEL Capital Group and subsidiaries and affiliated funds borrowings under the Credit Facility were as follows (in thousands):

	June 30,		December 31,
	2019		2018
Total available under the financing arrangement	$	75,000	$	75,000
Amount borrowed by affiliated partnerships and limited liability companies under the
working capital, acquisition and warehouse facilities		(880)		(2,110)
Total remaining available under the working capital, acquisition and warehouse facilities	$	74,120	$	72,890

The Company and its affiliates paid an annual commitment fee to have access to this line of credit. And, as of June 30, 2019, the Company was in compliance with all material financial covenants, and with all other material conditions of the Credit Facility during the tenure of participation.

The interest rate on the Credit Facility is based on either the LIBOR/Eurocurrency rate of 1‑, 2‑, 3‑ or 6‑month maturity plus a lender designated spread, or the bank’s Prime rate, which re-prices daily. Principal amounts of loans made under the Credit Facility that are prepaid may be re-borrowed on the terms and subject to the conditions set forth under the Credit Facility.

Warehouse facility

To hold the assets under the Warehousing Facility prior to allocation to specific investor programs, a Warehousing Trust must have been entered into by the Company, AFS, ALC, and certain of the affiliated partnerships and limited liability companies.

The Warehousing Trust is used by the Warehouse Facility borrowers to acquire and hold, on a short-term basis, certain lease transactions that meet the investment objectives of each of such entities. Each of the leasing programs sponsored by AFS and ALC is a pro rata participant in the Warehousing Trust, as described below. When a program no longer has a need for short-term financing provided by the Warehousing Facility, it is removed from participation, and as new leasing investment entities are formed by AFS and ALC and commence their acquisition stages, these new entities are added.

As of June 30, 2019, the investment program participants were ATEL 15, LLC, ATEL 16, LLC and ATEL 17, LLC. Pursuant to the Warehousing Trust, the benefit of the lease transaction assets, and the corresponding liabilities under the Warehouse Facility, inure to each of such entities based upon each entity’s pro-rata share in the Warehousing Trust estate. The “pro-rata share” is calculated as a ratio of the net worth of each entity over the aggregate net worth of all entities benefiting from the Warehousing Trust estate, excepting that the trustees, AFS and ALC, are both jointly and severally liable for the pro-rata portion of the obligations of each of the affiliated limited liability companies participating under the Warehouse Facility.

Transactions are financed through this Warehouse Facility only until the transactions are allocated to a specific program for purchase or are otherwise disposed by AFS and ALC. When a determination is made to allocate the transaction to a specific program for purchase by the program, the purchaser repays the debt associated with the asset, either with cash or by means of proceeds of a draw under the Acquisition Facility, and the asset is removed from the Warehouse Facility collateral, and ownership of the asset and any debt obligation associated with the asset are assumed solely by the purchasing entity.

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Commitments

6 Months Ended

Jun. 30, 2019

Commitments [Abstract]

Commitments

10. Commitments:

At June 30, 2019, there were no commitments to purchase lease assets and to fund investments in notes receivable.

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Members' Capital

6 Months Ended

Jun. 30, 2019

Members' Capital [Abstract]

Members' Capital

11. Members’ Capital:

A total of 6,542,557 Units were issued and outstanding at June 30, 2019 , including the 50 Units issued to the initial Member (Managing Member). The Fund was authorized to issue up to 15,000,000 Units in addition to the Units issued to the initial Member.

Distributions to the Other Members for the three and six months ended June 30, 2019 and 2018 were as follows (in thousands, except as to Units and per Unit data):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Distributions declared	$	1,479	$	—	$	1,486	$	1,303
Weighted average number of Units outstanding		6,542,557		6,542,557		6,542,557		6,545,582
Weighted average distributions per Unit	$	0.23	$	—	$	0.23	$	0.20

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Fair Value Measurements

6 Months Ended

Jun. 30, 2019

Fair Value Measurements [Abstract]

Fair Value Measurements

12. Fair value measurements:

Under applicable accounting standards, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

At June 30, 2019, the Company’s investment in securities and warrants were measured on a recurring basis. At December 31, 2018, only the Company’s warrants were measured on a recurring basis. In addition, certain notes receivable deemed impaired were measured at fair value on a non-recurring basis as of June 30, 2019 and December 31, 2018.

The measurement methodology is as follows:

Warrants (recurring)

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are carried on the balance sheet at an estimated fair value at the end of the period. The valuation of the warrants was determined using a Black-Scholes formulation of value based upon the stock price(s), the exercise price(s), the volatility of comparable venture companies, time to maturity and a risk free interest rate for the term(s) of the warrant exercise(s). The calculated fair value of the Fund’s warrant portfolio approximated at $195 thousand and $376 thousand at June 30, 2019 and December 31, 2018, respectively. Such valuations are classified within Level 3 of the valuation hierarchy.

The fair value of warrants that were accounted for on a recurring basis classified as Level 3 are as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Fair value of warrants at beginning of period	$	208	$	387	$	376	$	387
Unrealized loss on fair market valuation of warrants		(13)		(2)		(13)		(2)
Warrants converted to securities		—		—		(168)		—
Fair value of warrants at end of period	$	195	$	385	$	195	$	385

Investment securities (recurring)

The Company’s investment securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company’s results of operations. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital.

The fair value of investment securities that were accounted for on a recurring basis as of the three and six months ended June 30, 2019 and classified as Level 1 are as follows (in thousands):

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2019		2018		2019		2018
Fair value of securities at the beginning of period	$	91	$	240	$	101	$	101
Unrealized gains on fair valuation of securities		4		(48)		(6)		91
Fair value of investment securities at the end of period	$	95	$	192	$	95	$	192

Impaired off-lease equipment (non-recurring)

During the three and six months ended June 30, 2019 and 2018, the Company had no recorded fair value adjustments to reduce the cost basis of certain-off lease construction equipment (assets) deemed impaired.

Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the fair value of the impaired lease assets were classified within Level 3 of the valuation hierarchy as the data source utilized for the valuation of such assets reflect significant inputs that are unobservable in the market. Such valuation utilizes a market approach technique and uses inputs that reflect the sales price of similar assets sold by affiliates and/or information from third party remarketing agents not readily available in the market.

Impaired notes receivable (non-recurring)

The fair value of the Company’s notes receivable, when impairment adjustments are required, is estimated using either third party appraisals or estimations of the value of collateral (for collateral dependent loans) or discounted cash flow analyses (by discounting estimated future cash flows) using the effective interest rate contained in the terms of the original loan.

During the six months ended June 30, 2019, the Company recorded fair value adjustment totaling $13 thousand relative to two impaired notes. During the year ended December 31, 2018, the Company recorded fair value adjustments totaling $67 thousand relative to six impaired notes.

The fair value adjustments recorded in both years were non-recurring and were based upon an estimated valuation of underlying collateral. Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the fair value of the impaired notes receivable is classified within Level 3 of the valuation hierarchy. The valuation utilizes a market approach technique and uses inputs from third party appraisers that utilize current market transactions as adjusted for certain factors specific to the underlying collateral.

The following tables summarize the valuation techniques and significant unobservable inputs used for the Company’s recurring fair value calculation categorized as Level 3 in the fair value hierarchy at June 30, 2019 and December 31, 2018:

June 30, 2019
	Valuation	Valuation	Unobservable	Range of
Name	Frequency	Technique	Inputs	Input Values
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.12-  $12.92
			Exercise price	$0.10 - $1,000.00
			Time to maturity (in years)	1.12 - 6.58
			Risk-free interest rate	1.75% - 1.93%
			Annualized volatility	35.36% - 96.59%

December 31, 2018
	Valuation	Valuation	Unobservable	Range of
Name	Frequency	Technique	Inputs	Input Values
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.00 - $9.98
			Exercise price	$0.10 - $1,000.00
			Time to maturity (in years)	1.62 - 7.08
			Risk-free interest rate	2.46% - 2.596%
			Annualized volatility	35.36% - 91.94%

The following disclosure of the estimated fair value of financial instruments is made in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification. Fair value estimates, methods and assumptions, set forth below for the Company’s financial instruments, are made solely to comply with the requirements of the Financial Instruments Topic and should be read in conjunction with the Company’s financial statements and related notes.

The Company has determined the estimated fair value amounts by using market information and valuation methodologies that it considers appropriate and consistent with the fair value accounting guidance. Considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize or has realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Cash and cash equivalents

The recorded amounts of the Company’s cash and cash equivalents approximate fair value because of the liquidity and short-term maturity of these instruments.

Notes receivable

The fair value of the Company’s notes receivable is generally estimated based upon various methodologies deployed by financial and credit management including, but not limited to, credit analysis, third party appraisal and/or discounted cash flow analysis based upon current market valuation techniques and market rates for similar types of lending arrangements, which may consider adjustments for impaired loans as deemed necessary.

Investment in securities

The Company’s purchased securities registered for public sale with readily determinable fair value are carried at fair value. These investment securities are valued based on their quoted market prices.

Non-recourse and Senior long-term debt

The fair value of the Company’s non-recourse debt is estimated using discounted cash flow analyses, based upon current market borrowing rates for similar types of borrowing arrangements.

Commitments and Contingencies

Management has determined that no recognition for the fair value of the Company’s loan commitments is necessary because their terms are made on a market rate basis and require borrowers to be in compliance with the Company’s credit requirements at the time of funding.

The fair value of contingent liabilities (or guarantees) is not considered material because management believes there has been no event that has occurred wherein a guarantee liability has been incurred or will likely be incurred.

The following tables present estimated fair values of the Company’s financial instruments in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification at June 30, 2019 and December 31, 2018 (in thousands):

	Fair Value Measurements at June 30, 2019
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	3,820	$	3,820	$	—	$	—	$	3,820
Investment in securities		95		95		—		—		95
Warrants, fair value		195		—		—		195		195
Financial liabilities:
Non-recourse debt		4,838		—		—		4,885		4,885

	Fair Value Measurements at December 31, 2018
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	1,716	$	1,716	$	—	$	—	$	1,716
Investment in securities		127		127		—		—		127
Warrants, fair value		376		—		—		376		376
Financial liabilities:
Non-recourse debt		1,191		—		—		1,187		1,187
Senior long-term debt		2,068		—		—		2,456		2,456

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Summary of Significant Accounting Policies (Policy)

6 Months Ended

Jun. 30, 2019

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of presentation:

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10‑Q as mandated by the Securities and Exchange Commission. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the Managing Member, necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three and six months ended June 30, 2019 and 2018 are not necessarily indicative of the results to be expected for the full year. Certain prior period amounts may have been reclassified to conform to the current period presentation. These reclassifications had no significant effect on the reported financial position or results of operations.

Footnote and tabular amounts are presented in thousands, except as to Units and per Unit data.

In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after June 30, 2019 until the issuance of the financial statements. No events were noted which would require additional disclosure in the footnotes to the financial statements or adjustments thereto.

Cash and Cash Equivalents

Cash and cash equivalents:

Cash and cash equivalents include cash in banks and cash equivalent investments such as U.S. Treasury instruments with original and/or purchased maturities of ninety days or less.

Use of Estimates

Use of Estimates:

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates. Such estimates primarily relate to the determination of residual values at the end of the lease term and expected future cash flows used for impairment analysis purposes, and determination of the allowance for doubtful accounts and reserve for credit losses on notes receivable.

Segment Reporting

Segment reporting:

The Company is organized into one operating segment for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment in the United States.

The primary geographic region in which the Company seeks leasing and financing opportunities is North America. All of the Company’s current operating revenues for the three and six months ended June 30, 2019 and 2018, and long-lived tangible assets as of June 30, 2019 and December 31, 2018 relate to customers domiciled in the United States.

Accounts Receivable

Accounts receivable:

Accounts receivable represent the amounts billed under operating and direct financing lease contracts, and notes receivable which are currently due to the Company.

Allowances for doubtful accounts are typically established based upon their aging and historical charge off and collection experience and the creditworthiness of specifically identified lessees and borrowers, and invoiced amounts. Accounts receivable deemed uncollectible are generally charged off against the allowance on a specific identification basis. Recoveries of amounts that were previously written-off are recorded as other income in the period received.

Accounts receivable are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management periodically reviews the creditworthiness of companies with lease or note payments outstanding less than 90 days. Based upon management’s judgment, such leases or notes may be placed in non-accrual status. Leases or notes placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid receivable is probable. Until such time, revenues on operating leases are recognized on a cash basis. All payments received on amounts billed under direct financing leases and notes receivable are applied only against outstanding principal balances.

Financing Receivable

Financing receivables:

In addition to the allowance established for delinquent accounts receivable, the total allowance related solely to financing receivables also includes anticipated impairment charges on notes receivable and direct financing leases.

Notes are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest when due according to the contractual terms of the note agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest when due. If it is determined that a loan is impaired with regard to scheduled payments, the Company will perform an analysis of the note to determine if an impairment valuation reserve is necessary. This analysis considers the estimated cash flows from the note, or the collateral value of the property underlying the note when note repayment is collateral dependent. Any required valuation reserve is charged to earnings when determined; and notes are charged off to the allowance as they are deemed uncollectible.

The asset underlying a direct financing lease contract is considered impaired if the estimated undiscounted future cash flows of the asset are less than its net book value. The estimated undiscounted future cash flows are the sum of the estimated residual value of the asset at the end of the asset’s expected holding period and estimates of undiscounted future rents. The residual value assumes, among other things, that the asset is utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the market place are disregarded and it is assumed that there is no necessity either to dispose of a significant number of the assets, if held in quantity, simultaneously or to dispose of the asset quickly. Impairment is measured as the difference between the fair value (as determined by a valuation method using discounted estimated future cash flows, third party appraisals or comparable sales of similar assets as applicable based on asset type) of the asset and its carrying value on the measurement date.

Investment in Securities

Investment in securities:

From time to time, the Company may purchase securities of its borrowers in connection with its lending arrangements.

Purchased securities

The Company’s purchased securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company’s results of operations. The Company’s purchased securities that do not have readily determinable fair values are measured at cost minus impairment, and adjusted for changes in observable prices. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. The Company had $320 thousand and $144 thousand of purchased securities at June 30, 2019 and December 31, 2018, respectively. Based upon the Company’s review of its portfolio, unrealized gains of $5 thousand and $8 thousand were recorded for the respective three and six months ended June 30, 2019, and unrealized losses of $48 thousand and unrealized gains of $91 were recorded for the respective three and six months ended June 30, 2018.

Warrants

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are reflected at an estimated fair value on the balance sheet, as determined by the Managing Member. As of June 30, 2019 and December 31, 2018, the estimated fair value of the Company’s portfolio of warrants was $195 thousand and $376 thousand, respectively. During the respective three months and six months ended June 30, 2019 and 2018, the Company recorded unrealized losses of $13 thousand and $2 thousand on fair valuation of its warrants. There was a net exercise of warrants in exchange for securities in the first quarter. No exercises of any kind occurred during the comparative prior year period.

Credit Risk

Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, operating and direct financing lease receivables, notes receivable and accounts receivable. The Company places the majority of its cash deposits in non-interest bearing accounts with financial institutions that have no less than $10 billion in assets. Such deposits are insured up to $250 thousand. The remainder of the Fund’s cash is temporarily invested in U.S. Treasury denominated instruments. The concentration of such deposits and temporary cash investments is not deemed to create a significant risk to the Company. Accounts receivable represent amounts due from in various industries, related to equipment on operating leases.

Equipment on Operating Leases and Related Revenue Recognition

Equipment under operating leases, net and related revenue recognition:

Equipment subject to operating leases is stated at cost. Depreciation is being recognized on a straight-line method over the terms of the related leases to the equipment’s estimated residual values. Off-lease equipment is generally not subject to depreciation. The Company depreciates all lease assets, in accordance with guidelines consistent with ASC 360‑10‑35‑3, over the periods of the lease terms contained in each asset’s respective lease contract to the estimated residual value at the end of the lease contract. All lease assets are purchased only concurrent with the execution of a lease commitment by the lessee. Thus, the original depreciation period corresponds with the term of the original lease. Once the term of an original lease contract is completed, the subject property is typically sold to the existing user, re-leased to the existing user, or, when off-lease, is held for sale. Assets which are re-leased continue to be depreciated using the terms of the new lease agreements and the estimated residual values at the end of the new lease terms, adjusted downward as necessary. Assets classified as held-for-sale are carried at the lower of carrying amount, or the fair value less cost to sell (ASC 360‑10‑35‑43).

The Company does not use the equipment held in its portfolio, but holds it solely for lease and ultimate sale. In the course of marketing equipment that has come off-lease, management may determine at some point that re-leasing the assets may provide a superior return for investors and would then execute another lease. Upon entering into a new lease contract, management will estimate the residual value once again and resume depreciation. If, and when, the Company, at any time, determines that depreciation in value may have occurred with respect to an asset held-for-sale, the Company would review the value to determine whether a material reduction in value had occurred and recognize any appropriate impairment. All lease assets, including off-lease assets, are subject to the Company’s quarterly impairment analysis, as described below. Maintenance costs associated with the Fund’s portfolio of leased assets are expensed as incurred. Major additions and betterments are capitalized.

Operating lease revenue is recognized on a straight-line basis over the term of the underlying leases. The initial lease terms will vary as to the type of equipment subject to the leases, the needs of the lessees and the terms to be negotiated, but initial leases are generally on terms from 36 to 120 months. The difference between rent received and rental revenue recognized is recorded as unearned operating lease income on the balance sheet. Operating leases are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management considers the equipment underlying the lease contracts for impairment and periodically reviews the credit worthiness of all operating lessees with payments outstanding less than 90 days. Based upon management’s judgment, the related operating leases may be placed on non-accrual status. Leases placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid lease payments is probable. Until such time, revenues are recognized on a cash basis.

Initial Direct Costs

Initial direct costs:

With the adoption of ASU No. 2016-02 certain costs associated with the execution of the Company’s leases, which were previously capitalized and amortized over the life of their respective leases, are expensed as incurred. In 2018 and prior, the Company capitalized initial direct costs (“IDC”) associated with the origination of lease assets. IDC includes both internal costs (e.g., the costs of employees’ activities in connection with successful lease originations) and external broker fees incurred with such originations. The costs are amortized on a lease by lease basis based on actual contract term using a straight-line method for operating leases. Upon disposal of the underlying lease assets, both the initial direct costs and the associated accumulated amortization are relieved. Costs related to leases that are not consummated are not eligible for capitalization as initial direct costs and are expensed as acquisition expense.

Per Unit Data

Per Unit data:

The Company issues only one class of Units, none of which are considered dilutive. Net income and distributions per Unit is based upon the weighted average number of Other Members Units outstanding during the period.

Fair Value

Fair Value:

Fair value measurements and disclosures are based on a fair value hierarchy as determined by significant inputs used to measure fair value. The three levels of inputs within the fair value hierarchy are defined as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuations in which all significant inputs are observable in the market.

Level 3 – Valuation is modeled using significant inputs that are unobservable in the market. These unobservable inputs reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability.

The Company’s valuation policy is determined by members of the Asset Management, Credit and Accounting departments. The Company’s purchased securities registered for public sale with readily determinable fair value are carried at fair value. The Company elected to record equity investments without readily determinable fair values at cost, less impairment, and adjusted for changes in observable prices. Any changes in the basis of these equity investments are reported in current earnings. Whenever possible, the policy is to obtain quoted market prices in active markets to estimate fair values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes, information from third party remarketing agents, third party appraisals of collateral and/or other valuation techniques. These techniques are significantly affected by certain of the Company’s assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. As the Company is responsible for determining fair value, an analysis is performed on prices obtained from third parties. Such analysis is performed by asset management and credit department personnel who are familiar with the Company’s investments in equipment, notes receivable and equity securities of venture companies. The analysis may include a periodic review of price fluctuations and validation of numbers obtained from a specific third party by reference to multiple representative sources.

Recent Accounting Pronouncements

Recent accounting pronouncements:

In February 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-02, Leases. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases Topic 842: Targeted Improvements.  In December 2018, the FASB issued ASU No. 2018-20, Leases Topic 842, Narrow-Scope Improvements for Lessors. In March 2019, the FASB issued ASU No. 2019-01, Leases: Codification Improvements. Collectively referred to hereafter as ASU No. 2016-02, these standards set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract to control an asset (i.e., lessees and lessors). The Company does not have any non-cancelable leases where it is a lessee.

ASU No. 2016-02 requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. These standards were effective as of January 1, 2019. Upon adoption, the Company applied the package of practical expedients that has allowed the Company to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases and (iii) initial direct costs for any expired or existing leases. Furthermore, the Company applied the optional transition method in ASU No. 2018-11, which has allowed the Company to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the adoption period, although the Company did not have an adjustment. Additionally, the Company’s leases met the criteria in ASU No. 2018-11 to not separate non-lease components from the related lease component; therefore, the accounting for these leases remained largely unchanged from the previous standard. 

The adoption of ASU No. 2016-02 and the related improvements did not have a material impact in the Company’s financial statements. Upon adoption, (i) amounts previously recognized as lessee reimbursements and other income, for the three months ended June 30, 2019, have been classified as lease or financing income, (ii) allowances for bad debts are now recognized as a direct reduction of operating lease income, and (iii) certain costs associated with the execution of the Company’s leases, which were previously capitalized and amortized over the life of their respective leases, are expensed as incurred. Subsequent to January 1, 2019, provisions for credit losses relating to operating leases are now included in lease income in the Company’s financial statements.  Provisions for credit losses prior to January 1, 2019 were previously included in operating expenses in the financial statements and prior periods are not reclassified to conform to the current presentation.

In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments — Credit Losses (Topic 326) (“ASU 2016-13”). The main objective of this Update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. Management is currently evaluating the standard and expects the Update may potentially result in an increase in the allowance for credit losses given the change to estimated losses over the contractual life adjusted for expected prepayments.

In November 2018, the FASB issued Accounting Standards Update 2018-19, Codification Improvements to Topic 326, Financial Instruments — Credit Losses (“ASU 2018-19”). The new standard clarifies certain aspects of the new current expected credit losses (CECL) impairment model in ASU 2016-13. The amendment clarifies that receivables arising from operating leases are within the scope of ASC 842, rather than ASC 326; however, it will be applicable to the note receivables and direct financing leases, if any. The effective date and transition requirements in this Update are the same as the effective dates and transition requirements in Update 2016-13, as amended by this Update, which is for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Management is currently evaluating the impact of the standard on the financial statements and related disclosure requirements.

In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (“ASU 2018-13”), which amends the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. This ASU modifies disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. Management is currently evaluating the impact of this standard on the financial statements and related disclosure requirements.

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Notes Receivable, Net (Tables)

6 Months Ended

Jun. 30, 2019

Notes Receivable, Net

Minimum Future Payments Receivable

As of June 30, 2019, the future minimum payments receivable are as follows (in thousands):

Six months ending December 31, 2019	$	29
Less: portion representing unearned interest income		(29)
Notes receivable, net	$	—

Initial Direct Costs, Amortization Expense Related to Notes Receivable and Company's Operating and Direct Finance Leases

Initial direct costs (“IDC”) amortization expense related to notes receivable and the Company’s operating leases for the three months and six months ended June 30, 2019 and 2018 are as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
IDC amortization – notes receivable	$	—	$	3	$	—	$	6
IDC amortization – lease assets		—		13		—		28
Total	$	—	$	16	$	—	$	34

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Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2019

Allowance for Credit Losses [Abstract]

Activity in Allowance for Doubtful Accounts and Credit Losses

The Company’s allowance for credit losses are as follows (in thousands):

			Valuation
	Allowance for		Adjustments
	Doubtful		on Financing		Total
	Accounts		Receivables		Allowance for
	Operating Leases		Notes Receivable		Credit Losses
Balance December 31, 2017	$	44	$	12	$	56
Reversal of provision for credit losses		(44)		(12)		(56)
Balance June 30, 2018	$	—	$	—	$	—
Balance December 31, 2018	$	—	$	67	$	67
Provision for (reversal of) credit losses		17		13		30
Write-off		—		(80)		(80)
Balance June 30, 2019	$	17	$	—	$	17

Recorded Investment in Financing Receivables

The Company’s allowance for credit losses (related solely to financing receivables) and its recorded investment in financing receivables as of June 30, 2019 was zero and December 31, 2018 were as follows (in thousands):

	Notes
December 31, 2018	Receivable
Allowance for credit losses:
Ending balance	$	67
Ending balance: individually evaluated for impairment	$	67
Ending balance: collectively evaluated for impairment	$	—
Financing receivables:
Ending balance	$	—
Ending balance: individually evaluated for impairment	$	—
Ending balance: collectively evaluated for impairment	$	—

Financing Receivables by Credit Quality Indicator and by Class

As of June 30, 2019 and December 31, 2018, the Company’s financing receivables and its related investments by credit quality indicator and by class of financing receivables are as follows (excludes initial direct costs) (in thousands):

	Notes Receivable
	June 30,		December 31,
	2019		2018
Pass	$	—	$	—
Special mention		—		—
Substandard		—		—
Doubtful		—		67
Total	$	—	$	67

Schedule of Impaired Loans

As of June 30, 2019, there were no impaired investment in financing receivables and as of December 31, 2018, the Company’s impaired investment in financing receivables were as follows (in thousands):

	December 31, 2018
			Unpaid				Average
	Recorded		Principal		Related		Recorded		Interest Income
	Investment		Balance		Allowance		Investment		Recognized
With no related allowance recorded
Notes receivable	$	—	$	—	$	—	$	—	$	—
With an allowance recorded
Notes receivable		67		67		67		—		—
Total	$	67	$	67	$	67	$	—	$	—

Net Investment in Financing Receivables by Age

As of June 30, 2019, there were no aged investment in financing receivables and as of December 31, 2018, investment in financing receivables is aged as follows (in thousands):

													Recorded
											Total		Investment>90
	31‑60 Days		61‑90 Days		Greater Than		Total				Financing		Days and
December 31, 2018	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	67	$	67	$	—

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Equipment Under Operating Leases, Net (Tables)

6 Months Ended

Jun. 30, 2019

Equipment Under Operating Leases, Net [Abstract]

Investment in Leases

The Company’s equipment under operating leases, net consists of the following (in thousands):

					Depreciation/
					Amortization
	Balance		Reclassifications		Expense or		Balance
	December 31,		& Additions /		Amortization		June 30,
	2018		Dispositions		of Leases		2019
Equipment under operating leases, net	$	20,277	$	(1,719)	$	(1,791)	$	16,767
Net investment in direct financing leases		5		(5)		—		—
Assets held for sale or lease, net		2,463		1,478		—		3,941
Initial direct costs, net of accumulated amortization of $182 at     June 30, 2019 and $182 at December 31, 2018		32		—		—		32
Total	$	22,777	$	(246)	$	(1,791)	$	20,740

Depreciation Expense and Impairment Losses of Investments in Leases

Depreciation expense are the following (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Depreciation of operating lease assets	$	909	$	1,094	$	1,791	$	2,209

Property on Operating Leases

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

	Balance						Balance
	December 31,				Reclassifications		June 30,
	2018		Additions		or Dispositions		2019
Marine vessel	$	19,410	$	—	$	—	$	19,410
Manufacturing		7,836		—		—		7,836
Transportation, rail		7,686		—		(2,591)		5,095
Facility – other		5,084		—		—		5,084
Agriculture		2,112		—				2,112
Construction		2,009		—				2,009
Other		1,983		—		(770)		1,213
		46,120		—		(3,361)		42,759
Less accumulated depreciation		(25,843)		(1,791)		1,642		(25,992)
Total	$	20,277	$	(1,791)	$	(1,719)	$	16,767

Future Minimum Lease Payments Receivable

As June 30, 2019, the aggregate amounts of future minimum operating lease payments receivable are as follows ( in thousands):

Schedule of Useful Lives of Assets

	Operating
	Leases
Six months ending December 31, 2019	$	1,544
Year ending  December 31, 2020		2,342
2021		2,037
2022		1,902
2023		1,176
2024		254
Thereafter		16
	$	9,271

The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of June 30, 2019, the respective useful lives of each category of lease assets in the Company’s portfolio are as follows (in years):

Equipment category	Useful Life
Transportation, rail	35 – 50
Marine vessel	20 – 30
Manufacturing	10 – 15
Agriculture	7 – 10
Construction	7 – 10
Facility - other	7 - 10
Other	7 - 10

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Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2019

Related Party Transactions [Abstract]

Managing Member and/or Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement

During the respective three and six months ended June 30, 2019 and 2018, the Managing Member and/or affiliates earned fees and billed for reimbursements of costs and expenses pursuant to the Operating Agreement as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Administrative costs reimbursed to Managing Member and/or affiliates	$	132	$	220	$	292	$	457
Asset management fees to Managing Member		35		(63)		105		148
	$	167	$	157	$	397	$	605

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Non-Recourse Debt (Tables)

6 Months Ended

Jun. 30, 2019

Non-Recourse Debt [Abstract]

Future Minimum Payments of Non-Recourse Debt

Future minimum payments of non-recourse debt are as follows (in thousands):

	Principal		Interest		Total
Six months ending December 31, 2019	$	770	$	77	$	847
Year ending December 31, 2020		959		123		1,082
Year ending December 31, 2021		946		91		1,037
Year ending December 31, 2022		979		58		1,037
Year ending December 31, 2023		1,012		25		1,037
Year ending December 31, 2024		172		1		173
Total	$	4,838	$	375	$	5,213

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Borrowing Facilities (Tables)

6 Months Ended

Jun. 30, 2019

Borrowing Facilities [Abstract]

Borrowings Under Facility

As of June 30, 2019 and December 31, 2018, the total ATEL Capital Group and subsidiaries and affiliated funds borrowings under the Credit Facility were as follows (in thousands):

	June 30,		December 31,
	2019		2018
Total available under the financing arrangement	$	75,000	$	75,000
Amount borrowed by affiliated partnerships and limited liability companies under the
working capital, acquisition and warehouse facilities		(880)		(2,110)
Total remaining available under the working capital, acquisition and warehouse facilities	$	74,120	$	72,890

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Members' Capital (Tables)

6 Months Ended

Jun. 30, 2019

Members' Capital [Abstract]

Distributions to Other Members

Distributions to the Other Members for the three and six months ended June 30, 2019 and 2018 were as follows (in thousands, except as to Units and per Unit data):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Distributions declared	$	1,479	$	—	$	1,486	$	1,303
Weighted average number of Units outstanding		6,542,557		6,542,557		6,542,557		6,545,582
Weighted average distributions per Unit	$	0.23	$	—	$	0.23	$	0.20

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2019

Fair Value Measurements [Abstract]

Fair Value, Warrants Measured on Recurring Basis

The fair value of warrants that were accounted for on a recurring basis classified as Level 3 are as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Fair value of warrants at beginning of period	$	208	$	387	$	376	$	387
Unrealized loss on fair market valuation of warrants		(13)		(2)		(13)		(2)
Warrants converted to securities		—		—		(168)		—
Fair value of warrants at end of period	$	195	$	385	$	195	$	385

Fair Value, Investment Securities Measured on Recurring Basis

The fair value of investment securities that were accounted for on a recurring basis as of the three and six months ended June 30, 2019 and classified as Level 1 are as follows (in thousands):

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2019		2018		2019		2018
Fair value of securities at the beginning of period	$	91	$	240	$	101	$	101
Unrealized gains on fair valuation of securities		4		(48)		(6)		91
Fair value of investment securities at the end of period	$	95	$	192	$	95	$	192

Summary of Valuation Techniques and Significant Unobservable Inputs Used

The following tables summarize the valuation techniques and significant unobservable inputs used for the Company’s recurring fair value calculation categorized as Level 3 in the fair value hierarchy at June 30, 2019 and December 31, 2018:

June 30, 2019
	Valuation	Valuation	Unobservable	Range of
Name	Frequency	Technique	Inputs	Input Values
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.12-  $12.92
			Exercise price	$0.10 - $1,000.00
			Time to maturity (in years)	1.12 - 6.58
			Risk-free interest rate	1.75% - 1.93%
			Annualized volatility	35.36% - 96.59%

December 31, 2018
	Valuation	Valuation	Unobservable	Range of
Name	Frequency	Technique	Inputs	Input Values
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.00 - $9.98
			Exercise price	$0.10 - $1,000.00
			Time to maturity (in years)	1.62 - 7.08
			Risk-free interest rate	2.46% - 2.596%
			Annualized volatility	35.36% - 91.94%

Estimated Fair Values of Financial Instruments

The following tables present estimated fair values of the Company’s financial instruments in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification at June 30, 2019 and December 31, 2018 (in thousands):

	Fair Value Measurements at June 30, 2019
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	3,820	$	3,820	$	—	$	—	$	3,820
Investment in securities		95		95		—		—		95
Warrants, fair value		195		—		—		195		195
Financial liabilities:
Non-recourse debt		4,838		—		—		4,885		4,885

	Fair Value Measurements at December 31, 2018
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	1,716	$	1,716	$	—	$	—	$	1,716
Investment in securities		127		127		—		—		127
Warrants, fair value		376		—		—		376		376
Financial liabilities:
Non-recourse debt		1,191		—		—		1,187		1,187
Senior long-term debt		2,068		—		—		2,456		2,456

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Organization and Limited Liability Company Matters (Narrative) (Details) - USD ($)	6 Months Ended	92 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	May 03, 2011
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Business formation date	Mar. 04, 2011
Business formation State	California
Business activities, description	raising capital and originating equipment financing transactions and acquiring equipment to engage in equipment leasing and sales activities
Proceeds from sale of Limited Liability Company Units		$ 66,000,000
Other Members [Member]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Members capital account, Units issued	6,542,557	6,542,557		6,542,557
Members capital account, Units outstanding	6,542,557	6,542,557	6,542,557	6,542,557	6,542,557	6,542,557	6,557,057
Initial Member [Member]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Contributions of capital								$ 500
Members capital account, Units issued	50	50		50

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Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) segment	Jun. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Equipment on operating leases, depreciation method			straight-line
Investment in securities	$ 320		$ 320		$ 144
Warrants, fair value	195		$ 195		$ 376
Number of operating segments | segment			1
Number of reportable segments | segment			1
Unrealized gain (loss) on investment in securities	5	$ (48)	$ 8	$ 91
Impairment losses on investment in securities		16		16
Unrealized loss on fair value adjustment for warrants	$ (13)	$ (2)	$ (13)	$ (2)
Practical expedients package			true
Minimum [Member]
Required assets value of financial institutions for cash deposits			$ 10,000,000
Operating leases, period for non accrual status			90 days
Accounts receivable period for non accrual status			90 days
Operating leases, initial terms	36 months		36 months
Maximum [Member]
U.S. Treasury instruments maturity period			90 days
Cash deposits, insured amount	$ 250		$ 250
Operating leases, period of review for impairment			90 days
Accounts receivable, period of review for impairment			90 days
Operating leases, initial terms	120 months		120 months

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Notes Receivable, Net (Narrative) (Details)	6 Months Ended
	Jun. 30, 2019
Financing Receivable, Recorded Investment, Past Due [Line Items]
Notes receivable maturity date, description	The notes mature in 2020.
Minimum [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Terms of the notes receivable	84 months
Maximum [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Terms of the notes receivable	90 months
Notes receivable, interest rate	18.00%

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Notes Receivable, Net (Minimum Future Payments Receivable) (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Notes Receivable, Net
Six months ending December 31, 2019	$ 29
Less: portion representing unearned interest income	(29)
Notes receivable, net

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Notes Receivable, Net (Initial Direct Costs, Amortization Expense Related to Notes Receivable and Company's Operating and Direct Finance Leases) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amortization of initial direct costs	$ 16	$ 34
Notes Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amortization of initial direct costs	3	6
Lease Assets [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amortization of initial direct costs	$ 13	$ 28

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Allowance for Credit Losses (Activity in Allowance for Doubtful Accounts) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Jun. 30, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance		$ 67	$ 56
Provision for credit losses	$ 23	30	(56)
Write-off		(80)
Ending Balance	17	17
Allowance For Doubtful Accounts [Member] | Operating Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance			44
Provision for credit losses		17	(44)
Write-off
Ending Balance	17	17
Valuation Adjustments on Financing Receivables [Member] | Notes Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance		67	12
Provision for credit losses		13	(12)
Write-off		(80)
Ending Balance

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Allowance for Credit Losses (Recorded Investment in Financing Receivables) (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Allowances for credit losses:
Ending balance	$ 67
Ending balance: individually evaluated for impairment	67
Ending balance: collectively evaluated for impairment
Financing Receivables:
Ending balance
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment

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Allowance for Credit Losses (Financing Receivables by Credit Quality Indicator and by Class) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment [Line Items]
Notes receivable, net
Notes Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Notes receivable, net		$ 67
Notes Receivable [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Notes receivable, net
Notes Receivable [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Notes receivable, net
Notes Receivable [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Notes receivable, net
Notes Receivable [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Notes receivable, net		$ 67

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Allowance for Credit Losses (Schedule of Impaired Loans) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($)
Allowance for Credit Losses [Abstract]
Notes receivable, With no allowance recorded, Average recorded investment
Notes receivable, With no allowance recorded, Interest income recognized
Notes receivable, With an allowance recorded, Recorded investment	67
Notes receivable, With an allowance recorded, Unpaid principal balance	67
Notes receivable, With an allowance recorded, Related allowance	67
Notes receivable, With an allowance recorded, Average recorded investment
Notes receivable, With an allowance recorded, Interest income recognized
Recorded investment, Total	67
Unpaid principal balance, Total	67
Average recorded investment, Total
Interest income recognized, Total

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Allowance for Credit Losses (Net Investment in Financing Receivables by Age) (Details) - Notes Receivable [Member] $ in Thousands	Dec. 31, 2018 USD ($)
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
Current	67
Total Financing Receivables	67
Recorded Investment > 90 Days and Accruing
31-60 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
61-90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due
Greater Than 90 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due

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Equipment Under Operating Leases, Net (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2019	Dec. 31, 2018
Equipment Under Operating Leases, Net [Abstract]
Amortization of initial direct costs	$ 16	$ 34
Average estimated residual value of assets on operating leases			20.00%	34.00%
Operating leases in non-accrual status			$ 0	$ 0

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Equipment Under Operating Leases, Net (Investment in Leases) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Lessor, Lease, Description [Line Items]
Balance December 31, 2018	$ 22,777
Reclassifications & Additions/ Dispositions	(246)
Depreciation/ Amortization Expense or Amortization of Leases	(1,791)
Balance June 30, 2019	20,740
Initial direct costs, accumulated amortization	182	$ 182
Operating Leases [Member]
Lessor, Lease, Description [Line Items]
Balance December 31, 2018	20,277
Reclassifications & Additions/ Dispositions	(1,719)
Depreciation/ Amortization Expense or Amortization of Leases	(1,791)
Balance June 30, 2019	16,767
Finance Leases [Member]
Lessor, Lease, Description [Line Items]
Balance December 31, 2018	5
Reclassifications & Additions/ Dispositions	(5)
Depreciation/ Amortization Expense or Amortization of Leases
Balance June 30, 2019
Assets Held for Sale [Member]
Lessor, Lease, Description [Line Items]
Balance December 31, 2018	2,463
Reclassifications & Additions/ Dispositions	1,478
Depreciation/ Amortization Expense or Amortization of Leases
Balance June 30, 2019	3,941
Initial Direct Cost [Member]
Lessor, Lease, Description [Line Items]
Balance December 31, 2018	32
Depreciation/ Amortization Expense or Amortization of Leases
Balance June 30, 2019	$ 32

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Equipment Under Operating Leases, Net (Schedule of Depreciation Expense and Impairment Losses of Investments in Leases) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Equipment Under Operating Leases, Net [Abstract]
Depreciation of operating lease assets	$ 909	$ 1,094	$ 1,791	$ 2,209

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Equipment Under Operating Leases, Net (Property on Operating Leases) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Property Subject to or Available for Operating Lease [Line Items]
Property on operating leases, gross	$ 42,759	$ 46,120
Less accumulated depreciation	(25,992)	(25,843)
Property on operating leases, net	16,767	20,277
Additions, gross
Additions, less accumulated depreciation	(1,791)
Additions, net	(1,791)
Reclassifications or dispositions, gross	(3,361)
Reclassifications or dispositions, less accumulated depreciation	1,642
Reclassifications or dispositions, net	(1,719)
Marine Vessel [Member]
Property Subject to or Available for Operating Lease [Line Items]
Property on operating leases, gross	19,410	19,410
Additions, gross
Reclassifications or dispositions, gross
Manufacturing [Member]
Property Subject to or Available for Operating Lease [Line Items]
Property on operating leases, gross	7,836	7,836
Additions, gross
Reclassifications or dispositions, gross
Transportation, Rail [Member]
Property Subject to or Available for Operating Lease [Line Items]
Property on operating leases, gross	5,095	7,686
Additions, gross
Reclassifications or dispositions, gross	(2,591)
Facility, Other [Member]
Property Subject to or Available for Operating Lease [Line Items]
Property on operating leases, gross	5,084	5,084
Additions, gross
Reclassifications or dispositions, gross
Agriculture [Member]
Property Subject to or Available for Operating Lease [Line Items]
Property on operating leases, gross	2,112	2,112
Additions, gross
Reclassifications or dispositions, gross
Construction [Member]
Property Subject to or Available for Operating Lease [Line Items]
Property on operating leases, gross	2,009	2,009
Additions, gross
Reclassifications or dispositions, gross
Other [Member]
Property Subject to or Available for Operating Lease [Line Items]
Property on operating leases, gross	1,213	$ 1,983
Additions, gross
Reclassifications or dispositions, gross	$ (770)

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Equipment Under Operating Leases, Net (Future Minimum Lease Payments Receivable) (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Operating Leases
Six months ending December 31, 2019	$ 1,544
Year ending December 31, 2020	2,342
2021	2,037
2022	1,902
2023	1,176
2024	254
Thereafter	16
Operating leases, total	$ 9,271

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Equipment Under Operating Leases, Net (Schedule of Useful Lives of Lease Assets) (Details)	6 Months Ended
	Jun. 30, 2019
Transportation, Rail [Member] | Minimum [Member]
Property Subject to or Available for Operating Lease [Line Items]
Useful lives of lease assets	35 years
Transportation, Rail [Member] | Maximum [Member]
Property Subject to or Available for Operating Lease [Line Items]
Useful lives of lease assets	50 years
Marine Vessel [Member] | Minimum [Member]
Property Subject to or Available for Operating Lease [Line Items]
Useful lives of lease assets	20 years
Marine Vessel [Member] | Maximum [Member]
Property Subject to or Available for Operating Lease [Line Items]
Useful lives of lease assets	30 years
Manufacturing [Member] | Minimum [Member]
Property Subject to or Available for Operating Lease [Line Items]
Useful lives of lease assets	10 years
Manufacturing [Member] | Maximum [Member]
Property Subject to or Available for Operating Lease [Line Items]
Useful lives of lease assets	15 years
Agriculture [Member] | Minimum [Member]
Property Subject to or Available for Operating Lease [Line Items]
Useful lives of lease assets	7 years
Agriculture [Member] | Maximum [Member]
Property Subject to or Available for Operating Lease [Line Items]
Useful lives of lease assets	10 years
Construction [Member] | Minimum [Member]
Property Subject to or Available for Operating Lease [Line Items]
Useful lives of lease assets	7 years
Construction [Member] | Maximum [Member]
Property Subject to or Available for Operating Lease [Line Items]
Useful lives of lease assets	10 years
Facility, Other [Member] | Minimum [Member]
Property Subject to or Available for Operating Lease [Line Items]
Useful lives of lease assets	7 years
Facility, Other [Member] | Maximum [Member]
Property Subject to or Available for Operating Lease [Line Items]
Useful lives of lease assets	10 years
Other [Member] | Minimum [Member]
Property Subject to or Available for Operating Lease [Line Items]
Useful lives of lease assets	7 years
Other [Member] | Maximum [Member]
Property Subject to or Available for Operating Lease [Line Items]
Useful lives of lease assets	10 years

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Related Party Transactions (Managing Member and/or Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Related Party Transactions [Abstract]
Cost reimbursements to Managing Member and/or affiliates	$ 132	$ 220	$ 292	$ 457
Asset management fees to managing Member	35	(63)	105	148
Related party transaction, total	$ 167	$ 157	$ 397	$ 605

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Non-Recourse Debt (Narrative) (Details) - Non-Recourse Debt [Member] $ in Millions	6 Months Ended
	Jun. 30, 2019 USD ($)
Debt Instrument [Line Items]
Gross operating lease rentals and future payments on direct financing leases	$ 5.2
Carrying value of pledged assets	$ 11.2
Note maturity date, description	The notes mature from 2019 through 2024.
Minimum [Member]
Debt Instrument [Line Items]
Fixed Interest rate on note	3.40%
Maximum [Member]
Debt Instrument [Line Items]
Fixed Interest rate on note	3.66%

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Non-Recourse Debt (Future Minimum Payments of Non-Recourse Debt) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Principal
Six months ending December 31, 2019	$ 770
Year ending December 31, 2020	959
Year ending December 31, 2021	946
Year ending December 31, 2022	979
Year ending December 31, 2023	1,012
Year ending December 31, 2024	172
Long-term debt, total	4,838	$ 1,191
Interest
Six months ending December 31, 2019	77
Year ending December 31, 2020	123
Year ending December 31, 2021	91
Year ending December 31, 2022	58
Year ending December 31, 2023	25
Year ending December 31, 2024	1
Long-term debt interest, total	375
Total
Six months ending December 31, 2019	847
Year ending December 31, 2020	1,082
Year ending December 31, 2021	1,037
Year ending December 31, 2022	1,037
Year ending December 31, 2023	1,037
Year ending December 31, 2024	173
Long-term debt principal and interest, total	$ 5,213

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Senior long-Term Debt (Narrative) (Details) - USD ($) $ in Thousands		12 Months Ended
	May 20, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Senior long-term debt		$ 2,068
Non-recourse promissory note	$ 9,200
Marine Services Equipment [Member] | ATEL 14, LLC [Member]
Debt Instrument [Line Items]
Senior long-term debt		$ 2,100
Senior long term debt, description	The note bore interest at a fixed rate of 3.4% per annum	The note bore interest at a fixed-rate of 3.5% per annum, to accrue in arrears on a monthly basis
Senior notes interest rate	3.40%	3.50%
Non-recourse promissory note	$ 4,600

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Borrowing Facilities (Narrative) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum amount of Credit Facility	$ 75,000	$ 75,000
Credit Facility expiration date	Jun. 30, 2019
Amended Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum amount of Credit Facility	$ 55,000
Credit Facility expiration date	Jun. 30, 2021

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Borrowings Facilities (Borrowings Under Facility) (Details) - Revolving Credit Facility [Member] - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Line Of Credit Facility [Line Items]
Total available under the financing arrangement	$ 75,000	$ 75,000
Amounts borrowed by affiliated partnerships and limited liability companies under the working capital, acquisition and warehouse facilities	(880)	(2,110)
Total remaining available under the working capital, acquisition and warehouse facilities	$ 74,120	$ 72,890

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Commitments (Narrative) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Commitments [Abstract]
Commitments to fund investments in notes receivable and purchase lease assets	$ 0

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Members' Capital (Narrative) (Details) - shares	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017
Other Members [Member]
Other Members Capital Account [Line Items]
Members capital account, Units issued	6,542,557		6,542,557
Members capital account, Units outstanding	6,542,557	6,542,557	6,542,557	6,542,557	6,542,557	6,557,057
Initial Member [Member]
Other Members Capital Account [Line Items]
Members capital account, Units issued	50		50
Maximum [Member] | Other Members [Member]
Other Members Capital Account [Line Items]
Members capital account, units authorized	15,000,000		15,000,000

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Members' Capital (Distributions to Other Members) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Distributions declared	$ 1,479		$ 1,486	$ 1,303
Weighted average number of Units outstanding	6,542,557	6,542,557	6,542,557	6,545,582
Other Members [Member]
Distributions declared	$ 1,479		$ 1,486	$ 1,303
Weighted average number of Units outstanding	6,542,557	6,542,557	6,542,557	6,545,582
Weighted average distributions per Unit	$ 0.23		$ 0.23	$ 0.20

XML

Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2019	Dec. 31, 2018
Fair Value Measurements [Abstract]
Fair value adjustments on investment in securities	$ 16	$ 16
Warrants, fair value			$ 195	$ 376
Notes receivable, fair value adjustments			$ 13	$ 67

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Fair Value Measurements (Fair Value, Warrants Measured on Recurring Basis) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Fair value of warrants at beginning of period			$ 376
Unrealized loss on fair value adjustment for warrants	$ 13	$ 2	13	$ 2
Fair value of warrants at end of period	195		195
Level 3 Estimated Fair Value [Member]
Fair value of warrants at beginning of period	208	387	376	387
Unrealized loss on fair value adjustment for warrants	(13)	(2)	(13)	(2)
Warrants converted to securities			(168)
Fair value of warrants at end of period	$ 195	$ 385	$ 195	$ 385

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Fair Value Measurements (Fair Value, Investment Securities Measured on Recurring Basis) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Unrealized gains on fair valuation of securities	$ 5	$ (48)	$ 8	$ 91
Level 1 Estimated Fair Value [Member]
Fair value of securities at the beginning of period	91	240	101	101
Unrealized gains on fair valuation of securities	4	(48)	(6)	91
Fair value of securities at the end of period	$ 95	$ 192	$ 95	$ 192

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Fair Value Measurements (Summary of Valuation Techniques and Significant Unobservable Inputs Used) (Details) - Level 3 Estimated Fair Value [Member] - Recurring [Member] - Warrants [Member] - Black-Scholes Formulation [Member]	Jun. 30, 2019 Y $ / shares	Dec. 31, 2018 Y $ / shares
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Valuation Technique [Extensible List]	cik0001519117:BlackScholesFormulationMember	cik0001519117:BlackScholesFormulationMember
Minimum [Member] | Stock Price [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.12	0.00
Minimum [Member] | Exercise Price [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.10	0.10
Minimum [Member] | Time to Maturity (in Years) [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values | Y	1.12	1.62
Minimum [Member] | Risk Free Interest Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.0175	0.0246
Minimum [Member] | Annualized Volatility [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.3536	0.3536
Maximum [Member] | Stock Price [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	12.92	9.98
Maximum [Member] | Exercise Price [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	1,000.00	1,000.00
Maximum [Member] | Time to Maturity (in Years) [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values | Y	6.58	7.08
Maximum [Member] | Risk Free Interest Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.0193	0.02596
Maximum [Member] | Annualized Volatility [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.9659	0.9194

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Fair Value Measurements (Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017
Financial assets:
Warrants, fair value	$ 195		$ 376
Level 1 Estimated Fair Value [Member]
Financial assets:
Investment in securities	95	$ 91	101	$ 192	$ 240	$ 101
Level 3 Estimated Fair Value [Member]
Financial assets:
Warrants, fair value	195	$ 208	376	$ 385	$ 387	$ 387
Carrying Amount [Member]
Financial assets:
Cash and cash equivalents	3,820		1,716
Investment in securities	95		127
Warrants, fair value	195		376
Financial liabilities:
Non-recourse debt	4,838		1,191
Senior long-term debt			2,068
Estimate of Fair Value [Member]
Financial assets:
Cash and cash equivalents	3,820		1,716
Investment in securities	95		127
Warrants, fair value	195		376
Financial liabilities:
Non-recourse debt	4,885		1,187
Senior long-term debt			2,456
Estimate of Fair Value [Member] | Level 1 Estimated Fair Value [Member]
Financial assets:
Cash and cash equivalents	3,820		1,716
Investment in securities	95		127
Warrants, fair value
Financial liabilities:
Non-recourse debt
Estimate of Fair Value [Member] | Level 2 Estimated Fair Value [Member]
Financial assets:
Cash and cash equivalents
Investment in securities
Warrants, fair value
Financial liabilities:
Non-recourse debt
Senior long-term debt
Estimate of Fair Value [Member] | Level 3 Estimated Fair Value [Member]
Financial assets:
Cash and cash equivalents
Investment in securities
Warrants, fair value	195		376
Financial liabilities:
Non-recourse debt	$ 4,885		1,187
Senior long-term debt			$ 2,456