10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

☒              Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the year ended December 31, 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 333‑203841

ATEL 17, LLC

(Exact name of registrant as specified in its charter)

California	90‑1108275
(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: None

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Act of 1934.Yes ☐ No ☒

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 such files).Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10‑K or any amendment to this Form 10‑K. ☒

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

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 Exchange Act).Yes ☐ No ☒

State the aggregate market value of voting stock held by non-affiliates of the registrant: Not applicable

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days. (See definition of affiliate in Rule 12b‑2 of the Exchange Act.) Not applicable

The number of Limited Liability Company Units outstanding as of February 29, 2020 was 2,565,749.

DOCUMENTS INCORPORATED BY REFERENCE

None.

PART I

Item 1. BUSINESS

General Development of Business

ATEL 17, LLC (the “Company” or the “Fund”) was formed under the laws of the state of California on April 16, 2015 (“Date of Inception”) for the purpose of equipment financing 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 “Manager”), a Nevada limited liability company. The Managing Member is controlled by ATEL Financial Services, LLC (“AFS”), a wholly-owned subsidiary of ATEL Capital Group. The Fund may continue as provided in the ATEL 17, LLC limited liability company operating agreement dated April 24, 2015 (the “Operating Agreement”). Contributions in the amount of $500 were received as of April 28, 2015, 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 January 5, 2016. The offering will continue until the earlier of a period of two years from that date or until sales of the limited liability company units (Units) to the public reach $150 million. As of February 2, 2016, subscriptions for the minimum number of Units (120,000, representing $1.2 million), excluding subscriptions from Pennsylvania investors, had been received and the Fund requested subscription proceeds to be released from escrow. On that date, the Company commenced initial operations and continued in its development stage activities until transitioning to an operating enterprise during the first quarter of 2016. Pennsylvania subscriptions are subject to a separate escrow and are released to the Fund only when aggregate subscriptions for all investors equal to at least $7.5 million. Total contributions to the Fund exceeded $7.5 million on July 6, 2016, at which time a request was processed to release the Pennsylvania escrowed amounts. The offering terminated on January 5, 2018.

As of December 31, 2019, cumulative gross contributions less rescissions and repurchases (net of distributions paid and allocated syndication costs, as applicable) totaling $25.7 million (inclusive of the $500 initial Member’s capital investment) have been received. As of the same date, 2,565,749 Units were issued and outstanding.

The Company’s principal objectives are to invest in a diversified portfolio of investments that will generate a favorable overall return to investors and (i) preserve, protect and return the Fund’s invested capital; (ii) generate regular cash distributions to Unit holders during the Offering Stage and Operating Stage of the Fund, with any balance remaining after required minimum distributions, equal to not less than 8% nor more than 10% per annum on investors’ Original Invested Capital, to be used to purchase additional investments during the first six years after the year the offering terminates; and (iii) provide additional cash distributions during the Liquidating Stage, commencing with the end of the six year reinvestment period and continuing until all investment portfolio assets have been sold or otherwise disposed.

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 7, Related party transactions, as set forth in Part II, Item 8, Financial Statements and Supplementary Data.) The Company is required to maintain reasonable cash reserves for working capital, for the repurchase of Units and for contingencies. The repurchase of Units is solely at the discretion of the Managing Member.

Narrative Description of Business

The Company has acquired and intends to acquire various types of new and used equipment subject to leases and to make loans secured by equipment acquired by its borrowers. The Company’s primary investment objective is to acquire investments primarily in low-technology, low-obsolescence capital equipment such as the core operating equipment used by companies in the manufacturing, mining and transportation industries. A portion of the portfolio will include some more technology-dependent equipment such as certain types of communications equipment, medical equipment, manufacturing equipment and office equipment.

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The Company only purchases equipment under pre-existing leases or for which a lease will be entered into concurrently at the time of the purchase. Through December 31, 2019, the Company has purchased equipment with a total acquisition price of $14 million. The Company has also funded investments in notes receivable totaling $6.2 million through December 31, 2019.  

As of the date of the final commitment of its proceeds from the sale of Units, the Company’s objective is to have at least 75% of its investment portfolio (by cost) consist of equipment leased to lessees that the Manager deems to be high quality corporate credits and/or leases guaranteed by such high quality corporate credits. High quality corporate credits are lessees or guarantors who have a credit rating by Moody’s Investors Service, Inc. of “Baa3” or better, or the credit equivalent as determined by the Manager, or are public and private corporations with substantial revenues and histories of profitable operations, as well as established hospitals with histories of profitability or municipalities. The remaining 25% of the initial investment portfolio may include equipment lease transactions and other debt or equity financing for companies which, although deemed creditworthy by the Manager, would not satisfy the specific credit criteria for the portfolio described above. Included in this 25% of the portfolio may be growth capital financing investments. No more than 25% of the initial portfolio, by cost, will consist of these growth capital financing investments.

The equipment financing industry is highly competitive. Equipment manufacturers, corporations, partnerships and others offer users an alternative to the purchase of most types of equipment with payment terms that vary widely depending on the type of financing, the lease or loan term and type of equipment. The ability of the Company to keep the equipment leased and the terms of purchase, lease and sale of equipment depends on various factors (many of which neither the Managing Member nor the Company can control), such as general economic conditions, including the effects of inflation or recession, and fluctuations in supply and demand for various types of equipment resulting from, among other things, technological and economic obsolescence.

The Managing Member will use its best efforts to diversify lessees by geography and industry and to maintain an appropriate balance and diversity in the types of equipment acquired and the types of leases entered into by the Company, and will apply the following policies: (i) The Managing Member will seek to limit the amount invested in equipment or property leased to any single lessee to not more than 20% of the aggregate purchase price of investments as of the final commitment of net offering proceeds; (ii) in no event will the Company’s equity investment in equipment or property leased to a single lessee exceed an amount equal to 20% of the maximum capital from the sale of Units (or $30,000,000); and (iii) the Managing Member will seek to invest not more than 20% of the aggregate purchase price of equipment in equipment acquired from a single manufacturer. However, this last limitation is a general guideline only, and the Company may acquire equipment from a single manufacturer in excess of the stated percentage during the offering period and before the offering proceeds are fully invested, or if the Managing Member deems such a course of action to be in the Company’s best interest.

The primary geographic region in which the Company seeks leasing opportunities is North America. All of the Company’s current operating revenues and long-lived assets relate to customers domiciled in North America.

The business of the Company is not seasonal. The Company has no full time employees. Employees of the Managing Member and affiliates provide the services the Company requires to effectively operate. The cost of these services is reimbursed by the Company to the Managing Member and affiliates per the Operating Agreement.

For further information refer to the financial statements and footnotes.

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Equipment Leasing Activities

The Company has acquired a diversified portfolio of equipment. The equipment, all currently located in the U.S., has been leased to lessees in various industries. The following tables set forth the types of equipment acquired by the Company through December 31, 2019 and the industries to which the assets have been leased (dollars in thousands):  

	Purchase Price
	Excluding		Percentage of Total
Asset Types	Acquisition Fees		Acquisitions
Transportation, rail	$	3,679	26.33	%
Mining		2,749	19.67	%
Construction		1,484	10.62	%
Paper processing		1,058	7.57	%
Marine vessels		1,041	7.45	%
Containers		860	6.15	%
Agriculture		742	5.31	%
Materials handling		960	6.87	%
Aviation		1,306	9.34	%
Transportation, other		97	0.69	%
	$	13,976	100.00	%

	Purchase Price
	Excluding		Percentage of Total
Industry of Lessee	Acquisition Fees		Acquisitions
Transportation, rail	$	3,679	26.33	%
Construction		1,728	12.36	%
Agriculture		1,345	9.62	%
Paper and allied products		1,058	7.57	%
Utilities		1,041	7.45	%
Refuse systems		860	6.15	%
Chemical		1,093	7.82	%
Transportation, air		1,306	9.34	%
Industrial machinery		1,569	11.23	%
Transportation services, other		297	2.13	%
	$	13,976	100.00	%

From inception to December 31, 2019, the Company had disposed of certain leased assets as set forth below (in thousands):

	Original
	Equipment Costs
	Excluding
Asset Types	Acquisition Fees		Sale Price		Gross Rents
Transportation, rail	$	22	$	19	$	9
	$	22	$	19	$	9

For further information regarding the Company’s equipment lease portfolio as of December 31, 2019, see Note 5, Equipment under operating leases, net, as set forth in Part II, Item 8, Financial Statements and Supplementary Data.

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Notes Receivable Activities

The Company finances assets in diverse industries. The following tables set forth the types of assets financed by the Company through December 31, 2019 and the industries to which the assets have been financed (dollars in thousands):  

	Amount Financed
	Excluding		Percentage of Total
Asset Types	Acquisition Fees		Acquisitions
Research	$	1,599	25.89	%
Manufacturing		871	14.10	%
Agriculture		706	11.43	%
Miscellaneous		3,000	48.58	%
	$	6,176	100.00	%

	Amount Financed
	Excluding		Percentage of Total
Industry of Lessee	Acquisition Fees		Acquisitions
Business services	$	1,500	24.29	%
Electrical		1,125	18.22	%
Health services		1,000	16.19	%
Computer engines		871	14.10	%
Agriculture		706	11.43	%
Manufacturing		500	8.10	%
Research & development		474	7.67	%
	$	6,176	100.00	%

From inception to December 31, 2019, assets financed by the Company that are associated with terminated loans are as follows (in thousands):

	Amount Financed		Early
	Excluding		Termination of		Total
Asset Types	Acquisition Fees		Notes Proceeds		Payments Received
Miscellaneous		500		359		219
Research		1,125		837		565
	$	1,625	$	1,196	$	784

For further information regarding the Company’s notes receivable portfolio as of December 31, 2019, see Note 4, Notes receivable, net, as set forth in Part II, Item 8, Financial Statements and Supplementary Data.

Item 2. PROPERTIES

The Company does not own or lease any real property, plant or material physical properties other than the equipment held for lease as set forth in Item 1.

Item 3. LEGAL PROCEEDINGS

In the ordinary course of conducting business, there may be certain claims, suits, and complaints filed against the Company. In the opinion of management, the outcome of such matters, if any, will not have a material impact on the Company’s financial position or results of operations. No material legal proceedings are currently pending against the Company or against any of its assets.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

There are certain material conditions and restrictions on the transfer of Units imposed by the terms of the Operating Agreement. Consequently, there is no public market for Units and it is not anticipated that a public market for Units will develop. In the absence of a public market for the Units, there is no currently ascertainable fair market value for the Units.

Holders

As of December 31, 2019, a total of 413 investors were Unitholders of record in the Company.

Fund Valuation

Background to Fund Valuation

The Financial Industry Regulatory Authority (“FINRA”), in conjunction with the Securities and Exchange Commission (“SEC”) updated rules for the presentation of account statement values relative to pricing of Direct Placement Program (“DPP”) shares. Under FINRA Notice 15-02 (the “Notice”) the SEC approved amendments to National Association of Securities Dealers (“NASD”) Rule 2340, Customer Account Statements, and FINRA rule 2310, which address a FINRA member firm’s participation in a public offering of a DPP. In summary, the amendments require a FINRA member firm to include in the account statements for customers holding DPP securities a per share value for the DPP. This per share value must be prepared by, or with the material assistance or confirmation of, a third-party valuation expert or service. The results of this valuation must be disclosed in the issuer’s reports filed under the Securities Exchange Act of 1934. A valuation in compliance with the Notice must be undertaken and published on at least an annual basis.

The effective date of the Notice was April 11, 2016.

Methodologies

Broker dealers are required to provide a per share estimated value on the customer account statements for each non-listed DPP security held by their customers. Such estimated value must have been developed in a manner reasonably designed to provide a reliable value. Two valuation methodologies have been defined by FINRA, which by such designation are presumed to be reliable.

Net Investment Methodology

The amendments to NASD Rule 2340(c)(1)(A) require “net investment” to be based on the “amount available for investment” percentage disclosed in the “Estimated Use of Proceeds” section of the issuer’s offering prospectus. In essence, such value is equal to the offering price less selling commissions, other offering and organization expenses, and capital reserves. This method may be used for up to 150 days following the second anniversary of a Fund breaking escrow.

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Appraised Value Methodology

As amended, Rule NASD 2340(c)(1)(B) requires that the per share estimated value disclosed in an issuer’s most recent periodic or current report be based upon an appraisal of the assets and liabilities of the program by, or with the material assistance or confirmation of, a third-party valuation expert or service, in conformity with standard industry valuation practice as it relates to both the aforementioned assets and liabilities. No later than 150 days following the second anniversary of the issuer’s break of escrow for its minimum offering, this methodology must be used to establish the required estimated values.  

Unit Valuation

The per Unit valuation estimate for ATEL 17, LLC has been conducted, and the results disclosed herein, in compliance with the mandates of the Notice.

For ATEL 17, LLC, its estimated value per Unit reflects the Manager’s estimate of current portfolio valuation of all assets and liabilities of the Fund, calculated on a per Unit basis, and as such, does not represent a market value for the Units and may not accurately reflect the value of the Fund Units to the Unit holders if held over time to Fund maturity.

In connection with any estimate of per Unit value, Unit holders and all parties are reminded that no public market for the Units exists. Additionally, in order to preserve the Fund’s pass-through status for federal income tax purposes, the Fund will not permit a secondary market or the substantial equivalent of a secondary market for the Units. In the absence of a public market for the Units, there is no currently ascertainable fair market value for the Units.

The estimate of per Unit value does not take into account any extraordinary potential future business activity of the Fund; rather the valuation represents a snapshot view of the Fund’s portfolio as of the valuation date. In addition, the Fund does not include any analysis of the distributions that have already been paid by the Fund, nor the anticipated returns to Unit holder over the full course of the Fund life cycle, which will be dependent on many factors.

Disclosure

The estimated value per Unit reported in this Form 10-K has been calculated using the “Appraised Value Methodology” described above under “Methodologies” above, as of December 31, 2019.

ATEL 17, LLC, will satisfy the disclosure requirements for providing estimated per Unit values pursuant to the Notice as follows:

For these disclosure, subsequent to the Fund's initial compliance with FINRA 15-02, annual disclosures of estimated per unit values, through the termination of the Fund, will be accomplished and included on an annual basis in a document filed with the Securities and Exchange Commission available to the public.

Specifics Underlying Valuation Methodology:

Notes and Explanation of Valuation Components and Calculation

A. Fund Assets and Liabilities (other than as specifically identified below):  The estimated values for non-interest bearing items such as current assets and liabilities are assumed to equal their reported GAAP balances as an appropriate approximation of their fair values. Debt (interest bearing) is assumed to equal the fair values of the debt as disclosed in the footnotes of the financial statements.

B. Equipment under operating leases (net of fees and expenses):  The estimated values for equipment under operating leases are based on calculating the present value of the projected future cash flows. Projected future cash flows include both the remaining contractual lease payments, plus assumptions on lease renewals and sale value of the residuals. Projected future cash flows are net of projected future fees and expenses including:

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· management fees applicable for the Fund (1.25% of the aggregate original equipment cost of Portfolio Assets during offering stage, 1.75% of the aggregate net Portfolio Assets during operating stage and 1.75% of the Book Value of the Fund Assets less total cash reported as of the end of the most recent prior fiscal quarter or year, as the case may be)

· carried interest applicable for the Fund (0.01% of distributions)

· operating expenses which are assumed to be 3% of original equipment costs for the Fund

Projected future cash flows have been discounted back to present value at discount rates based on like-term U.S. Treasury yields (as of the valuation date) plus a 400 basis point spread, to account for the credit risk differentials between the instrument being valued and U.S. Treasury security yields.

Residual values assumptions used in the cash flow projections are as follows:

For On-Lease and Month-to-Month Lease:  Considers realized residual as a percent of book residual of 166%, based on ATEL’s historical track record as of December 31, 2019.

For Off-Lease:  A current fair market value of off-lease equipment is based upon estimates from ATEL’s seasoned Asset Management Group.

Special Situation Leases:  The valuation of certain leases has been performed outside of the above noted protocol based upon specific lease assumptions different than the macro assumptions above, due to the specific situations of those leases.

C. Investments in Notes Receivable:  The estimated values for Investments in Notes Receivable are 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 value techniques and market rates for similar types of lending arrangements, which may consider adjustments for impaired loans as deemed necessary.

D. Warrants Outstanding:  The estimated values for Warrants Outstanding considers the reported GAAP balances to be an appropriate approximation of their fair values.

E. Accrued distributions:  Accrued distributions, which are payable to the Unit holders have been removed from the balance sheet liability section because they are not a liability to a third party.

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ATEL 17, LLC Unit Valuation

The Manager’s estimated per Unit value of ATEL 17, LLC at December 31, 2019 as determined, and derived under the guidelines of the Appraised Value Methodology, and pursuant to the above specific enumerated component valuation methodologies and calculations, equals $6.94. An independent national public accounting firm with valuation expertise was retained to examine, attest and confirm ATEL 17, LLC’s per Unit valuation and its component methodologies and calculation as it relates to compliance with the regulatory mandate defined in the Notice. In this regard, they examined the components of the valuation methodologies and determined them to be reasonable and within industry standards. Other component attributes, including the bases and related key assumptions of the calculation were tested for their completeness, underlying documentation support and mathematical accuracy. Upon completion of their efforts, their attestation report confirmed that the per unit valuation of ATEL 17, LLC, and the related notes, in all material respects, was based upon industry practice as described in the Manager’s valuation approach.

Disclaimer

The foregoing Fund valuation has been performed solely for the purpose of providing an estimated value per Unit in accordance with a regulatory mandate, in order to provide the broker dealer and custodian community with a valuation on a reasonable basis for use in assigning an estimation of a Unit holder’s account value. Any statement of such valuation is to be accompanied by statements that the value so calculated does not represent an estimate of the amount a Unit holder would receive if the Unit holder were to seek to sell the Units, and that the Fund intends to liquidate its assets in the ordinary course of its business and over the Fund’s term. Further, each Fund Valuation is to be accompanied by a disclosure that there can be no assurance as to (1) when the Fund will be fully liquidated, (2) the amount the Fund may actually receive if and when the Fund seeks to liquidate its assets, (3) the amount of lease or loan payments the Fund will actually receive over the remaining term, (4) the amount of asset disposition proceeds the Fund will actually receive over the remaining term, and (5) the amounts that may actually be received in distributions by Unit holders over the course of the remaining term.

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 April 2016. Additional distributions have been consistently made through December 31, 2019.

Cash distributions were paid by the Fund to Unitholders of record as of November 30, 2019, and paid through December 31, 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. 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 17, LLC Prospectus dated January 5, 2016 (“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.

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.

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The following table summarizes distribution activity for the Fund from inception through December 31, 2019 (in thousands except for 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
Feb 2016 - Nov 2016	Apr 2016 - Dec 2016	$	492		$	—		$	492			0.64	770,832
Dec 2016 - Nov 2017	Jan 2017 - Dec 2017		1,540			—			1,540			0.78	1,967,313
Dec 2017 - Nov 2018	Jan 2018 - Dec 2018		2,043			—			2,043			0.80	2,562,088
Dec  2018 - Nov 2019	Jan 2019 - Dec 2019		2,052			—			2,052			0.80	2,565,749
		$	6,127		$	—		$	6,127		$	3.02
Source of distributions
Lease and loan payments and sales proceeds received		$	6,127	100.00%	$	—	0.00%	$	6,127	100.00%
		$	6,127	100.00%	$	—	0.00%	$	6,127	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 distributions rate for those units which were outstanding for all of the applicable period.

(3) Balances shown represent weighted average units for the period from February 2 - November 30, 2016, from December 1, 2016 - November 30, 2017, December 1, 2017 - November 30, 2018, and from December 1, 2018 - November  30, 2019,  respectively.

Use of Proceeds from Registered Securities

Information provided pursuant to § 229.701 (Item 701(f)) (formerly included in Form SR):

(1) Effective date of the offering: January 5, 2016; File Number: 333-203841

(2) Offering commenced: January 5, 2016

(3) The offering did not terminate before any securities were sold

(4) The managing underwriter is ATEL Securities Corporation.

(5) The title of the registered class of securities is “Units of Limited Liability Company Interest.”

(6) Aggregate amount and offering price of securities registered and sold as of December 31, 2019 (dollars in thousands):

		Aggregate price			Aggregate
		of offering			price of
	Amount	amount			offering
Title of Security	Registered	registered		Units sold	amount sold
Units of Limited Company Interest	15,000,000	$	150,000	2,565,749	$	25,850

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(7) Costs incurred for the issuers’ account in connection with the issuance and distribution of the securities registered for each category listed below (in thousands):

	Direct or indirect payments
	to directors, officers,
	Managing Members of the
	issuer or their associates, to
	persons owning ten percent
	or more of any class of		Direct or
	equity securities of the		indirect
	issuer; and to affiliates of		payments to
	the issuer		others		Total
Underwriting discounts and commissions	$	516	$	1,807	$	2,323
Other syndication costs		—		1,548		1,548
Total expenses	$	516	$	3,355	$	3,871
(8)Net offering proceeds to the issuer after the total expenses in item 7 (in thousands):					$	21,979

(9)  The amount of the net offering proceeds to the issuer used for each of the purposes listed below:

	Direct or indirect payments
	to directors, officers,
	Managing Members of the
	issuer or their associates, to
	persons owning ten percent
	or more of any class of		Direct or
	equity securities of the		indirect
	issuer; and to affiliates of		payments to
	the issuer		others		Total
Purchase and installation of machinery and equipment	$	332	$	13,976	$	14,308
Investment in notes receivable		24		6,176		6,200
Distributions paid and accrued		1		6,355		6,356
Other expenses		—		4,216		4,216
	$	357	$	30,723	$	31,080
(10) Net offering proceeds to the issuer after the total investments and distributions in item 9 (in thousands):					$	(9,101)

Item 6. SELECTED FINANCIAL DATA

A smaller reporting company is not required to present selected financial data in accordance with item 301(c) of Regulation S-K.

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Statements contained in this Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) and elsewhere in this Form 10-K, 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 defaults and the creditworthiness of its lessees. 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-K. 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-K or to reflect the occurrence of unanticipated events, other than as required by law.

Overview

ATEL 17, LLC (the “Company” or the “Fund”) was formed under the laws of the state of California on April 16, 2015 (“Date of Inception”) for the purpose of equipment financing and acquiring equipment to engage in equipment leasing and sales activities.

The offering of the Company was granted effectiveness by the Securities and Exchange Commission as of January 5, 2016. The offering will continue until the earlier of a period of two years from that date or until sales of the Limited Liability Company Units (“Units”) to the public reach $150 million. As of February 2, 2016, subscriptions for the minimum number of Units (120,000, representing $1.2 million), excluding subscriptions from Pennsylvania investors, had been received and the Fund requested subscription proceeds to be released from escrow. On that date, the Company commenced initial operations and continued in its development stage activities until transitioning to an operating enterprise during the first quarter of 2016. Pennsylvania subscriptions are subject to a separate escrow and are released to the Fund only when aggregate subscriptions for all investors equal to at least $7.5 million. Total contributions to the Fund exceeded $7.5 million on July 6, 2016, at which time a request was processed to release the Pennsylvania escrowed amounts. The offering was terminated on January 5, 2018. As of December 31, 2019, 2,565,749 Units were issued and outstanding.

During 2016, the Company initiated its initial acquisition stage with the investment of the net proceeds from the public offering of Units. Subsequently, during the reinvestment period (“Reinvestment Period”) (defined as six full years following the year the offering was terminated), the Company has reinvested and will reinvest cash flow in excess of certain amounts required to be distributed to the members and/or utilized its credit facilities to acquire additional equipment. Throughout the Reinvestment Period, which ends December 31, 2022, the Company anticipates continued reinvestment of cash flow in excess of minimum distributions and other obligations. The Company is governed by its Operating Agreement.

The Company may continue until terminated as provided in the Operating Agreement. Periodic distributions are paid at the discretion of the Managing Member.

11

Results of Operations

The Company had net income of $99 thousand and a net loss of $170 thousand for the years ended December 31, 2019 and 2018, respectively. The results for 2019 reflected increases in both total revenues and total operating expenses when compared to prior year.

Revenues

Total revenues for 2019 increased by $445 thousand, or 19%, as compared to prior year. The growth in total revenues was largely due to increases in the fair valuation of the Fund’s portfolio of warrants, operating lease income, and gains on sales of lease assets and early termination of notes receivable. Such increases were partially offset by a decline in interest income on notes receivable.

The increase in the fair value of the Fund’s portfolio of warrants resulted in a $413 thousand year over year increase in unrealized gains on warrants. Operating lease income increased by $184 thousand primarily due to an approximate $1.5 million of new assets acquired during the year. In addition, a borrower terminated its loan prior to maturity, which resulted in a $116 thousand gain on early termination of notes receivable. There was no such early termination of notes during the prior year.

Partially offsetting the increases in revenues was a $263 thousand decline in interest income on the Fund’s investments in notes receivable. Such decline was primarily attributable to loan maturities and the absence of notes receivable advances to borrowers during the current year.

Expenses

Total expenses for 2019 increased by $176 thousand, or 7%, as compared to prior year primarily due to increases in interest expense, depreciation on the Fund’s lease assets, and professional fees. Such increases were partially offset by reductions in costs reimbursed to the Manager, and acquisition expenses.

Interest expense increased by $135 thousand as the Fund borrowings increased in both 2019 and 2018, consistent with the growth in the Fund’s lease assets and notes receivable portfolios. Depreciation expense increased by $115 thousand due to lease acquisitions; and, professional fees increased by $98 thousand, which was mainly attributable to the timing of invoices related to Fund audits and compliance.

Such increases were partially offset by a $90 thousand decline in cost reimbursements and a $61 thousand decrease in acquisition expense, which were respectively attributable to lower Manager allocated costs, and lower year over year acquisition related activities.

Capital Resources and Liquidity

At December 31, 2019 and 2018, the Company’s cash and cash equivalents totaled $6.4 million and $6.5 million, respectively. The liquidity of the Company varies, increasing to the extent cash flows from leases and proceeds of asset sales exceed expenses and decreasing as leases and other assets are acquired, as distributions are made to the Members and to the extent expenses exceed cash flows from leases and proceeds from asset sales.

The Company currently believes it has adequate reserves available to meet its immediate cash requirements and those of the next twelve months, but in the event those reserves are found to be inadequate, the Company would likely be in a position to borrow against its current portfolio to meet such requirements. The Managing Member envisions no such requirements for operating purposes.

12

Cash Flows

The following table sets forth summary cash flow data (in thousands):

	2019		2018
Net cash provided by (used in) :
Operating activities	$	926	$	864
Investing activities		1,076		(3,098)
Financing activities		(2,076)		1,626
Net decrease in cash and cash equivalents	$	(74)	$	(608)

During 2019 and 2018, the Company’s primary sources of liquidity were from its portfolio of operating lease contracts, investments in notes receivable, Members’ capital contributions from the sale of Units and from borrowings under non-recourse debt. The net cash provided by the Company’s operating activities was $926 thousand and $864 thousand for 2019 and 2018, respectively. As the offering was terminated during early 2018, the last year of unit investment, $340 thousand of capital was raised from such unit sales during 2018. There were no unit sales transacted during 2019. Cash received from borrowings under non-recourse debt totaled $1.2 million and $3.7 million during the years ended December 31, 2019 and 2018, respectively. During the two-year period ended December 31, 2019, the Company also received $3.4 million of principal payments on notes receivable; $1.7 million during each of 2019 and 2018. In addition, during 2019, the Company realized $837 thousand of proceeds from early termination of certain notes receivable. No such proceeds from early termination of notes receivable occurred during 2018.

During 2019 and 2018, cash was primarily used to acquire lease assets, invest in notes receivable, and to pay distributions and syndication costs. Cash used to acquire lease assets totaled $1.5 million and $1.3 million for 2019 and 2018, respectively. For 2019 operations activity, there was no cash used to invest in notes receivable; $3.6 million was invested during the prior year. Distributions paid to Other Members totaled $2.1 million and $2.0 million for 2019 and 2018, respectively. Selling commissions and syndication costs of $51 thousand were paid during the final year of the Fund’s offering (2018); and during such year, $151 thousand was used for repurchasing of units.  No units were repurchased during 2019.

Distributions

The Company commenced periodic distributions beginning with the month of February 2016. Additional distributions have been consistently made through December 31, 2019. See Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities, for additional information regarding the distributions.

Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies

At December 31, 2019, there were no commitments to purchase lease assets and fund investments in notes receivable.

Off-Balance Sheet Transactions

None.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the Report of Independent Registered Public Accounting Firm, Financial Statements and Notes to Financial Statements attached hereto at pages 14 through 37.

13

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Member

ATEL 17, LLC

Opinion on the Financial Statements

We have audited the accompanying balance sheets of ATEL 17, LLC (the “Company”) as of December 31, 2019 and 2018,  the related statements of operations, changes in members’ capital, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Management of the Company’s Managing Member. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/   Moss Adams LLP

San Francisco, California

March 25, 2020

We have served as the Company’s auditor since 2015.

14

ATEL 17, LLC

BALANCE SHEETS

DECEMBER 31, 2019 AND 2018

(In Thousands)

	2019		2018
ASSETS
Cash and cash equivalents	$	6,410	$	6,484
Due from affiliates		-		44
Accounts receivable, net		81		60
Notes receivable, net		1,078		3,455
Warrants, fair value		731		302
Equipment under operating leases, net		10,290		10,186
Prepaid expenses and other assets		8		13
Total assets	$	18,598	$	20,544
LIABILITIES AND MEMBERS' CAPITAL
Accounts payable and accrued liabilities:
Affiliates	$	24	$	—
Accrued distributions to Other Members		228		228
Other		56		51
Non-recourse debt		3,508		3,531
Unearned operating lease income		114		113
Total liabilities		3,930		3,923
Commitments and contingencies
Members’ capital:
Managing Member		1		1
Other Members		14,667		16,620
Total Members’ capital		14,668		16,621
Total liabilities and Members’ capital	$	18,598	$	20,544

See accompanying notes.

15

ATEL 17, LLC

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(In Thousands Except for Units and Per Unit Data)

	2019		2018
Revenues:
Leasing and lending activities:
Operating leases	$	1,867	$	1,683
Notes receivable interest income		358		621
Gain on sales of lease assets and early termination of notes receivable		116		—
Unrealized gain on fair value adjustment for warrants		429		16
Other		7		12
Total revenues		2,777		2,332
Expenses:
Depreciation of operating lease assets		1,336		1,221
Asset management fees to Managing Member		269		268
Acquisition expense		47		108
Cost reimbursements to Managing Member and/or affiliates		331		421
Reversal of credit losses		—		(18)
Amortization of initial direct costs		67		77
Interest expense		159		24
Professional fees		196		98
Outside services		77		99
Taxes on income and franchise fees		7		(5)
Bank charges		87		120
Other		102		89
Total expenses		2,678		2,502
Net income (loss)	$	99	$	(170)
Net income (loss):
Other Members		99		(170)
	$	99	$	(170)
Net  income (loss) per Limited Liability Company Unit (Other Members)	$	0.04	$	(0.07)
Weighted average number of Units outstanding		2,565,749		2,567,041

See accompanying notes.

16

ATEL 17, LLC

STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(In Thousands Except for Units and Per Unit Data)

		Amount
		Other		Managing
	Units	Members		Member		Total
Balance December 31, 2017	2,551,749	$	18,706	$	1	$	18,707
Capital contributions	34,000		340		—		340
Repurchase of units	(20,000)		(151)		—		(151)
Syndication costs	—		(51)		—		(51)
Distributions to Other Members ($0.80 per Unit)	—		(2,054)		—		(2,054)
Net loss	—		(170)		—		(170)
Balance December 31, 2018	2,565,749	$	16,620	$	1	$	16,621
Distributions to Other Members ($0.80 per Unit)	—		(2,052)		—		(2,052)
Net income	—		99		—		99
Balance December 31, 2019	2,565,749	$	14,667	$	1	$	14,668

See accompanying notes.

17

ATEL 17, LLC

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(In Thousands)

	2019		2018
Operating activities:
Net income (loss)	$	99	$	(170)
Adjustment to reconcile net income (loss) to net cash provided by operating activities:
Accretion of note discount - warrants		(91)		(71)
Gain on sales of assets and early termination of notes receivable		(116)		—
Depreciation of operating lease assets		1,336		1,221
Amortization of initial direct costs		67		77
Reversal of credit losses		—		(18)
Unrealized gain on fair value adjustment for warrants		(429)		(16)
Changes in operating assets and liabilities:
Accounts receivable		(21)		24
Due from Managing Member and affiliates		44		(44)
Prepaid expenses and other assets		6		(1)
Accounts payable, Managing Member		—		(108)
Accounts payable, other		6		21
Accrued liabilities, affiliates		24		—
Unearned operating lease income		1		(51)
Net cash provided by operating activities		926		864
Investing activities:
Purchases of equipment under operating leases		(1,512)		(1,252)
Payments of initial direct costs		(5)		(38)
Note receivable advances		—		(3,551)
Proceeds from early termination of notes receivable		837		—
Proceeds from sales of equipment under operating leases		19		—
Principal payments received on notes receivable		1,737		1,743
Net cash provided by (used in) investing activities		1,076		(3,098)
Financing activities:
Borrowings under non-recourse debt		1,197		3,685
Repayments under non-recourse debt		(1,221)		(154)
Syndication costs paid to Managing Member and affiliates		—		(51)
Distributions to Other Members		(2,052)		(2,043)
Capital contributions		—		340
Repurchase/rescissions of Units		—		(151)
Net cash (used in) provided by financing activities		(2,076)		1,626
Net decrease in cash and cash equivalents		(74)		(608)
Cash at beginning of year		6,484		7,092
Cash at end of year	$	6,410	$	6,484
Supplemental disclosures of cash flow information:
Cash paid during the year for interest	$	156	$	19
Cash paid during the year for taxes	$	7	$	1
Schedule of non-cash financing transactions:
Distributions payable to Other Members at year-end	$	228	$	228

See accompanying notes.

18

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

1. Organization and Limited Liability Company matters:

ATEL 17, LLC (the “Company” or the “Fund”) was formed under the laws of the state of California on April 16, 2015 (“Date of Inception”) for the purpose of equipment financing 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 “Manager”), a Nevada limited liability company. The Managing Member is controlled by ATEL Financial Services, LLC (“AFS”), a wholly-owned subsidiary of ATEL Capital Group. The Fund may continue as provided in the ATEL 17, LLC limited liability operating agreement dated April 24, 2015 (the “Operating Agreement”). Contributions in the amount of $500 were received as of April 28, 2015, 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 January 5, 2016. The offering will continue until the earlier of a period of two years from that date or until sales of the limited liability company units (Units) to the public reach $150 million. As of February 2, 2016, subscriptions for the minimum number of Units (120,000, representing $1.2 million), excluding subscriptions from Pennsylvania investors, had been received and the Fund requested subscription proceeds to be released from escrow. On that date, the Company commenced initial operations and continued in its development stage activities until transitioning to an operating enterprise during the first quarter of 2016. Pennsylvania subscriptions are subject to a separate escrow and are released to the Fund only when aggregate subscriptions for all investors equal to at least $7.5 million. Total contributions to the Fund exceeded $7.5 million on July 6, 2016, at which time a request was processed to release the Pennsylvania escrowed amounts. The offering terminated on January 5, 2018.

As of December 31, 2019, cumulative gross contributions, less rescissions and repurchases (net of distributions paid and allocated syndication costs, as applicable), totaling $25.7 million (inclusive of the $500 initial Member’s capital investment) have been received. As of the same date, 2,565,749 Units were issued and outstanding.

The Company’s principal objectives are to invest in a diversified portfolio of investments that will (i) preserve, protect and return the Company’s invested capital; (ii) generate regular cash distributions to members, with any balance remaining after required minimum distributions to be used to purchase additional investments during the Reinvestment Period (ending six calendar years after the completion of the Company’s public offering of Units) and (iii) provide additional cash distributions following the Reinvestment Period and until all investment portfolio assets have been sold or otherwise disposed.

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 7, Related party transactions.) The Company is required to maintain reasonable cash reserves for working capital, for the repurchase of Units and for contingencies. The repurchase of Units is solely at the discretion of the Managing Member.

2. Summary of significant accounting policies:

Basis of presentation:

The accompanying balance sheets as of December 31, 2019 and 2018, and the related statements of operations, changes in members’ capital, and cash flows for the years then ended, have been prepared in accordance with accounting principles generally accepted in the United States of America (‘GAAP’) and the rules and regulations of the Securities and Exchange Commission. Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications had no significant effect on the reported financial position or results from operations.

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

19

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after December 31, 2019, up until the issuance of the financial statements. No events were noted which would require additional disclosure in the footnotes to the financial statements other than those disclosed in Note 15, Subsequent Events.

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 for determination of the allowance for doubtful accounts and reserve for credit losses on notes receivable.

Accounts receivable:

Accounts receivable represent the amounts billed under operating lease contracts, and notes receivable which are currently due to the Company. Allowances for doubtful accounts are typically established based on historical charge off and collection experience and the collectability 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.

Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, operating lease receivable, notes receivable and accounts receivable. The Company places the majority of its cash deposits in noninterest-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 Funds’ 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 and notes receivable represent amounts due from lessees or borrowers in various industries, related to equipment on operating leases or notes receivable.

Equipment on operating leases 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 Accounting Standards Condification (“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).

20

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

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.

Notes receivable, unearned interest income and related revenue recognition:

The Company records all future payments of principal and interest on notes as notes receivable, which are then offset by the amount of any related unearned interest income. For financial statement purposes, the Company reports only the net amount of principal due on the balance sheet. The unearned interest is recognized over the term of the note and the income portion of each note payment is calculated so as to generate a constant rate of return on the net balance outstanding. Any fees or costs related to notes receivable are recorded as part of the net investment in notes receivable and amortized over the term of the loan.

Allowances for losses on notes receivable are typically established based on historical charge off and collection experience and the collectability of specifically identified borrowers and billed and unbilled receivables. 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 payments 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.

Notes 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 note payments outstanding less than 90 days. Based upon management’s judgment, the related notes may be placed on non-accrual status. 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, all payments received are applied only against outstanding principal balances.

21

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

Initial direct costs:

With the adoption of Accounting Standards Update (“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 effective January 1, 2019. 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.

Acquisition expense:

Acquisition expense represents costs which include, but are not limited to, legal fees and expenses, travel and communication expenses, cost of appraisals, accounting fees and expenses and miscellaneous expenses related to the selection and acquisition of equipment which are reimbursable to the Managing Member under the terms of the Operating Agreement. As the costs are not eligible for capitalization as initial direct costs, such amounts are expensed as incurred.

Asset valuation:

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 the 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. 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.

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 Company’s principal decision makers are the Managing Member’s Chief Executive Officer and its Chief Financial Officer and Chief Operating Officer. The Company believes that its equipment leasing business operates as one reportable segment because: a) the Company measures profit and loss at the equipment portfolio level as a whole; b) the principal decision makers do not review information based on any operating segment other than the equipment leasing transaction portfolio; c) the Company does not maintain discrete financial information on any specific segment other than its equipment financing operations; d) the Company has not chosen to organize its business around different products and services other than equipment lease financing; and e) the Company has not chosen to organize its business around geographic areas.

22

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

The primary geographic region in which the Company seeks leasing opportunities is North America. For the years ended December 31, 2019 and 2018, all of the Company’s current operating revenues and long-lived assets relate to customers domiciled in the United States.

Investment in securities:

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. The Company recorded unrealized gain of $429 thousand and $16 thousand on fair valuation of its warrants during 2019 and 2018, respectively. The estimated fair value of the Company’s portfolio of warrants was $731 thousand and $302 thousand for the years ended December 31, 2019 and 2018, respectively.

Unearned operating lease income:

The Company records prepayments on operating leases as a liability under the caption of unearned operating lease income. The liability is recorded when prepayments are received and recognized as operating lease revenue over the period to which the prepayments relate using a straight-line method.

Income Taxes:

The Company is treated as a partnership for federal income tax purposes. Pursuant to the provisions of Section 701 of the Internal Revenue Code, a partnership is not subject to federal income taxes. Accordingly, the Company has provided current franchise income taxes for only those states which levy income taxes on partnerships.  For the year ended December 31, 2019, the related provision for state income taxes was $7 thousand; and, for the year ended December 31, 2018, the Company received $5 thousand of income tax credit adjustments. The Company does not have any entity level uncertain tax positions. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions and is generally subject to examination by U.S. federal (or state and local) income tax authorities for three years from the filing of a tax return.

The tax bases of the Company’s net assets and liabilities vary from the amounts presented in these financial statements at December 31, 2019 and 2018 as follows (in thousands):

	2019		2018
Financial statement basis of net assets	$	14,668	$	16,621
Tax basis of net assets (unaudited)		12,174		16,525
Difference	$	2,494	$	96

The primary differences between the tax bases of net assets and the amounts recorded in the financial statements are the result of differences in accounting for syndication costs and differences between the depreciation methods used in the financial statements and the Company’s tax returns.

23

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

The following reconciles the net income (loss) reported in these financial statements to the loss reported on the Company’s federal tax return (unaudited) for the years ended December 31, 2019 and 2018 (in thousands):

	2019		2018
Net income (loss) per financial statements	$	99	$	(170)
Tax adjustments (unaudited):
Adjustment to depreciation expense		(1,983)		(2,049)
Provision for losses and doubtful accounts		—		(18)
Adjustments to revenues		(427)		(68)
Other		13		(5)
Loss per federal tax return (unaudited)	$	(2,298)	$	(2,310)

Emerging growth company:

Section 107 of the Jumpstart Our Business Startups Act (the “JOBS Act”) provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we have chosen to “opt out” of such extended transition period and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

Per Unit data:

Net loss and distributions per Unit are based upon the weighted average number of members Units outstanding during the year.

Recent accounting pronouncements:

In February 2016, the Financial Accounting Standards Board, or FASB, issued ASU 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 and adopted as of January 1, 2019. Upon adoption, the Company applied the package of 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.

24

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

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 year ended December 31, 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 Company’s financial statements and prior periods are not reclassified to conform to the current presentation.

In June 2016, the FASB issued ASU 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 equipment under operating leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, equipment under operating 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. Management is currently evaluating the standard and expects the update may potentially result in the 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 ASU 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. Management is currently evaluating the impact of the standard on the financial statements and related disclosure requirements.

On August 15, 2019, the FASB issued a proposed ASU that would grant certain companies additional time to implement FASB standards on current expected credit losses (CECL), and hedging. The proposed ASU defers the effective date for CECL to fiscal periods beginning after December 15, 2022, including interim periods within those fiscal years; and defers the effective dates for hedging to fiscal periods beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The ASU was approved on October 16, 2019.

In August 2018, the FASB issued ASU 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.

25

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

3. Concentration of credit risk and major customers:

The Company leases equipment to lessees and provides debt financing to borrowers in diversified industries. Leases and notes receivable are subject to the Managing Member’s credit committee review. The leases and notes receivable provide for the return of the equipment to the Company upon default.

As of December 31, 2019 and 2018, there were concentrations (greater than or equal to 10% as a percentage of total equipment cost) of equipment leased to lessees and/or financed for borrowers in certain industries as follows:

	Percentage
	of Total Equipment Cost
Industry	2019		2018
Transportation, rail	26	%	30	%
Construction	21	%	14	%
Agriculture	*		11	%
Transportation, air	*		10	%

*Less than 10%

During 2019 and 2018, certain lessees and/or financial borrowers generated significant portions (defined as greater than or equal to 10%) of the Company’s total leasing and lending revenues, excluding gains or losses on disposition of assets, as follows:

		Percentage of Total Leasing
		and Lending Revenues
Lessee	Type of Equipment	2019		2018
Union Pacific Railroad Company	Railroad	22	%	22	%
Aggregate Industries Management, Inc.	Mining	15	%	11	%
Cargill, Inc.	Agriculture/Construction	11	%	11	%

These percentages are not expected to be comparable in future periods due to anticipated changes in the mix of investments and/or lessees as a result of normal business activities.

4. Notes receivable, net:

The Company has various notes receivable from borrowers who have financed the purchase of equipment through the Company. As of December 31, 2019, the original terms of the notes are from 24 to 42 months with interest rates ranging from 11.55%  to 16.49% per annum. The notes are secured by the equipment financed and have maturity dates ranging from 2020 to 2022.

As of December 31, 2019, the minimum future payments receivable are as follows (in thousands):

Year ending December 31, 2020	$	830
2021		437
2022		9
		1,276
Less: portion representing unearned interest income		(112)
		1,164
Less: warrants - notes receivable discount		(86)
Notes receivable, net	$	1,078

26

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

IDC amortization expense related to notes receivable and the Company’s operating leases for the years ended December 31, 2019 and 2018 are as follows (in thousands):

	2019		2018
IDC amortization - notes receivable	$	8	$	11
IDC amortization - lease assets		59		66
Total	$	67	$	77

5. Equipment under operating leases, net:

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

	Balance				Depreciation/		Balance
	December 31,				Amortization		December 31,
	2018		Additions		Expense		2019
Equipment under operating leases, net	$	10,001	$	1,494	$	(1,336)	$	10,159
Initial direct costs, net of accumulated amortization of $179 thousand    at December 31, 2019 and $148 thousand at December 31, 2018		185		5		(59)		131
Total	$	10,186	$	1,499	$	(1,395)	$	10,290

Impairment of equipment under operating leases:

As a result of impairment reviews, management determined that no impairment losses existed for the years ended December 31, 2019 and 2018.

The Company utilizes a straight line depreciation method over the term of the equipment lease for equipment on operating leases currently in its portfolio. Depreciation expense on the Company’s equipment totaled $1.3 million and $1.2 million for the respective years ended December 31, 2019 and 2018.IDC amortization expense related to the Company’s operating leases totaled $59 thousand and $66 thousand for the years ended December 31, 2019 and 2018, respectively.

All of the Company’s lease asset purchases and capital improvements were made during the years from 2016 through 2019.

27

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

Operating leases:

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

	Balance						Balance
	December 31,				Reclassifications		December 31,
	2018		Additions		or Dispositions		2019
Transportation, rail	$	3,679	$	—	$	(22)	$	3,657
Mining		1,728		1,021		—		2,749
Construction		1,242		242		—		1,484
Aviation		1,306		—		—		1,306
Paper processing		1,058		—		—		1,058
Marine vessels		1,041		—		—		1,041
Containers		860		—		—		860
Agriculture		742		—		—		742
Materials handling		711		249		—		960
Transportation, other		97		—		—		97
		12,464		1,512		(22)		13,954
Less accumulated depreciation		(2,463)		(1,336)		4		(3,795)
Total	$	10,001	$	176	$	(18)	$	10,159

The average estimated residual value for assets on operating leases was 37% and 38% of the assets’ original cost at December 31, 2019 and 2018, respectively. There were no operating leases in non-accrual status at both December 31, 2019 and 2018.

At December 31, 2019, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):

	Operating
	Leases
Year ending December 31, 2020	$	1,858
2021		1,364
2022		1,146
2023		1,091
2024		724
Thereafter		527
	$	6,710

The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of December 31, 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
Containers	15 - 20
Aviation	15 - 20
Mining	10 - 15
Paper processing	10 - 15
Agriculture	7 -  10
Construction	7 -  10
Materials handling	7 -  10
Transportation	7 -  10

28

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

6. Allowance for credit losses:

The Company’s had no allowance for credit losses for the years  ended December 31, 2019 and 2018.

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.

At December 31, 2019 and 2018, the Company’s financing receivables by credit quality indicator and by class of financing receivables are as follows (excludes warrants – notes receivable discount) (in thousands):

	Notes Receivable
	2019		2018
Pass	$	1,164	$	3,623
Special mention		—		—
Substandard		—		—
Doubtful		—		—
Total	$	1,164	$	3,623

29

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

At December 31, 2019 and December 31, 2018, investment in financing receivables is aged as follows (in thousands):

													Recorded
					Greater						Total		Investment>90
	31-60 Days		61-90 Days		Than		Total				Financing		Days and
December 31, 2019	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	1,164	$	1,164	$	—
Total	$	—	$	—	$	—	$	—	$	1,164	$	1,164	$	—

													Recorded
					Greater						Total		Investment>90
	31-60 Days		61-90 Days		Than		Total				Financing		Days and
December 31, 2018	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	3,623	$	3,623	$	—
Total	$	—	$	—	$	—	$	—	$	3,623	$	3,623	$	—

The Company had no financing receivables on non-accrual or impaired status at December 31, 2019 and 2018.

7. 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 lease and equipment 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, Inc. and performs services for the Company on behalf of the Managing Member. 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.

The Managing Member and/or affiliates earned fees and billed for reimbursements, pursuant to the Operating Agreement, during the years ended December 31, 2019 and 2018 are as follows (in thousands):

	2019		2018
Selling commissions, equal to 9% of the selling price of the Limited   Liability Company Units, deducted from Other Members capital	$	—	$	31
Reimbursement of other syndication costs to Managing Member   and/or affiliates, deducted from Other Members capital		—		20
Administrative costs reimbursed to Managing Member and/or affiliates		331		421
Asset management fees to Managing Member		269		268
Acquisition and initial direct costs paid to Managing Member		52		145
	$	652	$	885

30

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

8. Non-recourse debt:

At December 31, 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 3.70% to 4.66% per annum. The notes are secured by assignments of lease payments and pledges of assets. At December 31, 2019, gross operating lease rentals totaled approximately $3.8 million over the remaining lease terms and the carrying value of the pledged assets was $7.1 million. The notes mature from 2020 through 2028. 

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
Year ending December 31, 2020		1,169		124		1,293
2021		706		85		791
2022		518		61		579
2023		522		39		561
2024		288		20		308
Thereafter		305		29		334
	$	3,508	$	358	$	3,866

9. Syndication Costs:

Syndication costs are reflected as a reduction to Members’ capital, as such costs are netted against the capital raised. The amount shown is primarily comprised of selling commissions, well as fees pertaining to the organization of the Fund, document preparation, regulatory filing fees, and accounting and legal costs. Syndication costs totaled $0 and $51 thousand for the respective years ended December 31, 2019 and 2018.

The Operating Agreement places a limit for cost reimbursements to the Managing Member and/or affiliates. When added to selling commissions, such cost reimbursements may not exceed a total equal to 15% of all offering proceeds. As of December 31, 2019, the Company had not recorded any syndication costs in excess of the limitation. The limitation on the amount of syndication costs pursuant to the Operating Agreement is determined on the date of termination of the offering. At such time, the Manager guarantees repayment of any excess syndication costs (above the limitation) which it may have collected from the Company, which guarantee is without recourse or reimbursement by the Fund.

31

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

10. Borrowing facilities:

Effective October 31, 2019, the Company entered into an amended and restated revolving credit facility agreement (the “Credit Facility”) which replaced a previous agreement extended beyond its original expiration date of June 2019. The Company participated with ATEL Capital Group and certain subsidiaries and affiliated entities as borrowers, with a syndicate of financial institutions as lenders. The Credit Facility is comprised of a working capital sub-facility, an acquisition sub-facility, institutional leasing sub-facility, and a venture line sub-facility.   The Company participates in the acquisition sub-facility and the institutional leasing sub-facility, on  a several, but not joint, basis (i.e., the Company is liable only for the amount of the advances extended to the Company under those sub-facilities, and not as to amounts extended to any co-borrower).

The aggregate amount of the Credit Facility is $55 million, with sub-limits for each sub-facility, and currently expires June 30, 2021 (unless extended). The lending syndicate providing the Credit Facility has a blanket lien on all of the Company’s assets as collateral for any and all borrowings extended to the Company under the acquisition sub-facility or the institutional leasing sub-facility, on a several, but not joint, basis. The Credit Facility includes certain financial covenants made by the Company, as is customarily found in credit facilities of similar size and nature.

As of December 31, 2019 and 2018, borrowings under the Credit Facility were as follows (in thousands):

	2019		2018
Total available under the financing arrangement	$	55,000	$	75,000
Amount borrowed by the Company under the acquisition facility		—		(1,200)
Amount borrowed by affiliated partnerships and limited liability companies     under the venture, acquisition, and warehouse facilities.		(850)		(910)
Total remaining available under the working capital, acquisition and warehouse facilities	$	54,150	$	72,890

The Company and its affiliates pay an annual commitment fee to have access to this line of credit. As of December 31, 2019, the aggregate amount of the Credit Facility is potentially available to the Company, subject to certain sub-facility and borrowing-base limitations. However, as amounts are drawn on the Credit Facility by each of the Company and the affiliates who are borrowers under the Credit Facility, the amount remaining available to all borrowers to draw under Credit Facility is reduced. As the Warehousing Facility is a short term bridge facility, any amounts borrowed under the Warehousing Facility, and then repaid by the affiliated borrowers (including the Company) upon allocation of an acquisition to a specific purchaser, become available under the Warehouse Facility for further short term borrowing. 

As of December 31, 2019, the Company’s Tangible Net Worth requirement under the Credit Facility was $10.0 million, the permitted maximum leverage ratio was not to exceed 1.25 to 1, and the required minimum interest coverage ratio was not to be less than 2 to 1. 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 $14.7 million, 0.24 to 1, and 18.67 to 1, respectively, as of December 31, 2019. As such, as of December 31, 2019, the Company was in compliance with all material financial covenants, and with all other material conditions of the Credit Facility. The Company does not anticipate any covenant violations nor does it anticipate that any of these covenants will restrict its operations or its ability to procure additional financing.

Fee and interest terms

The interest rate on the Credit Facility is based on either the LIBOR plus 2.25% 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. There were no borrowings outstanding at December 31, 2019 and 2018.

32

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

Warehouse facility

To hold the assets under the Warehousing Facility prior to allocation to specific investor programs, a Warehousing Trust has 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 December 31, 2019, the investment program participants were the Company, ATEL 15, LLC and ATEL 16, 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.

11. Commitments:

At December 31, 2019, there were no commitments to purchase lease assets and fund investments in notes receivable.

12. Guarantees:

The Company enters into contracts that contain a variety of indemnifications. The Company’s maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

The Managing Member knows of no facts or circumstances that would make the Company’s contractual commitments outside standard mutual covenants applicable to commercial transactions between businesses. Accordingly, the Company believes that these indemnification obligations are made in the ordinary course of business as part of standard commercial and industry practice, and that any potential liability under the Company’s similar commitments is remote. Should any such indemnification obligation become payable, the Company would separately record and/or disclose such liability in accordance with GAAP.

33

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

13. Members’ capital:

A total of 2,565,749 Units were issued and outstanding at both December 31, 2019 and 2018, 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.

The Company has the right, exercisable at the Managing Member’s discretion, but not the obligation, to repurchase Units of a Unitholder who ceases to be a U.S. Citizen, for a price equal to 100% of the holder’s capital account. The Company is otherwise permitted, but not required, to repurchase Units upon a holder’s request. The repurchase of Fund Units is made in accordance with Section 13 of the Amended and Restated Limited Liability Company Operating Agreement. The repurchase would be at the discretion of the Managing Member on terms it determines to be appropriate under given circumstances, in the event that the Managing Member deems such repurchase to be in the best interest of the Company; provided, the Company is never required to repurchase any Units. Upon the repurchase of any Units by the Fund, the tendered Units are cancelled. Units repurchased in prior periods were repurchased at amounts representing the original investment less cumulative distributions made to the Unitholder with respect to the Units. All Units repurchased during a quarter are deemed to be repurchased effective the last day of the preceding quarter, and are not deemed to be outstanding during, or entitled to allocations of net income, net loss or distributions for the quarter in which such repurchase occurs.

The Fund’s net income or net losses are to be allocated 100% to the members. From the commencement of the Fund until the initial closing date, net income and net loss were allocated 99% to the Managing Member and 1% to the initial members. Commencing with the initial closing date, net income and net loss are to be allocated 99.99% to the Other Members and 0.01% to the Managing Member.

Fund distributions are to be allocated 0.01% to the Managing Member and 99.99% to the Other Members. The Company commenced periodic distributions in February 2016.

Distributions to the Other Members for the years ended December 31, 2019 and 2018 were as follows (in thousands except Units and per Unit data):

	2019		2018
Distributions	$	2,052	$	2,054
Weighted average number of Units outstanding		2,565,749		2,567,041
Weighted average distributions per Unit	$	0.80	$	0.80

14. 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.

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, generally on a national exchange.

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.

34

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

At December 31, 2019 and 2018, only the Company’s warrants were measured on a recurring basis. The Company’s valuation policy is determined by members of the Asset Management, Credit and Accounting departments. 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 equipment under operating leases, 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.

Such fair value adjustments utilized the following methodology:

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 are determined using a Black-Scholes formulation of value based upon the stock price(s), the exercise price(s), the volatility of comparable venture companies, the time to maturity, and a risk free interest rate for the term(s) of the warrant exercise(s). As of December 31, 2019 and 2018, the calculated fair value of the Fund’s warrant portfolio approximated $731 thousand and $302 thousand, respectively. Such valuations are classified within Level 3 of the valuation hierarchy.

The following table reconciles the beginning and ending balances of the Company’s Level 3 recurring assets (in thousands):

	2019		2018
Fair value of warrants at beginning of year	$	302	$	62
Fair value of new warrants, recorded during the year (included as a discount on notes receivable)		—		224
Unrealized gain on fair valuation of warrants		429		16
Fair value of warrants at end of year	$	731	$	302

35

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

The following table summarizes the valuation techniques and significant unobservable inputs used for the Company’s recurring and non-recurring fair value calculation/adjustments categorized as Level 3 in the fair value hierarchy at December 31, 2019 and 2018:

December 31, 2019
	Valuation	Valuation	Unobservable	Range of
Name	Frequency	Technique	Inputs	Input Values
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.24 - $16.07
			Exercise price	0.02 - 9.00
			Time to maturity (in years)	6.63 - 11.95
			Risk-free interest rate	1.80% - 1.99%
			Annualized volatility	32.21% - 111.44%

December 31, 2018
	Valuation	Valuation	Unobservable	Range of
Name	Frequency	Technique	Inputs	Input Values
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.18 - $14.50
			Exercise price	0.02 - 9.00
			Time to maturity (in years)	7.63 - 12.95
			Risk-free interest rate	2.61% - 2.74%
			Annualized volatility	34.20% - 292.35%

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 determines 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. 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.

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.

36

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

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 December 31, 2019 and 2018 (in thousands):

	December 31, 2019
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	6,410	$	6,410	$	—	$	—	$	6,410
Notes receivable, net		1,078		—		—		1,086		1,086
Warrants, fair value		731		—		—		731		731
Financial liabilities:
Non-recourse debt		3,508		—		—		3,516		3,516

	December 31, 2018
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	6,484	$	6,484	$	—	$	—	$	6,484
Notes receivable, net		3,455		—		—		3,370		3,370
Warrants, fair value		302		—		—		302		302
Financial liabilities:
Non-recourse debt		3,531		—		—		3,539		3,539

15.  Subsequent Events:

Subsequent to December 31, 2019, the World Health Organization declared the novel coronavirus outbreak a public health emergency. The Fund’s operations is located in California, which has restricted gatherings of people due to the coronavirus outbreak. At present, the Fund’s operations have not been adversely affected and continues to function effectively. Due to the dynamic nature of these unprecedented circumstances and possible business disruption, the Fund will continue to monitor the situation closely, but given the uncertainty about the situation, an estimate of the future impact, if any, cannot be made at this time.

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Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURES

None.

Item 9A.  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)) 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.

Management’s Annual Report on Internal Control over Financial Reporting

The Management of the Managing Member is responsible for establishing and maintaining adequate internal control over financial reporting as that term is defined in Exchange Act Rule 13a-15(f) for the Company, and for performing an assessment of the effectiveness of internal control over financial reporting as of December 31, 2019. The internal control process of the Managing Member, as it is applicable to the Company, was designed to provide reasonable assurance to Management regarding the preparation and fair presentation of published financial statements, and includes those policies and procedures that:

(1) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles in the United States, and that the Company’s receipts and expenditures are being made only in accordance with authorization of the Management of the Managing Member; and

(2) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

All internal control processes, no matter how well designed, have inherent limitations. Therefore, even those processes determined to be effective can provide only reasonable assurance with respect to the reliability of financial statement preparation and presentation. Further, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

38

Management of the Managing Member assessed the effectiveness of its internal control over financial reporting, as it is applicable to the Company, as of December 31, 2019. In making this assessment, it used the criteria set forth in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its assessment, Management of the Managing Member concluded that the Managing Member’s internal control over financial reporting, as it is applicable to the Company, was effective as of December 31, 2019.

This annual report does not include an audit report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s internal control over financial reporting was not subject to audit by the Company’s independent registered public accounting firm pursuant to Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which exempts non-accelerated filers from Section 404(b) of the Sarbanes-Oxley Act of 2002.

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 year ended December 31, 2019 that has materially affected, or is reasonably likely to materially affect, the Managing Member’s internal control over financial reporting, as it is applicable to the Company.

39

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

The registrant is a Limited Liability Company and has no officers or directors.

ATEL Managing Member, LLC (the “Managing Member” or “Manager”) is the Company’s Managing Member. The Managing Member is controlled by ATEL Financial Services, LLC (“AFS”), a wholly-owned subsidiary of ATEL Capital Group (“ACG” or “ATEL”). The outstanding voting capital stock of ATEL is owned 100% by Dean L. Cash.

Each of AFS and ATEL Leasing Corporation (“ALC”) is a wholly-owned subsidiary of ACG and performs services for the Company on behalf of the Managing Member. Acquisition services, equipment management, lease administration and asset disposition services are performed by ALC; investor relations and communications services, and general administrative services are performed by AFS. ATEL Securities Corporation (“ASC”), a wholly-owned subsidiary of AFS, performs distribution services in connection with the Company’s public offering of its Units.

The officers and directors of ATEL and its affiliates are as follows:

Dean L. Cash	Chairman of the Board, President and Chief Executive Officer of ATEL Managing Member, LLC (Managing Member)
Paritosh K. Choksi	Director, Executive Vice President and Chief Financial Officer and Chief Operating Officer of ATEL Managing Member, LLC (Managing Member)
Vasco H. Morais	Executive Vice President, Secretary and General Counsel of ATEL Managing Member, LLC (Managing Member)

Dean L. Cash, age 69, became chairman, president and chief executive officer of ATEL in April 2001. Mr. Cash joined ATEL as director of marketing in 1980 and served as a vice president since 1981, executive vice president since 1983 and a director since 1984. Prior to joining ATEL, Mr. Cash was a senior marketing representative for Martin Marietta Corporation, data systems division, from 1979 to 1980. From 1977 to 1979, he was employed by General Electric Corporation, where he was an applications specialist in the medical systems division and a marketing representative in the information services division. Mr. Cash was a systems engineer with Electronic Data Systems from 1975 to 1977, and was involved in maintaining and developing software for commercial applications. Mr. Cash received a B.S. degree in psychology and mathematics in 1972 and an M.B.A. degree with a concentration in finance in 1975 from Florida State University. Mr. Cash is an arbitrator with the American Arbitration Association and is qualified as a registered principal with the Financial Industry Regulatory Authority.

Paritosh K. Choksi, age 66, joined ATEL in 1999 as a director, senior vice president and its chief financial officer. He became its executive vice president and CFO/COO in April 2001. Prior to joining ATEL, Mr. Choksi was chief financial officer at Wink Communications, Inc. from 1997 to 1999. From 1977 to 1997, Mr. Choksi was with Phoenix American Incorporated, a financial services and management company, where he held various positions during his tenure, and was senior vice president, chief financial officer and director when he left the company. Mr. Choksi was involved in all corporate matters at Phoenix and was responsible for Phoenix’s capital market needs. He also served on the credit committee overseeing all corporate investments, including its venture lease portfolio. Mr. Choksi was a part of the executive management team which caused Phoenix’s portfolio to increase from $50 million in assets to over $2 billion. Mr. Choksi is a member of the board of directors of Syntel, Inc. Mr. Choksi received a bachelor of technology degree in mechanical engineering from the Indian Institute of Technology, Bombay; and an M.B.A. degree from the University of California, Berkeley.

40

Vasco H. Morais, age 61, joined ATEL in 1989 as general counsel. Mr. Morais manages ATEL’s legal department, which provides legal and contractual support in the negotiating, documenting, drafting, reviewing and funding of lease transactions. In addition, Mr. Morais advises on general corporate law matters, and assists on securities law issues. From 1986 to 1989, Mr. Morais was employed by the BankAmeriLease Companies, Bank of America’s equipment leasing subsidiaries, providing in-house legal support on the documentation of tax-oriented and non-tax oriented direct and leveraged lease transactions, vendor leasing programs and general corporate matters. Prior to the BankAmeriLease Companies, Mr. Morais was with the Consolidated Capital Companies in the Corporate and Securities Legal Department involved in drafting and reviewing contracts, advising on corporate law matters and securities law issues. Mr. Morais received a B.A. degree in 1982 from the University of California in Berkeley, a J.D. degree in 1986 from Golden Gate University Law School; and an M.B.A. (Finance) degree from Golden Gate University in 1997. Mr. Morais, an active member of the State Bar of California since 1986, served as co-chair of the Uniform Business Law Section of the State Bar of California and was inducted as a fellow of the American College of Commercial Finance Lawyers in 2010.

Audit Committee

The board of directors of the Managing Member acts as the audit committee of the Company. Dean L. Cash and Paritosh K. Choksi are members of the board of directors of the Managing Member and are deemed to be financial experts. They are not independent of the Company.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely on a review of Forms 3, 4, and 5, the Company is not aware of any failures to file reports of beneficial ownership required to be filed during or for the year ended December 31, 2019.  

Code of Ethics

A Code of Ethics that is applicable to the Company, including the Chief Executive Officer and Chief Financial Officer and Chief Operating Officer of its Manager, ATEL Managing Member, LLC, or persons acting in such capacity on behalf of the Company, is included as Exhibit 14.1 to this report.

Item 11. EXECUTIVE COMPENSATION

The registrant has no officers or directors.

Set forth hereinafter is a description of the nature of remuneration paid and to be paid to the Manager and its affiliates. The amount of such remuneration paid for the years ended December 31, 2019 and 2018 is set forth in Item 8 of this report under the caption “Financial Statements and Supplementary Data — Notes to Financial Statements — Related party transactions,” at Note 7 thereof, which information is hereby incorporated by reference.

Asset Management Fee and Carried Interest

The Company pays the Manager an annual Asset Management Fee in an amount equal to 1.25% of the aggregate Purchase Price of Portfolio Assets acquired by the Fund through the end of each month during the period. Upon commencement of the Operating State; the period starting with the final sale of Units and ending six calendar years after the final sale of units, and the first two years of the Liquidating Stage; the period occurring after the Operating Stage until the final sale of units, the Company will pay the Manager an annual Asset Management Fee in an amount equal to an annualized 1.75% of the aggregate net Portfolio Assets, calculated for each month during the period as the aggregate Purchase Price of Portfolio Assets as of the end of the month, less the amount of the aggregate Purchase Price of Portfolio Assets attributable to Portfolio Assets which have been sold or otherwise disposed by the Fund through the end of the month. The Asset Management Fee payable for services rendered during the reminder of the Liquidating Stage will be equal to an annualized 1.75% of the Book Value of Fund Assets less total cash reported as of the end of the most recent prior fiscal quarter or year, as the case may be. The Asset Management Fee is paid on a monthly basis.

41

The Manager supervises performance of all management activities, including, among other activities: the acquisition and financing of the investment portfolio, collection of lease and loan revenues, monitoring compliance by lessees borrowers with their contract terms, assuring that investment assets are being used in accordance with all operative contractual arrangements, paying operating expenses and arranging for necessary maintenance and repair of equipment and property in the event a lessee fails to do so, monitoring property, sales and use tax compliance and preparation of operating financial data. The Manager intends to delegate all or a portion of its duties and the Asset Management Fee to one or more of its affiliates who are in the business of providing such services.

The Manager also receives, as its Carried Interest, an amount equal to 0.01% of all Company Distributions.

Limitations on Fees

The Fund has adopted a single Asset Management Fee plus the Carried Interest as a means of compensating the Manager for sponsoring the Fund and managing its operations. While this compensation structure is intended to simplify management compensation for purposes of investor’s understanding, state securities administrators use a more complicated compensation structure in their review of equipment program offerings in order to assure that those offerings are fair under the states’ merit review guidelines. The total of all Front End Fees, the Carried Interest and the Asset Management Fee will be subject to the Asset Management Fee Limit in order to assure these state administrators that the Fund will not bear greater fees than permitted under the state merit review guidelines. The North American Securities Administrators Association, Inc. (“NASAA”) is an organization of state securities administrators, those state government agencies responsible for qualifying securities offerings in their respective states. NASAA has established standards for the qualification of a number of different types of securities offerings and investment products, including its Statement of Policy on Equipment Programs (the “NASAA Equipment Leasing Guidelines”). Article IV, Sections C through G of the NASAA Equipment Leasing Guidelines establish the standards for payment of reasonable carried interests, promotional interests and fees for equipment acquisition, management, resale and releasing services to equipment leasing program sponsors. Article IV, Sections C through G of the NASAA Equipment Leasing Guidelines set the maximum compensation payable to the sponsor and its affiliates from an equipment leasing program such as the Fund. The Asset Management Fee Limit will equal the maximum compensation payable under Article IV, Sections C through G of the NASAA Equipment Leasing Guidelines as in effect on the date of the Fund’s prospectus (the “NASAA Fee Limitation”). Under the Asset Management Fee Limit, the Fund will calculate the maximum fees payable under the NASAA Fee Limitation and guarantee that the Asset Management Fee it will pay the Manager and its Affiliates, when added to its Carried Interest, will never exceed the fees and interest payable to a sponsor and its affiliates under the NASAA Fee Limitation.

Asset Management Fee Limit.  The Asset Management Fee Limit will be calculated each year during the Fund’s term by calculating the maximum amount of fees that would be payable to the Manager from the Initial Closing Date though the end of the year in question under Article IV, Sections C through G, and Article V, Section F, of the North American Securities Administrators Association Statement of Policy on Equipment Programs in effect as of the initial effective date of the Fund’s Registration Statement on Form S-1 for the initial public offering of its Units (the “NASAA Guidelines”). For purposes of the application of the NASAA Guidelines, all Portfolio Assets will be deemed “Equipment” as defined in the NASAA Guidelines. To the extent that the total amount paid to the Manager through the end of such year as the Asset Management Fee and the Carried Interest would cause the total compensation to exceed the aggregate amount of fees that would have been payable a calculated under the NASAA Guidelines through the end of that year, the Asset Management Fee and/or Carried Interest for the year will be reduced to equal the maximum aggregate fees that would have been payable under the NASAA Guidelines through the end of that year. The limitations set forth in this Section 8.3 will be subject to adjustment pursuant to the limitations imposed under Section 15.7 relating to the Minimum Investment in Equipment.

42

Minimum Investment in Equipment/Maximum Front-End Fees.  The Manager must commit not less than 85.875% of the Gross Proceeds to Investment in Equipment, with the balance thereof available to pay Organization and Offering Expenses and Front End Fees, however designated. Under the North American Securities Administrators Association, Inc. (“NASAA”) Statement of Policy concerning Equipment Programs in effect as of the initial effective date of the Fund’s Registration Statement on Form S-1 for the initial public offering of its Units (referred to herein as the “NASAA Guidelines”), the Fund is required to commit a minimum percentage of the Gross Proceeds to Investment in Equipment, which shall be deemed to be Portfolio Assets for the purposes of this Agreement, calculated as the greater of: (i) 80% of the Gross Proceeds reduced by 0.0625% for each 1% of indebtedness encumbering the Fund’s Portfolio Assets; or (ii) 75% of such Gross Proceeds. The maximum amounts to be paid under the terms of this Agreement are subject to the application of the Asset Management Fee Limit provided in Section 8.3, which limits the annual amount payable to the Manager and its Affiliates as the Asset Management Fee and the Carried Interest to an aggregate not to exceed the maximum amount of fees that would be payable to the Manager under specified provisions of the NASAA Guidelines. Upon completion of the offering of Units, final commitment of Net Proceeds to acquisition of Portfolio Assets and establishment of final levels of permanent portfolio debt encumbering such Portfolio Assets, the Manager shall calculate the maximum carried interest and promotional interest payable to the Manager and its Affiliates under the NASS Guidelines and compare such total permitted fees to the total of the Asset Management Fee and Carried Interest. If and to the extent that the fees exceed the Asset Management Fee Limit provided in Section 8.3, the fees payable to the Manager and its Affiliates shall be reduced as described herein. In such event, Section 8.3 of this Agreement shall be amended immediately to reduce the amounts calculated as the Carried Interest by an amount sufficient to cause the total of such compensation to comply with the limitations in the NASAA Guidelines on the aggregate of promotional interests and carried interests. A comparison of the Front End Fees actually paid by the End and the NASAA Guideline maximums fixed as set forth above shall be repeated, and any required adjustments shall be made, at least annually thereafter.

See Note 7 to the financial statements as set forth in Part II, Item 8, Financial Statements and Supplementary Data, for amounts paid.

43

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Security Ownership of Certain Beneficial Owners

At December 31, 2019, no investor is known to hold beneficially more than 5% of the issued and outstanding Units.

Security Ownership of Management

The parent of ATEL Managing Member, LLC is the beneficial owner of Limited Liability Company Units as follows:

(1) Title of Class	(2) Name and Address of Beneficial Owner	(3) Amount and Nature of Beneficial Ownership	(4) Percent of Class
Limited Liability Company Units	ATEL Financial Services, LLC The Transamerica Pyramid 600 Montgomery Street, 9th Floor San Francisco, CA 94111	Initial Limited Liability Company Units 50 Units ($500)	0.0020%

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

See Item 8 of this report under the caption “Financial Statements and Supplementary Data — Notes to Financial Statements — Related party transactions” at Note 7 thereof.

Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

During the years ended December 31, 2019 and 2018, the Company incurred audit fees with its principal auditors totaling $149 thousand and $78 thousand, respectively.

Audit fees consist of the aggregate fees and expenses billed in connection with the audit of the Company’s annual financial statements and the review of the financial statements included in the Company’s quarterly reports on Form 10-Q.

The board of directors of the Managing Member acts as the audit committee of the registrant. Engagements for audit services, audit related services and tax services are approved in advance by the Chief Financial Officer of the Managing Member acting on behalf of the board of directors of the Managing Member in its role as the audit committee of the Company.

44

PART IV

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)	Financial Statements and Schedules
1.	Financial Statements
	Included in Part II of this report:
	Report of Independent Registered Public Accounting Firm		14
	Balance Sheets at December 31, 2019 and 2018		15
	Statements of Operations for the years ended December 31, 2019 and 2018		16
	Statements of Changes in Members’ Capital for the years ended December 31, 2019 and 2018		17
	Statements of Cash Flows for the years ended December 31, 2019 and 2018		18
	Notes to Financial Statements		19
2.	Financial Statement Schedules
	All 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.
(b)	Exhibits
	(3) and (4) Amended and Restated Limited Liability Company Operating Agreement, included as exhibit B to the Prospectus effective January 5, 2016 as filed on December 15, 2015 (File Number 333-203841) is hereby incorporated herein by reference
	(4.1)	Description of the Registrant’s Securities
	(14.1)	Code of Ethics
	(31.1)	Certification of Dean L. Cash pursuant to Rules 13a‑14(a)/15d‑14(a)
	(31.2)	Certification of Paritosh K. Choksi pursuant to Rules 13a‑14(a)/15d‑14(a)
	(32.1)	Certification of Dean L. Cash pursuant to 18 U.S.C. section 1350
	(32.2)	Certification of Paritosh K. Choksi pursuant to 18 U.S.C. section 1350
	(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

45

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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: March 25, 2020

ATEL 17, LLC

(Registrant)

By:	ATEL Managing Member, LLC Managing Member of Registrant
By:	/s/ Dean L. Cash
	Dean L. Cash
	Chairman of the Board, President and Chief Executive Officer of ATEL Managing Member, LLC (Managing Member)
By:	/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)
By:	/s/ Samuel Schussler
	Samuel Schussler
	Senior Vice President and Chief Accounting Officer of ATEL Managing Member, LLC (Managing Member)

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

SIGNATURE	CAPACITIES	DATE
/s/ Dean L. Cash	Chairman of the Board, President and Chief ExecutiveOfficer of ATEL Managing Member, LLC (Managing Member)	March 25, 2020
Dean L. Cash
/s/ Paritosh K. Choksi	Director, Executive Vice President and Chief FinancialOfficer and Chief Operating Officer of ATEL Managing Member, LLC (Managing Member)	March 25, 2020
Paritosh K. Choksi
/s/ Samuel Schussler	Senior Vice President and Chief Accounting Officer ofATEL Managing Member, LLC (Managing Member)	March 25, 2020
Samuel Schussler

No proxy materials have been or will be sent to security holders. An annual report will be furnished to security holders subsequent to the filing of this report on Form 10-K, and copies thereof will be furnished supplementally to the Commission when forwarded to the security holders.

46

EX-4.1

Exhibit 4.1

DESCRIPTION OF COMPANY MEMBERSHIP INTEREST (“UNITS”)

Fast Act Exhibit 4(vi) “Description of registrant’s securities”

Summary

The following description summarizes certain important terms of ATEL 17, LLC’s (the “Company”) membership interests (the “Units”). This description summarizes the provisions that are included in the Company’s Amended and Restated Limited Liability Company Operating Agreement (the “Operating Agreement”).  This summary will not provide all the information relevant to the Units. For a complete description of the Units,  please refer to the applicable provisions of Company’s  Operating Agreement and relevant California governing law.

Outstanding Units

2,565,749 Units have been subscribed by the members of the Company as of December 31, 2019.

General

Liquidity. The Units were offered and sold pursuant to registration under the Securities Act of 1933.  However, the Units are subject to significant restriction on transferability in order to preserve the tax characterization of the Company and tax consequences for Unit holders.  Accordingly, the Units are not traded on any securities exchange and have limited liquidity.  Please review the rights of Unit holders for transfer of shares under the Operating Agreement.

Voting Rights. The holders of Units are entitled to one vote per share on any matter to be voted upon by holders of Units in the Company’s Operating Agreement. Certain rights may only be exercised upon receiving at least a majority of the votes entitled to be cast by Unit holders

Distributions. The holders of Units are entitled to distributions on a pro rata basis, if, as, and when distributed by the Manager.

Other Rights. No holder of Units has any priority or preemptive right as to the Units.

Dissolution and Winding Up. Upon any voluntary or involuntary liquidation, dissolution, or winding up of the Company, the Unit holders are entitled to share ratably in all assets remaining after payment of creditors.

Transfer Agent and Registrar. The transfer agent and registrar of the Units is Conduent Inc.

EX-14.1

Exhibit 14.1

ATEL 17, LLC

CODE OF ETHICS FOR CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL AND OPERATING OFFICER

A.  SCOPE

This Code of Ethics is applicable to ATEL 17, LLC (“Fund 17”), including the Chief Executive Officer and Chief Financial Officer and Chief Operating Officer of its Manager, ATEL Managing Member, LLC (“AMM”), or persons acting in such capacity (collectively the “Covered Officers”) on behalf of Fund 17, referred to herein as the “Company.”

Accordingly, under the Securities and Exchange Commission’s interpretation of its disclosure rules, the Board of Directors of the Manager of AMM, ATEL Financial Services, LLC (“AFS”), functions as the de facto audit committee for the Company with respect to all procedural and disclosure requirements applicable to audit committees under Securities and Exchange Commission rules. The Board of Directors shall have oversight responsibility over the activities of the Company for purposes of this Code of Ethics.

B.  PURPOSE

The Company is proud of the values with which it conducts business. It has and will continue to uphold the highest levels of business ethics and personal integrity in all types of transactions and interactions. To this end, this Code of Ethics serves to (1) emphasize the Company’s commitment to ethics and compliance with the law; (2) set forth basic standards of ethical and legal behavior; (3) provide reporting mechanisms for known or suspected ethical or legal violations; and (4) help prevent and detect wrongdoing. This Code of Ethics is intended to augment and supplement the standard of ethics and business conduct expected of all Company employees, and its limitation to Covered Officers is not intended to limit the obligation of all Company employees to adhere to the highest standards of business ethics and integrity in all transactions and interactions conducted while in the Company’s employ.

Given the variety and complexity of ethical questions that may arise in the course of business of the Company, this Code of Ethics serves only as a rough guide. Confronted with ethically ambiguous situations, the Covered Officers should remember the Company’s commitment to the highest ethical standards and seek independent advice, where necessary, to ensure that all actions they take on behalf of the Company honor this commitment.

C.  ETHICS STANDARDS

1.  Honest and Ethical Conduct

The Covered Officers shall behave honestly and ethically at all times and with all people. They shall act in good faith, with due care, and shall engage only in fair and open competition, by treating ethically competitors, suppliers, customers, and colleagues. They shall not misrepresent facts or engage in illegal, unethical, or anti-competitive practices for personal or professional gain.

2.  Conflicts of Interest

This fundamental standard of honest and ethical conduct extends to the handling of conflicts of interest. The Covered Officers shall avoid any actual, potential, or apparent conflicts of interest with the Company, and any personal activities, investments, or associations that might give rise to such conflicts. They shall not compete with or use the Company, for personal gain, self-deal, or take advantage of any corporate opportunities. They shall act on behalf of the Company free from improper influence or the appearance of improper influence on their judgment or performance of duties. A Covered Officer shall disclose any material transaction or relationship that reasonably could be expected to give rise to such a conflict to the Company’s General Counsel or a member of the Company’s Board of Directors. No action may be taken with respect to such transaction or party unless and until the Company’s Board of Directors has approved such action.

Notwithstanding the foregoing, it is understood, as fully disclosed in the offering documents for the Company, that AMM as managing member of the Company has certain inherent conflicts of interest. The provisions of the Company’s Operating Agreement have been drafted to address the obligations, restrictions and limitations on the power and authority of AMM to manage the Company’s affairs, including restrictions prohibiting or limiting the terms of any transactions in which conflicts of interest may arise. Furthermore, AMS has a fiduciary duty to the Company as its manager. It is therefore expressly understood by the Company and the Covered Officers that any and all actions by AMM and its personnel that comply with the provisions of the Company’s Operating Agreement, and which are consistent with AMM’s fiduciary duty to the Company, will not be considered material transactions or relationships which require disclosure or reporting under this Code of Ethics.

3.  Timely and Truthful Disclosure

In reports and documents filed with or submitted to the Securities and Exchange Commission and other regulators by the Company and in other public communications made by the Company, the Covered Officers shall make disclosures that are full, fair, accurate, timely, and understandable. The Covered Officers shall provide thorough and accurate financial and accounting data for inclusion in such disclosures. The Covered Officers shall not knowingly conceal or falsify information, misrepresent material facts, or omit material facts necessary to avoid misleading the Company’s independent public auditors or investors.

4.  Legal Compliance

In conducting the business of the Company, the Covered Officers shall comply with applicable governmental laws, rules, and regulations at all levels of government in the United States and in any non-U.S. jurisdiction in which the Company does business, as well as applicable rules and regulations of self-regulatory organizations of which the Company is a member. If the Covered Officer is unsure whether a particular action would violate an applicable law, rule, or regulation, he or she should seek the advice of inside counsel (if available), and, where necessary, outside counsel before undertaking it.

D.  VIOLATIONS OF ETHICAL STANDARDS

1.  Reporting Known or Suspected Violations

The Covered Officers will promptly bring to the attention of the Company’s General Counsel or the Board of Directors any information concerning a material violation of any of the laws, rules or regulations applicable to the Company and the operation of its businesses, by the Company or any agent thereof, or of violation of this Code of Ethics. The Company’s General Counsel will investigate reports of violations and the findings communicated to the Company’s Board of Directors.

2.  Accountability for Violations

If the Company’s Board of Directors determines that this Code of Ethics has been violated, either directly, by failure to report a violation, or by withholding information related to a violation, it may discipline the offending Covered Officer for non-compliance with penalties up to and including termination of employment. Violations of this Code of Ethics may also constitute violations of law and may result in criminal penalties and civil liabilities for the offending Covered Officer and the Company.

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‑K of ATEL 17, 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: March 25, 2020

/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‑K of ATEL 17, 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:   March 25, 2020

/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 Annual Report of ATEL 17, LLC (the “Company”) on Form 10-K for the period ended December 31, 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:    March 25, 2020

/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 17, LLC (the “Company”) on 10-K for the period ended December 31, 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:    March 25, 2020

/s/ Paritosh K. Chosksi

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

Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2019

Related Party Transactions [Abstract]

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

The Managing Member and/or affiliates earned fees and billed for reimbursements, pursuant to the Operating Agreement, during the years ended December 31, 2019 and 2018 are as follows (in thousands):

	2019		2018
Selling commissions, equal to 9% of the selling price of the Limited   Liability Company Units, deducted from Other Members capital	$	—	$	31
Reimbursement of other syndication costs to Managing Member   and/or affiliates, deducted from Other Members capital		—		20
Administrative costs reimbursed to Managing Member and/or affiliates		331		421
Asset management fees to Managing Member		269		268
Acquisition and initial direct costs paid to Managing Member		52		145
	$	652	$	885

XML

Fair Value Measurements

12 Months Ended

Dec. 31, 2019

Fair Value Measurements [Abstract]

Fair Value Measurements

14. 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.

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, generally on a national exchange.

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.

At December 31, 2019 and 2018, only the Company’s warrants were measured on a recurring basis. The Company’s valuation policy is determined by members of the Asset Management, Credit and Accounting departments. 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 equipment under operating leases, 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.

Such fair value adjustments utilized the following methodology:

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 are determined using a Black-Scholes formulation of value based upon the stock price(s), the exercise price(s), the volatility of comparable venture companies, the time to maturity, and a risk free interest rate for the term(s) of the warrant exercise(s). As of December 31, 2019 and 2018, the calculated fair value of the Fund’s warrant portfolio approximated $731 thousand and $302 thousand, respectively. Such valuations are classified within Level 3 of the valuation hierarchy.

The following table reconciles the beginning and ending balances of the Company’s Level 3 recurring assets (in thousands):

	2019		2018
Fair value of warrants at beginning of year	$	302	$	62
Fair value of new warrants, recorded during the year (included as a discount on notes receivable)		—		224
Unrealized gain on fair valuation of warrants		429		16
Fair value of warrants at end of year	$	731	$	302

The following table summarizes the valuation techniques and significant unobservable inputs used for the Company’s recurring and non-recurring fair value calculation/adjustments categorized as Level 3 in the fair value hierarchy at December 31, 2019 and 2018:

December 31, 2019
	Valuation	Valuation	Unobservable	Range of
Name	Frequency	Technique	Inputs	Input Values
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.24 - $16.07
			Exercise price	0.02 - 9.00
			Time to maturity (in years)	6.63 - 11.95
			Risk-free interest rate	1.80% - 1.99%
			Annualized volatility	32.21% - 111.44%

December 31, 2018
	Valuation	Valuation	Unobservable	Range of
Name	Frequency	Technique	Inputs	Input Values
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.18 - $14.50
			Exercise price	0.02 - 9.00
			Time to maturity (in years)	7.63 - 12.95
			Risk-free interest rate	2.61% - 2.74%
			Annualized volatility	34.20% - 292.35%

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 determines 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. 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.

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 December 31, 2019 and 2018 (in thousands):

	December 31, 2019
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	6,410	$	6,410	$	—	$	—	$	6,410
Notes receivable, net		1,078		—		—		1,086		1,086
Warrants, fair value		731		—		—		731		731
Financial liabilities:
Non-recourse debt		3,508		—		—		3,516		3,516

	December 31, 2018
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	6,484	$	6,484	$	—	$	—	$	6,484
Notes receivable, net		3,455		—		—		3,370		3,370
Warrants, fair value		302		—		—		302		302
Financial liabilities:
Non-recourse debt		3,531		—		—		3,539		3,539

XML

Concentration of Credit Risk and Major Customers (Tables)

12 Months Ended

Dec. 31, 2019

Concentration of Credit Risk and Major Customers [Abstract]

Schedule of Equipment Leased

As of December 31, 2019 and 2018, there were concentrations (greater than or equal to 10% as a percentage of total equipment cost) of equipment leased to lessees and/or financed for borrowers in certain industries as follows:

	Percentage
	of Total Equipment Cost
Industry	2019		2018
Transportation, rail	26	%	30	%
Construction	21	%	14	%
Agriculture	*		11	%
Transportation, air	*		10	%

*Less than 10%

Schedule of Major Customers Credit Risk Concentration

During 2019 and 2018, certain lessees and/or financial borrowers generated significant portions (defined as greater than or equal to 10%) of the Company’s total leasing and lending revenues, excluding gains or losses on disposition of assets, as follows:

		Percentage of Total Leasing
		and Lending Revenues
Lessee	Type of Equipment	2019		2018
Union Pacific Railroad Company	Railroad	22	%	22	%
Aggregate Industries Management, Inc.	Mining	15	%	11	%
Cargill, Inc.	Agriculture/Construction	11	%	11	%

XML

Equipment Under Operating Leases, Net (Schedule of Useful Lives of Lease Assets) (Details)	12 Months Ended
	Dec. 31, 2019
Transportation, Rail [Member] | Minimum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	35 years
Transportation, Rail [Member] | Maximum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	50 years
Marine Vessel [Member] | Minimum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	20 years
Marine Vessel [Member] | Maximum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	30 years
Containers [Member] | Minimum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	15 years
Containers [Member] | Maximum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	20 years
Aviation [Member] | Minimum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	15 years
Aviation [Member] | Maximum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	20 years
Mining [Member] | Minimum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	10 years
Mining [Member] | Maximum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	15 years
Paper Processing [Member] | Minimum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	10 years
Paper Processing [Member] | Maximum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	15 years
Agriculture [Member] | Minimum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	7 years
Agriculture [Member] | Maximum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	10 years
Construction [Member] | Minimum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	7 years
Construction [Member] | Maximum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	10 years
Materials Handling [Member] | Minimum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	7 years
Materials Handling [Member] | Maximum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	10 years
Transportation, Air [Member] | Minimum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	7 years
Transportation, Air [Member] | Maximum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	10 years

XML

Equipment Under Operating Leases, Net (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Lessor, Lease, Description [Line Items]
Amortization of initial direct costs	$ 67	$ 77
Depreciation of operating lease assets	$ 1,336	$ 1,221
Average estimated residual value of assets on operating leases	37.00%	38.00%
Initial direct costs, accumulated amortization	$ 179	$ 148
Lease investment impairment charges	0	0
Operating leases in non-accrual status	0	0
Lease Assets [Member]
Lessor, Lease, Description [Line Items]
Amortization of initial direct costs	$ 59	$ 66

XML

Related Party Transactions (Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Related Party Transactions [Abstract]
Selling commissions, equal to 9% of the selling price of the Limited Liability Company Units, deducted from Other Members capital		$ 31
Reimbursement of other syndication costs to Managing Member and/or affiliates, deducted from Other Members capital		20
Administrative costs reimbursed to Managing Member and/or affiliates	$ 331	421
Asset management fees to managing Member	269	268
Acquisition and initial direct costs paid to Managing Member	52	145
Related party transaction, total	$ 652	$ 885
Selling commission rate	9.00%	9.00%

XML

Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Operating activities:
Net income (loss)	$ 99	$ (170)
Adjustment to reconcile net income (loss) to net cash provided by operating activities:
Accretion of note discount - warrants	(91)	(71)
Gain on sales of assets and early termination of notes receivable	(116)
Depreciation of operating lease assets	1,336	1,221
Amortization of initial direct costs	67	77
Reversal of credit losses		(18)
Unrealized gain on fair value adjustment for warrants	(429)	(16)
Changes in operating assets and liabilities:
Accounts receivable	(21)	24
Due from Managing Member and affiliates	44	(44)
Prepaid expenses and other assets	6	(1)
Accounts payable, Managing Member		(108)
Accounts payable, other	6	21
Accrued liabilities, affiliates	24
Unearned operating lease income	1	(51)
Net cash provided by operating activities	926	864
Investing activities:
Purchases of equipment under operating leases	(1,512)	(1,252)
Payments of initial direct costs	(5)	(38)
Note receivable advances		(3,551)
Proceeds from early termination of notes receivable	837
Proceeds from sales of equipment under operating leases	19
Principal payments received on notes receivable	1,737	1,743
Net cash provided by (used in) investing activities	1,076	(3,098)
Financing activities:
Borrowings under non-recourse debt	1,197	3,685
Repayments under non-recourse debt	(1,221)	(154)
Syndication costs paid to Managing Member and affiliates		(51)
Distributions to Other Members	(2,052)	(2,043)
Capital contributions		340
Repurchase/rescissions of Units		(151)
Net cash (used in) provided by financing activities	(2,076)	1,626
Net decrease in cash and cash equivalents	(74)	(608)
Cash at beginning of year	6,484	7,092
Cash at end of year	6,410	6,484
Supplemental disclosures of cash flow information:
Cash paid during the year for interest	156	19
Cash paid during the year for taxes	7	1
Other Members [Member]
Operating activities:
Net income (loss)	99	(170)
Schedule of non-cash financing transactions:
Distributions payable to Members at year-end	$ 228	$ 228

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Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
ASSETS
Cash and cash equivalents	$ 6,410	$ 6,484
Due from affiliates		44
Accounts receivable, net	81	60
Notes receivable, net	1,078	3,455
Warrants, fair value	731	302
Equipment under operating leases, net	10,290	10,186
Prepaid expenses and other assets	8	13
Total assets	18,598	20,544
Accounts payable and accrued liabilities:
Affiliates	24
Accrued distributions to Other Members	228	228
Other	56	51
Non-recourse debt	3,508	3,531
Unearned operating lease income	114	113
Total liabilities	3,930	3,923
Commitments and contingencies
Members' capital:
Managing Member	1	1
Other Members	14,667	16,620
Total Members' capital	14,668	16,621
Total liabilities and Members' capital	$ 18,598	$ 20,544

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Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Fair Value Measurements [Abstract]
Warrants, fair value	$ 731	$ 302

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Non-Recourse Debt (Future Minimum Payments of Non-Recourse Debt) (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Principal
Year ending December 31, 2020	$ 1,169
2021	706
2022	518
2023	522
2024	288
Thereafter	305
Secured Debt, Total	3,508	$ 3,531
Interest
Year ending December 31, 2020	124
2021	85
2022	61
2023	39
2024	20
Thereafter	29
Long-term debt interest, total	358
Total
Year ending December 31, 2019	1,293
2021	791
2022	579
2023	561
2024	308
Thereafter	334
Principal and interest, total	$ 3,866

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Borrowing Facilities (Borrowings Under the Facility) (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Borrowing Facilities [Abstract]
Total available under the financing arrangement	$ 55,000	$ 75,000
Amount borrowed by the Company under the acquisition facility		(1,200)
Amount borrowed by affiliated partnerships and limited liability companies under the venture, acquisition, and warehouse facilities	(850)	(910)
Total remaining available under the working capital, acquisition and warehouse facilities	$ 54,150	$ 72,890

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Allowance for Credit Losses

12 Months Ended

Dec. 31, 2019

Allowance for Credit Losses [Abstract]

Allowance for Credit Losses

6. Allowance for credit losses:

The Company’s had no allowance for credit losses for the years ended December 31, 2019 and 2018.

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.

At December 31, 2019 and 2018, the Company’s financing receivables by credit quality indicator and by class of financing receivables are as follows (excludes warrants – notes receivable discount) (in thousands):

	Notes Receivable
	2019		2018
Pass	$	1,164	$	3,623
Special mention		—		—
Substandard		—		—
Doubtful		—		—
Total	$	1,164	$	3,623

At December 31, 2019 and December 31, 2018, investment in financing receivables is aged as follows (in thousands):

													Recorded
					Greater						Total		Investment>90
	31-60 Days		61-90 Days		Than		Total				Financing		Days and
December 31, 2019	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	1,164	$	1,164	$	—
Total	$	—	$	—	$	—	$	—	$	1,164	$	1,164	$	—

													Recorded
					Greater						Total		Investment>90
	31-60 Days		61-90 Days		Than		Total				Financing		Days and
December 31, 2018	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	3,623	$	3,623	$	—
Total	$	—	$	—	$	—	$	—	$	3,623	$	3,623	$	—

The Company had no financing receivables on non-accrual or impaired status at December 31, 2019 and 2018.

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Borrowing Facilities

12 Months Ended

Dec. 31, 2019

Borrowing Facilities [Abstract]

Borrowing Facilities

10. Borrowing facilities:

Effective October 31, 2019, the Company entered into an amended and restated revolving credit facility agreement (the “Credit Facility”) which replaced a previous agreement extended beyond its original expiration date of June 2019. The Company participated with ATEL Capital Group and certain subsidiaries and affiliated entities as borrowers, with a syndicate of financial institutions as lenders. The Credit Facility is comprised of a working capital sub-facility, an acquisition sub-facility, institutional leasing sub-facility, and a venture line sub-facility.   The Company participates in the acquisition sub-facility and the institutional leasing sub-facility, on  a several, but not joint, basis (i.e., the Company is liable only for the amount of the advances extended to the Company under those sub-facilities, and not as to amounts extended to any co-borrower).

The aggregate amount of the Credit Facility is $55 million, with sub-limits for each sub-facility, and currently expires June 30, 2021 (unless extended). The lending syndicate providing the Credit Facility has a blanket lien on all of the Company’s assets as collateral for any and all borrowings extended to the Company under the acquisition sub-facility or the institutional leasing sub-facility, on a several, but not joint, basis. The Credit Facility includes certain financial covenants made by the Company, as is customarily found in credit facilities of similar size and nature.

As of December 31, 2019 and 2018, borrowings under the Credit Facility were as follows (in thousands):

	2019		2018
Total available under the financing arrangement	$	55,000	$	75,000
Amount borrowed by the Company under the acquisition facility		—		(1,200)
Amount borrowed by affiliated partnerships and limited liability companies     under the venture, acquisition, and warehouse facilities.		(850)		(910)
Total remaining available under the working capital, acquisition and warehouse facilities	$	54,150	$	72,890

The Company and its affiliates pay an annual commitment fee to have access to this line of credit. As of December 31, 2019, the aggregate amount of the Credit Facility is potentially available to the Company, subject to certain sub-facility and borrowing-base limitations. However, as amounts are drawn on the Credit Facility by each of the Company and the affiliates who are borrowers under the Credit Facility, the amount remaining available to all borrowers to draw under Credit Facility is reduced. As the Warehousing Facility is a short term bridge facility, any amounts borrowed under the Warehousing Facility, and then repaid by the affiliated borrowers (including the Company) upon allocation of an acquisition to a specific purchaser, become available under the Warehouse Facility for further short term borrowing.

As of December 31, 2019, the Company’s Tangible Net Worth requirement under the Credit Facility was $10.0 million, the permitted maximum leverage ratio was not to exceed 1.25 to 1, and the required minimum interest coverage ratio was not to be less than 2 to 1. 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 $14.7 million, 0.24 to 1, and 18.67 to 1, respectively, as of December 31, 2019. As such, as of December 31, 2019, the Company was in compliance with all material financial covenants, and with all other material conditions of the Credit Facility. The Company does not anticipate any covenant violations nor does it anticipate that any of these covenants will restrict its operations or its ability to procure additional financing.

Fee and interest terms

The interest rate on the Credit Facility is based on either the LIBOR plus 2.25% 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. There were no borrowings outstanding at December 31, 2019 and 2018.

Warehouse facility

To hold the assets under the Warehousing Facility prior to allocation to specific investor programs, a Warehousing Trust has 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 December 31, 2019, the investment program participants were the Company, ATEL 15, LLC and ATEL 16, 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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Summary of Significant Accounting Policies (Schedule of Differences Between Book Value and Tax Basis of Net Assets) (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Summary of Significant Accounting Policies [Abstract]
Financial statement basis of net assets	$ 14,668	$ 16,621	$ 18,707
Tax basis of net assets (unaudited)	12,174	16,525
Difference	$ 2,494	$ 96

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Members' Capital (Tables)

12 Months Ended

Dec. 31, 2019

Members' Capital [Abstract]

Distributions to Other Members

Distributions to the Other Members for the years ended December 31, 2019 and 2018 were as follows (in thousands except Units and per Unit data):

	2019		2018
Distributions	$	2,052	$	2,054
Weighted average number of Units outstanding		2,565,749		2,567,041
Weighted average distributions per Unit	$	0.80	$	0.80

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Notes Receivable, Net (Minimum Future Payments Receivable) (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Notes Receivable, Net [Abstract]
Year ending December 31, 2020	$ 830
2021	437
2022	9
Financing receivable, gross	1,276
Less: portion representing unearned interest income	(112)
Notes receivable	1,164	$ 3,623
Less: warrants - notes receivable discount	(86)
Notes receivable, net	$ 1,078	$ 3,455

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Non-Recourse Debt (Narrative) (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Debt Instrument [Line Items]
Gross operating lease rentals and future payments on direct financing leases	$ 3.8
Assets pledged as collateral	$ 7.1
Notes maturity date, description	The notes mature from 2020 through 2028
Minimum [Member]
Debt Instrument [Line Items]
Fixed interest rate on notes	3.70%
Maximum [Member]
Debt Instrument [Line Items]
Fixed interest rate on notes	4.66%

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Commitments (Narrative) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)
Commitments [Abstract]
Commitments to purchase lease assets	$ 0

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Organization and Limited Liability Company Matters

12 Months Ended

Dec. 31, 2019

Organization and Limited Liability Company Matters [Abstract]

Organization and Limited Liability Company Matters

1. Organization and Limited Liability Company matters:

ATEL 17, LLC (the “Company” or the “Fund”) was formed under the laws of the state of California on April 16, 2015 (“Date of Inception”) for the purpose of equipment financing 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 “Manager”), a Nevada limited liability company. The Managing Member is controlled by ATEL Financial Services, LLC (“AFS”), a wholly-owned subsidiary of ATEL Capital Group. The Fund may continue as provided in the ATEL 17, LLC limited liability operating agreement dated April 24, 2015 (the “Operating Agreement”). Contributions in the amount of $500 were received as of April 28, 2015, 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 January 5, 2016. The offering will continue until the earlier of a period of two years from that date or until sales of the limited liability company units (Units) to the public reach $150 million. As of February 2, 2016, subscriptions for the minimum number of Units (120,000, representing $1.2 million), excluding subscriptions from Pennsylvania investors, had been received and the Fund requested subscription proceeds to be released from escrow. On that date, the Company commenced initial operations and continued in its development stage activities until transitioning to an operating enterprise during the first quarter of 2016. Pennsylvania subscriptions are subject to a separate escrow and are released to the Fund only when aggregate subscriptions for all investors equal to at least $7.5 million. Total contributions to the Fund exceeded $7.5 million on July 6, 2016, at which time a request was processed to release the Pennsylvania escrowed amounts. The offering terminated on January 5, 2018.

As of December 31, 2019, cumulative gross contributions, less rescissions and repurchases (net of distributions paid and allocated syndication costs, as applicable), totaling $25.7 million (inclusive of the $500 initial Member’s capital investment) have been received. As of the same date, 2,565,749 Units were issued and outstanding.

The Company’s principal objectives are to invest in a diversified portfolio of investments that will (i) preserve, protect and return the Company’s invested capital; (ii) generate regular cash distributions to members, with any balance remaining after required minimum distributions to be used to purchase additional investments during the Reinvestment Period (ending six calendar years after the completion of the Company’s public offering of Units) and (iii) provide additional cash distributions following the Reinvestment Period and until all investment portfolio assets have been sold or otherwise disposed.

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 7, Related party transactions.) The Company is required to maintain reasonable cash reserves for working capital, for the repurchase of Units and for contingencies. The repurchase of Units is solely at the discretion of the Managing Member.

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Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Leasing and lending activities:
Operating leases	$ 1,867	$ 1,683
Notes receivable interest income	358	621
Gain on sales of lease assets and early termination of notes receivable	116
Unrealized gain on fair value adjustment for warrants	429	16
Other	7	12
Total revenues	2,777	2,332
Expenses:
Depreciation of operating lease assets	1,336	1,221
Asset management fees to managing Member	269	268
Acquisition expense	47	108
Cost reimbursements to Managing Member and/or affiliates	331	421
Reversal of credit losses		(18)
Amortization of initial direct costs	67	77
Interest expense	159	24
Professional fees	196	98
Outside services	77	99
Taxes expense (benefit) on income and franchise fees	7	(5)
Bank charges	87	120
Other	102	89
Total expenses	2,678	2,502
Net income (loss)	99	(170)
Net income (loss):
Other Members	99	(170)
Net income (loss)	$ 99	$ (170)
Net income (loss) per Limited Liability Company Unit (Other Members)	$ 0.04	$ (0.07)
Weighted average number of Units outstanding	2,565,749	2,567,041

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Fair Value Measurements (Fair Value, Warrants Measured on Recurring Basis) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Fair value of warrants at beginning of year	$ 302
Unrealized gain on fair value adjustment for warrants	429	$ 16
Fair value of warrants at end of year	731	302
Fair Value, Inputs, Level 3 [Member]
Fair value of warrants at beginning of year	302	62
Fair value of new warrants, recorded during the year (included as a discount on notes receivable)		224
Unrealized gain on fair value adjustment for warrants	429	16
Fair value of warrants at end of year	$ 731	$ 302

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Related Party Transactions

12 Months Ended

Dec. 31, 2019

Related Party Transactions [Abstract]

Related Party Transactions

7. 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 lease and equipment 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, Inc. and performs services for the Company on behalf of the Managing Member. 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.

The Managing Member and/or affiliates earned fees and billed for reimbursements, pursuant to the Operating Agreement, during the years ended December 31, 2019 and 2018 are as follows (in thousands):

	2019		2018
Selling commissions, equal to 9% of the selling price of the Limited   Liability Company Units, deducted from Other Members capital	$	—	$	31
Reimbursement of other syndication costs to Managing Member   and/or affiliates, deducted from Other Members capital		—		20
Administrative costs reimbursed to Managing Member and/or affiliates		331		421
Asset management fees to Managing Member		269		268
Acquisition and initial direct costs paid to Managing Member		52		145
	$	652	$	885

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Commitments

12 Months Ended

Dec. 31, 2019

Commitments [Abstract]

Commitments

11. Commitments:

At December 31, 2019, there were no commitments to purchase lease assets and fund investments in notes receivable.

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Notes Receivable, Net (Narrative) (Details)	12 Months Ended
	Dec. 31, 2019
Notes receivable, maturity date description	have maturity dates ranging from 2020 to 2022
Minimum [Member]
Notes receivable term	24 months
Notes receivable interest rate	11.55%
Maximum [Member]
Notes receivable term	42 months
Notes receivable interest rate	16.49%

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Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($) segment	Dec. 31, 2018 USD ($)
Summary of Significant Accounting Policies [Line Items]
Equipment on operating leases, depreciation method	straight-line
Taxes expense (benefit) on income and franchise fees	$ 7	$ (5)
Period subject to income tax examination	3 years
Number of operating segments | segment	1
Number of reportable segments | segment	1
Unrealized gain on fair value adjustment for warrants	$ 429	16
Warrants, fair value	$ 731	$ 302
Practical expedients package	true
Minimum [Member]
Summary of Significant Accounting Policies [Line Items]
Required assets value of financial institutions for cash deposits	$ 10,000,000
Operating leases, initial terms	36 months
Accounts receivable, period for non-accrual status	90 days
Operating leases, Period for non-accrual status	90 days
Maximum [Member]
Summary of Significant Accounting Policies [Line Items]
Treasury instruments maturity period	90 days
Cash deposits, insured amount	$ 250
Operating leases, initial terms	120 months
Accounts receivable, period for review of impairment	90 days
Operating leases, period of review for impairment	90 days

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Borrowing Facilities (Tables)

12 Months Ended

Dec. 31, 2019

Borrowing Facilities [Abstract]

Borrowings Under the Facility

As of December 31, 2019 and 2018, borrowings under the Credit Facility were as follows (in thousands):

	2019		2018
Total available under the financing arrangement	$	55,000	$	75,000
Amount borrowed by the Company under the acquisition facility		—		(1,200)
Amount borrowed by affiliated partnerships and limited liability companies     under the venture, acquisition, and warehouse facilities.		(850)		(910)
Total remaining available under the working capital, acquisition and warehouse facilities	$	54,150	$	72,890

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Subsequent Events

12 Months Ended

Dec. 31, 2019

Subsequent Events [Abstract]

Subsequent Events

15.  Subsequent Events:

Subsequent to December 31, 2019, the World Health Organization declared the novel coronavirus outbreak a public health emergency. The Fund’s operations is located in California, which has restricted gatherings of people due to the coronavirus outbreak. At present, the Fund’s operations have not been adversely affected and continues to function effectively. Due to the dynamic nature of these unprecedented circumstances and possible business disruption, the Fund will continue to monitor the situation closely, but given the uncertainty about the situation, an estimate of the future impact, if any, cannot be made at this time.

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Notes Receivable, Net (Tables)

12 Months Ended

Dec. 31, 2019

Notes Receivable, Net [Abstract]

Minimum Future Payments Receivable

As of December 31, 2019, the minimum future payments receivable are as follows (in thousands):

Year ending December 31, 2020	$	830
2021		437
2022		9
		1,276
Less: portion representing unearned interest income		(112)
		1,164
Less: warrants - notes receivable discount		(86)
Notes receivable, net	$	1,078

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

IDC amortization expense related to notes receivable and the Company’s operating leases for the years ended December 31, 2019 and 2018 are as follows (in thousands):

	2019		2018
IDC amortization - notes receivable	$	8	$	11
IDC amortization - lease assets		59		66
Total	$	67	$	77

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Non-Recourse Debt (Tables)

12 Months Ended

Dec. 31, 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
Year ending December 31, 2020		1,169		124		1,293
2021		706		85		791
2022		518		61		579
2023		522		39		561
2024		288		20		308
Thereafter		305		29		334
	$	3,508	$	358	$	3,866

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Allowance for Credit Losses (Net Investment in Financing Receivables by Age) (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 1,164	$ 3,623
Total Financing Receivables	1,164	3,623
Notes Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,164	3,623
Total Financing Receivables	$ 1,164	$ 3,623

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Equipment Under Operating Leases, Net (Future Minimum Lease Payments Receivable) (Details) $ in Thousands	Dec. 31, 2019 USD ($)
OPerating Leases
Year ending December 31, 2020	$ 1,858
2021	1,364
2022	1,146
2023	1,091
2024	724
Thereafter	527
Operating leases, total	$ 6,710

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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	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amortization of initial direct costs	$ 67	$ 77
Lease Assets [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amortization of initial direct costs	59	66
Notes Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amortization of initial direct costs	$ 8	$ 11

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Concentration of Credit Risk and Major Customers

12 Months Ended

Dec. 31, 2019

Concentration of Credit Risk and Major Customers [Abstract]

Concentration of Credit Risk and Major Customers

3. Concentration of credit risk and major customers:

The Company leases equipment to lessees and provides debt financing to borrowers in diversified industries. Leases and notes receivable are subject to the Managing Member’s credit committee review. The leases and notes receivable provide for the return of the equipment to the Company upon default.

As of December 31, 2019 and 2018, there were concentrations (greater than or equal to 10% as a percentage of total equipment cost) of equipment leased to lessees and/or financed for borrowers in certain industries as follows:

	Percentage
	of Total Equipment Cost
Industry	2019		2018
Transportation, rail	26	%	30	%
Construction	21	%	14	%
Agriculture	*		11	%
Transportation, air	*		10	%

*Less than 10%

During 2019 and 2018, certain lessees and/or financial borrowers generated significant portions (defined as greater than or equal to 10%) of the Company’s total leasing and lending revenues, excluding gains or losses on disposition of assets, as follows:

		Percentage of Total Leasing
		and Lending Revenues
Lessee	Type of Equipment	2019		2018
Union Pacific Railroad Company	Railroad	22	%	22	%
Aggregate Industries Management, Inc.	Mining	15	%	11	%
Cargill, Inc.	Agriculture/Construction	11	%	11	%

These percentages are not expected to be comparable in future periods due to anticipated changes in the mix of investments and/or lessees as a result of normal business activities.

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Borrowing Facilities (Narrative) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Line of Credit Facility [Line Items]
Maximum amount of Credit Facility	$ 55,000	$ 75,000
Total remaining available under the working capital, acquisition and warehouse facilities	54,150	72,890
Amount borrowed by the Company under the facility		$ 1,200
Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum amount of Credit Facility	$ 55,000
Line of Credit Facility, expiration date	Jun. 30, 2021	Jun. 30, 2019
Tangible net worth	$ 14,700
Leverage ratio	0.24
Interest Coverage ratio	18.67
Amount borrowed by the Company under the facility	$ 0	$ 0
Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate	2.25%
Credit Facility [Member] | Covenant Requirement [Member]
Line of Credit Facility [Line Items]
Tangible net worth requirement under the Credit Facility	$ 10,000
Maximum [Member] | Credit Facility [Member] | Covenant Requirement [Member]
Line of Credit Facility [Line Items]
Leverage ratio	1.25
Interest Coverage ratio	2

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Members' Capital (Distributions to Other Members) (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Distributions	$ 2,052	$ 2,054
Weighted average number of Units outstanding	2,565,749	2,567,041
Other Members [Member]
Distributions	$ 2,052	$ 2,054
Weighted average number of Units outstanding	2,565,749	2,567,041
Weighted average distributions per Unit	$ 0.80	$ 0.80

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Statements of Changes in Members' Capital (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Other Members [Member]
Distributions to Other Members, per unit	$ 0.80	$ 0.80

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Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2019	Feb. 29, 2020	Jun. 28, 2019
Document And Entity Information [Abstract]
Document Type	10-K
Document Period End Date	Dec. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Registrant Name	ATEL 17, LLC
Entity Central Index Key	0001640982
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Smaller Reporting Company	true
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Well-known Seasoned Issuer	No
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Public Float			$ 0
Entity Units Outstanding		2,565,749

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Summary of Significant Accounting Policies (Reconciliation of Net Income (Loss) Reported in Financial Statements and Federal Tax Return) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Summary of Significant Accounting Policies [Abstract]
Net income (loss) per financial statements	$ 99	$ (170)
Adjustment to depreciation expense	(1,983)	(2,049)
Provision for losses and doubtful accounts		(18)
Adjustments to revenues	(427)	(68)
Other	13	(5)
Loss per federal tax return (unaudited)	$ (2,298)	$ (2,310)

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Measurements [Abstract]

Fair Value, Warrants Measured on Recurring Basis

The following table reconciles the beginning and ending balances of the Company’s Level 3 recurring assets (in thousands):

	2019		2018
Fair value of warrants at beginning of year	$	302	$	62
Fair value of new warrants, recorded during the year (included as a discount on notes receivable)		—		224
Unrealized gain on fair valuation of warrants		429		16
Fair value of warrants at end of year	$	731	$	302

Summary of Valuation Techniques and Significant Unobservable Inputs Used

The following table summarizes the valuation techniques and significant unobservable inputs used for the Company’s recurring and non-recurring fair value calculation/adjustments categorized as Level 3 in the fair value hierarchy at December 31, 2019 and 2018:

December 31, 2019
	Valuation	Valuation	Unobservable	Range of
Name	Frequency	Technique	Inputs	Input Values
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.24 - $16.07
			Exercise price	0.02 - 9.00
			Time to maturity (in years)	6.63 - 11.95
			Risk-free interest rate	1.80% - 1.99%
			Annualized volatility	32.21% - 111.44%

December 31, 2018
	Valuation	Valuation	Unobservable	Range of
Name	Frequency	Technique	Inputs	Input Values
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.18 - $14.50
			Exercise price	0.02 - 9.00
			Time to maturity (in years)	7.63 - 12.95
			Risk-free interest rate	2.61% - 2.74%
			Annualized volatility	34.20% - 292.35%

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 December 31, 2019 and 2018 (in thousands):

	December 31, 2019
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	6,410	$	6,410	$	—	$	—	$	6,410
Notes receivable, net		1,078		—		—		1,086		1,086
Warrants, fair value		731		—		—		731		731
Financial liabilities:
Non-recourse debt		3,508		—		—		3,516		3,516

	December 31, 2018
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	6,484	$	6,484	$	—	$	—	$	6,484
Notes receivable, net		3,455		—		—		3,370		3,370
Warrants, fair value		302		—		—		302		302
Financial liabilities:
Non-recourse debt		3,531		—		—		3,539		3,539

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Members' Capital

12 Months Ended

Dec. 31, 2019

Members' Capital [Abstract]

Members' Capital

13. Members’ capital:

A total of 2,565,749 Units were issued and outstanding at both December 31, 2019 and 2018, 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.

The Company has the right, exercisable at the Managing Member’s discretion, but not the obligation, to repurchase Units of a Unitholder who ceases to be a U.S. Citizen, for a price equal to 100% of the holder’s capital account. The Company is otherwise permitted, but not required, to repurchase Units upon a holder’s request. The repurchase of Fund Units is made in accordance with Section 13 of the Amended and Restated Limited Liability Company Operating Agreement. The repurchase would be at the discretion of the Managing Member on terms it determines to be appropriate under given circumstances, in the event that the Managing Member deems such repurchase to be in the best interest of the Company; provided, the Company is never required to repurchase any Units. Upon the repurchase of any Units by the Fund, the tendered Units are cancelled. Units repurchased in prior periods were repurchased at amounts representing the original investment less cumulative distributions made to the Unitholder with respect to the Units. All Units repurchased during a quarter are deemed to be repurchased effective the last day of the preceding quarter, and are not deemed to be outstanding during, or entitled to allocations of net income, net loss or distributions for the quarter in which such repurchase occurs.

The Fund’s net income or net losses are to be allocated 100% to the members. From the commencement of the Fund until the initial closing date, net income and net loss were allocated 99% to the Managing Member and 1% to the initial members. Commencing with the initial closing date, net income and net loss are to be allocated 99.99% to the Other Members and 0.01% to the Managing Member.

Fund distributions are to be allocated 0.01% to the Managing Member and 99.99% to the Other Members. The Company commenced periodic distributions in February 2016.

Distributions to the Other Members for the years ended December 31, 2019 and 2018 were as follows (in thousands except Units and per Unit data):

	2019		2018
Distributions	$	2,052	$	2,054
Weighted average number of Units outstanding		2,565,749		2,567,041
Weighted average distributions per Unit	$	0.80	$	0.80

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Equipment Under Operating Leases, Net

12 Months Ended

Dec. 31, 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):

	Balance				Depreciation/		Balance
	December 31,				Amortization		December 31,
	2018		Additions		Expense		2019
Equipment under operating leases, net	$	10,001	$	1,494	$	(1,336)	$	10,159
Initial direct costs, net of accumulated amortization of $179 thousand    at December 31, 2019 and $148 thousand at December 31, 2018		185		5		(59)		131
Total	$	10,186	$	1,499	$	(1,395)	$	10,290

Impairment of equipment under operating leases:

As a result of impairment reviews, management determined that no impairment losses existed for the years ended December 31, 2019 and 2018.

The Company utilizes a straight line depreciation method over the term of the equipment lease for equipment on operating leases currently in its portfolio. Depreciation expense on the Company’s equipment totaled $1.3 million and $1.2 million for the respective years ended December 31, 2019 and 2018.IDC amortization expense related to the Company’s operating leases totaled $59 thousand and $66 thousand for the years ended December 31, 2019 and 2018, respectively.

All of the Company’s lease asset purchases and capital improvements were made during the years from 2016 through 2019.

Operating leases:

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

	Balance						Balance
	December 31,				Reclassifications		December 31,
	2018		Additions		or Dispositions		2019
Transportation, rail	$	3,679	$	—	$	(22)	$	3,657
Mining		1,728		1,021		—		2,749
Construction		1,242		242		—		1,484
Aviation		1,306		—		—		1,306
Paper processing		1,058		—		—		1,058
Marine vessels		1,041		—		—		1,041
Containers		860		—		—		860
Agriculture		742		—		—		742
Materials handling		711		249		—		960
Transportation, other		97		—		—		97
		12,464		1,512		(22)		13,954
Less accumulated depreciation		(2,463)		(1,336)		4		(3,795)
Total	$	10,001	$	176	$	(18)	$	10,159

The average estimated residual value for assets on operating leases was 37% and 38% of the assets’ original cost at December 31, 2019 and 2018, respectively. There were no operating leases in non-accrual status at both December 31, 2019 and 2018.

At December 31, 2019, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):

	Operating
	Leases
Year ending December 31, 2020	$	1,858
2021		1,364
2022		1,146
2023		1,091
2024		724
Thereafter		527
	$	6,710

The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of December 31, 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
Containers	15 - 20
Aviation	15 - 20
Mining	10 - 15
Paper processing	10 - 15
Agriculture	7 -  10
Construction	7 -  10
Materials handling	7 -  10
Transportation	7 -  10

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Syndication Costs

12 Months Ended

Dec. 31, 2019

Syndication Costs [Abstract]

Syndication Costs

9. Syndication Costs:

Syndication costs are reflected as a reduction to Members’ capital, as such costs are netted against the capital raised. The amount shown is primarily comprised of selling commissions, well as fees pertaining to the organization of the Fund, document preparation, regulatory filing fees, and accounting and legal costs. Syndication costs totaled $0 and $51 thousand for the respective years ended December 31, 2019 and 2018.

The Operating Agreement places a limit for cost reimbursements to the Managing Member and/or affiliates. When added to selling commissions, such cost reimbursements may not exceed a total equal to 15% of all offering proceeds. As of December 31, 2019, the Company had not recorded any syndication costs in excess of the limitation. The limitation on the amount of syndication costs pursuant to the Operating Agreement is determined on the date of termination of the offering. At such time, the Manager guarantees repayment of any excess syndication costs (above the limitation) which it may have collected from the Company, which guarantee is without recourse or reimbursement by the Fund.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Summary of Significant Accounting Policies [Abstract]

Schedule of Differences Between Book Value and Tax Basis of Net Assets

The tax bases of the Company’s net assets and liabilities vary from the amounts presented in these financial statements at December 31, 2019 and 2018 as follows (in thousands):

	2019		2018
Financial statement basis of net assets	$	14,668	$	16,621
Tax basis of net assets (unaudited)		12,174		16,525
Difference	$	2,494	$	96

Reconciliation of Net Income Loss Reported in Financial Statements and Federal Tax Return

The following reconciles the net income (loss) reported in these financial statements to the loss reported on the Company’s federal tax return (unaudited) for the years ended December 31, 2019 and 2018 (in thousands):

	2019		2018
Net income (loss) per financial statements	$	99	$	(170)
Tax adjustments (unaudited):
Adjustment to depreciation expense		(1,983)		(2,049)
Provision for losses and doubtful accounts		—		(18)
Adjustments to revenues		(427)		(68)
Other		13		(5)
Loss per federal tax return (unaudited)	$	(2,298)	$	(2,310)

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Allowance for Credit Losses (Tables)

12 Months Ended

Dec. 31, 2019

Allowance for Credit Losses [Abstract]

Financing Receivables by Credit Quality Indicator and by Class

At December 31, 2019 and 2018, the Company’s financing receivables by credit quality indicator and by class of financing receivables are as follows (excludes warrants – notes receivable discount) (in thousands):

	Notes Receivable
	2019		2018
Pass	$	1,164	$	3,623
Special mention		—		—
Substandard		—		—
Doubtful		—		—
Total	$	1,164	$	3,623

Net Investment in Financing Receivables by Age

At December 31, 2019 and December 31, 2018, investment in financing receivables is aged as follows (in thousands):

													Recorded
					Greater						Total		Investment>90
	31-60 Days		61-90 Days		Than		Total				Financing		Days and
December 31, 2019	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	1,164	$	1,164	$	—
Total	$	—	$	—	$	—	$	—	$	1,164	$	1,164	$	—

													Recorded
					Greater						Total		Investment>90
	31-60 Days		61-90 Days		Than		Total				Financing		Days and
December 31, 2018	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	3,623	$	3,623	$	—
Total	$	—	$	—	$	—	$	—	$	3,623	$	3,623	$	—

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Fair Value Measurements (Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Financial assets:
Cash and cash equivalents	$ 6,410	$ 6,484
Notes receivable, net	1,086	3,370
Warrants, fair value	731	302
Financial liabilities:
Non-recourse debt	3,516	3,539
Carrying Amount [Member]
Financial assets:
Cash and cash equivalents	6,410	6,484
Notes receivable, net	1,078	3,455
Warrants, fair value	731	302
Financial liabilities:
Non-recourse debt	3,508	3,531
Fair Value, Inputs, Level 1 [Member]
Financial assets:
Cash and cash equivalents	6,410	6,484
Fair Value, Inputs, Level 3 [Member]
Financial assets:
Notes receivable, net	1,086	3,370
Warrants, fair value	731	302	$ 62
Financial liabilities:
Non-recourse debt	$ 3,516	$ 3,539

XML

Allowance for Credit Losses (Narrative) (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Allowance for Credit Losses [Abstract]
Financing receivables on non-accrual status	$ 0	$ 0
Allowance for credit losses	$ 0	$ 0

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Equipment Under Operating Leases, Net (Investment in Leases) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Leases Disclosure [Line Items]
Balance December 31, 2018	$ 10,186
Additions	1,499
Depreciation/ Amortization Expense	(1,395)
Balance December 31, 2019	10,290
Initial direct costs, accumulated amortization	179	$ 148
Initial Direct Cost [Member]
Leases Disclosure [Line Items]
Balance December 31, 2018	185
Additions	5
Depreciation/ Amortization Expense	(59)
Balance December 31, 2019	131
Operating Leases [Member]
Leases Disclosure [Line Items]
Balance December 31, 2018	10,001
Additions	1,494
Depreciation/ Amortization Expense	(1,336)
Balance December 31, 2019	$ 10,159

XML

Summary of Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2019

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of presentation:

The accompanying balance sheets as of December 31, 2019 and 2018, and the related statements of operations, changes in members’ capital, and cash flows for the years then ended, have been prepared in accordance with accounting principles generally accepted in the United States of America (‘GAAP’) and the rules and regulations of the Securities and Exchange Commission. Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications had no significant effect on the reported financial position or results from operations.

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

In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after December 31, 2019, up until the issuance of the financial statements. No events were noted which would require additional disclosure in the footnotes to the financial statements other than those disclosed in Note 15, Subsequent Events.

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 for determination of the allowance for doubtful accounts and reserve for credit losses on notes receivable.

Accounts Receivable

Accounts receivable:

Accounts receivable represent the amounts billed under operating lease contracts, and notes receivable which are currently due to the Company. Allowances for doubtful accounts are typically established based on historical charge off and collection experience and the collectability 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.

Credit Risk

Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, operating lease receivable, notes receivable and accounts receivable. The Company places the majority of its cash deposits in noninterest-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 Funds’ 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 and notes receivable represent amounts due from lessees or borrowers in various industries, related to equipment on operating leases or notes receivable.

Equipment on Operating Leases and Related Revenue Recognition

Equipment on operating leases 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 Accounting Standards Condification (“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.

Notes Receivable, Unearned Interest Income and Related Revenue Recognition

Notes receivable, unearned interest income and related revenue recognition:

The Company records all future payments of principal and interest on notes as notes receivable, which are then offset by the amount of any related unearned interest income. For financial statement purposes, the Company reports only the net amount of principal due on the balance sheet. The unearned interest is recognized over the term of the note and the income portion of each note payment is calculated so as to generate a constant rate of return on the net balance outstanding. Any fees or costs related to notes receivable are recorded as part of the net investment in notes receivable and amortized over the term of the loan.

Allowances for losses on notes receivable are typically established based on historical charge off and collection experience and the collectability of specifically identified borrowers and billed and unbilled receivables. 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 payments 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.

Notes 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 note payments outstanding less than 90 days. Based upon management’s judgment, the related notes may be placed on non-accrual status. 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, all payments received are applied only against outstanding principal balances.

Initial Direct Costs

Initial direct costs:

With the adoption of Accounting Standards Update (“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 effective January 1, 2019. 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.

Acquisition Expense

Acquisition expense:

Acquisition expense represents costs which include, but are not limited to, legal fees and expenses, travel and communication expenses, cost of appraisals, accounting fees and expenses and miscellaneous expenses related to the selection and acquisition of equipment which are reimbursable to the Managing Member under the terms of the Operating Agreement. As the costs are not eligible for capitalization as initial direct costs, such amounts are expensed as incurred.

Asset Valuation

Asset valuation:

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 the 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. 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.

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 Company’s principal decision makers are the Managing Member’s Chief Executive Officer and its Chief Financial Officer and Chief Operating Officer. The Company believes that its equipment leasing business operates as one reportable segment because: a) the Company measures profit and loss at the equipment portfolio level as a whole; b) the principal decision makers do not review information based on any operating segment other than the equipment leasing transaction portfolio; c) the Company does not maintain discrete financial information on any specific segment other than its equipment financing operations; d) the Company has not chosen to organize its business around different products and services other than equipment lease financing; and e) the Company has not chosen to organize its business around geographic areas.

The primary geographic region in which the Company seeks leasing opportunities is North America. For the years ended December 31, 2019 and 2018, all of the Company’s current operating revenues and long-lived assets relate to customers domiciled in the United States.

Investment in Securities

Investment in securities:

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. The Company recorded unrealized gain of $429 thousand and $16 thousand on fair valuation of its warrants during 2019 and 2018, respectively. The estimated fair value of the Company’s portfolio of warrants was $731 thousand and $302 thousand for the years ended December 31, 2019 and 2018, respectively.

Unearned Operating Lease Income

Unearned operating lease income:

The Company records prepayments on operating leases as a liability under the caption of unearned operating lease income. The liability is recorded when prepayments are received and recognized as operating lease revenue over the period to which the prepayments relate using a straight-line method.

Income Taxes

Income Taxes:

The Company is treated as a partnership for federal income tax purposes. Pursuant to the provisions of Section 701 of the Internal Revenue Code, a partnership is not subject to federal income taxes. Accordingly, the Company has provided current franchise income taxes for only those states which levy income taxes on partnerships. For the year ended December 31, 2019, the related provision for state income taxes was $7 thousand; and, for the year ended December 31, 2018, the Company received $5 thousand of income tax credit adjustments. The Company does not have any entity level uncertain tax positions. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions and is generally subject to examination by U.S. federal (or state and local) income tax authorities for three years from the filing of a tax return.

The tax bases of the Company’s net assets and liabilities vary from the amounts presented in these financial statements at December 31, 2019 and 2018 as follows (in thousands):

	2019		2018
Financial statement basis of net assets	$	14,668	$	16,621
Tax basis of net assets (unaudited)		12,174		16,525
Difference	$	2,494	$	96

The primary differences between the tax bases of net assets and the amounts recorded in the financial statements are the result of differences in accounting for syndication costs and differences between the depreciation methods used in the financial statements and the Company’s tax returns.

The following reconciles the net income (loss) reported in these financial statements to the loss reported on the Company’s federal tax return (unaudited) for the years ended December 31, 2019 and 2018 (in thousands):

	2019		2018
Net income (loss) per financial statements	$	99	$	(170)
Tax adjustments (unaudited):
Adjustment to depreciation expense		(1,983)		(2,049)
Provision for losses and doubtful accounts		—		(18)
Adjustments to revenues		(427)		(68)
Other		13		(5)
Loss per federal tax return (unaudited)	$	(2,298)	$	(2,310)

Emerging Growth Company

Emerging growth company:

Section 107 of the Jumpstart Our Business Startups Act (the “JOBS Act”) provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we have chosen to “opt out” of such extended transition period and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

Per Unit Data

Per Unit data:

Net loss and distributions per Unit are based upon the weighted average number of members Units outstanding during the year.

Recent Accounting Pronouncements

Recent accounting pronouncements:

In February 2016, the Financial Accounting Standards Board, or FASB, issued ASU 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 and adopted as of January 1, 2019. Upon adoption, the Company applied the package of 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 year ended December 31, 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 Company’s financial statements and prior periods are not reclassified to conform to the current presentation.

In June 2016, the FASB issued ASU 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 equipment under operating leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, equipment under operating 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. Management is currently evaluating the standard and expects the update may potentially result in the 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 ASU 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. Management is currently evaluating the impact of the standard on the financial statements and related disclosure requirements.

On August 15, 2019, the FASB issued a proposed ASU that would grant certain companies additional time to implement FASB standards on current expected credit losses (CECL), and hedging. The proposed ASU defers the effective date for CECL to fiscal periods beginning after December 15, 2022, including interim periods within those fiscal years; and defers the effective dates for hedging to fiscal periods beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The ASU was approved on October 16, 2019.

In August 2018, the FASB issued ASU 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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Equipment Under Operating Leases, Net (Tables)

12 Months Ended

Dec. 31, 2019

Equipment Under Operating Leases, Net [Abstract]

Investment in Leases

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

	Balance				Depreciation/		Balance
	December 31,				Amortization		December 31,
	2018		Additions		Expense		2019
Equipment under operating leases, net	$	10,001	$	1,494	$	(1,336)	$	10,159
Initial direct costs, net of accumulated amortization of $179 thousand    at December 31, 2019 and $148 thousand at December 31, 2018		185		5		(59)		131
Total	$	10,186	$	1,499	$	(1,395)	$	10,290

Property on Operating Leases

Operating leases:

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

	Balance						Balance
	December 31,				Reclassifications		December 31,
	2018		Additions		or Dispositions		2019
Transportation, rail	$	3,679	$	—	$	(22)	$	3,657
Mining		1,728		1,021		—		2,749
Construction		1,242		242		—		1,484
Aviation		1,306		—		—		1,306
Paper processing		1,058		—		—		1,058
Marine vessels		1,041		—		—		1,041
Containers		860		—		—		860
Agriculture		742		—		—		742
Materials handling		711		249		—		960
Transportation, other		97		—		—		97
		12,464		1,512		(22)		13,954
Less accumulated depreciation		(2,463)		(1,336)		4		(3,795)
Total	$	10,001	$	176	$	(18)	$	10,159

Future Minimum Lease Payments Receivable

At December 31, 2019, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):

	Operating
	Leases
Year ending December 31, 2020	$	1,858
2021		1,364
2022		1,146
2023		1,091
2024		724
Thereafter		527
	$	6,710

Schedule of Useful Lives of Lease Assets

As of December 31, 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
Containers	15 - 20
Aviation	15 - 20
Mining	10 - 15
Paper processing	10 - 15
Agriculture	7 -  10
Construction	7 -  10
Materials handling	7 -  10
Transportation	7 -  10

XML

Fair Value Measurements (Summary of Valuation Techniques and Significant Unobservable Inputs Used) (Details) - Fair Value, Inputs, Level 3 [Member] - Recurring [Member] - Warrant [Member] - Black-Scholes formulation [Member]	Dec. 31, 2019 $ / shares USD ($)	Dec. 31, 2018 $ / shares USD ($)
Minimum [Member] | Unobservable Inputs, Stock Price [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values | $ / shares	0.24	0.18
Minimum [Member] | Unobservable Inputs, Exercise Price [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.02	0.02
Minimum [Member] | Unobservable Inputs, Time to Maturity (in Years) [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	6.63	7.63
Minimum [Member] | Unobservable Inputs, Risk Free Interest Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.0180	0.0261
Minimum [Member] | Unobservable Inputs, Annualized Volatility [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.3221	0.3420
Maximum [Member] | Unobservable Inputs, Stock Price [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values | $ / shares	16.07	14.50
Maximum [Member] | Unobservable Inputs, Exercise Price [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	9.00	9.00
Maximum [Member] | Unobservable Inputs, Time to Maturity (in Years) [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	11.95	12.95
Maximum [Member] | Unobservable Inputs, Risk Free Interest Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.0199	0.0274
Maximum [Member] | Unobservable Inputs, Annualized Volatility [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	1.1144	2.9235

XML

Allowance for Credit Losses (Financing Receivables by Credit Quality Indicator and by Class) (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment [Line Items]
Notes Receivable	$ 1,164	$ 3,623
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Notes Receivable	$ 1,164	$ 3,623

XML

Equipment Under Operating Leases, Net (Property on Operating Leases) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	$ 13,954	$ 12,464
Less accumulated depreciation	(3,795)	(2,463)
Property on operating leases, net	10,159	10,001
Additions, gross	1,512
Additions, less accumulated depreciation	(1,336)
Additions, net	176
Reclassifications or dispositions, gross	(22)
Reclassifications or dispositions, less accumulated depreciation	4
Reclassifications or dispositions, net	(18)
Property on operating leases, gross	13,954	12,464
Property on operating leases, accumulated depreciation	3,795	2,463
Property on operating leases, net	10,159	10,001
Transportation, Rail [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	3,657	3,679
Reclassifications or dispositions, gross	(22)
Property on operating leases, gross	3,657	3,679
Mining [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	2,749	1,728
Additions, gross	1,021
Property on operating leases, gross	2,749	1,728
Construction [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	1,484	1,242
Additions, gross	242
Property on operating leases, gross	1,484	1,242
Paper Processing [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	1,058	1,058
Additions, gross
Reclassifications or dispositions, gross
Property on operating leases, gross	1,058	1,058
Marine Vessel [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	1,041	1,041
Property on operating leases, gross	1,041	1,041
Containers [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	860	860
Property on operating leases, gross	860	860
Agriculture [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	742	742
Property on operating leases, gross	742	742
Materials Handling [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	960	711
Additions, gross	249
Property on operating leases, gross	960	711
Aviation [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	1,306	1,306
Property on operating leases, gross	1,306	1,306
Transportation, Air [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	97	97
Property on operating leases, gross	$ 97	$ 97

XML

Statements of Changes in Members' Capital - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Beginning Balance	$ 16,621	$ 18,707
Capital contributions		340
Repurchase of Units		(151)
Syndication costs		(51)
Distributions to Other Members	(2,052)	(2,054)
Net income (loss)	99	(170)
Ending Balance	$ 14,668	$ 16,621
Other Members [Member]
Beginning Balance (in units)	2,565,749	2,551,749
Beginning Balance	$ 16,620	$ 18,706
Capital contributions		$ 340
Capital contributions (in Units)		34,000
Repurchase of Units		$ (151)
Repurchase of Units (in Units)		(20,000)
Syndication costs		$ (51)
Distributions to Other Members	(2,052)	(2,054)
Net income (loss)	$ 99	$ (170)
Ending Balance (in units)	2,565,749	2,565,749
Ending Balance	$ 14,667	$ 16,620
Managing Member [Member]
Beginning Balance	1	1
Ending Balance	$ 1	$ 1

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of significant accounting policies:

Basis of presentation:

The accompanying balance sheets as of December 31, 2019 and 2018, and the related statements of operations, changes in members’ capital, and cash flows for the years then ended, have been prepared in accordance with accounting principles generally accepted in the United States of America (‘GAAP’) and the rules and regulations of the Securities and Exchange Commission. Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications had no significant effect on the reported financial position or results from operations.

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

In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after December 31, 2019, up until the issuance of the financial statements. No events were noted which would require additional disclosure in the footnotes to the financial statements other than those disclosed in Note 15, Subsequent Events.

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 for determination of the allowance for doubtful accounts and reserve for credit losses on notes receivable.

Accounts receivable:

Accounts receivable represent the amounts billed under operating lease contracts, and notes receivable which are currently due to the Company. Allowances for doubtful accounts are typically established based on historical charge off and collection experience and the collectability 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.

Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, operating lease receivable, notes receivable and accounts receivable. The Company places the majority of its cash deposits in noninterest-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 Funds’ 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 and notes receivable represent amounts due from lessees or borrowers in various industries, related to equipment on operating leases or notes receivable.

Equipment on operating leases 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 Accounting Standards Condification (“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.

Notes receivable, unearned interest income and related revenue recognition:

The Company records all future payments of principal and interest on notes as notes receivable, which are then offset by the amount of any related unearned interest income. For financial statement purposes, the Company reports only the net amount of principal due on the balance sheet. The unearned interest is recognized over the term of the note and the income portion of each note payment is calculated so as to generate a constant rate of return on the net balance outstanding. Any fees or costs related to notes receivable are recorded as part of the net investment in notes receivable and amortized over the term of the loan.

Allowances for losses on notes receivable are typically established based on historical charge off and collection experience and the collectability of specifically identified borrowers and billed and unbilled receivables. 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 payments 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.

Notes 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 note payments outstanding less than 90 days. Based upon management’s judgment, the related notes may be placed on non-accrual status. 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, all payments received are applied only against outstanding principal balances.

Initial direct costs:

With the adoption of Accounting Standards Update (“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 effective January 1, 2019. 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.

Acquisition expense:

Acquisition expense represents costs which include, but are not limited to, legal fees and expenses, travel and communication expenses, cost of appraisals, accounting fees and expenses and miscellaneous expenses related to the selection and acquisition of equipment which are reimbursable to the Managing Member under the terms of the Operating Agreement. As the costs are not eligible for capitalization as initial direct costs, such amounts are expensed as incurred.

Asset valuation:

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 the 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. 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.

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 Company’s principal decision makers are the Managing Member’s Chief Executive Officer and its Chief Financial Officer and Chief Operating Officer. The Company believes that its equipment leasing business operates as one reportable segment because: a) the Company measures profit and loss at the equipment portfolio level as a whole; b) the principal decision makers do not review information based on any operating segment other than the equipment leasing transaction portfolio; c) the Company does not maintain discrete financial information on any specific segment other than its equipment financing operations; d) the Company has not chosen to organize its business around different products and services other than equipment lease financing; and e) the Company has not chosen to organize its business around geographic areas.

The primary geographic region in which the Company seeks leasing opportunities is North America. For the years ended December 31, 2019 and 2018, all of the Company’s current operating revenues and long-lived assets relate to customers domiciled in the United States.

Investment in securities:

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. The Company recorded unrealized gain of $429 thousand and $16 thousand on fair valuation of its warrants during 2019 and 2018, respectively. The estimated fair value of the Company’s portfolio of warrants was $731 thousand and $302 thousand for the years ended December 31, 2019 and 2018, respectively.

Unearned operating lease income:

The Company records prepayments on operating leases as a liability under the caption of unearned operating lease income. The liability is recorded when prepayments are received and recognized as operating lease revenue over the period to which the prepayments relate using a straight-line method.

Income Taxes:

The Company is treated as a partnership for federal income tax purposes. Pursuant to the provisions of Section 701 of the Internal Revenue Code, a partnership is not subject to federal income taxes. Accordingly, the Company has provided current franchise income taxes for only those states which levy income taxes on partnerships. For the year ended December 31, 2019, the related provision for state income taxes was $7 thousand; and, for the year ended December 31, 2018, the Company received $5 thousand of income tax credit adjustments. The Company does not have any entity level uncertain tax positions. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions and is generally subject to examination by U.S. federal (or state and local) income tax authorities for three years from the filing of a tax return.

The tax bases of the Company’s net assets and liabilities vary from the amounts presented in these financial statements at December 31, 2019 and 2018 as follows (in thousands):

	2019		2018
Financial statement basis of net assets	$	14,668	$	16,621
Tax basis of net assets (unaudited)		12,174		16,525
Difference	$	2,494	$	96

The primary differences between the tax bases of net assets and the amounts recorded in the financial statements are the result of differences in accounting for syndication costs and differences between the depreciation methods used in the financial statements and the Company’s tax returns.

The following reconciles the net income (loss) reported in these financial statements to the loss reported on the Company’s federal tax return (unaudited) for the years ended December 31, 2019 and 2018 (in thousands):

	2019		2018
Net income (loss) per financial statements	$	99	$	(170)
Tax adjustments (unaudited):
Adjustment to depreciation expense		(1,983)		(2,049)
Provision for losses and doubtful accounts		—		(18)
Adjustments to revenues		(427)		(68)
Other		13		(5)
Loss per federal tax return (unaudited)	$	(2,298)	$	(2,310)

Emerging growth company:

Section 107 of the Jumpstart Our Business Startups Act (the “JOBS Act”) provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we have chosen to “opt out” of such extended transition period and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

Per Unit data:

Net loss and distributions per Unit are based upon the weighted average number of members Units outstanding during the year.

Recent accounting pronouncements:

In February 2016, the Financial Accounting Standards Board, or FASB, issued ASU 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 and adopted as of January 1, 2019. Upon adoption, the Company applied the package of 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 year ended December 31, 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 Company’s financial statements and prior periods are not reclassified to conform to the current presentation.

In June 2016, the FASB issued ASU 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 equipment under operating leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, equipment under operating 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. Management is currently evaluating the standard and expects the update may potentially result in the 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 ASU 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. Management is currently evaluating the impact of the standard on the financial statements and related disclosure requirements.

On August 15, 2019, the FASB issued a proposed ASU that would grant certain companies additional time to implement FASB standards on current expected credit losses (CECL), and hedging. The proposed ASU defers the effective date for CECL to fiscal periods beginning after December 15, 2022, including interim periods within those fiscal years; and defers the effective dates for hedging to fiscal periods beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The ASU was approved on October 16, 2019.

In August 2018, the FASB issued ASU 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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Syndication Costs (Schedule of Syndication Costs) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Syndication Costs [Abstract]
Syndication costs	$ 0	$ 51
Percentage of offering proceeds, limit on reimbursements to Managing Members and/or affiliates	15.00%

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Members' Capital (Narrative) (Details) - shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Members Capital Account [Line Items]
Potential repurchase price of Units as percentage of holder's capital account	100.00%
Allocation of net income and net loss	100.00%
Other Members [Member]
Members Capital Account [Line Items]
Members capital account, Units issued	2,565,749	2,565,749
Members capital account, Units outstanding	2,565,749	2,565,749	2,551,749
Percentage of fund distributions	99.99%
Other Members [Member] | After Initial Closing Date [Member]
Members Capital Account [Line Items]
Allocation of net income and net loss	99.99%
Managing Member [Member]
Members Capital Account [Line Items]
Allocation of net income and net loss	0.01%
Managing Member [Member] | Until Initial Closing Date [Member]
Members Capital Account [Line Items]
Allocation of net income and net loss	99.00%
Managing Member [Member] | After Initial Closing Date [Member]
Members Capital Account [Line Items]
Percentage of fund distributions	0.01%
Initial Member [Member]
Members Capital Account [Line Items]
Members capital account, Units issued	50
Initial Member [Member] | Until Initial Closing Date [Member]
Members Capital Account [Line Items]
Allocation of net income and net loss	1.00%
Maximum [Member] | Other Members [Member]
Members Capital Account [Line Items]
Members capital account, units authorized	15,000,000

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Concentration of Credit Risk and Major Customers (Schedule of Leasing and Lending Revenues) (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Transportation, Rail [Member] | Equipment Cost [Member]
Concentration Risk [Line Items]
Percentage of concentration risk	26.00%	30.00%
Transportation, Rail [Member] | Union Pacific Railroad Company [Member] | Operating Revenue [Member]
Concentration Risk [Line Items]
Percentage of concentration risk	22.00%	22.00%
Mining [Member] | Aggregate Industries Management, Inc. [Member] | Operating Revenue [Member]
Concentration Risk [Line Items]
Percentage of concentration risk	15.00%	11.00%
Agriculture [Member] | Equipment Cost [Member]
Concentration Risk [Line Items]
Percentage of concentration risk		11.00%
Agriculture [Member] | Cargill, Inc. [Member] | Operating Revenue [Member]
Concentration Risk [Line Items]
Percentage of concentration risk	11.00%	11.00%
Construction [Member] | Equipment Cost [Member]
Concentration Risk [Line Items]
Percentage of concentration risk	21.00%	14.00%
Transportation, Air [Member] | Equipment Cost [Member]
Concentration Risk [Line Items]
Percentage of concentration risk		10.00%

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Organization and Limited Liability Company Matters (Narrative) (Details) - USD ($)	12 Months Ended	24 Months Ended	56 Months Ended
	Dec. 31, 2019	Jan. 05, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Jul. 06, 2016	Feb. 02, 2016	Apr. 28, 2015
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Business activities, description	equipment financing and acquiring equipment to engage in equipment leasing and sales activities
Business formation date	Apr. 16, 2015
Business formation Date	California
Initial offering expiration period			2 years
Limited liability company, minimum required proceeds from initial offering		$ 150,000,000
Sale of limited liability Company Units, number of Units							120,000
Proceeds from sale of Limited Liability Company Units	$ 25,700,000		$ 25,700,000				$ 1,200,000
Reinvestment period			6 years
Minimum [Member]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Amount of aggregate subscriptions for Pennsylvania subscriptions to be released to the Fund							$ 7,500,000
Contributions received, net of rescissions						$ 7,500,000
Other Members [Member]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Members capital account, Units issued	2,565,749		2,565,749	2,565,749
Members capital account, Units outstanding	2,565,749		2,565,749	2,565,749	2,551,749
Initial Member [Member]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Contributions of capital, initial								$ 500
Members capital account, Units issued	50		50

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Notes Receivable, Net

12 Months Ended

Dec. 31, 2019

Notes Receivable, Net [Abstract]

Notes Receivable, Net

4. Notes receivable, net:

The Company has various notes receivable from borrowers who have financed the purchase of equipment through the Company. As of December 31, 2019, the original terms of the notes are from 24 to 42 months with interest rates ranging from 11.55%  to 16.49% per annum. The notes are secured by the equipment financed and have maturity dates ranging from 2020 to 2022.

As of December 31, 2019, the minimum future payments receivable are as follows (in thousands):

Year ending December 31, 2020	$	830
2021		437
2022		9
		1,276
Less: portion representing unearned interest income		(112)
		1,164
Less: warrants - notes receivable discount		(86)
Notes receivable, net	$	1,078

IDC amortization expense related to notes receivable and the Company’s operating leases for the years ended December 31, 2019 and 2018 are as follows (in thousands):

	2019		2018
IDC amortization - notes receivable	$	8	$	11
IDC amortization - lease assets		59		66
Total	$	67	$	77

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Non-Recourse Debt

12 Months Ended

Dec. 31, 2019

Non-Recourse Debt [Abstract]

Non-Recourse Debt

8. Non-recourse debt:

At December 31, 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 3.70% to 4.66% per annum. The notes are secured by assignments of lease payments and pledges of assets. At December 31, 2019, gross operating lease rentals totaled approximately $3.8 million over the remaining lease terms and the carrying value of the pledged assets was $7.1 million. The notes mature from 2020 through 2028. 

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
Year ending December 31, 2020		1,169		124		1,293
2021		706		85		791
2022		518		61		579
2023		522		39		561
2024		288		20		308
Thereafter		305		29		334
	$	3,508	$	358	$	3,866

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Guarantees

12 Months Ended

Dec. 31, 2019

Guarantees [Abstract]

Guarantees

12. Guarantees:

The Company enters into contracts that contain a variety of indemnifications. The Company’s maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

The Managing Member knows of no facts or circumstances that would make the Company’s contractual commitments outside standard mutual covenants applicable to commercial transactions between businesses. Accordingly, the Company believes that these indemnification obligations are made in the ordinary course of business as part of standard commercial and industry practice, and that any potential liability under the Company’s similar commitments is remote. Should any such indemnification obligation become payable, the Company would separately record and/or disclose such liability in accordance with GAAP.