10-Q

Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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

For the quarterly period ended September 30, 2021

☐         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 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 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.

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

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

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

The number of Limited Liability Company Units outstanding as of October 31, 2021 was 2,565,749.

DOCUMENTS INCORPORATED BY REFERENCE

None.

ATEL 17, LLC

Index

Part I. Financial Information		3
Item 1.	Financial Statements (Unaudited)	3
	Balance Sheets, September 30, 2021 and December 31, 2020	3
	Statements of Operations for the three and nine months ended September 30, 2021 and 2020	4
	Statements of Changes in Members’ Capital for the three and nine months ended September 30, 2021 and 2020	5
	Statements of Cash Flows for the nine months ended September 30, 2021 and 2020	6
	Notes to the Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 4.	Controls and Procedures	29
Part II. Other Information		30
Item 1.	Legal Proceedings	30
Item 2.	Defaults Upon Senior Securities	30
Item 3.	Mine Safety Disclosures	30
Item 4.	Other Information	30
Item 5.	Exhibits	30

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

ATEL 17, LLC

BALANCE SHEETS

SEPTEMBER 30, 2021 AND DECEMBER 31, 2020

(In Thousands)

(Unaudited)

	September 30,		December 31,
	2021		2020
ASSETS
Cash and cash equivalents	$	2,956	$	2,873
Due from Managing Member and affiliates		-		12
Accounts receivable, net		28		41
Notes receivable, net		5		390
Investment in securities		406		1,448
Warrants, fair value		161		187
Equipment under operating leases, net		9,714		11,011
Prepaid expenses and other assets		13		7
Total assets	$	13,283	$	15,969
LIABILITIES AND MEMBERS' CAPITAL
Accounts payable and accrued liabilities:
Due to Managing Member and affiliates	$	7	$	-
Accrued distributions to Other Members		228		228
Options - short position		16		-
Other		120		74
Non-recourse debt		1,768		2,339
Unearned operating lease income		115		115
Total liabilities		2,254		2,756
Members’ capital:
Managing Member		1		1
Other Members		11,028		13,212
Total Members’ capital		11,029		13,213
Total liabilities and Members’ capital	$	13,283	$	15,969

See accompanying notes.

3

ATEL 17, LLC

STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2021 AND 2020

(In Thousands Except for Units and Per Unit Data)

(Unaudited)

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
	2021		2020		2021		2020
Operating revenues:
Leasing and lending activities:
Operating lease revenue, net	$	616	$	551	$	1,723	$	1,554
Notes receivable interest income		14		33		52		117
Loss on sales of lease assets and early termination of notes receivable		(111)		-		(111)		-
Other revenue		-		-		1		1
Total operating revenues		519		584		1,665		1,672
Operating expenses:
Depreciation of operating lease assets		423		381		1,179		1,087
Asset management fees to Managing Member		64		63		195		192
Acquisition expense		3		43		17		63
Cost reimbursements to Managing Member and/or affiliates		92		74		274		242
Amortization of initial direct costs		9		11		24		40
Interest expense		20		28		65		95
Professional fees		26		19		127		115
Outside services		17		21		36		43
Taxes on income and franchise fees		1		2		3		7
Bank charges		9		7		25		20
Other		12		13		28		31
Total operating expenses		676		662		1,973		1,935
Net loss from operations		(157)		(78)		(308)		(263)
Other (loss) income:
Gain on sale of securities		-		-		78		-
Unrealized loss on fair value adjustment for securities		(492)		-		(423)		-
Unrealized gain (loss) on fair value adjustment for warrants		4		1		(26)		(338)
Unrealized gain on fair value of options		34		-		34		-
Total other (loss) income		(454)		1		(337)		(338)
Net loss	$	(611)	$	(77)	$	(645)	$	(601)
Net loss:
Managing Member		-		-		-		-
Other Members	$	(611)	$	(77)	$	(645)	$	(601)
	$	(611)	$	(77)	$	(645)	$	(601)
Net loss per Limited Liability Company Unit (Other Members)	$	(0.24)	$	(0.03)	$	(0.25)	$	(0.23)
Weighted average number of Units outstanding		2,565,749		2,565,749		2,565,749		2,565,749

See accompanying notes.

4

ATEL 17, LLC

STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2021 AND 2020

(In Thousands Except for Units and Per Unit Data)

(Unaudited)

	Three Months Ended September 30, 2021
		Amount
		Other		Managing
	Units	Members		Member		Total
Balance June 30, 2021	2,565,749	$	12,152	$	1	$	12,153
Distributions to Other Members ($0.20 per Unit)	-		(513)		-		(513)
Net loss	-		(611)		-		(611)
Balance September 30, 2021	2,565,749	$	11,028	$	1	$	11,029
	Nine Months Ended September 30, 2021
		Amount
		Other		Managing
	Units	Members		Member		Total
Balance December 31, 2020	2,565,749	$	13,212	$	1	$	13,213
Distributions to Other Members ($0.60 per Unit)	-		(1,539)		-		(1,539)
Net loss	-		(645)		-		(645)
Balance September 30, 2021	2,565,749	$	11,028	$	1	$	11,029
	Three Months Ended September 30, 2020
		Amount
		Other		Managing
	Units	Members		Member		Total
Balance June 30, 2020	2,565,749	$	13,117	$	1	$	13,118
Distributions to Other Members ($0.20 per Unit)	-		(513)		-		(513)
Net loss	-		(77)		-		(77)
Balance September 30, 2020	2,565,749	$	12,527	$	1	$	12,528
	Nine Months Ended September 30, 2020
		Amount
		Other		Managing
	Units	Members		Member		Total
Balance December 31, 2019	2,565,749	$	14,667	$	1	$	14,668
Distributions to Other Members ($0.60 per Unit)	-		(1,539)		-		(1,539)
Net loss	-		(601)		-		(601)
Balance September 30, 2020	2,565,749	$	12,527	$	1	$	12,528

See accompanying notes.

5

ATEL 17, LLC

STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(In Thousands)

(Unaudited)

	Nine Months Ended
	September 30,
	2021		2020
Operating activities:
Net loss	$	(645)	$	(601)
Adjustment to reconcile net loss to net cash provided by operating activities:
Loss on sales of lease assets and early termination of notes receivable		111		-
Accretion of note discount - warrants		(32)		(42)
Depreciation of operating lease assets		1,179		1,087
Amortization of initial direct costs		24		40
Reversal of provision for credit losses		(17)		10
Gain on sale of securities		(78)		-
Unrealized loss on fair value adjustment for securities		423		-
Unrealized loss on fair value adjustment for warrants		26		338
Unrealized gain on fair value adjustment for options		(34)		-
Changes in operating assets and liabilities:
Accounts receivable		30		(4)
Due from/to Managing Member and affiliates		69		44
Prepaid expenses and other assets		(6)		(5)
Accounts payable, other		46		12
Unearned operating lease income		-		(25)
Net cash provided by operating activities		1,096		854
Investing activities:
Purchases of equipment under operating leases		(355)		(1,416)
Proceeds from sale of securities		697		-
Payments of initial direct costs		-		(5)
Proceeds from early termination of notes receivable		76		54
Proceeds from sales of equipment under operating leases		339		-
Principal payments received on notes receivable		340		560
Net cash provided by (used in) investing activities		1,097		(807)
Financing activities:
Repayments under non-recourse debt		(571)		(906)
Distributions to Other Members		(1,539)		(1,539)
Net cash used in financing activities		(2,110)		(2,445)
Net increase (decrease) in cash and cash equivalents		83		(2,398)
Cash at beginning of period		2,873		6,410
Cash at end of period	$	2,956	$	4,012
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	66	$	97
Cash paid during the period for taxes	$	1	$	7
Schedule of non-cash investing and financing transactions:
Distributions payable to Other Members at period-end	$	228	$	228
Options - short position sold through due to/from affiliate	$	50	$	-

See accompanying notes.

6

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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 September 30, 2021, 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 6, 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.

These unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto contained in the report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission.

7

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

2. Summary of significant accounting policies:

Basis of presentation:

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (‘‘GAAP’’) for interim financial information and with the instructions to Form 10-Q as mandated by the Securities and Exchange Commission. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the Managing Member, necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year.

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

In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after September 30, 2021, up until the issuance of the financial statements. No events were noted which would require disclosure in the footnotes to the financial statements.

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.

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. All of the Company’s current operating revenues for the nine months ended September 30, 2021 and 2020, and long-lived assets as of September 30, 2021 and December 31, 2020 relate to customers domiciled in the United States.

8

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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.

Financing receivables:

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

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

Investment in securities:

Purchased securities

The Company’s purchased securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company’s results of operations. The Company’s purchased securities that do not have readily determinable fair values are measured at cost minus impairment and adjusted for changes in observable prices. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. The Company had $406 thousand and $1.4 million of purchased securities at September 30, 2021 and December 31, 2020, respectively. During the three and nine months ended September 30, 2021, the Company recorded $492 thousand and $423 thousand, respectively, of unrealized losses on investment securities with readily determinable fair values. Prior to December 2020, the Company only held securities that do not have readily determinable fair values. Cumulatively, there has been no fair value adjustments recorded on such securities. Securities with an approximate value of $619 thousand were sold during the nine months ended September 30, 2021, which resulted in realized gains of $78 thousand. There were no sales or dispositions of securities during the three and nine months ended September 30, 2020.

9

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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 estimated fair value of the Company’s portfolio of warrants was $161 thousand and $187 thousand at September 30, 2021 and December 31, 2020, respectively. The Company recorded unrealized gains of $4 thousand and $1 thousand on fair valuation of its warrants for the three months ended September 30, 2021 and 2020, respectively. During the nine months ended September 30, 2021 and 2020, the Company recorded unrealized losses of $26 thousand and $338 thousand, respectively. The Company realized no gains or losses from the net exercise of warrants during the three and nine months ended September 30, 2021 and 2020.

Options- short position

During the three and nine months ended September 30, 2021, the Fund had sold options contracts on a publicly traded investment security. Such contracts were sold in two tranches as follows: 125 options at a premium of $3.00 and 75 options at $1.64 per share. Accordingly, the Fund recorded a liability for the initial options value totaling $38 thousand and $12 thousand, respectively. The options contracts both expire on January 21, 2022 with a strike price of $15.00 and $12.50, respectively. The options are measured at fair value at least quarterly. During the three and nine months ended September 30, 2021, the Fund recorded unrealized gains totaling $34 thousand related to the options. Such unrealized gains reflect changes in the fair value of the options, and effectively reduces the liability related to the options. As of September 30, 2021, such liability totaled $16 thousand.

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).

10

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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. Provisions for credit losses relating to operating leases are included in lease income in the Company’s financial statements.

Initial direct costs:

Incremental costs of a lease that would not have been incurred if the lease had not been obtained are capitalized and amortized over the lease term. All other costs associated with the execution of the Company’s leases 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 their net book value. The estimated undiscounted future cash flows are the sum of the residual value of the asset at the end of the asset’s lease contract and undiscounted future rents from the existing lease contract. 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.

11

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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 and are expensed as incurred.

Fair Value:

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

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

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

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

The Company’s valuation policy is determined by members of the Asset Management, Credit and Accounting departments. Whenever possible, the policy is to obtain quoted market prices in active markets to estimate fair values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes, information from third party remarketing agents, third party appraisals of collateral and/or other valuation techniques. These techniques are significantly affected by certain of the Company’s assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. As the Company is responsible for determining fair value, an analysis is performed on prices obtained from third parties. Such analysis is performed by asset management and credit department personnel who are familiar with the Company’s investments in equipment, notes receivable and equity securities of venture companies. The analysis may include a periodic review of price fluctuations and validation of numbers obtained from a specific third party by reference to multiple representative sources.

Per Unit data:

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

Recent accounting pronouncements:

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-03, Codification Improvements to Financial Instruments (“ASU 2020-03”). ASU 2020-03 improves and clarifies various financial instruments topics, including the current expected credit losses (CECL) standard issued in 2016. ASU 2020-03 includes seven different issues that describe the areas of improvement and the related amendments to GAAP that are intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments have different effective dates. Management is currently evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on the Fund’s financial statements and disclosures.

12

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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 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 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 February 2020, the FASB issued ASU 2020-02 and delayed the effective date of Topic 326 until fiscal year beginning after December 15, 2022.

3. Notes receivable, net:

The Company has various notes receivable from borrowers who have financed the purchase of equipment through the Company. As of September 30, 2021, the original terms of the notes are 42 months with interest rates ranging from 14.44% to 14.84% per annum. The notes are secured by the equipment financed and will mature in September and December 2021.

As of September 30, 2021, the minimum future payments receivable are as follows (in thousands):

Three months ending December 31, 2021	$	8
		8
Less: warrants - notes receivable discount		(3)
Notes receivable, net	$	5

Initial direct costs (“IDC”) amortization expense related to notes receivable and the Company’s operating leases for the three and nine months ended September 30, 2021 and 2020 are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
IDC amortization - notes receivable	$	—	$	—	$	—	$	2
IDC amortization - lease assets		9		11		24		38
Total	$	9	$	11	$	24	$	40

13

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

4. Equipment under operating leases, net:

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

			Additions/
	Balance		Dispositions/		Depreciation/		Balance
		December 31,	Reclassifications and		Amortization			September 30,
	2020		Impairment Losses		Expense		2021
Equipment under operating leases, net	$	10,907	$	(819)	$	(1,179)	$	8,909
Assets held for sale/off lease		—		725		—		725
Initial direct costs, net		104		—		(24)		80
Total	$	11,011	$	(94)	$	(1,203)	$	9,714

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 $423 thousand and $381 thousand for the respective three months ended September 30, 2021 and 2020. For the nine months ended September 30, 2021 and 2020, depreciation expense totaled $1.2 million and $1.1 million, respectively.

Total depreciation for the respective three and nine months ended September 30, 2021 included $102 thousand and $167 thousand of additional depreciation recorded to reflect year-to-date changes in estimated residual values of certain equipment generating revenue under month-to-month extensions. Such estimated residual values of equipment associated with leases on month-to-month extensions are evaluated at least semi-annually, and depreciation recorded for the change in estimated reduction in value. Additional adjustments to depreciation totaled $29 thousand for both three and nine months ended September 30, 2020.

IDC amortization expense related to the Company’s operating leases totaled $9 thousand and $11 thousand for the three months ended September 30, 2021 and 2020, respectively. For the respective nine months ended September 30, 2021 and 2020, IDC amortization expense totaled $24 thousand and $38 thousand.

All of the Company’s lease asset purchases and capital improvements were made during the years from 2016 through 2021.

Impairment of equipment under operating leases:

As a result of impairment reviews, management determined that no impairment losses existed for the nine months ended September 30, 2021 and 2020.

14

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

Operating leases:

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

	Balance						Balance
	December 31,				Reclassifications		September 30,
	2020		Additions		or Dispositions		2021
Transportation, rail	$	3,657	$	—	$	(652)	$	3,005
Mining		2,749		—		—		2,749
Construction		2,892		—		—		2,892
Aviation		2,118		—		—		2,118
Paper processing		1,058		—		—		1,058
Marine vessel		1,041		—		(1,041)		—
Containers		860		—		—		860
Agriculture		742		—		—		742
Materials handling		960		355		—		1,315
Transportation, other		97		—		—		97
		16,174		355		(1,693)		14,836
Less accumulated depreciation		(5,267)		(1,179)		519		(5,927)
Total	$	10,907	$	(824)	$	(1,174)	$	8,909

The average estimated residual value for assets on operating leases was 32% and 35% of the assets’ original cost at September 30, 2021 and December 31, 2020, respectively. There were no operating leases in non-accrual status at September 30, 2021 and December 31, 2020.

At September 30, 2021, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):

	Operating
	Leases
Three months ending December 31, 2021	$	399
Year ending December 31, 2022		1,555
2023		1,500
2024		1,054
2025		528
Thereafter		608
	$	5,644

15

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of September 30, 2021, 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, other	7 - 10

5. Allowance for credit losses:

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

	Accounts Receivable		Valuation
	Allowance for Doubtful		Adjustments on
	Accounts		Financing Receivables
	Operating		Notes
	Leases		Receivables		Total
Balance December 31, 2020	$	20	$	—	$	20
Reversal of provision for credit losses		(17)		—		(17)
Balance September 30, 2021	$	3	$	—	$	3

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.

16

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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 September 30, 2021 and December 31, 2020, 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
	September 30, 2021		December 31, 2020
Pass	$	8	$	424
Special mention		—		—
Substandard		—		—
Doubtful		—		—
Total	$	8	$	424

At September 30, 2021 and December 31, 2020, 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
September 30, 2021	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	8	$	8	$	—

													Recorded
					Greater						Total		Investment>90
	31-60 Days		61-90 Days		Than		Total				Financing		Days and
December 31, 2020	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	424	$	424	$	—

The Company had no financing receivables on non-accrual or impaired status at September 30, 2021 and December 31, 2020.

6. Related party transactions:

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

The Operating Agreement allows for the reimbursement of costs incurred by the Managing Member and/or affiliates for providing administrative services to the Company. Administrative services provided include Company accounting, investor relations, legal counsel and 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.

17

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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 three and nine months ended September 30, 2021 and 2020 as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Administrative costs reimbursed to Managing Member and/or affiliates	$	92	$	74	$	274	$	242
Asset management fees to Managing Member		64		63		195		192
Acquisition and initial direct costs paid to Managing Member		3		43		17		63
	$	159	$	180	$	486	$	497

7. Non-recourse debt:

At September 30, 2021, non-recourse debt consists of notes payable to financial institutions. The note payments are due in monthly installments. Interest on the notes range from 3.74% to 4.66% per annum. The notes are secured by assignments of lease payments and pledges of assets. At September 30, 2021, gross operating lease rentals totaled approximately $1.9 million over the remaining lease terms and the carrying value of the pledged assets was $2.9 million. The notes mature from 2021 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.

18

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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

	Principal		Interest		Total
Three months ending December 31, 2021	$	135	$	19	$	154
Year ending December 31, 2022		518		61		579
2023		522		39		561
2024		288		20		308
2025		73		13		86
Thereafter		232		17		249
	$	1,768	$	169	$	1,937

8. Borrowing facilities:

Effective June 30, 2021, the Company entered into an amended and restated revolving credit facility agreement (the “Credit Facility”) which replaced a previous agreement that had an expiration date of June 2021. 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 September 30, 2023 (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 September 30, 2021 and December 31, 2020, borrowings under the Credit Facility were as follows (in thousands):

	September 30,		December 31,
	2021		2020
Total available under the financing arrangement	$	55,000	$	55,000
Amount borrowed by affiliated partnerships and limited liability companies under the venture, acquisition, and warehouse facilities.		(5,452)		(5,879)
Total remaining available under the working capital, acquisition and warehouse facilities	$	49,548	$	49,121

The Company and its affiliates pay an annual commitment fee to have access to this line of credit. As of September 30, 2021, 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.

19

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

As of September 30, 2021, the Company’s Tangible Net Worth requirement under the Credit Facility was $10.0 million, the permitted maximum leverage ratial 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 $11.0 million, 0.16 to 1, and 21.81 to 1, respectively, as of September 30, 2021. As such, as of September 30, 2021, 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 September 30, 2021 and December 31, 2020.

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 September 30, 2021, the investment program participants were the Company 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.

9. Commitments and contingencies:

At September 30, 2021, there was a commitment to purchase lease assets totaling $115 thousand. This amount represents contract awards which may be canceled by the prospective investee or may not be accepted by the Company.

10. Members’ capital:

A total of 2,565,749 Units were issued and outstanding at both September 30, 2021 and December 31, 2020, 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.

20

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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 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 three and nine months ended September 30, 2021 and 2020 were as follows (in thousands except Units and per Unit data):

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
	2021		2020		2021		2020
Distributions	$	513	$	513	$	1,539	$	1,539
Weighted average number of Units outstanding		2,565,749		2,565,749		2,565,749		2,565,749
Weighted average distributions per Unit	$	0.20	$	0.20	$	0.60	$	0.60

11. Fair value measurements:

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

At September 30, 2021 and December 31, 2020, only the Company’s warrants, investment securities and options - short position were measured on a recurring basis. There were no assets or liabilities measured at fair value on a non-recurring basis as of September 30, 2021 and December 31, 2020.

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 September 30, 2021 and December 31, 2020, the calculated fair value of the Fund’s warrant portfolio approximated $161 thousand and $187 thousand, respectively. Such valuations are classified within Level 3 of the valuation hierarchy.

21

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Fair value of warrants at beginning of period	$	157	$	392	$	187	$	731
Unrealized gain (loss) on fair value adjustment for warrants		4		1		(26)		(338)
Fair value of warrants at end of period	$	161	$	393	$	161	$	393

Investment securities (recurring)

The Company’s investment securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company’s results of operations. The fair value of such securities totaled $406 thousand and $1.4 million at September 30, 2021 and December 31, 2020, respectively. There were no investment securities with readily determinable values held at September 30, 2020.

The fair value of investment securities that were accounted for on a recurring basis for the three and nine months ended September 30, 2021 and 2020 and classified as Level 1 are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Fair value of securities at the beginning of period	$	898	$	—	$	1,448	$	—
Securities sold		—		—		(619)		—
Unrealized loss on fair value adjustment for securities		(492)		—		(423)		—
Fair value of investment securities at the end of period	$	406	$	—	$	406	$	—

Options – short position (recurring)

The liability associated with the Company’s options – short position contracts are measured at fair value based on the price of the publicly traded options contracts, with any changes in fair value recognized in the Company’s results of operations. The fair value of such options totaled $16 thousand as of September 30, 2021. There were no such options contracts prior to the third quarter of 2021.

The fair value of the options – short position that were accounted for on a recurring basis for both the three and nine months ended September 30, 2021 and classified as Level 1 are as follows (in thousands):

Fair value of options - short position at begnnning of period	$	—
Options sold		50
Unrealized gain on fair valuation of options		(34)
Fair value of options - short position at end of period	$	16

22

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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 September 30, 2021 and December 31, 2020:

September 30, 2021
	Valuation	Valuation	Unobservable	Range of Input Values
Name	Frequency	Technique	Inputs	(Weighted Average)
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.01 - $11.71 ($0.08)
			Exercise price	$0.02 - $9.00 ($0.07)
			Time to maturity (in years)	6.16 - 10.19 (6.31)
			Risk-free interest rate	1.19% - 1.58% (1.23%)
			Annualized volatility	39.81% - 115.04% (55.63%)

December 31, 2020
	Valuation	Valuation	Unobservable	Range of Input Values
Name	Frequency	Technique	Inputs	(Weighted Average)
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.01 - $16.95 ($0.09)
			Exercise price	$0.02 - $9.00 ($0.07)
			Time to maturity (in years)	6.91 - 10.94 (7.06)
			Risk-free interest rate	0.65% - 1.58% (0.67%)
			Annualized volatility	40.36% - 115.04% (55.70%)

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.

23

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

Non-recourse debt

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

Commitments and Contingencies

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

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

The following tables present estimated fair values of the Company’s financial instruments in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification at September 30, 2021 and December 31, 2020 (in thousands):

	Fair Value Measurements at September 30, 2021
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	2,956	$	2,956	$	—	$	—	$	2,956
Notes receivable, net		5		—		—		5		5
Investment in securities		406		406		—		—		406
Warrants, fair value		161		—		—		161		161
Financial liabilities:
Options - short position		16		16		—		—		16
Non-recourse debt		1,768		—		—		1,822		1,822

	Fair Value Measurements at December 31, 2020
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	2,873	$	2,873	$	—	$	—	$	2,873
Notes receivable, net		390		—		—		396		396
Investment in securities		1,448		1,448		—		—		1,448
Warrants, fair value		187		—		—		187		187
Financial liabilities:
Non-recourse debt		2,339		—		—		2,438		2,438

12.  Global health emergency:

On January 30, 2020, 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.

24

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

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

Overview

ATEL 17, LLC (the “Company” or the “Fund”) was formed under the laws of the state of California on April 16, 2015 for the purpose of raising capital and originating equipment financing transactions and acquiring equipment to engage in equipment leasing and sales activities. The offering of the Company was granted effectiveness by the Securities and Exchange Commission as of January 5, 2016.

The Company conducted a public offering of 15,000,000 Limited Liability Company Units (“Units”), at a price of $10 per Unit. 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 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. Pennsylvania subscriptions are subject to a separate escrow and will be released to the Fund only at such time as total subscription proceeds received by the Fund from all subscribers, including the escrowed Pennsylvania subscriptions, equal not less than $7.5 million in gross proceeds. Total contributions to the Fund exceeded $7.5 million on July 6, 2016. The offering was terminated on January 5, 2018.

Results of Operations

The three months ended September 30, 2021 versus the three months ended September 30, 2020

The Company had net losses of $611 thousand and $77 thousand for the three months ended September 30, 2021 and 2020, respectively. The current quarter results reflect a decrease in total operating revenues, an increase in total operating expenses, and an unfavorable change in other (loss) income related to the Company’s investment securities, warrants and options – short position when compared to the prior year period.

Total operating revenues declined by $65 thousand, or 11%, primarily due to losses recognized on sales of lease assets partially offset by an increase in operating lease revenue.

Sales of certain railcars during the current quarter resulted in $111 thousand of losses. There were no sales of equipment during the prior year period. Such losses were partially offset by a $65 thousand net increase in operating lease revenues on a combination of incremental revenues derived from new lease acquisitions since September 30, 2020 and increased revenues from leases on month-to-month extensions partially offset by the impact of run-off and dispositions of sales assets.

Total operating expenses increased by $14 thousand, or 2%, primarily due to increases in depreciation of operating lease assets and cost reimbursements to the Managing Member partially offset by a decline in acquisition expense.

25

The increase in depreciation totaled $42 thousand and was attributable to an increase in additional depreciation related to leases on month-to-month extensions, and incremental depreciation on equipment acquired since September 30, 2020 offset, in part, by dispositions of lease assets. Cost reimbursement increased by $18 thousand due to an increase of allocated payroll costs. Such increases in expenses were partially offset by a $40 thousand reduction in acquisition expense which was due to the decline in acquisition activity.

During the three months ended September 30, 2021, the Company also recorded other loss totaling $454 thousand. Such other loss was comprised of $492 thousand of unrealized losses on an investment security which saw a decline in share price, $4 thousand of unrealized gains on warrants due to changes in the underlying prices of certain securities, and $34 thousand of unrealized gains on a short position on options contract the Company sold on its investment security. By comparison, during the three months ended September 30, 2020, the Company only had $1 thousand of other income, which was entirely related to unrealized gain recorded on its warrants.

The nine months ended September 30, 2021 versus the nine months ended September 30, 2020

The Company had net losses of $645 thousand and $601 thousand for the nine months ended September 30, 2021 and 2020, respectively. The results for the first nine months of 2021 reflect a slight decrease in total operating revenues and an increase in total operating expenses when compared to the prior year period.

Total operating revenues for the first nine months of 2021 declined by $7 thousand when compared to the prior year period. Such decrease was comprised of losses recognized on sales of lease assets, and a decline in notes receivable interest income offset by an increase in operating lease revenues.

The Company realized $111 thousand of losses on sales of certain railcars during the current period. There were no sales of lease assets during the prior year period. In addition, notes receivable interest income decreased by $65 thousand primarily due to the scheduled maturities of the loans. Partially offsetting such decreases in revenues was a $169 thousand increase in operating lease revenues, which was attributable to lease assets acquired since September 2020 and an increase in revenues from leases on month-to-month extensions.

Total operating expenses increased by $38 thousand, or 2%, largely due to increases in depreciation and cost reimbursements to the Managing Member partially offset by decreases in acquisition expense and interest expense.

Depreciation of operating lease assets increased by $92 thousand as a result of incremental depreciation on equipment acquired since September 30, 2020; and cost reimbursements to the Managing Member increased by $32 thousand due to an increase in allocated payroll costs. Partially offsetting such increases in expenses was a $46 thousand decline in acquisition expense and a $30 thousand decrease in interest expense. The decrease in acquisition expense was attributable to the decline in acquisition activity while the decline in interest expense reflects the declining balance of the Company’s non-recourse debt.

During the nine months ended September 30, 2021 and 2020, the Company also recorded other losses totaling $337 thousand and $338 thousand, respectively. Such losses reflect both realized and unrealized gains/losses on the Company’s investment securities, warrants portfolio, and options contracts.

The $337 thousand other loss during the current period was comprised of $423 thousand of unrealized losses on the Company’s investment securities, $26 thousand of unrealized losses on its warrants, and $34 thousand of unrealized gains on its options contracts. Such unrealized gains and losses were attributable to price changes of the investment security and those of the securities underlying the warrants. In addition, the Company realized $78 thousand of gains on the sale of securities during the current nine-month period. By comparison, the $338 thousand of other loss during the prior year nine-month period was entirely related to changes to the underlying prices of certain securities in the Company’s warrants portfolio.

26

Capital Resources and Liquidity

The Company’s cash and cash equivalents totaled $3.0 million and $2.9 million as of September 30, 2021 and December 31, 2020, 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 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 were found to be inadequate, the Company would likely be in a position to borrow against its current portfolio to meet such requirements.

Cash Flows

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

	Nine Months Ended
	September 30,
	2021		2020
Net cash provided by (used in):
Operating activities	$	1,096	$	854
Investing activities		1,097		(807)
Financing activities		(2,110)		(2,445)
Net increase (decrease) in cash and cash equivalents	$	83	$	(2,398)

During the respective nine months ended September 30, 2021 and 2020, the Company’s main sources of liquidity were cash flows from its portfolio of operating lease contracts and principal payments on its investments in notes receivable. Principal payments received on the notes receivable totaled $341 thousand and $560 thousand for the nine months ended September 30, 2021 and 2020, respectively. In addition, the Company received proceeds of $697 thousand from the sale of securities and $339 thousand from sales of certain equipment during the nine months ended September 30, 2021. There were no such proceeds during the prior year period. The Company also received $76 thousand and $54 thousand of proceeds from the early termination of certain notes receivable during the nine months ended September 30, 2021 and 2020, respectively.

During the nine months ended September 30, 2021 and 2020, cash was primarily used to pay distributions, to repay borrowings under non-recourse debt, and to acquire lease assets. Distributions paid to the Other Members totaled $1.5 million for each of the nine months ended September 30, 2021 and 2020; and, cash used to paydown non-recourse debt totaled $571 thousand and $906 thousand for the same respective nine-month periods. In addition, cash was used to acquire $355 thousand and $1.4 million of equipment and to satisfy invoices related to management fees and expenses, and other payables for the respective nine-month periods.

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 February 2016.

Cash distributions were paid by the Fund to Unitholders of record as of August 31, 2021, and paid through September 30, 2021. The 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 Prospectus under “Income, Losses and Distributions.” Accordingly, the amount of cash flow from Fund investments distributed to Unitholders will not be available for reinvestment in additional portfolio assets.

27

The cash distributions were based on current and anticipated gross revenues from the loans funded and equity investments 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 loans and investments funded.

The following table summarizes distribution activity for the Fund from inception through September 30, 2021 (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
Dec 2019 - Nov 2020	Jan 2020 - Dec 2020		2,052			—			2,052			0.80	2,565,749
Dec 2020 - Aug 2021	Jan 2021 - Sept 2021		1,539			—			1,539			0.60	2,565,749
		$	9,718		$	—		$	9,718		$	4.42
Source of distributions
Lease and loan payments and sales proceeds received		$	9,718	100.00%	$	—	0.00%	$	9,718	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, December 1, 2016 - November 30, 2017, December 1, 2017 - November 30, 2018, December 1, 2018 - November 30, 2019, December 1, 2019 - November 30, 2020, December 1, 2020 - November 30, 2020, and December 1, 2020 - August 31, 2021, respectively.

Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies

At September 30, 2021, there was a commitment to purchase lease assets totaling $115 thousand. This amount represents contract awards which may be canceled by the prospective investee or may not be accepted by the Company.

Off-Balance Sheet Transactions

None.

Recent Accounting Pronouncements

For information on recent accounting pronouncements, see Note 2 summary of significant accounting policies.

28

Significant Accounting Policies and Estimates

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

The Company’s significant accounting policies are described in its Annual Report on Form 10-K for the year ended December 31, 2020. There have been no material changes to the Company’s significant accounting policies since December 31, 2020.

Item 4.  Controls and procedures.

Evaluation of disclosure controls and procedures

The Company’s Managing Member’s Chief Executive Officer, and Executive Vice President and Chief Financial Officer and Chief 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, Management concluded that as of the end of the period covered by this report, the design and operation of these disclosure controls and procedures were effective.

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

Changes in internal control

There were no changes in the Managing Member’s internal control over financial reporting, as it is applicable to the Company, during the quarter ended September 30, 2021 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.

29

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

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

Item 2. Defaults Upon Senior Securities.

None.

Item 3. Mine Safety Disclosures.

Not Applicable.

Item 4. Other Information.

None.

Item 5. Exhibits.

(a) Documents filed as a part of this report

1.	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.

2.	Other Exhibits
	(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)	Inline XBRL Instance Document
	(101.SCH)	Inline XBRL Taxonomy Extension Schema Document
	(101.CAL)	Inline XBRL Taxonomy Extension Calculation Linkbase Document
	(101.DEF)	Inline XBRL Taxonomy Extension Definition Linkbase Document
	(101.LAB)	Inline XBRL Taxonomy Extension Label Linkbase Document
	(101.PRE)	Inline XBRL Taxonomy Extension Presentation Linkbase Document
	(104)	The cover page for the Company’s Quarterly Report on Form 10-Q for the quarter ended
		September 30, 2021 has been formatted in Inline XBRL

30

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: November 12, 2021

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/ Raymond A. Rigo
	Raymond A. Rigo
	Vice President, Fund Controller of ATEL Financial Services, LLC (Managing Member)

31

EX-31.1

Exhibit 31.1

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

OF THE SECURITIES EXCHANGE ACT OF 1934

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

I, Dean L. Cash, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of ATEL 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.

9

Date: November 12, 2021

/s/ Dean L. Cash

Dean L. Cash

Chairman of the Board, President and Chief

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

EX-31.2

Exhibit 31.2

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

OF THE SECURITIES EXCHANGE ACT OF 1934

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

I, Paritosh K. Choksi, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of ATEL 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: November 12, 2021

/s/ Paritosh K. Choksi

Paritosh K. Choksi

Director, Executive Vice President and Chief Financial Officer

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

EX-32.1

Exhibit 32.1

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

AS ADOPTED PURSUANT TO

§906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ATEL 17, LLC (the “Company”) on Form 10-Q for the period ended September 30, 2021 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: November 12, 2021

/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 Form 10-Q for the period ended September 30, 2021 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: November 12, 2021

/s/ Paritosh K. Choksi

Paritosh K. Choksi

Director, Executive Vice President and Chief

Financial Officer and Chief Operating Officer

of ATEL Managing Member, LLC (Managing Member)

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

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2021	Oct. 31, 2021
Document And Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	Sep. 30, 2021
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	333-203841
Entity Registrant Name	ATEL 17, LLC
Entity Incorporation, State or Country Code	CA
Entity Tax Identification Number	90-1108275
Entity Address, Address Line One	The Transamerica Pyramid
Entity Address, Address Line Two	600 Montgomery Street, 9th Floor
Entity Address, City or Town	San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94111
City Area Code	415
Local Phone Number	989-8800
Title of 12(g) Security	NONE
No Trading Symbol Flag	true
Security Exchange Name	NONE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Smaller Reporting Company	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Central Index Key	0001640982
Amendment Flag	false
Entity Units Outstanding		2,565,749

XML

Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
ASSETS
Cash and cash equivalents	$ 2,956	$ 2,873
Due from Managing Member and affiliates	0	12
Accounts receivable, net	28	41
Notes receivable, net	5	390
Investment in securities	406	1,448
Warrants, fair value	161	187
Equipment under operating leases, net	9,714	11,011
Prepaid expenses and other assets	13	7
Total assets	13,283	15,969
Accounts payable and accrued liabilities:
Due to Managing Member and affiliates	7	0
Accrued distributions to Other Members	228	228
Options - short position	16	0
Other	120	74
Non-recourse debt	1,768	2,339
Unearned operating lease income	115	115
Total liabilities	2,254	2,756
Members' capital:
Managing Member	1	1
Other Members	11,028	13,212
Total Members' capital	11,029	13,213
Total liabilities and Members' capital	$ 13,283	$ 15,969

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Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Leasing and lending activities:
Operating lease revenue, net	$ 616	$ 551	$ 1,723	$ 1,554
Notes receivable interest income	14	33	52	117
Loss on sales of lease assets and early termination of notes receivable	(111)	0	(111)	0
Other revenue	0	0	1	1
Total operating revenues	519	584	1,665	1,672
Operating expenses:
Depreciation of operating lease assets	423	381	1,179	1,087
Asset management fees to Managing Member	64	63	195	192
Acquisition expense	3	43	17	63
Cost reimbursements to Managing Member and/or affiliates	92	74	274	242
Amortization of initial direct costs	9	11	24	40
Interest expense	20	28	65	95
Professional fees	26	19	127	115
Outside services	17	21	36	43
Taxes on income and franchise fees	1	2	3	7
Bank charges	9	7	25	20
Other	12	13	28	31
Total operating expenses	676	662	1,973	1,935
Net loss	(157)	(78)	(308)	(263)
Other (loss) income:
Gain on sale of securities	0	0	78	0
Unrealized loss on fair value adjustment for securities	(492)	0	(423)	0
Unrealized gain (loss) on fair value adjustment for warrants	4	1	(26)	(338)
Unrealized gain on fair valuation of options	34	0	34	0
Total other (loss) income	(454)	1	(337)	(338)
Net loss	(611)	(77)	(645)	(601)
Net loss:
Managing Member
Other Members	(611)	(77)	(645)	(601)
Net loss	$ (611)	$ (77)	$ (645)	$ (601)
Net loss per Limited Liability Company Unit (Other Members)	$ (0.24)	$ (0.03)	$ (0.25)	$ (0.23)
Weighted average number of Units outstanding	2,565,749	2,565,749	2,565,749	2,565,749

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Statements of Changes in Members' Capital - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Beginning Balance	$ 12,153	$ 13,118	$ 13,213	$ 14,668
Distributions to Other Members	(513)	(513)	(1,539)	(1,539)
Net income (loss)	(611)	(77)	(645)	(601)
Ending Balance	$ 11,029	$ 12,528	$ 11,029	$ 12,528
Other Members [Member]
Beginning Balance (in units)	2,565,749	2,565,749	2,565,749	2,565,749
Beginning Balance	$ 12,152	$ 13,117	$ 13,212	$ 14,667
Distributions to Other Members	(513)	(513)	(1,539)	(1,539)
Net income (loss)	$ (611)	$ (77)	$ (645)	$ (601)
Ending Balance (in units)	2,565,749	2,565,749	2,565,749	2,565,749
Ending Balance	$ 11,028	$ 12,527	$ 11,028	$ 12,527
Managing Member [Member]
Beginning Balance	1	1	1	1
Ending Balance	$ 1	$ 1	$ 1	$ 1

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Statements of Changes in Members' Capital (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Other Members [Member]
Distributions to Other Members, per unit	$ 0.20	$ 0.20	$ 0.60	$ 0.60

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Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Operating activities:
Net loss	$ (77)	$ (645)	$ (601)
Adjustment to reconcile net loss to net cash provided by operating activities:
Loss on sales of lease assets and early termination of notes receivable	0	111	0
Accretion of note discount - warrants		(32)	(42)
Depreciation of operating lease assets	381	1,179	1,087
Amortization of initial direct costs	11	24	40
(Reversal) of provision for credit losses		(17)	10
Gain on sale of securities	0	(78)	0
Unrealized loss on fair value adjustment for securities	0	423	0
Unrealized loss on fair value adjustment for warrants	(1)	26	338
Unrealized gain on fair valuation of options	0	(34)	0
Changes in operating assets and liabilities:
Accounts receivable		30	(4)
Due from/to Managing Member and affiliates		69	44
Prepaid expenses and other assets		(6)	(5)
Accounts payable, other		46	12
Unearned operating lease income		0	(25)
Net cash provided by operating activities		1,096	854
Investing activities:
Purchases of equipment under operating leases		(355)	(1,416)
Proceeds from sale of securities	0	697	0
Payments of initial direct costs		0	(5)
Proceeds from early termination of notes receivable		76	54
Proceeds from sales of equipment under operating leases		339	0
Principal payments received on notes receivable		340	560
Net cash provided by (used in) investing activities		1,097	(807)
Financing activities:
Repayments under non-recourse debt		(571)	(906)
Distributions to Other Members		(1,539)	(1,539)
Net cash used in financing activities		(2,110)	(2,445)
Net increase (decrease) in cash and cash equivalents		83	(2,398)
Cash at beginning of period		2,873	6,410
Cash at end of period	$ 4,012	2,956	4,012
Supplemental disclosures of cash flow information:
Cash paid during the period for interest		66	97
Cash paid during the period for taxes		1	7
Schedule of non-cash investing and financing transactions:
Distributions payable to Other Members at period-end		228	228
Options - short position sold through due to/from affiliate		$ 50	$ 0

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Organization and Limited Liability Company Matters

9 Months Ended

Sep. 30, 2021

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 September 30, 2021, 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 6, 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.

These unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto contained in the report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2021

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of significant accounting policies:

Basis of presentation:

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (‘‘GAAP’’) for interim financial information and with the instructions to Form 10-Q as mandated by the Securities and Exchange Commission. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the Managing Member, necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year.

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

In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after September 30, 2021, up until the issuance of the financial statements. No events were noted which would require disclosure in the footnotes to the financial statements.

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.

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. All of the Company’s current operating revenues for the nine months ended September 30, 2021 and 2020, and long-lived assets as of September 30, 2021 and December 31, 2020 relate to customers domiciled in the United States.

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.

Financing receivables:

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

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

Investment in securities:

Purchased securities

The Company’s purchased securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company’s results of operations. The Company’s purchased securities that do not have readily determinable fair values are measured at cost minus impairment and adjusted for changes in observable prices. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. The Company had $406 thousand and $1.4 million of purchased securities at September 30, 2021 and December 31, 2020, respectively. During the three and nine months ended September 30, 2021, the Company recorded $492 thousand and $423 thousand, respectively, of unrealized losses on investment securities with readily determinable fair values. Prior to December 2020, the Company only held securities that do not have readily determinable fair values. Cumulatively, there has been no fair value adjustments recorded on such securities. Securities with an approximate value of $619 thousand were sold during the nine months ended September 30, 2021, which resulted in realized gains of $78 thousand. There were no sales or dispositions of securities during the three and nine months ended September 30, 2020.

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 estimated fair value of the Company’s portfolio of warrants was $161 thousand and $187 thousand at September 30, 2021 and December 31, 2020, respectively. The Company recorded unrealized gains of $4 thousand and $1 thousand on fair valuation of its warrants for the three months ended September 30, 2021 and 2020, respectively. During the nine months ended September 30, 2021 and 2020, the Company recorded unrealized losses of $26 thousand and $338 thousand, respectively. The Company realized no gains or losses from the net exercise of warrants during the three and nine months ended September 30, 2021 and 2020.

Options- short position

During the three and nine months ended September 30, 2021, the Fund had sold options contracts on a publicly traded investment security. Such contracts were sold in two tranches as follows: 125 options at a premium of $3.00 and 75 options at $1.64 per share. Accordingly, the Fund recorded a liability for the initial options value totaling $38 thousand and $12 thousand, respectively. The options contracts both expire on January 21, 2022 with a strike price of $15.00 and $12.50, respectively. The options are measured at fair value at least quarterly. During the three and nine months ended September 30, 2021, the Fund recorded unrealized gains totaling $34 thousand related to the options. Such unrealized gains reflect changes in the fair value of the options, and effectively reduces the liability related to the options. As of September 30, 2021, such liability totaled $16 thousand.

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. Provisions for credit losses relating to operating leases are included in lease income in the Company’s financial statements.

Initial direct costs:

Incremental costs of a lease that would not have been incurred if the lease had not been obtained are capitalized and amortized over the lease term. All other costs associated with the execution of the Company’s leases 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 their net book value. The estimated undiscounted future cash flows are the sum of the residual value of the asset at the end of the asset’s lease contract and undiscounted future rents from the existing lease contract. 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.

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 and are expensed as incurred.

Fair Value:

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

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

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

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

The Company’s valuation policy is determined by members of the Asset Management, Credit and Accounting departments. Whenever possible, the policy is to obtain quoted market prices in active markets to estimate fair values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes, information from third party remarketing agents, third party appraisals of collateral and/or other valuation techniques. These techniques are significantly affected by certain of the Company’s assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. As the Company is responsible for determining fair value, an analysis is performed on prices obtained from third parties. Such analysis is performed by asset management and credit department personnel who are familiar with the Company’s investments in equipment, notes receivable and equity securities of venture companies. The analysis may include a periodic review of price fluctuations and validation of numbers obtained from a specific third party by reference to multiple representative sources.

Per Unit data:

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

Recent accounting pronouncements:

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-03, Codification Improvements to Financial Instruments (“ASU 2020-03”). ASU 2020-03 improves and clarifies various financial instruments topics, including the current expected credit losses (CECL) standard issued in 2016. ASU 2020-03 includes seven different issues that describe the areas of improvement and the related amendments to GAAP that are intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments have different effective dates. Management is currently evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on the Fund’s financial statements and disclosures.

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 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 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 February 2020, the FASB issued ASU 2020-02 and delayed the effective date of Topic 326 until fiscal year beginning after December 15, 2022.

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Notes Receivable, Net

9 Months Ended

Sep. 30, 2021

Notes Receivable, Net [Abstract]

Notes Receivable, Net

3. Notes receivable, net:

The Company has various notes receivable from borrowers who have financed the purchase of equipment through the Company. As of September 30, 2021, the original terms of the notes are 42 months with interest rates ranging from 14.44% to 14.84% per annum. The notes are secured by the equipment financed and will mature in September and December 2021.

As of September 30, 2021, the minimum future payments receivable are as follows (in thousands):

Three months ending December 31, 2021	$	8
		8
Less: warrants - notes receivable discount		(3)
Notes receivable, net	$	5

Initial direct costs (“IDC”) amortization expense related to notes receivable and the Company’s operating leases for the three and nine months ended September 30, 2021 and 2020 are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
IDC amortization - notes receivable	$	—	$	—	$	—	$	2
IDC amortization - lease assets		9		11		24		38
Total	$	9	$	11	$	24	$	40

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Equipment Under Operating Leases, Net

9 Months Ended

Sep. 30, 2021

Equipment Under Operating Leases, Net [Abstract]

Equipment Under Operating Leases, Net

4. Equipment under operating leases, net:

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

			Additions/
	Balance		Dispositions/		Depreciation/		Balance
		December 31,	Reclassifications and		Amortization			September 30,
	2020		Impairment Losses		Expense		2021
Equipment under operating leases, net	$	10,907	$	(819)	$	(1,179)	$	8,909
Assets held for sale/off lease		—		725		—		725
Initial direct costs, net		104		—		(24)		80
Total	$	11,011	$	(94)	$	(1,203)	$	9,714

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 $423 thousand and $381 thousand for the respective three months ended September 30, 2021 and 2020. For the nine months ended September 30, 2021 and 2020, depreciation expense totaled $1.2 million and $1.1 million, respectively.

Total depreciation for the respective three and nine months ended September 30, 2021 included $102 thousand and $167 thousand of additional depreciation recorded to reflect year-to-date changes in estimated residual values of certain equipment generating revenue under month-to-month extensions. Such estimated residual values of equipment associated with leases on month-to-month extensions are evaluated at least semi-annually, and depreciation recorded for the change in estimated reduction in value. Additional adjustments to depreciation totaled $29 thousand for both three and nine months ended September 30, 2020.

IDC amortization expense related to the Company’s operating leases totaled $9 thousand and $11 thousand for the three months ended September 30, 2021 and 2020, respectively. For the respective nine months ended September 30, 2021 and 2020, IDC amortization expense totaled $24 thousand and $38 thousand.

All of the Company’s lease asset purchases and capital improvements were made during the years from 2016 through 2021.

Impairment of equipment under operating leases:

As a result of impairment reviews, management determined that no impairment losses existed for the nine months ended September 30, 2021 and 2020.

Operating leases:

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

	Balance						Balance
	December 31,				Reclassifications		September 30,
	2020		Additions		or Dispositions		2021
Transportation, rail	$	3,657	$	—	$	(652)	$	3,005
Mining		2,749		—		—		2,749
Construction		2,892		—		—		2,892
Aviation		2,118		—		—		2,118
Paper processing		1,058		—		—		1,058
Marine vessel		1,041		—		(1,041)		—
Containers		860		—		—		860
Agriculture		742		—		—		742
Materials handling		960		355		—		1,315
Transportation, other		97		—		—		97
		16,174		355		(1,693)		14,836
Less accumulated depreciation		(5,267)		(1,179)		519		(5,927)
Total	$	10,907	$	(824)	$	(1,174)	$	8,909

The average estimated residual value for assets on operating leases was 32% and 35% of the assets’ original cost at September 30, 2021 and December 31, 2020, respectively. There were no operating leases in non-accrual status at September 30, 2021 and December 31, 2020.

At September 30, 2021, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):

	Operating
	Leases
Three months ending December 31, 2021	$	399
Year ending December 31, 2022		1,555
2023		1,500
2024		1,054
2025		528
Thereafter		608
	$	5,644

The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of September 30, 2021, 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, other	7 - 10

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Allowance for Credit Losses

9 Months Ended

Sep. 30, 2021

Allowance for Credit Losses [Abstract]

Allowance for Credit Losses

5. Allowance for credit losses:

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

	Accounts Receivable		Valuation
	Allowance for Doubtful		Adjustments on
	Accounts		Financing Receivables
	Operating		Notes
	Leases		Receivables		Total
Balance December 31, 2020	$	20	$	—	$	20
Reversal of provision for credit losses		(17)		—		(17)
Balance September 30, 2021	$	3	$	—	$	3

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 September 30, 2021 and December 31, 2020, 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
	September 30, 2021		December 31, 2020
Pass	$	8	$	424
Special mention		—		—
Substandard		—		—
Doubtful		—		—
Total	$	8	$	424

At September 30, 2021 and December 31, 2020, 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
September 30, 2021	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	8	$	8	$	—

													Recorded
					Greater						Total		Investment>90
	31-60 Days		61-90 Days		Than		Total				Financing		Days and
December 31, 2020	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	424	$	424	$	—

The Company had no financing receivables on non-accrual or impaired status at September 30, 2021 and December 31, 2020.

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Related Party Transactions

9 Months Ended

Sep. 30, 2021

Related Party Transactions [Abstract]

Related Party Transactions

6. Related party transactions:

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

The Operating Agreement allows for the reimbursement of costs incurred by the Managing Member and/or affiliates for providing administrative services to the Company. Administrative services provided include Company accounting, investor relations, legal counsel and 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 three and nine months ended September 30, 2021 and 2020 as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Administrative costs reimbursed to Managing Member and/or affiliates	$	92	$	74	$	274	$	242
Asset management fees to Managing Member		64		63		195		192
Acquisition and initial direct costs paid to Managing Member		3		43		17		63
	$	159	$	180	$	486	$	497

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Non-Recourse Debt

9 Months Ended

Sep. 30, 2021

Non-Recourse Debt [Abstract]

Non-Recourse Debt

7. Non-recourse debt:

At September 30, 2021, non-recourse debt consists of notes payable to financial institutions. The note payments are due in monthly installments. Interest on the notes range from 3.74% to 4.66% per annum. The notes are secured by assignments of lease payments and pledges of assets. At September 30, 2021, gross operating lease rentals totaled approximately $1.9 million over the remaining lease terms and the carrying value of the pledged assets was $2.9 million. The notes mature from 2021 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
Three months ending December 31, 2021	$	135	$	19	$	154
Year ending December 31, 2022		518		61		579
2023		522		39		561
2024		288		20		308
2025		73		13		86
Thereafter		232		17		249
	$	1,768	$	169	$	1,937

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Borrowing Facilities

9 Months Ended

Sep. 30, 2021

Borrowing Facilities [Abstract]

Borrowing Facilities

8. Borrowing facilities:

Effective June 30, 2021, the Company entered into an amended and restated revolving credit facility agreement (the “Credit Facility”) which replaced a previous agreement that had an expiration date of June 2021. 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 September 30, 2023 (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 September 30, 2021 and December 31, 2020, borrowings under the Credit Facility were as follows (in thousands):

	September 30,		December 31,
	2021		2020
Total available under the financing arrangement	$	55,000	$	55,000
Amount borrowed by affiliated partnerships and limited liability companies under the venture, acquisition, and warehouse facilities.		(5,452)		(5,879)
Total remaining available under the working capital, acquisition and warehouse facilities	$	49,548	$	49,121

The Company and its affiliates pay an annual commitment fee to have access to this line of credit. As of September 30, 2021, 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 September 30, 2021, the Company’s Tangible Net Worth requirement under the Credit Facility was $10.0 million, the permitted maximum leverage ratial 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 $11.0 million, 0.16 to 1, and 21.81 to 1, respectively, as of September 30, 2021. As such, as of September 30, 2021, 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 September 30, 2021 and December 31, 2020.

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 September 30, 2021, the investment program participants were the Company 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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Commitments

9 Months Ended

Sep. 30, 2021

Commitments [Abstract]

Commitments

9. Commitments and contingencies:

At September 30, 2021, there was a commitment to purchase lease assets totaling $115 thousand. This amount represents contract awards which may be canceled by the prospective investee or may not be accepted by the Company.

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Members' Capital

9 Months Ended

Sep. 30, 2021

Members' Capital [Abstract]

Members' Capital

10. Members’ capital:

A total of 2,565,749 Units were issued and outstanding at both September 30, 2021 and December 31, 2020, 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 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 three and nine months ended September 30, 2021 and 2020 were as follows (in thousands except Units and per Unit data):

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
	2021		2020		2021		2020
Distributions	$	513	$	513	$	1,539	$	1,539
Weighted average number of Units outstanding		2,565,749		2,565,749		2,565,749		2,565,749
Weighted average distributions per Unit	$	0.20	$	0.20	$	0.60	$	0.60

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Fair Value Measurements

9 Months Ended

Sep. 30, 2021

Fair Value Measurements [Abstract]

Fair Value Measurements

11. Fair value measurements:

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

At September 30, 2021 and December 31, 2020, only the Company’s warrants, investment securities and options - short position were measured on a recurring basis. There were no assets or liabilities measured at fair value on a non-recurring basis as of September 30, 2021 and December 31, 2020.

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 September 30, 2021 and December 31, 2020, the calculated fair value of the Fund’s warrant portfolio approximated $161 thousand and $187 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):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Fair value of warrants at beginning of period	$	157	$	392	$	187	$	731
Unrealized gain (loss) on fair value adjustment for warrants		4		1		(26)		(338)
Fair value of warrants at end of period	$	161	$	393	$	161	$	393

Investment securities (recurring)

The Company’s investment securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company’s results of operations. The fair value of such securities totaled $406 thousand and $1.4 million at September 30, 2021 and December 31, 2020, respectively. There were no investment securities with readily determinable values held at September 30, 2020.

The fair value of investment securities that were accounted for on a recurring basis for the three and nine months ended September 30, 2021 and 2020 and classified as Level 1 are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Fair value of securities at the beginning of period	$	898	$	—	$	1,448	$	—
Securities sold		—		—		(619)		—
Unrealized loss on fair value adjustment for securities		(492)		—		(423)		—
Fair value of investment securities at the end of period	$	406	$	—	$	406	$	—

Options – short position (recurring)

The liability associated with the Company’s options – short position contracts are measured at fair value based on the price of the publicly traded options contracts, with any changes in fair value recognized in the Company’s results of operations. The fair value of such options totaled $16 thousand as of September 30, 2021. There were no such options contracts prior to the third quarter of 2021.

The fair value of the options – short position that were accounted for on a recurring basis for both the three and nine months ended September 30, 2021 and classified as Level 1 are as follows (in thousands):

Fair value of options - short position at begnnning of period	$	—
Options sold		50
Unrealized gain on fair valuation of options		(34)
Fair value of options - short position at end of period	$	16

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 September 30, 2021 and December 31, 2020:

September 30, 2021
	Valuation	Valuation	Unobservable	Range of Input Values
Name	Frequency	Technique	Inputs	(Weighted Average)
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.01 - $11.71 ($0.08)
			Exercise price	$0.02 - $9.00 ($0.07)
			Time to maturity (in years)	6.16 - 10.19 (6.31)
			Risk-free interest rate	1.19% - 1.58% (1.23%)
			Annualized volatility	39.81% - 115.04% (55.63%)

December 31, 2020
	Valuation	Valuation	Unobservable	Range of Input Values
Name	Frequency	Technique	Inputs	(Weighted Average)
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.01 - $16.95 ($0.09)
			Exercise price	$0.02 - $9.00 ($0.07)
			Time to maturity (in years)	6.91 - 10.94 (7.06)
			Risk-free interest rate	0.65% - 1.58% (0.67%)
			Annualized volatility	40.36% - 115.04% (55.70%)

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.

Non-recourse debt

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

Commitments and Contingencies

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

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

The following tables present estimated fair values of the Company’s financial instruments in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification at September 30, 2021 and December 31, 2020 (in thousands):

	Fair Value Measurements at September 30, 2021
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	2,956	$	2,956	$	—	$	—	$	2,956
Notes receivable, net		5		—		—		5		5
Investment in securities		406		406		—		—		406
Warrants, fair value		161		—		—		161		161
Financial liabilities:
Options - short position		16		16		—		—		16
Non-recourse debt		1,768		—		—		1,822		1,822

	Fair Value Measurements at December 31, 2020
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	2,873	$	2,873	$	—	$	—	$	2,873
Notes receivable, net		390		—		—		396		396
Investment in securities		1,448		1,448		—		—		1,448
Warrants, fair value		187		—		—		187		187
Financial liabilities:
Non-recourse debt		2,339		—		—		2,438		2,438

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Global Health Emergency

9 Months Ended

Sep. 30, 2021

Global Health Emergency [Abstract]

Global Health Emergency

12.  Global health emergency:

On January 30, 2020, 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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Summary of Significant Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2021

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of presentation:

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (‘‘GAAP’’) for interim financial information and with the instructions to Form 10-Q as mandated by the Securities and Exchange Commission. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the Managing Member, necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year.

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

In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after September 30, 2021, up until the issuance of the financial statements. No events were noted which would require disclosure in the footnotes to the financial statements.

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.

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. All of the Company’s current operating revenues for the nine months ended September 30, 2021 and 2020, and long-lived assets as of September 30, 2021 and December 31, 2020 relate to customers domiciled in the United States.

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.

Financing Receivables

Financing receivables:

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

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

Investment in Securities

Investment in securities:

Purchased securities

The Company’s purchased securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company’s results of operations. The Company’s purchased securities that do not have readily determinable fair values are measured at cost minus impairment and adjusted for changes in observable prices. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. The Company had $406 thousand and $1.4 million of purchased securities at September 30, 2021 and December 31, 2020, respectively. During the three and nine months ended September 30, 2021, the Company recorded $492 thousand and $423 thousand, respectively, of unrealized losses on investment securities with readily determinable fair values. Prior to December 2020, the Company only held securities that do not have readily determinable fair values. Cumulatively, there has been no fair value adjustments recorded on such securities. Securities with an approximate value of $619 thousand were sold during the nine months ended September 30, 2021, which resulted in realized gains of $78 thousand. There were no sales or dispositions of securities during the three and nine months ended September 30, 2020.

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 estimated fair value of the Company’s portfolio of warrants was $161 thousand and $187 thousand at September 30, 2021 and December 31, 2020, respectively. The Company recorded unrealized gains of $4 thousand and $1 thousand on fair valuation of its warrants for the three months ended September 30, 2021 and 2020, respectively. During the nine months ended September 30, 2021 and 2020, the Company recorded unrealized losses of $26 thousand and $338 thousand, respectively. The Company realized no gains or losses from the net exercise of warrants during the three and nine months ended September 30, 2021 and 2020.

Options- short position

During the three and nine months ended September 30, 2021, the Fund had sold options contracts on a publicly traded investment security. Such contracts were sold in two tranches as follows: 125 options at a premium of $3.00 and 75 options at $1.64 per share. Accordingly, the Fund recorded a liability for the initial options value totaling $38 thousand and $12 thousand, respectively. The options contracts both expire on January 21, 2022 with a strike price of $15.00 and $12.50, respectively. The options are measured at fair value at least quarterly. During the three and nine months ended September 30, 2021, the Fund recorded unrealized gains totaling $34 thousand related to the options. Such unrealized gains reflect changes in the fair value of the options, and effectively reduces the liability related to the options. As of September 30, 2021, such liability totaled $16 thousand.

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. Provisions for credit losses relating to operating leases are included in lease income in the Company’s financial statements.

Initial Direct Costs

Initial direct costs:

Incremental costs of a lease that would not have been incurred if the lease had not been obtained are capitalized and amortized over the lease term. All other costs associated with the execution of the Company’s leases 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 their net book value. The estimated undiscounted future cash flows are the sum of the residual value of the asset at the end of the asset’s lease contract and undiscounted future rents from the existing lease contract. 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.

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 and are expensed as incurred.

Fair Value

Fair Value:

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

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

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

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

The Company’s valuation policy is determined by members of the Asset Management, Credit and Accounting departments. Whenever possible, the policy is to obtain quoted market prices in active markets to estimate fair values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes, information from third party remarketing agents, third party appraisals of collateral and/or other valuation techniques. These techniques are significantly affected by certain of the Company’s assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. As the Company is responsible for determining fair value, an analysis is performed on prices obtained from third parties. Such analysis is performed by asset management and credit department personnel who are familiar with the Company’s investments in equipment, notes receivable and equity securities of venture companies. The analysis may include a periodic review of price fluctuations and validation of numbers obtained from a specific third party by reference to multiple representative sources.

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 period.

Recent Accounting Pronouncements

Recent accounting pronouncements:

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-03, Codification Improvements to Financial Instruments (“ASU 2020-03”). ASU 2020-03 improves and clarifies various financial instruments topics, including the current expected credit losses (CECL) standard issued in 2016. ASU 2020-03 includes seven different issues that describe the areas of improvement and the related amendments to GAAP that are intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments have different effective dates. Management is currently evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on the Fund’s financial statements and disclosures.

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 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 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 February 2020, the FASB issued ASU 2020-02 and delayed the effective date of Topic 326 until fiscal year beginning after December 15, 2022.

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Notes Receivable, Net (Tables)

9 Months Ended

Sep. 30, 2021

Notes Receivable, Net [Abstract]

Minimum Future Payments Receivable

As of September 30, 2021, the minimum future payments receivable are as follows (in thousands):

Three months ending December 31, 2021	$	8
		8
Less: warrants - notes receivable discount		(3)
Notes receivable, net	$	5

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

Initial direct costs (“IDC”) amortization expense related to notes receivable and the Company’s operating leases for the three and nine months ended September 30, 2021 and 2020 are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
IDC amortization - notes receivable	$	—	$	—	$	—	$	2
IDC amortization - lease assets		9		11		24		38
Total	$	9	$	11	$	24	$	40

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Equipment Under Operating Leases, Net (Tables)

9 Months Ended

Sep. 30, 2021

Equipment Under Operating Leases, Net [Abstract]

Investment in Leases

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

			Additions/
	Balance		Dispositions/		Depreciation/		Balance
		December 31,	Reclassifications and		Amortization			September 30,
	2020		Impairment Losses		Expense		2021
Equipment under operating leases, net	$	10,907	$	(819)	$	(1,179)	$	8,909
Assets held for sale/off lease		—		725		—		725
Initial direct costs, net		104		—		(24)		80
Total	$	11,011	$	(94)	$	(1,203)	$	9,714

Property on Operating Leases

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

	Balance						Balance
	December 31,				Reclassifications		September 30,
	2020		Additions		or Dispositions		2021
Transportation, rail	$	3,657	$	—	$	(652)	$	3,005
Mining		2,749		—		—		2,749
Construction		2,892		—		—		2,892
Aviation		2,118		—		—		2,118
Paper processing		1,058		—		—		1,058
Marine vessel		1,041		—		(1,041)		—
Containers		860		—		—		860
Agriculture		742		—		—		742
Materials handling		960		355		—		1,315
Transportation, other		97		—		—		97
		16,174		355		(1,693)		14,836
Less accumulated depreciation		(5,267)		(1,179)		519		(5,927)
Total	$	10,907	$	(824)	$	(1,174)	$	8,909

Future Minimum Lease Payments Receivable

At September 30, 2021, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):

	Operating
	Leases
Three months ending December 31, 2021	$	399
Year ending December 31, 2022		1,555
2023		1,500
2024		1,054
2025		528
Thereafter		608
	$	5,644

Schedule of Useful Lives of Lease Assets

The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of September 30, 2021, 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, other	7 - 10

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Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2021

Allowance for Credit Losses [Abstract]

Activity in Allowance for Doubtful Accounts and Credit Losses

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

	Accounts Receivable		Valuation
	Allowance for Doubtful		Adjustments on
	Accounts		Financing Receivables
	Operating		Notes
	Leases		Receivables		Total
Balance December 31, 2020	$	20	$	—	$	20
Reversal of provision for credit losses		(17)		—		(17)
Balance September 30, 2021	$	3	$	—	$	3

Financing Receivables by Credit Quality Indicator and by Class

At September 30, 2021 and December 31, 2020, 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
	September 30, 2021		December 31, 2020
Pass	$	8	$	424
Special mention		—		—
Substandard		—		—
Doubtful		—		—
Total	$	8	$	424

Net Investment in Financing Receivables by Age

At September 30, 2021 and December 31, 2020, 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
September 30, 2021	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	8	$	8	$	—

													Recorded
					Greater						Total		Investment>90
	31-60 Days		61-90 Days		Than		Total				Financing		Days and
December 31, 2020	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	424	$	424	$	—

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Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2021

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 three and nine months ended September 30, 2021 and 2020 as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Administrative costs reimbursed to Managing Member and/or affiliates	$	92	$	74	$	274	$	242
Asset management fees to Managing Member		64		63		195		192
Acquisition and initial direct costs paid to Managing Member		3		43		17		63
	$	159	$	180	$	486	$	497

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Non-Recourse Debt (Tables)

9 Months Ended

Sep. 30, 2021

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
Three months ending December 31, 2021	$	135	$	19	$	154
Year ending December 31, 2022		518		61		579
2023		522		39		561
2024		288		20		308
2025		73		13		86
Thereafter		232		17		249
	$	1,768	$	169	$	1,937

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Borrowing Facilities (Tables)

9 Months Ended

Sep. 30, 2021

Borrowing Facilities [Abstract]

Borrowings Under the Facility

As of September 30, 2021 and December 31, 2020, borrowings under the Credit Facility were as follows (in thousands):

	September 30,		December 31,
	2021		2020
Total available under the financing arrangement	$	55,000	$	55,000
Amount borrowed by affiliated partnerships and limited liability companies under the venture, acquisition, and warehouse facilities.		(5,452)		(5,879)
Total remaining available under the working capital, acquisition and warehouse facilities	$	49,548	$	49,121

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Members' Capital (Tables)

9 Months Ended

Sep. 30, 2021

Members' Capital [Abstract]

Distributions to Other Members

Distributions to the Other Members for the three and nine months ended September 30, 2021 and 2020 were as follows (in thousands except Units and per Unit data):

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
	2021		2020		2021		2020
Distributions	$	513	$	513	$	1,539	$	1,539
Weighted average number of Units outstanding		2,565,749		2,565,749		2,565,749		2,565,749
Weighted average distributions per Unit	$	0.20	$	0.20	$	0.60	$	0.60

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2021

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):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Fair value of warrants at beginning of period	$	157	$	392	$	187	$	731
Unrealized gain (loss) on fair value adjustment for warrants		4		1		(26)		(338)
Fair value of warrants at end of period	$	161	$	393	$	161	$	393

Fair Value, Investment Securities Measured on Recurring Basis

The fair value of investment securities that were accounted for on a recurring basis for the three and nine months ended September 30, 2021 and 2020 and classified as Level 1 are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Fair value of securities at the beginning of period	$	898	$	—	$	1,448	$	—
Securities sold		—		—		(619)		—
Unrealized loss on fair value adjustment for securities		(492)		—		(423)		—
Fair value of investment securities at the end of period	$	406	$	—	$	406	$	—

Fair Value Measurement of Options on Recurring Basis

The fair value of the options – short position that were accounted for on a recurring basis for both the three and nine months ended September 30, 2021 and classified as Level 1 are as follows (in thousands):

Fair value of options - short position at begnnning of period	$	—
Options sold		50
Unrealized gain on fair valuation of options		(34)
Fair value of options - short position at end of period	$	16

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 September 30, 2021 and December 31, 2020:

September 30, 2021
	Valuation	Valuation	Unobservable	Range of Input Values
Name	Frequency	Technique	Inputs	(Weighted Average)
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.01 - $11.71 ($0.08)
			Exercise price	$0.02 - $9.00 ($0.07)
			Time to maturity (in years)	6.16 - 10.19 (6.31)
			Risk-free interest rate	1.19% - 1.58% (1.23%)
			Annualized volatility	39.81% - 115.04% (55.63%)

December 31, 2020
	Valuation	Valuation	Unobservable	Range of Input Values
Name	Frequency	Technique	Inputs	(Weighted Average)
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.01 - $16.95 ($0.09)
			Exercise price	$0.02 - $9.00 ($0.07)
			Time to maturity (in years)	6.91 - 10.94 (7.06)
			Risk-free interest rate	0.65% - 1.58% (0.67%)
			Annualized volatility	40.36% - 115.04% (55.70%)

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 September 30, 2021 and December 31, 2020 (in thousands):

	Fair Value Measurements at September 30, 2021
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	2,956	$	2,956	$	—	$	—	$	2,956
Notes receivable, net		5		—		—		5		5
Investment in securities		406		406		—		—		406
Warrants, fair value		161		—		—		161		161
Financial liabilities:
Options - short position		16		16		—		—		16
Non-recourse debt		1,768		—		—		1,822		1,822

	Fair Value Measurements at December 31, 2020
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	2,873	$	2,873	$	—	$	—	$	2,873
Notes receivable, net		390		—		—		396		396
Investment in securities		1,448		1,448		—		—		1,448
Warrants, fair value		187		—		—		187		187
Financial liabilities:
Non-recourse debt		2,339		—		—		2,438		2,438

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Organization and Limited Liability Company Matters (Narrative) (Details) - USD ($)	9 Months Ended	24 Months Ended
	Sep. 30, 2021	Jan. 05, 2018	Jun. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019	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 State	California
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								$ 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
Members capital account, Units outstanding	2,565,749		2,565,749	2,565,749	2,565,749	2,565,749	2,565,749
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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Summary of Significant Accounting Policies (Narrative) (Details) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021 USD ($) contract $ / shares	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) contract segment $ / shares	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Summary of Significant Accounting Policies [Line Items]
Equipment on operating leases, depreciation method			straight-line
Taxes on income and franchise fees	$ 1	$ 2	$ 3	$ 7
Investment in securities	406		406		$ 1,448
Securities sold, but proceed not received			619
Gain on sale of securities	0	0	78	0
Unrealized loss on fair value adjustment for securities	(492)	0	(423)	0
Warrants exercised	0	0	0	0
Options - short position	16		$ 16		0
Options, short position, contract expiration date			Jan. 21, 2022
Unrealized gain on fair valuation of options	34	0	$ 34	0
Number of operating segments | segment			1
Number of reportable segments | segment			1
Unrealized gain (loss) on fair value adjustment for warrants	4	$ 1	$ (26)	$ (338)
Warrants, fair value	161		161		187
Securities With Readily Determinable Fair Values [Member]
Summary of Significant Accounting Policies [Line Items]
Unrealized loss on fair value adjustment for securities	$ (492)		$ (423)
Securities Without Readily Determinable Fair Values [Member]
Summary of Significant Accounting Policies [Line Items]
Unrealized loss on fair value adjustment for securities					$ 0
Short Position Options Sold - Tranche One [Member]
Summary of Significant Accounting Policies [Line Items]
Short position options, number of contracts sold | contract	125		125
Short position options contracts sold, premium per share | $ / shares	$ 3.00		$ 3.00
Investment in short options, initial	$ 38		$ 38
Options, short position, strike price per share | $ / shares			$ 15
Short Position Options Sold - Tranche Two [Member]
Summary of Significant Accounting Policies [Line Items]
Short position options, number of contracts sold | contract	75		75
Short position options contracts sold, premium per share | $ / shares	$ 1.64		$ 1.64
Investment in short options, initial	$ 12		$ 12
Options, short position, strike price per share | $ / shares			$ 12.50
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		36 months
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		$ 250
Operating leases, initial terms	120 months		120 months
Operating leases, period of review for impairment			90 days

XML

Notes Receivable, Net (Narrative) (Details)	9 Months Ended
	Sep. 30, 2021
Notes receivable term	42 months
Notes receivable, maturity date description	will mature in September and December 2021
Minimum [Member]
Notes receivable interest rate	14.44%
Maximum [Member]
Notes receivable interest rate	14.84%

XML

Notes Receivable, Net (Minimum Future Payments Receivable) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Notes Receivable, Net [Abstract]
Three months ending December 31, 2021	$ 8
Financing receivable, gross	8
Notes receivable	8	$ 424
Less: warrants - notes receivable discount	(3)
Notes receivable, net	$ 5	$ 390

XML

Notes Receivable, Net (Initial Direct Costs, Amortization Expense Related to Notes Receivable and Company's Operating and Direct Finance Leases) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amortization of initial direct costs	$ 9	$ 11	$ 24	$ 40
Notes Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amortization of initial direct costs	0	0	0	2
Operating Lease Assets [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amortization of initial direct costs	$ 9	$ 11	$ 24	$ 38

XML

Equipment Under Operating Leases, Net (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Lessor, Lease, Description [Line Items]
Lease investment impairment charges			$ 0	$ 0
Depreciation of operating lease assets	$ 423	$ 381	1,179	1,087
Additional depreciation		29	102	29
Changes in estimated residual value for assets on operating leases			167
Amortization of initial direct costs	$ 9	11	$ 24	40
Average estimated residual value of assets on operating leases	32.00%		32.00%		35.00%
Operating leases in non-accrual status	$ 0		$ 0		$ 0
Equipment on operating leases, depreciation method			straight-line
Operating Lease Assets [Member]
Lessor, Lease, Description [Line Items]
Amortization of initial direct costs	$ 9	$ 11	$ 24	$ 38

XML

Equipment Under Operating Leases, Net (Investment in Leases) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)
Leases Disclosure [Line Items]
Balance December 31, 2020	$ 11,011
Additions	(94)
Depreciation/ Amortization Expense	(1,203)
Balance September 30, 2021	9,714
Initial Direct Cost [Member]
Leases Disclosure [Line Items]
Balance December 31, 2020	104
Additions	0
Depreciation/ Amortization Expense	(24)
Balance September 30, 2021	80
Assets Held for Sale/off Lease [Member]
Leases Disclosure [Line Items]
Balance December 31, 2020
Additions	725
Depreciation/ Amortization Expense	0
Balance September 30, 2021	725
Operating Lease Assets [Member]
Leases Disclosure [Line Items]
Balance December 31, 2020	10,907
Additions	(819)
Depreciation/ Amortization Expense	(1,179)
Balance September 30, 2021	$ 8,909

XML

Equipment Under Operating Leases, Net (Property on Operating Leases) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	$ 14,836	$ 16,174
Less accumulated depreciation	(5,927)	(5,267)
Property on operating leases, net	8,909	10,907
Additions, gross	355
Additions, less accumulated depreciation	(1,179)
Additions, net	(824)
Reclassifications or Dispositions, gross	(1,693)
Reclassifications or Dispositions, less accumulated depreciation	519
Reclassifications or Dispositions, net	(1,174)
Transportation, Rail [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	3,005	3,657
Additions, gross	0
Reclassifications or Dispositions, gross	(652)
Mining [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	2,749	2,749
Additions, gross	0
Reclassifications or Dispositions, gross	0
Construction [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	2,892	2,892
Additions, gross	0
Reclassifications or Dispositions, gross	0
Aviation [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	2,118	2,118
Additions, gross	0
Reclassifications or Dispositions, gross	0
Paper Processing [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	1,058	1,058
Additions, gross	0
Reclassifications or Dispositions, gross	0
Marine Vessel [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	0	1,041
Additions, gross	0
Reclassifications or Dispositions, gross	(1,041)
Containers [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	860	860
Additions, gross	0
Reclassifications or Dispositions, gross	0
Agriculture [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	742	742
Additions, gross	0
Reclassifications or Dispositions, gross	0
Materials Handling [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	1,315	960
Additions, gross	355
Reclassifications or Dispositions, gross	0
Transportation, other [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	97	$ 97
Additions, gross	0
Reclassifications or Dispositions, gross	$ 0

XML

Equipment Under Operating Leases, Net (Future Minimum Lease Payments Receivable) (Details) $ in Thousands	Sep. 30, 2021 USD ($)
Operating Leases
Three months ending December 31, 2021	$ 399
Year ending December 31, 2022	1,555
2023	1,500
2024	1,054
2025	528
Thereafter	608
Operating leases, total	$ 5,644

XML

Equipment Under Operating Leases, Net (Schedule of Useful Lives of Lease Assets) (Details)	9 Months Ended
	Sep. 30, 2021
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, other [Member] | Minimum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	7 years
Transportation, other [Member] | Maximum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	10 years

XML

Allowance for Credit Losses (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Allowance for Credit Losses [Abstract]
Financing receivables on non-accrual status	$ 0	$ 0

XML

Allowance for Credit Losses (Activity in Allowance for Doubtful Accounts) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance	$ 20
Reversal of provision for credit losses	(17)	$ 10
Ending Balance	3
Operating Lease Assets [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance	20
Reversal of provision for credit losses	(17)
Ending Balance	3
Notes Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance	0
Reversal of provision for credit losses	0
Ending Balance	$ 0

XML

Allowance for Credit Losses (Financing Receivables by Credit Quality Indicator and by Class) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Financing Receivable, Recorded Investment [Line Items]
Notes Receivable	$ 8	$ 424
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Notes Receivable	8	424
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Notes Receivable	0	0
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Notes Receivable	0	0
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Notes Receivable	$ 0	$ 0

XML

Allowance for Credit Losses (Net Investment in Financing Receivables by Age) (Details) - Notes Receivable [Member] - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 0	$ 0
Current	8	424
Total Financing Receivables	8	424
Recorded Investment > 90 Days and Accruing	0	0
31-60 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
61-90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Greater Than 90 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 0	$ 0

XML

Related Party Transactions (Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Related Party Transactions [Abstract]
Administrative costs reimbursed to Managing Member and/or affiliates	$ 92	$ 74	$ 274	$ 242
Asset management fees to Managing Member	64	63	195	192
Acquisition and initial direct costs paid to Managing Member	3	43	17	63
Related party transactions, total	$ 159	$ 180	$ 486	$ 497

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Non-Recourse Debt (Narrative) (Details) $ in Millions	9 Months Ended
	Sep. 30, 2021 USD ($)
Debt Instrument [Line Items]
Gross operating lease rentals and future payments on direct financing leases	$ 1.9
Assets pledged as collateral	$ 2.9
Notes maturity date, description	The notes mature from 2021 through 2028
Minimum [Member]
Debt Instrument [Line Items]
Fixed interest rate on notes	3.74%
Maximum [Member]
Debt Instrument [Line Items]
Fixed interest rate on notes	4.66%

XML

Non-Recourse Debt (Future Minimum Payments of Non-Recourse Debt) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Principal
Three months ending December 31, 2021	$ 135
Year ending December 31, 2022	518
2023	522
2024	288
2025	73
Thereafter	232
Secured Debt, Total	1,768	$ 2,339
Interest
Three months ending December 31, 2021	19
Year ending December 31, 2022	61
2023	39
2024	20
2025	13
Thereafter	17
Long-term debt interest, total	169
Total
Three months ending December 31, 2021	154
Year ending December 31, 2022	579
2023	561
2024	308
2025	86
Thereafter	249
Principal and interest, total	$ 1,937

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Borrowing Facilities (Narrative) (Details) $ in Thousands		9 Months Ended
	Oct. 31, 2019	Sep. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
Line of Credit Facility [Line Items]
Maximum amount of Credit Facility		$ 55,000	$ 55,000
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	Sep. 30, 2023
Tangible net worth		$ 11,000
Leverage ratio		0.16
Interest Coverage ratio		21.81
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%
Minimum [Member] | Credit Facility [Member] | Covenant Requirement [Member]
Line of Credit Facility [Line Items]
Tangible net worth requirement under the Credit Facility		$ 10,000
Interest Coverage ratio		2
Maximum [Member] | Credit Facility [Member] | Covenant Requirement [Member]
Line of Credit Facility [Line Items]
Leverage ratio		1.25

XML

Borrowing Facilities (Borrowings Under the Facility) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Borrowing Facilities [Abstract]
Total available under the financing arrangement	$ 55,000	$ 55,000
Amount borrowed by affiliated partnerships and limited liability companies under the venture, acquisition, and warehouse facilities	(5,452)	(5,879)
Total remaining available under the working capital, acquisition and warehouse facilities	$ 49,548	$ 49,121

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Commitments (Narrative) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)
Commitments [Abstract]
Commitments to purchase lease assets	$ 115

XML

Members' Capital (Narrative) (Details) - shares	9 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
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	2,565,749	2,565,749	2,565,749	2,565,749
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]
Percentage of fund distributions	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]
Allocation of net income and net loss	0.01%
Initial Member [Member]
Members Capital Account [Line Items]
Members capital account, Units issued	50		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		15,000,000

XML

Members' Capital (Distributions to Other Members) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Distributions	$ 513	$ 513	$ 1,539	$ 1,539
Weighted average number of Units outstanding	2,565,749	2,565,749	2,565,749	2,565,749
Other Members [Member]
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Distributions	$ 513	$ 513	$ 1,539	$ 1,539
Weighted average number of Units outstanding	2,565,749	2,565,749	2,565,749	2,565,749
Weighted average distributions per Unit	$ 0.20	$ 0.20	$ 0.60	$ 0.60

XML

Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020
Warrants, fair value	$ 161	$ 187
Investment in securities	406	1,448
Options - short position	16	0
Non-recurring [Member]
Asset, fair value	0	0
Liabilities, fair value	$ 0	$ 0
Securities With Readily Determinable Fair Values [Member]
Investment in securities			$ 0

XML

Fair Value Measurements (Fair Value, Warrants Measured on Recurring Basis) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Fair value of warrants at beginning of period			$ 187
Unrealized loss on fair valuation of warrants	$ 4	$ 1	(26)	$ (338)
Fair value of warrants at end of period	161		161
Fair Value, Inputs, Level 3 [Member]
Fair value of warrants at beginning of period	157	392	187	731
Unrealized loss on fair valuation of warrants	4	1	(26)	(338)
Fair value of warrants at end of period	$ 161	$ 393	$ 161	$ 393

XML

Fair Value Measurements (Fair Value, Investment Securities Measured on Recurring Basis) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Fair value of securities at the beginning of period			$ 1,448
Unrealized loss on fair value adjustment for securities	$ (492)	$ 0	(423)	$ 0
Fair value of securities at the end of period	406		406		$ 1,448
Fair Value, Inputs, Level 1 [Member]
Fair value of securities at the beginning of period	898	0	1,448	0	0
Securities sold	0	0	(619)	0
Unrealized loss on fair value adjustment for securities	(492)	0	(423)	0
Fair value of securities at the end of period	$ 406	$ 0	$ 406	$ 0	$ 1,448

XML

Fair Value Measurements (Fair Value, Options Measured on Recurring Basis) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Unrealized gain on fair valuation of options	$ 34	$ 0	$ 34	$ 0
Fair Value, Inputs, Level 1 [Member]
Fair value of options - short position at beginning of period			0
Options sold			50
Unrealized gain on fair valuation of options			(34)
Fair value of options - short position at end of period	$ 16		$ 16

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]	Sep. 30, 2021 USD ($) Y	Dec. 31, 2020 USD ($) Y $ / shares
Minimum [Member] | Unobservable Inputs, Stock Price [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.0001	0.0001
Minimum [Member] | Unobservable Inputs, Exercise Price [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.0002	0.0002
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 | Y	6.16	6.91
Minimum [Member] | Unobservable Inputs, Risk Free Interest Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.0119	0.0065
Minimum [Member] | Unobservable Inputs, Annualized Volatility [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.3981	0.4036
Maximum [Member] | Unobservable Inputs, Stock Price [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.1171	0.1695
Maximum [Member] | Unobservable Inputs, Exercise Price [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.0900	0.0900
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 | Y	10.19	10.94
Maximum [Member] | Unobservable Inputs, Risk Free Interest Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.0158	0.0158
Maximum [Member] | Unobservable Inputs, Annualized Volatility [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	1.1504	1.1504
Weighted Average [Member] | Unobservable Inputs, Stock Price [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.0008	0.0009
Weighted Average [Member] | Unobservable Inputs, Exercise Price [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.0007	0.07
Weighted Average [Member] | Unobservable Inputs, Time to Maturity (in Years) [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	(6.31)	(7.06)
Weighted Average [Member] | Unobservable Inputs, Risk Free Interest Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.0123	0.0067
Weighted Average [Member] | Unobservable Inputs, Annualized Volatility [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.5563	0.5570

XML

Fair Value Measurements (Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Financial assets:
Cash and cash equivalents	$ 2,956		$ 2,873
Notes receivable, net	5		396
Investment in securities	406		1,448
Warrants, fair value	161		187
Financial liabilities:
Options - short position	16		0
Non-recourse debt	1,822		2,438
Carrying Amount [Member]
Financial assets:
Cash and cash equivalents	2,956		2,873
Notes receivable, net	5		390
Investment in securities	406		1,448
Warrants, fair value	161		187
Financial liabilities:
Options - short position	16
Non-recourse debt	1,768		2,339
Fair Value, Inputs, Level 1 [Member]
Financial assets:
Cash and cash equivalents	2,956		2,873
Notes receivable, net	0		0
Investment in securities	406	$ 898	1,448	$ 0	$ 0	$ 0
Warrants, fair value	0		0
Financial liabilities:
Options - short position	16
Non-recourse debt	0		0
Fair Value, Inputs, Level 2 [Member]
Financial assets:
Cash and cash equivalents	0		0
Notes receivable, net	0		0
Investment in securities	0		0
Warrants, fair value	0		0
Financial liabilities:
Options - short position	0
Non-recourse debt	0		0
Fair Value, Inputs, Level 3 [Member]
Financial assets:
Cash and cash equivalents	0		0
Notes receivable, net	5		396
Investment in securities	0		0
Warrants, fair value	161	$ 157	187	$ 393	$ 392	$ 731
Financial liabilities:
Options - short position	0
Non-recourse debt	$ 1,822		$ 2,438