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, 2022

☐         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, 2022 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, 2022 and December 31, 2021	3
	Statements of Operations for the three and nine months ended September 30, 2022 and 2021	4
	Statements of Changes in Members’ Capital for the three and nine months ended September 30, 2022 and 2021	5
	Statements of Cash Flows for the nine months ended September 30, 2022 and 2021	6
	Notes to the Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 4.	Controls and Procedures	26
Part II. Other Information		27
Item 1.	Legal Proceedings	27
Item 2.	Defaults Upon Senior Securities	27
Item 3.	Mine Safety Disclosures	27
Item 4.	Other Information	27
Item 5.	Exhibits	27

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

ATEL 17, LLC

BALANCE SHEETS

SEPTEMBER 30, 2022 AND DECEMBER 31, 2021

(In Thousands)

(Unaudited)

	September 30,		December 31,
	2022		2021
ASSETS
Cash and cash equivalents	$	3,062	$	4,035
Due from Managing Member and affiliates		-		32
Accounts receivable, net		37		26
Investment in equity securities		42		308
Warrants, fair value		145		142
Investments in equipment and leases, net		6,936		8,076
Prepaid expenses and other assets		9		9
Total assets	$	10,231	$	12,628
LIABILITIES AND MEMBERS' CAPITAL
Accounts payable and accrued liabilities:
Due to Managing Member and affiliates	$	26	$	-
Accrued distributions to Other Members		228		228
Options - short position		-		1
Other		68		158
Non-recourse debt		1,247		1,633
Unearned operating lease income		112		107
Total liabilities		1,681		2,127
Members’ capital:
Managing Member		1		1
Other Members		8,549		10,500
Total Members’ capital		8,550		10,501
Total liabilities and Members’ capital	$	10,231	$	12,628

See accompanying notes.

3

ATEL 17, LLC

STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2022 AND 2021

(In Thousands Except for Units and Per Unit Data)

(Unaudited)

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
	2022		2021		2022		2021
Operating revenues:
Leasing and lending activities:
Operating lease revenue, net	$	445	$	616	$	1,340	$	1,723
Notes receivable interest income		-		14		-		52
Gain (loss) on sales of lease assets		(6)		(111)		202		(111)
Other revenue		-		-		23		1
Total operating revenues		439		519		1,565		1,665
Operating expenses:
Depreciation of operating lease assets		348		423		1,034		1,179
Asset management fees to Managing Member		53		64		165		195
Acquisition expense		2		3		4		17
Cost reimbursements to Managing Member and/or affiliates		74		92		230		274
Amortization of initial direct costs		6		9		21		24
Interest expense		14		20		47		65
Professional fees		43		26		126		127
Outside services		8		17		30		36
Taxes on income and franchise fees		1		1		4		3
Bank charges		8		9		24		25
Other expense		6		12		30		28
Total operating expenses		563		676		1,715		1,973
Net loss from operations		(124)		(157)		(150)		(308)
Other loss:
Gain on sale of securities		-		-		-		78
Realized gain on sale of options		-		-		1		-
Unrealized loss on fair value adjustment for equity securities		(10)		(492)		(266)		(423)
Unrealized gain (loss) on fair value adjustment for warrants		1		4		3		(26)
Unrealized gain on fair value of options		-		34		-		34
Total other loss		(9)		(454)		(262)		(337)
Net loss	$	(133)	$	(611)	$	(412)	$	(645)
Net loss:
Managing Member	$	-	$	-	$	-	$	-
Other Members		(133)		(611)		(412)		(645)
	$	(133)	$	(611)	$	(412)	$	(645)
Net loss per Limited Liability Company Unit - Other Members	$	(0.05)	$	(0.24)	$	(0.16)	$	(0.25)
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, 2022 AND 2021

(In Thousands Except for Units and Per Unit Data)

(Unaudited)

	Three Months Ended September 30, 2022
		Amount
		Other		Managing
	Units	Members		Member		Total
Balance June 30, 2022	2,565,749	$	9,195	$	1	$	9,196
Distributions to Other Members ($0.20 per Unit)	-		(513)		-		(513)
Net loss	-		(133)		-		(133)
Balance September 30, 2022	2,565,749	$	8,549	$	1	$	8,550
	Nine Months Ended September 30, 2022
		Amount
		Other		Managing
	Units	Members		Member		Total
Balance December 31, 2021	2,565,749	$	10,500	$	1	$	10,501
Distributions to Other Members ($0.60 per Unit)	-		(1,539)		-		(1,539)
Net loss	-		(412)		-		(412)
Balance September 30, 2022	2,565,749	$	8,549	$	1	$	8,550
	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

See accompanying notes.

5

ATEL 17, LLC

STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

(In Thousands)

(Unaudited)

	Nine Months Ended
	September 30,
	2022		2021
Operating activities:
Net loss	$	(412)	$	(645)
Adjustment to reconcile net loss to net cash provided by operating activities:
(Gain) loss on sales of lease assets		(202)		111
Accretion of note discount - warrants		-		(32)
Depreciation of operating lease assets		1,034		1,179
Amortization of initial direct costs		21		24
Provision for credit losses		-		(17)
Gain on sale of securities		-		(78)
Realized gain on sale of options		(1)		-
Unrealized gain on sale of options		-		(34)
Unrealized loss on fair value adjustment for equity securities		266		423
Unrealized (gain) loss on fair value adjustment for warrants		(3)		26
Changes in operating assets and liabilities:
Accounts receivable		(11)		30
Due from/to Managing Member and affiliates		8		69
Prepaid expenses and other assets		-		(6)
Accounts payable, other		(90)		46
Unearned operating lease income		5		-
Net cash provided by operating activities		615		1,096
Investing activities:
Purchases of equipment under operating leases		(133)		(355)
Proceeds from sale of securities		-		697
Proceeds from sale of options		50		-
Proceeds from early termination of notes receivable		-		76
Proceeds from sales of equipment under operating leases		420		339
Principal payments received on notes receivable		-		340
Net cash provided by investing activities		337		1,097
Financing activities:
Repayments under non-recourse debt		(386)		(571)
Distributions to Other Members		(1,539)		(1,539)
Net cash used in financing activities		(1,925)		(2,110)
Net (decrease) increase in cash and cash equivalents		(973)		83
Cash at beginning of period		4,035		2,873
Cash at end of period	$	3,062	$	2,956
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	48	$	66
Cash paid during the period for taxes	$	13	$	1
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, 2022, 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 4, 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, 2021, 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, 2022 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, 2022, 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 on accounts 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 three and nine months ended September 30, 2022 and 2021, and long-lived assets as of September 30, 2022 and December 31, 2021 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 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 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.

Investment in securities:

From time to time, the Company may receive rights to purchase equity securities of its borrowers or receive warrants in connection with its lending arrangements.

Investment in equity securities

The Company’s equity 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 equity 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 $42 thousand and $308 thousand of investment in equity securities as of September 30, 2022 and December 31, 2021, respectively. All of such securities were publicly held and had readily determinable fair values. During the three months ended September 30, 2022 and 2021, the Company recorded unrealized losses of $10 thousand and $492 thousand, respectively, on its investment securities. During the nine months ended September 30, 2022 and 2021, the Company recorded unrealized losses of $266 thousand and $423 thousand, respectively. There were no impairment losses on securities during the three and nine months ended September 30, 2022 and 2021. During the prior year nine-month period, the Company recorded gains of $78 thousand on sales of securities, all of which were sold during the first half of 2021. There were no other sales of securities during the three and nine months ended September 30, 2022 and 2021.

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 $145 thousand and $142 thousand as of September 30, 2022 and December 31, 2021, respectively. The Company recorded unrealized gains of $1 thousand and $4 thousand on fair valuation of its warrants for the three months ended September 30, 2022 and 2021, respectively. During the nine months ended September 30, 2022 and 2021, the Company recorded unrealized gains of $3 thousand and unrealized losses of $26 thousand, respectively.

9

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

Options - short position

During the third quarter of 2021, the Company 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 Company recorded a liability for the initial options value totaling $38 thousand and $12 thousand, respectively. During the three and nine months ended September 30, 2021, the Company recorded unrealized gains totaling $34 thousand related to the options. Such realized gains reflect changes in the fair value of the options, and effectively reduces the liability related to the options. The options contracts both expired on January 21, 2022 with a strike price of $15.00 and $12.50, respectively. The Company realized gains totaling $1 thousand related to the expiration of the options.

Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, operating lease 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 receivable represent amounts due from lessees in various industries, related to equipment on operating leases.

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.

10

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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 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.

11

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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.

12

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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. Investment in equipment and leases, net:

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

	Balance		Additions/		Depreciation/		Balance
		December 31,	Dispositions/		Amortization			September 30,
	2021		Reclassifications		Expense		2022
Equipment under operating leases, net	$	8,003	$	(85)	$	(1,034)	$	6,884
Assets held for sale or lease, net		—		—		—		—
Initial direct costs, net		73		—		(21)		52
Total	$	8,076	$	(85)	$	(1,055)	$	6,936

As a result of impairment reviews, management determined that no impairment losses existed for the periods ended September 30, 2022 and 2021.

The Company utilizes a straight-line depreciation method over the term of the equipment lease for equipment under operating leases currently in its portfolio. Depreciation expense on the Company’s equipment totaled $348 thousand and $423 thousand for the respective three months ended September 30, 2022 and 2021; and was $1.0 million and $1.2 million for the respective nine months ended September 30, 2022 and 2021. Total depreciation for the three months ended September 30, 2022 and 2021 include $7 thousand and $102 thousand of additional depreciation recorded to reflect quarter-to-date changes in estimated residual values of certain equipment generating revenue under month-to-month extensions. For the respective nine months ended September 30, 2022 and 2021, such additional depreciation totaled $14 thousand and $167 thousand. The 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 the estimated reduction in value.

IDC amortization expense related to the Company’s operating leases totaled $6 thousand and $9 thousand for the three months ended September 30, 2022 and 2021, respectively, and was $21 thousand and $24 thousand for the nine months ended September 30, 2022 and 2021.

All of the Company’s lease asset purchases and capital improvements were made during the years from 2016 through 2022.

13

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,
	2021		Additions		or Dispositions		2022
Transportation, rail	$	1,723	$	—	$	—	$	1,723
Mining		2,749		—		—		2,749
Construction		3,725		—		(507)		3,218
Aviation		2,327		—		—		2,327
Paper processing		1,058		—		—		1,058
Agriculture		742		16		(742)		16
Materials handling		1,315		118		(82)		1,351
Transportation, other		97		—		—		97
		13,736		134		(1,331)		12,539
Less accumulated depreciation		(5,733)		(1,034)		1,112		(5,655)
Total	$	8,003	$	(900)	$	(219)	$	6,884

The average estimated residual value for assets on operating leases was 27% and 28% of the assets’ original cost at September 30, 2022 and December 31, 2021, respectively. There were no operating leases in non-accrual status at September 30, 2022 and December 31, 2021.

At September 30, 2022, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):

	Operating
	Leases
Three months ending December 31, 2022	$	427
Year ending December 31, 2023		1,652
2024		1,191
2025		536
2026		301
Thereafter		311
	$	4,418

The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of September 30, 2022, 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
Aviation	15 - 20
Mining	10 - 15
Paper processing	10 - 15
Agriculture	7 - 10
Construction	7 - 10
Materials handling	7 - 10
Transportation, other	7 - 10

14

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

4. 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.

Pursuant to the Operating Agreement, the Managing Member and/or affiliates earned fees and billed for reimbursements during the three and nine months ended September 30, 2022 and 2021 as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Administrative costs reimbursed to Managing Member and/or affiliates	$	74	$	92	$	230	$	274
Asset management fees to Managing Member		53		64		165		195
Acquisition and initial direct costs paid to Managing Member		2		3		4		17
	$	129	$	159	$	399	$	486

5. Non-recourse debt:

At September 30, 2022, non-recourse debt consists of notes payable to financial institutions. The note payments are due in monthly installments. Interest on the notes range from 3.82% to 4.66% per annum. The notes are secured by assignments of lease payments and pledges of assets. At September 30, 2022, remaining gross operating lease rentals totaled approximately $1.3 million over the remaining lease terms and the carrying value of the pledged assets was $2.4 million. The notes mature from 2023 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

15

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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, 2022	$	132	$	13	$	145
Year ending December 31, 2023		522		39		561
2024		288		20		308
2025		73		13		86
2026		76		9		85
Thereafter		156		7		163
	$	1,247	$	101	$	1,348

6. 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 June 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, 2022 and December 31, 2021, borrowings under the Credit Facility were as follows (in thousands):

	September 30,		December 31,
	2022		2021
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.		(685)		(730)
Total remaining available under the working capital, acquisition and warehouse facilities	$	54,315	$	54,270

The Company and its affiliates pay an annual commitment fee to have access to this line of credit. As of September 30, 2022, 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

16

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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, 2022, the Company’s Tangible Net Worth requirement under the Credit Facility was $10.0 million, the permitted maximum leverage ratio was not to exceed 1.25 to 1, and the required minimum interest coverage ratio was not to be less than 2 to 1. At September 30, 2022, the Company’s minimum Tangible Net Worth, leverage ratio and interest coverage ratio, as calculated per the Credit Facility agreement, were $8.6 million, 0.15 to 1, and 21.51 to 1, respectively. As such, as of September 30, 2022, the Company’s leverage ratio and interest coverage ratio were in compliance with the conditions of the Credit Facility. However, the Company’s Tangible Net Worth did not meet the requirements of the Credit Facility. Accordingly, the Fund will not be able to borrow from the Credit Facility unless all material covenants are met. The Company does not anticipate that such inability to borrow from the Credit Facility will have any material impact on future operations.

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, 2022 and December 31, 2021.

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, 2022, the Company is the sole participant in the investment program. 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.

7. Commitments and contingencies:

At September 30, 2022, there was no commitment to purchase lease assets.

17

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

8. Members’ capital:

A total of 2,565,749 Units were issued and outstanding at both September 30, 2022 and December 31, 2021, inclusive of 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, 2022 and 2021 were as follows (in thousands except Units and per Unit data):

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
	2022		2021		2022		2021
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

9. 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, 2022 and December 31, 2021 the Company’s warrants and investment securities were measured on a recurring basis. In addition, at December 31, 2021, the Company’s options - short position were also measured on a recurring basis. There were no assets or liabilities measured at fair value on a non-recurring basis as of September 30, 2022 and December 31, 2021.

18

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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, 2022 and December 31, 2021, the calculated fair value of the Fund’s warrant portfolio approximated $145 thousand and $142 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 for the three and nine months ended September 30, 2022 and 2021 (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Fair value of warrants at beginning of period	$	144	$	157	$	142	$	187
Unrealized gain (loss) on fair value adjustment for warrants		1		4		3		(26)
Fair value of warrants at end of period	$	145	$	161	$	145	$	161

Investment in equity securities (recurring)

The Company’s equity 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. As of September 30, 2022 and December 31, 2021, the calculated fair value of the Fund’s investment securities approximated $42 thousand and $308 thousand, respectively. Such valuations are classified within Level 1 of the valuation hierarchy.

The fair value of investment securities that were accounted for on a recurring basis for the three and nine months ended September 30, 2022 and 2021 and classified as Level 1 are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Fair value of securities at the beginning of period	$	52	$	898	$	308	$	1,448
Securities sold		—		—		—		(619)
Unrealized (loss) gain on fair value adjustment for equity securities		(10)		(492)		(266)		(423)
Fair value of investment securities at the end of period	$	42	$	406	$	42	$	406

Options - short position (recurring)

The liability associated with the Company’s options – short position contracts were 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. During the three and nine months ended September 30, 2021, the Company recorded $34 thousand of unrealized gains on the options, which reduced the $50 thousand initial value of the options to $16 thousand at September 30, 2021. Such value was further reduced to $1 thousand as of December 31, 2021. The options both expired on January 22, 2022, upon which the Company realized $1 thousand of gains on the transactions.

19

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, 2022 and December 31, 2021:

September 30, 2022
	Valuation	Valuation	Unobservable	Range of Input Values
Name	Frequency	Technique	Inputs	(Weighted Average)
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.01 - $11.71 ($0.07)
			Exercise price	$0.02 - $9.00 ($0.07)
			Time to maturity (in years)	5.16 - 9.19 (5.32)
			Risk-free interest rate	3.86% - 4.05% (4.04%)
			Annualized volatility	40.26% - 115.04% (49.88%)

December 31, 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 ($0.07)
			Exercise price	$0.02 - $9.00 ($0.07)
			Time to maturity (in years)	5.91 - 9.94 (6.06)
			Risk-free interest rate	1.35% - 1.58% (1.37%)
			Annualized volatility	37.90% - 115.04% (55.09%)

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.

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.

20

ATEL 17, LLC
 
NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

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, 2022 and December 31, 2021 (in thousands):

	Fair Value Measurements at September 30, 2022
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	3,062	$	3,062	$	—	$	—	$	3,062
Investment in equity securities		42		42		—		—		42
Warrants, fair value		145		—		—		145		145
Financial liabilities:
Non-recourse debt		1,247		—		—		1,214		1,214

	Fair Value Measurements at December 31, 2021
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	4,035	$	4,035	$	—	$	—	$	4,035
Investment in equity securities		308		308		—		—		308
Warrants, fair value		142		—		—		142		142
Financial liabilities:
Options - short position		1		1		—		—		1
Non-recourse debt		1,633		—		—		1,673		1,673

21

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, 2022 versus the three months ended September 30, 2021

The Company had net losses of $133 thousand and $611 thousand for the three months ended September 30, 2022 and 2021, respectively. Compared to the prior year period, the current quarter results reflect decreases in total other loss related to fair valuation of the Company’s investment securities and warrants, and in total operating expenses partially offset by a decline in total operating revenues.

Revenues

Total operating revenues declined by $80 thousand, or 15%, primarily due to the $171 thousand decrease in operating lease revenues partially offset by a $105 thousand reduction in losses realized from lease asset sales. The decrease in operating lease revenues was mainly attributable to lease run-off and dispositions of lease assets, while the reduction in losses from lease asset sales was largely a result of a change in the mix of assets sold.

Expenses

Total operating expenses decreased by $113 thousand, or 17%, primarily due to decreases in depreciation of operating lease assets, cost reimbursements to the Managing Member, and asset management fees to Managing Member partially offset by an increase in professional fees.

22

The decrease in depreciation totaled $75 thousand and was attributable to lease run-off and dispositions of lease assets since September 30, 2021. Costs reimbursed to the Manager were lower by $18 thousand largely due to lower allocated costs associated with the continued decline of the Fund’s asset base. In addition, management fees were reduced by $11 thousand due to a decrease in managed assets and related rents. Partially offsetting such decreases in expenses was a $17 thousand increase in professional fees, which can be attributed to timing differences between receipt of services and billings.

Other loss

During the three months ended September 30, 2022 and 2021, the Company recorded other losses of $9 thousand and $454 thousand, respectively, to reflect net unrealized gains and losses on the Fund’s portfolio of equity securities, warrants and options. Most of the unrealized losses during the three months ended September 30, 2022 and 2021, totaling $10 thousand and $492 thousand, were related to one of the Company’s publicly traded equity securities, which had experienced a significant price reduction during the third quarter of 2021. The price of such equity securities continued to decline during the current quarter, albeit at a lower amount.

During the prior year period, the Company also recorded $34 thousand of unrealized gains on options which expired during the first quarter of 2022.

The nine months ended September 30, 2022 versus the nine months ended September 30, 2021

The Company had net losses of $412 thousand and $645 thousand for the nine months ended September 30, 2022 and 2021, respectively. Compared to the prior year period, the results for the first nine months of 2022 reflect decreases in total operating expenses and in other loss related to fair valuation of the Company’s investment securities and warrants, partially offset by a decline in total operating revenues

Revenues

Total operating revenues for the first nine months of 2022 declined by $100 thousand, or 6%, when compared to the prior year period. Such decrease was comprised of reductions in operating lease revenues and notes receivable interest income partially offset by increases in gains on sales of lease assets and in other revenue.

Operating lease revenues decreased by $383 thousand largely due to lease run-off and sales of lease assets since September 30, 2021; while notes receivable interest income declined by $52 thousand, and was zero during the first nine months of 2022 as all the Fund’s notes receivable have been paid in full and terminated as December 31, 2021. Partially offsetting such decreases were increases in gains on sales of lease assets and other revenue totaling $313 thousand and $22 thousand, respectively. The increase in gains on sales of lease assets was attributable to the changes in the mix of assets sold, while the increase in other revenue reflects higher deferred maintenance fees received on certain returned equipment with excessive wear and tear.

Expenses

Total operating expenses decreased by $258 thousand, or 13%, largely due to decreases in depreciation of operating lease assets, cost reimbursements to the Managing Member, asset management fees and interest expense.

Depreciation of operating lease assets decreased by $145 thousand due to lease run-off and sales of lease assets, while cost reimbursements to the Managing Member declined by $44 thousand due to the continued decline of the Company’s asset base. Likewise, asset management fees were lower by $30 thousand due to the decline in managed assets and related rents, and interest expense decreased by $18 thousand due to the declining balance of the Company’s non-recourse debt.

23

Other loss

During the nine months ended September 30, 2022 and 2021, the Company recorded other losses of $262 thousand and of $337 thousand, respectively, to reflect both realized and unrealized gains/losses on the Fund’s investment securities and warrants portfolio. Most of the unrealized losses during the nine months ended September 30, 2022 and 2021, totaling $266 thousand and $423 thousand, respectively, were related to one of the Company’s publicly traded equity securities, which had experienced a significant price reduction during the prior year period. The price of such equity securities continued to decline during the current period, albeit at a lower amount.

During the prior year period, the Company recorded $34 thousand of unrealized gains on options which expired during the first quarter of 2022. The Company also recorded $26 thousand of unrealized losses related to the fair valuation of its warrants portfolio and realized $78 thousand of gains from sales of equity securities. There were no sales of securities during the current period.

Capital Resources and Liquidity

At September 30, 2022 and December 31, 2021, the Company’s cash and cash equivalents totaled $3.1 million and $4.0 million, respectively. The liquidity of the Company varies, increasing to the extent cash flows from leases and proceeds of asset sales exceed expenses and decreasing as leases and other assets are acquired, as distributions are made to the Members and to the extent expenses exceed cash flows from leases and proceeds from asset sales.

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

Cash Flows

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

	Nine Months Ended
	September 30,
	2022		2021
Net cash provided by (used in):
Operating activities	$	615	$	1,096
Investing activities		337		1,097
Financing activities		(1,925)		(2,110)
Net (decrease) increase in cash and cash equivalents	$	(973)	$	83

During the respective nine months ended September 30, 2022 and 2021, the Company’s main source of liquidity were cash flows from its portfolio of operating lease contracts. During the current period, the Company also received $420 thousand of proceeds from sales of lease assets and $50 thousand of proceeds from the sale of options - short position contracts. By comparison, during the prior year period, the Company received $697 thousand of proceeds from sales of equity securities, $415 thousand of proceeds from sales of equipment and early termination of notes receivable, and $340 thousand of principal payments on its investments in notes receivable.

During the respective nine months ended September 30, 2022 and 2021, cash was primarily used to pay distributions, repay borrowings under non-recourse debt, and acquire assets. Cash used to pay distributions totaled $1.5 million for each of the nine-month periods ended September 30, 2022 and 2021; and repayments of non-recourse debt totaled $386 thousand and $571 thousand for the nine months ended September 30, 2022 and 2021, respectively. In addition, cash used to acquire lease assets totaled $133 thousand and $355 thousand for the nine months ended September 30, 2022 and 2021, respectively. Cash was also used to pay invoices related to management fees and expenses, and other payables in both nine-month periods.

24

Distributions

The Unitholders of record are entitled to certain distributions as provided under the Operating Agreement. The Company commenced periodic distributions beginning with the month of April 2016.

Cash distributions were paid by the Fund to Unitholders of record as of August 31, 2022, and paid through September 30, 2022. 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.

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, 2022 (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 - Nov 2021	Jan 2021 - Dec 2021		2,053			—			2,053			0.80	2,565,749
Dec 2021 - Aug 2022	Jan 2022 - Sep 2022		1,539			—			1,539			0.60	2,565,749
		$	11,771		$	—		$	11,771		$	5.22
Source of distributions
Lease and loan payments and sales proceeds received		$	11,771	100.00%	$	—	0.00%	$	11,771	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, 2021, and December 1, 2021 - August 31, 2022, respectively.

Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies

At September 30, 2022, there was no commitment to purchase lease assets.

Off-Balance Sheet Transactions

None.

25

Recent Accounting Pronouncements

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

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, 2021. There have been no material changes to the Company’s significant accounting policies since December 31, 2021.

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, 2022 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.

26

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, 2022 has been formatted in Inline XBRL

27

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 14, 2022

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 Managing Member, LLC (Managing Member)

28

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 14, 2022

/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 14, 2022

/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, 2022 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 14, 2022

/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, 2022 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 14, 2022

/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, 2022	Oct. 31, 2022
Document And Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	Sep. 30, 2022
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	2022
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, 2022	Dec. 31, 2021
ASSETS
Cash and cash equivalents	$ 3,062	$ 4,035
Due from Managing Member and affiliates	0	32
Accounts receivable, net	37	26
Investment in equity securities	42	308
Warrants, fair value	145	142
Investments in equipment and leases, net	6,936	8,076
Prepaid expenses and other assets	9	9
Total assets	10,231	12,628
Accounts payable and accrued liabilities:
Due to Managing Member and affiliates	26	0
Accrued distributions to Other Members	228	228
Options - short position	0	1
Other	68	158
Non-recourse debt	1,247	1,633
Unearned operating lease income	112	107
Notes receivable, unearned interest income	112	107
Total liabilities	1,681	2,127
Members' capital:
Managing Member	1	1
Other Members	8,549	10,500
Total Members' capital	8,550	10,501
Total liabilities and Members' capital	$ 10,231	$ 12,628

XML

Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Leasing and lending activities:
Operating lease revenue, net	$ 445	$ 616	$ 1,340	$ 1,723
Notes receivable interest income		14	0	52
Gain (loss) on sales of lease assets	(6)	(111)	202	(111)
Other revenue			23	1
Total operating revenues	439	519	1,565	1,665
Operating expenses:
Depreciation of operating lease assets	348	423	1,034	1,179
Asset management fees to Managing Member	53	64	165	195
Acquisition expense	2	3	4	17
Cost reimbursements to Managing Member and/or affiliates	74	92	230	274
Amortization of initial direct costs	6	9	21	24
Interest expense	14	20	47	65
Professional fees	43	26	126	127
Outside services	8	17	30	36
Taxes on income and franchise fees	1	1	4	3
Bank charges	8	9	24	25
Other	6	12	30	28
Total operating expenses	563	676	1,715	1,973
Net loss from operations	(124)	(157)	(150)	(308)
Other loss:
Gain on sale of securities			0	78
Realized gain on sale of options			1	0
Unrealized loss on fair value adjustment for equity securities	(10)	(492)	(266)	(423)
Unrealized gain (loss) on fair value adjustment for warrants	1	4	3	(26)
Unrealized gain on fair valuation of options		34	0	34
Total other loss	(9)	(454)	(262)	(337)
Net loss	(133)	(611)	(412)	(645)
Net loss:
Managing Member			0	0
Other Members	(133)	(611)	(412)	(645)
Net loss	$ (133)	$ (611)	$ (412)	$ (645)
Net loss per Limited Liability Company Unit - Other Members	$ (0.05)	$ (0.24)	$ (0.16)	$ (0.25)
Weighted average number of Units outstanding	2,565,749	2,565,749	2,565,749	2,565,749

XML

Statements of Changes in Members' Capital - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Beginning Balance	$ 9,196	$ 12,153	$ 10,501	$ 13,213
Distributions to Other Members	(513)	(513)	(1,539)	(1,539)
Net income (loss)	(133)	(611)	(412)	(645)
Ending Balance	$ 8,550	$ 11,029	$ 8,550	$ 11,029
Other Members [Member]
Beginning Balance (in units)	2,565,749	2,565,749	2,565,749	2,565,749
Beginning Balance	$ 9,195	$ 12,152	$ 10,500	$ 13,212
Distributions to Other Members	(513)	(513)	(1,539)	(1,539)
Net income (loss)	$ (133)	$ (611)	$ (412)	$ (645)
Ending Balance (in units)	2,565,749	2,565,749	2,565,749	2,565,749
Ending Balance	$ 8,549	$ 11,028	$ 8,549	$ 11,028
Managing Member [Member]
Beginning Balance	1	1	1	1
Ending Balance	$ 1	$ 1	$ 1	$ 1

XML

Statements of Changes in Members' Capital (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Distributions to Other Members, per unit	$ 0.20	$ 0.20
Other Members [Member]
Distributions to Other Members, per unit	$ 0.20	$ 0.20	$ 0.60	$ 0.60

XML

Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Operating activities:
Net loss	$ (412)	$ (645)
Adjustment to reconcile net loss to net cash provided by operating activities:
(Gain) loss on sales of lease assets	(202)	111
Accretion of note discount - warrants	0	(32)
Depreciation of operating lease assets	1,034	1,179
Amortization of initial direct costs	21	24
Provision for credit losses	0	(17)
Gain on sale of securities	0	(78)
Realized gain on sale of options	(1)	0
Unrealized gain on sale of options	0	(34)
Unrealized loss on fair value adjustment for equity securities	266	423
Unrealized (gain) loss on fair value adjustment for warrants	(3)	26
Changes in operating assets and liabilities:
Accounts receivable	(11)	30
Due from/to Managing Member and affiliates	8	69
Prepaid expenses and other assets	0	(6)
Accounts payable, other	(90)	46
Unearned operating lease income	5	0
Net cash provided by operating activities	615	1,096
Investing activities:
Purchases of equipment under operating leases	(133)	(355)
Proceeds from sale of securities	0	697
Proceeds from sale of options	50	0
Proceeds from early termination of notes receivable	0	76
Proceeds from sales of equipment under operating leases	420	339
Principal payments received on notes receivable	0	340
Net cash provided by investing activities	337	1,097
Financing activities:
Repayments under non-recourse debt	(386)	(571)
Distributions to Other Members	(1,539)	(1,539)
Net cash used in financing activities	(1,925)	(2,110)
Net (decrease) increase in cash and cash equivalents	(973)	83
Cash at beginning of period	4,035	2,873
Cash at end of period	3,062	2,956
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	48	66
Cash paid during the period for taxes	13	1
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	$ 0	$ 50

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Organization and Limited Liability Company Matters

9 Months Ended

Sep. 30, 2022

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, 2022, 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 4, 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, 2021, filed with the Securities and Exchange Commission.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

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, 2022 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, 2022, 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 on accounts 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 three and nine months ended September 30, 2022 and 2021, and long-lived assets as of September 30, 2022 and December 31, 2021 relate to customers domiciled in the United States.

Accounts receivable:

Accounts receivable represent the amounts billed under operating lease contracts 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 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.

Investment in securities:

From time to time, the Company may receive rights to purchase equity securities of its borrowers or receive warrants in connection with its lending arrangements.

Investment in equity securities

The Company’s equity 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 equity 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 $42 thousand and $308 thousand of investment in equity securities as of September 30, 2022 and December 31, 2021, respectively. All of such securities were publicly held and had readily determinable fair values. During the three months ended September 30, 2022 and 2021, the Company recorded unrealized losses of $10 thousand and $492 thousand, respectively, on its investment securities. During the nine months ended September 30, 2022 and 2021, the Company recorded unrealized losses of $266 thousand and $423 thousand, respectively. There were no impairment losses on securities during the three and nine months ended September 30, 2022 and 2021. During the prior year nine-month period, the Company recorded gains of $78 thousand on sales of securities, all of which were sold during the first half of 2021. There were no other sales of securities during the three and nine months ended September 30, 2022 and 2021.

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 $145 thousand and $142 thousand as of September 30, 2022 and December 31, 2021, respectively. The Company recorded unrealized gains of $1 thousand and $4 thousand on fair valuation of its warrants for the three months ended September 30, 2022 and 2021, respectively. During the nine months ended September 30, 2022 and 2021, the Company recorded unrealized gains of $3 thousand and unrealized losses of $26 thousand, respectively.

Options - short position

During the third quarter of 2021, the Company 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 Company recorded a liability for the initial options value totaling $38 thousand and $12 thousand, respectively. During the three and nine months ended September 30, 2021, the Company recorded unrealized gains totaling $34 thousand related to the options. Such realized gains reflect changes in the fair value of the options, and effectively reduces the liability related to the options. The options contracts both expired on January 21, 2022 with a strike price of $15.00 and $12.50, respectively. The Company realized gains totaling $1 thousand related to the expiration of the options.

Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, operating lease 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 receivable represent amounts due from lessees in various industries, related to equipment on operating leases.

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 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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Investment in Equipment and Leases, Net

9 Months Ended

Sep. 30, 2022

Investment in Equipment and Leases, Net [Abstract]

Investment in Equipment and Leases, Net

3. Investment in equipment and leases, net:

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

	Balance		Additions/		Depreciation/		Balance
		December 31,	Dispositions/		Amortization			September 30,
	2021		Reclassifications		Expense		2022
Equipment under operating leases, net	$	8,003	$	(85)	$	(1,034)	$	6,884
Assets held for sale or lease, net		—		—		—		—
Initial direct costs, net		73		—		(21)		52
Total	$	8,076	$	(85)	$	(1,055)	$	6,936

As a result of impairment reviews, management determined that no impairment losses existed for the periods ended September 30, 2022 and 2021.

The Company utilizes a straight-line depreciation method over the term of the equipment lease for equipment under operating leases currently in its portfolio. Depreciation expense on the Company’s equipment totaled $348 thousand and $423 thousand for the respective three months ended September 30, 2022 and 2021; and was $1.0 million and $1.2 million for the respective nine months ended September 30, 2022 and 2021. Total depreciation for the three months ended September 30, 2022 and 2021 include $7 thousand and $102 thousand of additional depreciation recorded to reflect quarter-to-date changes in estimated residual values of certain equipment generating revenue under month-to-month extensions. For the respective nine months ended September 30, 2022 and 2021, such additional depreciation totaled $14 thousand and $167 thousand. The 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 the estimated reduction in value.

IDC amortization expense related to the Company’s operating leases totaled $6 thousand and $9 thousand for the three months ended September 30, 2022 and 2021, respectively, and was $21 thousand and $24 thousand for the nine months ended September 30, 2022 and 2021.

All of the Company’s lease asset purchases and capital improvements were made during the years from 2016 through 2022.

Operating leases:

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

	Balance						Balance
	December 31,				Reclassifications		September 30,
	2021		Additions		or Dispositions		2022
Transportation, rail	$	1,723	$	—	$	—	$	1,723
Mining		2,749		—		—		2,749
Construction		3,725		—		(507)		3,218
Aviation		2,327		—		—		2,327
Paper processing		1,058		—		—		1,058
Agriculture		742		16		(742)		16
Materials handling		1,315		118		(82)		1,351
Transportation, other		97		—		—		97
		13,736		134		(1,331)		12,539
Less accumulated depreciation		(5,733)		(1,034)		1,112		(5,655)
Total	$	8,003	$	(900)	$	(219)	$	6,884

The average estimated residual value for assets on operating leases was 27% and 28% of the assets’ original cost at September 30, 2022 and December 31, 2021, respectively. There were no operating leases in non-accrual status at September 30, 2022 and December 31, 2021.

At September 30, 2022, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):

	Operating
	Leases
Three months ending December 31, 2022	$	427
Year ending December 31, 2023		1,652
2024		1,191
2025		536
2026		301
Thereafter		311
	$	4,418

The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of September 30, 2022, 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
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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Related Party Transactions

9 Months Ended

Sep. 30, 2022

Related Party Transactions [Abstract]

Related Party Transactions

4. 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.

Pursuant to the Operating Agreement, the Managing Member and/or affiliates earned fees and billed for reimbursements during the three and nine months ended September 30, 2022 and 2021 as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Administrative costs reimbursed to Managing Member and/or affiliates	$	74	$	92	$	230	$	274
Asset management fees to Managing Member		53		64		165		195
Acquisition and initial direct costs paid to Managing Member		2		3		4		17
	$	129	$	159	$	399	$	486

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Non-Recourse Debt

9 Months Ended

Sep. 30, 2022

Non-Recourse Debt [Abstract]

Non-Recourse Debt

5. Non-recourse debt:

At September 30, 2022, non-recourse debt consists of notes payable to financial institutions. The note payments are due in monthly installments. Interest on the notes range from 3.82% to 4.66% per annum. The notes are secured by assignments of lease payments and pledges of assets. At September 30, 2022, remaining gross operating lease rentals totaled approximately $1.3 million over the remaining lease terms and the carrying value of the pledged assets was $2.4 million. The notes mature from 2023 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, 2022	$	132	$	13	$	145
Year ending December 31, 2023		522		39		561
2024		288		20		308
2025		73		13		86
2026		76		9		85
Thereafter		156		7		163
	$	1,247	$	101	$	1,348

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Borrowing Facilities

9 Months Ended

Sep. 30, 2022

Borrowing Facilities [Abstract]

Borrowing Facilities

6. 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 June 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, 2022 and December 31, 2021, borrowings under the Credit Facility were as follows (in thousands):

	September 30,		December 31,
	2022		2021
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.		(685)		(730)
Total remaining available under the working capital, acquisition and warehouse facilities	$	54,315	$	54,270

The Company and its affiliates pay an annual commitment fee to have access to this line of credit. As of September 30, 2022, 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, 2022, the Company’s Tangible Net Worth requirement under the Credit Facility was $10.0 million, the permitted maximum leverage ratio was not to exceed 1.25 to 1, and the required minimum interest coverage ratio was not to be less than 2 to 1. At September 30, 2022, the Company’s minimum Tangible Net Worth, leverage ratio and interest coverage ratio, as calculated per the Credit Facility agreement, were $8.6 million, 0.15 to 1, and 21.51 to 1, respectively. As such, as of September 30, 2022, the Company’s leverage ratio and interest coverage ratio were in compliance with the conditions of the Credit Facility. However, the Company’s Tangible Net Worth did not meet the requirements of the Credit Facility. Accordingly, the Fund will not be able to borrow from the Credit Facility unless all material covenants are met. The Company does not anticipate that such inability to borrow from the Credit Facility will have any material impact on future operations.

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, 2022 and December 31, 2021.

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, 2022, the Company is the sole participant in the investment program. 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 and contingencies

9 Months Ended

Sep. 30, 2022

Commitments and contingencies [Abstract]

Commitments and contingencies

7. Commitments and contingencies:

At September 30, 2022, there was no commitment to purchase lease assets.

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Members' Capital

9 Months Ended

Sep. 30, 2022

Members' Capital [Abstract]

Members' Capital

8. Members’ capital:

A total of 2,565,749 Units were issued and outstanding at both September 30, 2022 and December 31, 2021, inclusive of 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, 2022 and 2021 were as follows (in thousands except Units and per Unit data):

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
	2022		2021		2022		2021
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, 2022

Fair Value Measurements [Abstract]

Fair Value Measurements

9. 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, 2022 and December 31, 2021 the Company’s warrants and investment securities were measured on a recurring basis. In addition, at December 31, 2021, the Company’s options - short position were also measured on a recurring basis. There were no assets or liabilities measured at fair value on a non-recurring basis as of September 30, 2022 and December 31, 2021.

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, 2022 and December 31, 2021, the calculated fair value of the Fund’s warrant portfolio approximated $145 thousand and $142 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 for the three and nine months ended September 30, 2022 and 2021 (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Fair value of warrants at beginning of period	$	144	$	157	$	142	$	187
Unrealized gain (loss) on fair value adjustment for warrants		1		4		3		(26)
Fair value of warrants at end of period	$	145	$	161	$	145	$	161

Investment in equity securities (recurring)

The Company’s equity 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. As of September 30, 2022 and December 31, 2021, the calculated fair value of the Fund’s investment securities approximated $42 thousand and $308 thousand, respectively. Such valuations are classified within Level 1 of the valuation hierarchy.

The fair value of investment securities that were accounted for on a recurring basis for the three and nine months ended September 30, 2022 and 2021 and classified as Level 1 are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Fair value of securities at the beginning of period	$	52	$	898	$	308	$	1,448
Securities sold		—		—		—		(619)
Unrealized (loss) gain on fair value adjustment for equity securities		(10)		(492)		(266)		(423)
Fair value of investment securities at the end of period	$	42	$	406	$	42	$	406

Options - short position (recurring)

The liability associated with the Company’s options – short position contracts were 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. During the three and nine months ended September 30, 2021, the Company recorded $34 thousand of unrealized gains on the options, which reduced the $50 thousand initial value of the options to $16 thousand at September 30, 2021. Such value was further reduced to $1 thousand as of December 31, 2021. The options both expired on January 22, 2022, upon which the Company realized $1 thousand of gains on the transactions.

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, 2022 and December 31, 2021:

September 30, 2022
	Valuation	Valuation	Unobservable	Range of Input Values
Name	Frequency	Technique	Inputs	(Weighted Average)
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.01 - $11.71 ($0.07)
			Exercise price	$0.02 - $9.00 ($0.07)
			Time to maturity (in years)	5.16 - 9.19 (5.32)
			Risk-free interest rate	3.86% - 4.05% (4.04%)
			Annualized volatility	40.26% - 115.04% (49.88%)

December 31, 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 ($0.07)
			Exercise price	$0.02 - $9.00 ($0.07)
			Time to maturity (in years)	5.91 - 9.94 (6.06)
			Risk-free interest rate	1.35% - 1.58% (1.37%)
			Annualized volatility	37.90% - 115.04% (55.09%)

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.

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, 2022 and December 31, 2021 (in thousands):

	Fair Value Measurements at September 30, 2022
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	3,062	$	3,062	$	—	$	—	$	3,062
Investment in equity securities		42		42		—		—		42
Warrants, fair value		145		—		—		145		145
Financial liabilities:
Non-recourse debt		1,247		—		—		1,214		1,214

	Fair Value Measurements at December 31, 2021
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	4,035	$	4,035	$	—	$	—	$	4,035
Investment in equity securities		308		308		—		—		308
Warrants, fair value		142		—		—		142		142
Financial liabilities:
Options - short position		1		1		—		—		1
Non-recourse debt		1,633		—		—		1,673		1,673

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Summary of Significant Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies [Abstract]

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 on accounts 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 three and nine months ended September 30, 2022 and 2021, and long-lived assets as of September 30, 2022 and December 31, 2021 relate to customers domiciled in the United States.

Accounts Receivable

Accounts receivable:

Accounts receivable represent the amounts billed under operating lease contracts 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 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.

Investment in Securities

Investment in securities:

From time to time, the Company may receive rights to purchase equity securities of its borrowers or receive warrants in connection with its lending arrangements.

Investment in equity securities

The Company’s equity 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 equity 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 $42 thousand and $308 thousand of investment in equity securities as of September 30, 2022 and December 31, 2021, respectively. All of such securities were publicly held and had readily determinable fair values. During the three months ended September 30, 2022 and 2021, the Company recorded unrealized losses of $10 thousand and $492 thousand, respectively, on its investment securities. During the nine months ended September 30, 2022 and 2021, the Company recorded unrealized losses of $266 thousand and $423 thousand, respectively. There were no impairment losses on securities during the three and nine months ended September 30, 2022 and 2021. During the prior year nine-month period, the Company recorded gains of $78 thousand on sales of securities, all of which were sold during the first half of 2021. There were no other sales of securities during the three and nine months ended September 30, 2022 and 2021.

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 $145 thousand and $142 thousand as of September 30, 2022 and December 31, 2021, respectively. The Company recorded unrealized gains of $1 thousand and $4 thousand on fair valuation of its warrants for the three months ended September 30, 2022 and 2021, respectively. During the nine months ended September 30, 2022 and 2021, the Company recorded unrealized gains of $3 thousand and unrealized losses of $26 thousand, respectively.

Options - short position

During the third quarter of 2021, the Company 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 Company recorded a liability for the initial options value totaling $38 thousand and $12 thousand, respectively. During the three and nine months ended September 30, 2021, the Company recorded unrealized gains totaling $34 thousand related to the options. Such realized gains reflect changes in the fair value of the options, and effectively reduces the liability related to the options. The options contracts both expired on January 21, 2022 with a strike price of $15.00 and $12.50, respectively. The Company realized gains totaling $1 thousand related to the expiration of the options.

Credit Risk

Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, operating lease 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 receivable represent amounts due from lessees in various industries, related to equipment on operating leases.

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.

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.

Asset Valuation

Asset valuation:

Recorded values of the Company’s leased asset portfolio are reviewed each 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.

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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Investment in Equipment and Leases, Net (Tables)

9 Months Ended

Sep. 30, 2022

Investment in Equipment and Leases, Net [Abstract]

Investment in Leases

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

	Balance		Additions/		Depreciation/		Balance
		December 31,	Dispositions/		Amortization			September 30,
	2021		Reclassifications		Expense		2022
Equipment under operating leases, net	$	8,003	$	(85)	$	(1,034)	$	6,884
Assets held for sale or lease, net		—		—		—		—
Initial direct costs, net		73		—		(21)		52
Total	$	8,076	$	(85)	$	(1,055)	$	6,936

Property on Operating Leases

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

	Balance						Balance
	December 31,				Reclassifications		September 30,
	2021		Additions		or Dispositions		2022
Transportation, rail	$	1,723	$	—	$	—	$	1,723
Mining		2,749		—		—		2,749
Construction		3,725		—		(507)		3,218
Aviation		2,327		—		—		2,327
Paper processing		1,058		—		—		1,058
Agriculture		742		16		(742)		16
Materials handling		1,315		118		(82)		1,351
Transportation, other		97		—		—		97
		13,736		134		(1,331)		12,539
Less accumulated depreciation		(5,733)		(1,034)		1,112		(5,655)
Total	$	8,003	$	(900)	$	(219)	$	6,884

Future Minimum Lease Payments Receivable

At September 30, 2022, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):

	Operating
	Leases
Three months ending December 31, 2022	$	427
Year ending December 31, 2023		1,652
2024		1,191
2025		536
2026		301
Thereafter		311
	$	4,418

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, 2022, 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
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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Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2022

Related Party Transactions [Abstract]

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

Pursuant to the Operating Agreement, the Managing Member and/or affiliates earned fees and billed for reimbursements during the three and nine months ended September 30, 2022 and 2021 as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Administrative costs reimbursed to Managing Member and/or affiliates	$	74	$	92	$	230	$	274
Asset management fees to Managing Member		53		64		165		195
Acquisition and initial direct costs paid to Managing Member		2		3		4		17
	$	129	$	159	$	399	$	486

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Non-Recourse Debt (Tables)

9 Months Ended

Sep. 30, 2022

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, 2022	$	132	$	13	$	145
Year ending December 31, 2023		522		39		561
2024		288		20		308
2025		73		13		86
2026		76		9		85
Thereafter		156		7		163
	$	1,247	$	101	$	1,348

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Borrowing Facilities (Tables)

9 Months Ended

Sep. 30, 2022

Borrowing Facilities [Abstract]

Borrowings Under the Facility

As of September 30, 2022 and December 31, 2021, borrowings under the Credit Facility were as follows (in thousands):

	September 30,		December 31,
	2022		2021
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.		(685)		(730)
Total remaining available under the working capital, acquisition and warehouse facilities	$	54,315	$	54,270

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Members' Capital (Tables)

9 Months Ended

Sep. 30, 2022

Members' Capital [Abstract]

Distributions to Other Members

Distributions to the Other Members for the three and nine months ended September 30, 2022 and 2021 were as follows (in thousands except Units and per Unit data):

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
	2022		2021		2022		2021
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, 2022

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 for the three and nine months ended September 30, 2022 and 2021 (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Fair value of warrants at beginning of period	$	144	$	157	$	142	$	187
Unrealized gain (loss) on fair value adjustment for warrants		1		4		3		(26)
Fair value of warrants at end of period	$	145	$	161	$	145	$	161

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, 2022 and 2021 and classified as Level 1 are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Fair value of securities at the beginning of period	$	52	$	898	$	308	$	1,448
Securities sold		—		—		—		(619)
Unrealized (loss) gain on fair value adjustment for equity securities		(10)		(492)		(266)		(423)
Fair value of investment securities at the end of period	$	42	$	406	$	42	$	406

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, 2022 and December 31, 2021:

September 30, 2022
	Valuation	Valuation	Unobservable	Range of Input Values
Name	Frequency	Technique	Inputs	(Weighted Average)
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.01 - $11.71 ($0.07)
			Exercise price	$0.02 - $9.00 ($0.07)
			Time to maturity (in years)	5.16 - 9.19 (5.32)
			Risk-free interest rate	3.86% - 4.05% (4.04%)
			Annualized volatility	40.26% - 115.04% (49.88%)

December 31, 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 ($0.07)
			Exercise price	$0.02 - $9.00 ($0.07)
			Time to maturity (in years)	5.91 - 9.94 (6.06)
			Risk-free interest rate	1.35% - 1.58% (1.37%)
			Annualized volatility	37.90% - 115.04% (55.09%)

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, 2022 and December 31, 2021 (in thousands):

	Fair Value Measurements at September 30, 2022
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	3,062	$	3,062	$	—	$	—	$	3,062
Investment in equity securities		42		42		—		—		42
Warrants, fair value		145		—		—		145		145
Financial liabilities:
Non-recourse debt		1,247		—		—		1,214		1,214

	Fair Value Measurements at December 31, 2021
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	4,035	$	4,035	$	—	$	—	$	4,035
Investment in equity securities		308		308		—		—		308
Warrants, fair value		142		—		—		142		142
Financial liabilities:
Options - short position		1		1		—		—		1
Non-recourse debt		1,633		—		—		1,673		1,673

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Organization and Limited Liability Company Matters (Narrative) (Details) - USD ($)	9 Months Ended	24 Months Ended
	Sep. 30, 2022	Jan. 05, 2018	Jun. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020	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)			3 Months Ended		9 Months Ended		12 Months Ended
	Jan. 22, 2022 USD ($)	Jan. 21, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) segment	Sep. 30, 2021 USD ($) contract $ / shares	Dec. 31, 2021 USD ($) $ / shares	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	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			$ 1,000	$ 1,000	$ 4,000	$ 3,000
Investment in equity securities			42,000		42,000		$ 308,000
Gain on sale of securities					0	78,000
Unrealized loss on fair value adjustment for equity securities			10,000	492,000	266,000	423,000
Options - short position			0	16,000	0	16,000	$ 1,000			$ 50,000
Options, short position, contract expiration date							Jan. 21, 2022
Unrealized gain on fair valuation of options				34,000	$ 0	34,000
Number of operating segments | segment					1
Number of reportable segments | segment					1
Unrealized gain (loss) on fair value adjustment for warrants			1,000	4,000	$ 3,000	(26,000)
Warrants, fair value			145,000	161,000	145,000	161,000	$ 142,000	$ 144,000	$ 157,000
Impairment on investments			0	0	0	0
Realized gain on sale of options	$ (1,000)	$ 1,000			1,000	0
Securities With Readily Determinable Fair Values [Member]
Summary of Significant Accounting Policies [Line Items]
Unrealized loss on fair value adjustment for equity securities			$ 10,000	492,000	266,000	$ 423,000
Short Position Options Sold - Tranche One [Member]
Summary of Significant Accounting Policies [Line Items]
Short position options, number of contracts sold | contract						125
Short position options contracts sold, premium per share | $ / shares						$ 3.00
Investment in short options, initial				38,000		$ 38,000
Options, short position, strike price per share | $ / shares							$ 15.00
Short Position Options Sold - Tranche Two [Member]
Summary of Significant Accounting Policies [Line Items]
Short position options, number of contracts sold | contract						75
Short position options contracts sold, premium per share | $ / shares						$ 1.64
Investment in short options, initial				$ 12,000		$ 12,000
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					$ 10,000,000,000
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			$ 250,000		$ 250,000
Operating leases, initial terms			120 months		120 months
Operating leases, period of review for impairment					90 days

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Investment in Equipment and Leases, Net (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Lessor, Lease, Description [Line Items]
Depreciation of operating lease assets	$ 348,000	$ 423,000	$ 1,034,000	$ 1,179,000
Amortization of initial direct costs	$ 6,000	9,000	$ 21,000	24,000
Average estimated residual value of assets on operating leases	27.00%		27.00%		28.00%
Operating leases in non-accrual status	$ 0		$ 0		$ 0
Equipment on operating leases, depreciation method			straight-line
Operating Leases [Member]
Lessor, Lease, Description [Line Items]
Lease investment impairment charges			$ 0	0
Depreciation of operating lease assets	348,000	423,000	1,000,000.0	1,200,000
Additional depreciation	7,000	102,000	14,000	167,000
Amortization of initial direct costs	$ 6,000	$ 9,000	$ 21,000	$ 24,000

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Investment in Equipment and Leases, Net (Investment in Leases) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Leases Disclosure [Line Items]
Balance December 31, 2021	$ 8,076
Additions/ Dispositions/ Reclassifications	(85)
Depreciation/ Amortization Expense	(1,055)
Balance September 30, 2022	6,936
Initial direct costs, net [Member]
Leases Disclosure [Line Items]
Balance December 31, 2021	73
Additions/ Dispositions/ Reclassifications	0
Depreciation/ Amortization Expense	(21)
Balance September 30, 2022	52
Assets held for sale or lease, net [Member]
Leases Disclosure [Line Items]
Balance December 31, 2021
Additions/ Dispositions/ Reclassifications	0
Depreciation/ Amortization Expense	0
Equipment under operating leases, net [Member]
Leases Disclosure [Line Items]
Balance December 31, 2021	8,003
Additions/ Dispositions/ Reclassifications	(85)
Depreciation/ Amortization Expense	(1,034)
Balance September 30, 2022	$ 6,884

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Investment in Equipment and Leases, Net (Property on Operating Leases) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	$ 12,539	$ 13,736
Less accumulated depreciation	(5,655)	(5,733)
Property on operating leases, net	6,884	8,003
Additions, gross	134
Additions, less accumulated depreciation	(1,034)
Additions, net	(900)
Reclassifications or Dispositions, gross	(1,331)
Reclassifications or Dispositions, less accumulated depreciation	1,112
Reclassifications or Dispositions, net	(219)
Railroad [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	1,723	1,723
Additions, gross	0
Reclassifications or Dispositions, gross	0
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	3,218	3,725
Additions, gross	0
Reclassifications or Dispositions, gross	(507)
Aviation [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	2,327	2,327
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
Agriculture [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	16	742
Additions, gross	16
Reclassifications or Dispositions, gross	(742)
Materials Handling [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	1,351	1,315
Additions, gross	118
Reclassifications or Dispositions, gross	(82)
Transportation, other [Member]
Lessor, Lease, Description [Line Items]
Property on operating leases, gross	97	$ 97
Additions, gross	0
Reclassifications or Dispositions, gross	$ 0

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Investment in Equipment and Leases, Net (Future Minimum Lease Payments Receivable) (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Operating Leases
Three months ending December 31, 2022	$ 427
Year ending December 31, 2023	1,652
2024	1,191
2025	536
2026	301
Thereafter	311
Operating leases, total	$ 4,418

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Investment in Equipment and Leases, Net (Schedule of Useful Lives of Lease Assets) (Details)	9 Months Ended
	Sep. 30, 2022
Railroad [Member] | Minimum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	35 years
Railroad [Member] | Maximum [Member]
Lessor, Lease, Description [Line Items]
Useful lives of lease assets	50 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

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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, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Related Party Transactions [Abstract]
Administrative costs reimbursed to Managing Member and/or affiliates	$ 74	$ 92	$ 230	$ 274
Asset management fees to Managing Member	53	64	165	195
Acquisition and initial direct costs paid to Managing Member	2	3	4	17
Related party transactions, total	$ 129	$ 159	$ 399	$ 486

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Non-Recourse Debt (Narrative) (Details) $ in Millions	9 Months Ended
	Sep. 30, 2022 USD ($)
Debt Instrument [Line Items]
Gross operating lease rentals and future payments on direct financing leases	$ 1.3
Assets pledged as collateral	$ 2.4
Notes maturity date, description	The notes mature from 2023 through 2028
Minimum [Member]
Debt Instrument [Line Items]
Fixed interest rate on notes	3.82%
Maximum [Member]
Debt Instrument [Line Items]
Fixed interest rate on notes	4.66%

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Non-Recourse Debt (Future Minimum Payments of Non-Recourse Debt) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Principal
Three months ending December 31, 2022	$ 132
Year ending December 31, 2023	522
2024	288
2025	73
2026	76
Thereafter	156
Secured Debt, Total	1,247	$ 1,633
Interest
Three months ending December 31, 2022	13
Year ending December 31, 2023	39
2024	20
2025	13
2026	9
Thereafter	7
Long-term debt interest, total	101
Total
Three months ending December 31, 2022	145
Year ending December 31, 2023	561
2024	308
2025	86
2026	85
Thereafter	163
Principal and interest, total	$ 1,348

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Borrowing Facilities (Narrative) (Details) $ in Thousands		9 Months Ended
	Jun. 30, 2021	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Line of Credit Facility [Line Items]
Maximum amount of Credit Facility		$ 55,000	$ 55,000
Tangible net worth		$ 8,600
Leverage ratio		0.15
Interest Coverage ratio		21.51
Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum amount of Credit Facility		$ 55,000
Line of Credit Facility, expiration date	Jun. 30, 2021	Jun. 30, 2023
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] | 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] | Covenant Requirement [Member]
Line of Credit Facility [Line Items]
Leverage ratio		1.25

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Borrowing Facilities (Borrowings Under the Facility) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
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	(685)	(730)
Total remaining available under the working capital, acquisition and warehouse facilities	$ 54,315	$ 54,270

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Commitments and contingencies (Narrative) (Details)	9 Months Ended
	Sep. 30, 2022 USD ($)
Commitments and contingencies [Abstract]
Commitments to purchase lease assets	$ 0

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Members' Capital (Narrative) (Details) - shares	9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020
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

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Members' Capital (Distributions to Other Members) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
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
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
Weighted average distributions per Unit	$ 0.20	$ 0.20	$ 0.60	$ 0.60

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Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands			3 Months Ended	9 Months Ended
	Jan. 22, 2022	Jan. 21, 2021	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021	Dec. 31, 2020
Warrants, fair value			$ 161	$ 145	$ 161	$ 144	$ 142	$ 157
Investment in equity securities			406	42	406	$ 52	308	$ 898
Options - short position			16	0	16		1		$ 50
Unrealized gain on fair valuation of options			$ 34	0	34
Realized gain on sale of options	$ 1	$ (1)		(1)	$ 0
Non-recurring [Member]
Asset, fair value				$ 0			$ 0

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Fair Value Measurements (Fair Value, Warrants Measured on Recurring Basis) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Fair value of warrants at beginning of year	$ 144	$ 157	$ 142
Unrealized loss on fair valuation of warrants	1	4	3	$ (26)
Fair value of warrants at end of year	145	161	145	161
Fair Value, Inputs, Level 3 [Member]
Fair value of warrants at beginning of year			142	187
Unrealized loss on fair valuation of warrants			3	(26)
Fair value of warrants at end of year	$ 145	$ 161	$ 145	$ 161

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Fair Value Measurements (Fair Value, Investment Securities Measured on Recurring Basis) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Fair value of securities at the beginning of year	$ 52	$ 898	$ 308
Unrealized loss on fair value adjustment for equity securities	(10)	(492)	(266)	$ (423)
Fair value of securities at the end of year	42	406	42	406
Fair Value, Inputs, Level 1 [Member]
Fair value of securities at the beginning of year			308	1,448
Securities sold				(619)
Unrealized loss on fair value adjustment for equity securities			(266)	(423)
Fair value of securities at the end of year	$ 42	$ 406	$ 42	$ 406

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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, 2022	Sep. 30, 2021
Fair Value Measurements [Abstract]
Unrealized gain on fair value adjustment for options - short position	$ (34)	$ 0	$ (34)

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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, 2022 USD ($) Y	Dec. 31, 2021 $ / shares Y USD ($)
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	5.16	5.91
Minimum [Member] | Unobservable Inputs, Risk Free Interest Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.0386	0.0135
Minimum [Member] | Unobservable Inputs, Annualized Volatility [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.4026	0.3790
Maximum [Member] | Unobservable Inputs, Stock Price [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.1171	0.1171
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	9.19	9.94
Maximum [Member] | Unobservable Inputs, Risk Free Interest Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.0405	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	0.0007	0.0007
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	(5.32)	(6.06)
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	0.0404	0.0137
Weighted Average [Member] | Unobservable Inputs, Annualized Volatility [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Warrants, Range of Input Values	0.4988	0.5509

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Fair Value Measurements (Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020
Financial assets:
Cash and cash equivalents	$ 3,062		$ 4,035
Investment in equity securities	42	$ 52	308	$ 406	$ 898
Warrants, fair value	145	$ 144	142	161	$ 157
Financial liabilities:
Options - short position	0		1	16		$ 50
Non-recourse debt	1,214		1,673
Carrying Amount [Member]
Financial assets:
Cash and cash equivalents	3,062		4,035
Investment in equity securities	42		308
Warrants, fair value	145		142
Financial liabilities:
Options - short position			1
Non-recourse debt	1,247		1,633
Fair Value, Inputs, Level 1 [Member]
Financial assets:
Cash and cash equivalents	3,062		4,035
Investment in equity securities	42		308	406		1,448
Warrants, fair value	0		0
Financial liabilities:
Options - short position			1
Non-recourse debt	0		0
Fair Value, Inputs, Level 2 [Member]
Financial assets:
Cash and cash equivalents	0		0
Investment in equity 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
Investment in equity securities	0		0
Warrants, fair value	145		142	$ 161		$ 187
Financial liabilities:
Options - short position			0
Non-recourse debt	$ 1,214		$ 1,673