Attached files

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EXCEL - IDEA: XBRL DOCUMENT - ATEL 15, LLC	Financial_Report.xls
EX-31.2 - EXHIBIT 31.2 - ATEL 15, LLC	v385907_ex31x2.htm
EX-31.1 - EXHIBIT 31.1 - ATEL 15, LLC	v385907_ex31x1.htm
EX-32.2 - EXHIBIT 32.2 - ATEL 15, LLC	v385907_ex32x2.htm
EX-32.1 - EXHIBIT 32.1 - ATEL 15, LLC	v385907_ex32x1.htm

Form 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


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

For the quarterly period ended June 30, 2014


o		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 333-174418

ATEL 15, LLC

(Exact name of registrant as specified in its charter)


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

The Transamerica Pyramid, 600 Montgomery Street, 9th Floor, San Francisco, California 94111
(Address of principal executive offices)

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

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

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

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 x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

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

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company x

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

The number of Limited Liability Company Units outstanding as of July 31, 2014 was 6,620,221.

DOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS

ATEL 15, LLC

Index


Part I. Financial Information			3
Item 1. Financial Statements (Unaudited)			3
Balance Sheets, June 30, 2014 and December 31, 2013			3
Statements of Operations for the three and six months ended June 30, 2014 and 2013			4
Statements of Changes in Members’ Capital for the year ended December 31, 2013 and for the six months ended June 30, 2014			5
Statements of Cash Flows for the three and six months ended June 30, 2014 and 2013			6
Notes to the Financial Statements			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			22
Item 4. Controls and Procedures			29
Part II. Other Information			30
Item 1. Legal Proceedings			30
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			30
Item 3. Defaults Upon Senior Securities			30
Item 4. Mine Safety Disclosures			30
Item 5. Other Information			30
Item 6. Exhibits			30

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

ATEL 15, LLC

BALANCE SHEETS

JUNE 30, 2014 AND DECEMBER 31, 2013
(in thousands)


	June 30, 2014		December 31, 2013
	(Unaudited)
ASSETS
Cash and cash equivalents	$	4,151	$	12,749
Accounts receivable, net of allowance for doubtful accounts of $44 at June 30, 2014 and $0 at December 31, 2013		274		240
Notes receivable, net of unearned interest income of $752 at June 30, 2014 and $790 at December 31, 2013		4,560		4,970
Due from affiliates		561		—
Investment in securities		125		32
Fair value of warrants		640		784
Investments in equipment and leases, net of accumulated depreciation of $9,351 at June 30, 2014 and $5,381 at December 31, 2013		53,003		49,731
Prepaid expenses and other assets		57		38
Total assets	$	63,371	$	68,544
LIABILITIES AND MEMBERS’ CAPITAL
Accounts payable and accrued liabilities:
Managing Member	$	46	$	77
Affiliates		—		126
Accrued distributions to Other Members		624		620
Other		149		94
Non-recourse debt		16,536		17,584
Long-term debt		2,068		2,068
Unearned operating lease income and/or advance payments		246		258
Total liabilities		19,669		20,827
Commitments and contingencies
Members’ capital:
Managing Member		—		—
Other Members		43,702		47,717
Total Members’ capital		43,702		47,717
Total liabilities and Members’ capital	$	63,371	$	68,544

See accompanying notes.

TABLE OF CONTENTS

ATEL 15, LLC

STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS
ENDED JUNE 30, 2014 AND 2013
(in thousands except units and per unit data)
(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Revenues:
Leasing and lending activities:
Operating leases	$	2,384		$	1,001		$	4,735		$	1,830
Direct financing leases		1			2			2			5
Interest on notes receivable		133			122			264			245
(Loss) gain on sales of lease assets and early termination of notes		(10	)		10			21			10
Gain on sales or dispositions of securities		37			—			43			—
Unrealized loss on fair valuation of warrants		(4	)		—			(144	)		—
Other		21			9			37			17
Total revenues		2,562			1,144			4,958			2,107
Expenses:
Depreciation of operating lease assets		2,001			858			3,991			1,561
Asset management fees to Managing Member		120			33			244			64
Acquisition expense		(157	)		428			89			686
Cost reimbursements to Managing Member and/or affiliates		336			150			645			291
Provision for credit losses		44			—			44			—
Amortization of initial direct costs		18			6			33			11
Interest expense		143			8			286			17
Professional fees		18			20			78			60
Outside services		13			16			34			30
Railcar maintenance		54			46			83			61
Bank charges		53			27			105			56
Other		51			29			121			57
Total expenses		2,694			1,621			5,753			2,894
Net loss	$	(132	)	$	(477	)	$	(795	)	$	(787	)
Net income (loss):
Managing Member	$	120		$	82		$	241		$	150
Other Members		(252	)		(559	)		(1,036	)		(937	)
	$	(132	)	$	(477	)	$	(795	)	$	(787	)
Net loss per Limited Liability Company Unit (Other Members)	$	(0.04	)	$	(0.12	)	$	(0.16	)	$	(0.23	)
Weighted average number of Units outstanding		6,620,971			4,510,077			6,620,971			4,118,119

See accompanying notes.

TABLE OF CONTENTS

ATEL 15, LLC

STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2013
AND FOR THE SIX MONTHS ENDED
JUNE 30, 2014
(in thousands except units and per unit data)


				Amount
	Units			Other Members			Managing Member			Total
Balance December 31, 2012		3,358,770		$	24,745		$	—		$	24,745
Capital contributions		3,294,401			32,944			—			32,944
Rescissions of Units		(7,200	)		(68	)		—			(68	)
Repurchases of Units		(25,000	)		(174	)		—			(174	)
Less selling commissions to affiliates		—			(2,958	)		—			(2,958	)
Syndication costs		—			(652	)		—			(652	)
Distributions to Other Members ($0.90 per Unit)		—			(4,528	)		—			(4,528	)
Distributions to Managing Member		—			—			(367	)		(367	)
Net (loss) income		—			(1,592	)		367			(1,225	)
Balance December 31, 2013		6,620,971			47,717			—			47,717
Distributions to Other Members ($0.45 per Unit)		—			(2,979	)		—			(2,979	)
Distributions to Managing Member		—			—			(241	)		(241	)
Net (loss) income		—			(1,036	)		241			(795	)
Balance June 30, 2014 (Unaudited)		6,620,971		$	43,702		$	—		$	43,702

See accompanying notes.

TABLE OF CONTENTS

ATEL 15, LLC

STATEMENTS OF CASH FLOWS

FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2014 AND 2013
(in thousands)
(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Operating activities:
Net loss	$	(132	)	$	(477	)	$	(795	)	$	(787	)
Adjustment to reconcile net loss to cash provided by operating activities:
Loss (gain) on sales of lease assets and early termination of notes		10			(10	)		(21	)		(10	)
Depreciation of operating lease assets		2,001			858			3,991			1,561
Amortization of initial direct costs		18			6			33			11
Provision for credit losses		44			—			44			—
Gain on sale of securities		(37	)		—			(43	)		—
Unrealized loss on fair valuation of warrants		4			—			144			—
Changes in operating assets and liabilities:
Accounts receivable		(50	)		59			(78	)		(10	)
Prepaid expenses and other assets		3			3			(19	)		8
Accounts payable, Managing Member		(2	)		(29	)		(31	)		(28	)
Accounts payable, other		24			(208	)		50			15
Accrued liabilities, affiliates		(245	)		79			(687	)		(66	)
Unearned fee income related to notes receivable		(3	)		(4	)		(12	)		(10	)
Unearned operating lease income and/or advance payments		102			128			(12	)		79
Net cash provided by operating activities		1,737			405			2,564			763
Investing activities:
Purchases of equipment on operating leases		(5,803	)		(3,035	)		(7,222	)		(5,783	)
Purchase of securities		(93	)		—			(93	)		—
Proceeds from sales of lease assets and early termination of notes		211			333			801			333
Proceeds from sale of securities		37			—			43			—
Payments of initial direct costs		(69	)		(24	)		(167	)		(32	)
Principal payments received on direct financing leases		10			9			20			18
Note receivable advances		(1,450	)		(250	)		(1,450	)		(300	)
Principal payments received on notes receivable		473			334			1,170			704
Net cash used in investing activities		(6,684	)		(2,633	)		(6,898	)		(5,060	)
Financing activities:
Borrowings under non-recourse debt		865			—			865			—
Repayments under non-recourse debt		(1,005	)		(207	)		(1,913	)		(413	)
Selling commissions to affiliates		—			(685	)		—			(1,366	)
Syndication costs paid to Managing Member and affiliates		—			(272	)		—			(272	)
Distributions to Other Members		(1,489	)		(937	)		(2,975	)		(1,683	)
Distributions to Managing Member		(120	)		(75	)		(241	)		(136	)
Capital contributions		—			7,873			—			15,546
Rescissions of Units		—			(66	)		—			(66	)
Net cash (used in) provided by financing activities		(1,749	)		5,631			(4,264	)		11,610
Net (decrease) increase in cash and cash equivalents		(6,696	)		3,403			(8,598	)		7,313
Cash and cash equivalents at beginning of period		10,847			9,968			12,749			6,058
Cash and cash equivalents at end of period	$	4,151		$	13,371		$	4,151		$	13,371

See accompanying notes.

TABLE OF CONTENTS

ATEL 15, LLC

STATEMENTS OF CASH FLOWS – (continued)

FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2014 AND 2013
(in thousands)
(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	141	$	8	$	291	$	17
Cash paid during the period for taxes	$	7	$	2	$	8	$	2
Schedule of non-cash investing and financing transactions:
Distributions payable to Other Members at period-end	$	624	$	447	$	624	$	447
Distributions payable to Managing Member at period-end	$	50	$	36	$	50	$	36
Payables to Managing Member and affiliates at period-end (syndication costs)	$	—	$	1,611	$	—	$	1,611
Purchases of equipment, included in accounts payable, other	$	5	$	—	$	5	$	—

See accompanying notes.

TABLE OF CONTENTS

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

1. Organization and Limited Liability Company matters:

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

As of December 21, 2011, 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 2012. Pennsylvania subscriptions are subject to a separate escrow and are released to the Fund only when aggregate subscriptions for all investors equal to not less than $7.5 million. Total contributions to the Fund exceeded $7.5 million on April 4, 2012, at which time a request was processed to release the Pennsylvania escrowed amounts. The offering was terminated on October 28, 2013.

Through June 30, 2014, cumulative contributions of $66.5 million (inclusive of the $500 initial Member’s capital investment), representing 6,653,171 Units, have been received. Through the same date, a net total of $242 thousand of such contributions (representing 32,200 Units) have been rescinded or repurchased (net of distributions paid and allocated syndication costs) by the Company. As of June 30, 2014, 6,620,971 Units were issued and outstanding.

The Fund, or Managing Member on behalf of the Fund, has and will continue to incur costs in connection with the organization, registration and issuance of the Units. The amount of such costs to be borne by the Fund is limited by certain provisions of the Operating Agreement.

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 Unitholders, 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 has been sold or otherwise disposed. The Company is governed by its Operating Agreement.

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

These unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto contained in the report on Form 10-K for the year ended December 31, 2013, filed with the Securities and Exchange Commission.

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ATEL 15, LLC

NOTES TO 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 six months ended June 30, 2014 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 June 30, 2014 up until the issuance of the financial statements. No events were noted which would require disclosure in the footnotes to the financial statements.

Use of Estimates:

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

Segment reporting:

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

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

Investment in securities:

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

TABLE OF CONTENTS

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

2. Summary of significant accounting policies: - (continued)

Purchased securities

Purchased securities are generally not registered for public sale and are carried at cost. Such securities are adjusted to fair value if the fair value is less than the carrying value and such impairment is deemed by the Managing Member to be other than temporary. 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 $125 thousand and $32 thousand of purchased securities at June 30, 2014 and December 31, 2013, respectively. There were no sales or dispositions of purchased securities during the three and six months ended June 30, 2014 and 2013.

Warrants

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are carried at an estimated fair value on the balance sheet at the end of the period, as determined by the Managing Member. During the three and six months ended June 30, 2014, the Company recorded unrealized losses of $4 thousand and $144 thousand, respectively, on fair valuation of its warrants. Such unrealized losses reduced the estimated fair value of the Company’s portfolio of warrants to $640 thousand at June 30, 2014 from $784 thousand at December 31, 2013. There were no unrealized gains or losses recorded during the prior year period. The Company recognized gains of $37 thousand and $43 thousand on the net exercise of warrants during the respective three and six months ended June 30, 2014. There was no net exercise of warrants during the three and six months ended June 30, 2013.

Per Unit data:

Net loss per Unit is based upon the weighted average number of Other Members Units outstanding during the period.

Recent accounting pronouncements:

Recent accounting standards updates as issued by the Financial Accounting Standards Board (FASB) were evaluated and determined to be not applicable to the Company.

3. Notes receivable, net:

The Company has various notes receivables from borrowers who have financed the purchase of equipment through the Company. The terms of the notes receivable are from 30 to 42 months and bear interest at rates ranging from 11.26% to 17.31% per annum. The notes are secured by the equipment financed. The notes mature from 2015 through 2017.

As of June 30, 2014, a note receivable with a net book value approximating $150 thousand was on non-accrual status and was considered impaired relative to its payment terms. Such note was modified to defer the repayment of principal until November 1, 2014 while maintaining interest-only payments at its original rate of 12.00%. Upon resumption of principal and interest payments, such monthly payments were adjusted such that the ultimate total payments would reflect interest earned at a composite rate of 18.00% per annum as related to the entire term of the indebtedness from the original funding date. As of June 30, 2014, the note was current with respect to its restructured terms; and, management has determined that no adjustment was necessary to reflect fair value. No notes receivable were impaired or in non-accrual status as of December 31, 2013.

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ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

3. Notes receivable, net: - (continued)

As of June 30, 2014, the minimum future payments receivable are as follows (in thousands):


Six months ending December 31, 2014	$	1,215
Year ending December 31, 2015		2,047
2016		1,613
2017		415
		5,290
Less: portion representing unearned interest income		(752	)
		4,538
Unamortized initial direct costs		22
Notes receivable, net	$	4,560

Initial direct costs (“IDC”) amortization expense related to notes receivable and the Company’s operating and direct financing leases for the three and six months ended June 30, 2014 and 2013 are as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
IDC amortization – notes receivable	$	4	$	4	$	9	$	7
IDC amortization – lease assets		14		2		24		4
Total	$	18	$	6	$	33	$	11

4. Allowance for credit losses:

The allowance for credit losses at June 30, 2014 totaled $44 thousand and was solely related to delinquent operating lease receivables. There was neither an allowance for credit losses nor delinquent amounts due to the Company as of December 31, 2013.

5. Investment in equipment and leases, net:

The Company’s investment in leases consists of the following (in thousands):


	Balance December 31, 2013		Reclassifications & Additions/ Dispositions		Depreciation/ Amortization Expense or Amortization of Leases			Balance June 30, 2014
Net investment in operating leases	$	49,586	$	7,163	$	(3,991	)	$	52,758
Net investment in direct financing leases		51		—		(20	)		31
Initial direct costs, net of accumulated amortization of $42 at June 30, 2014 and $18 at December 31, 2013		94		144		(24	)		214
Total	$	49,731	$	7,307	$	(4,035	)	$	53,003

Additions to net investment in operating lease assets are stated at cost. IDC amortization expense related to operating leases and direct financing leases totaled $14 thousand and $2 thousand for the respective three months ended June 30, 2014 and 2013, and $24 thousand and $4 thousand for the respective six months ended June 30, 2014 and 2013 (See Note 3).

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ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

5. Investment in equipment and leases, net: - (continued)

Impairment of investments in leases:

Management periodically reviews the carrying values of its lease assets. The fair value of the assets is determined based on the sum of the discounted estimated future cash flows of the assets. Impairment losses are recorded as an adjustment to the net investment in operating leases. As a result of these reviews, management determined that no impairment losses existed during the respective three and six months ended June 30, 2014 and 2013.

The Company utilizes a straight-line depreciation method for equipment in all of the categories currently in its portfolio of lease transactions. Depreciation expense on the Company’s equipment totaled $2.0 million and $858 thousand for the respective three months ended June 30, 2014 and 2013, and was $4.0 million and $1.6 million for the respective six months ended June 30, 2014 and 2013.

Operating leases:

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


	Balance December 31, 2013			Additions			Reclassifications or Dispositions			Balance June 30, 2014
Marine vessel	$	19,410		$	—		$	—		$	19,410
Manufacturing		11,327			—			—			11,327
Transportation, rail		10,921			104			(84	)		10,941
Food processing		5,200			—			—			5,200
Coal Terminal		—			5,084			—			5,084
Materials handling		2,520			1,526			—			4,046
Construction		2,244			234			—			2,478
Research		2,250			—			—			2,250
Agriculture		574			—			—			574
Computer		393			—			—			393
Aviation		—			279			—			279
Cleaning & maintenance		51			—			—			51
Transportation		48			—			—			48
Other		28			—			—			28
		54,966			7,227			(84	)		62,109
Less accumulated depreciation		(5,380	)		(3,991	)		20			(9,351	)
Total	$	49,586		$	3,236		$	(64	)	$	52,758

The average estimated residual value for assets on operating leases was 43% and 42% of the assets’ original cost at June 30, 2014 and December 31, 2013, respectively. There were no operating leases in non-accrual status as of June 30, 2014 and December 31, 2013.

All of the Company’s leased property was acquired beginning in January 2012 through June 2014.

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ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

5. Investment in equipment and leases, net: - (continued)

Direct financing leases:

As of June 30, 2014 and December 31, 2013, investment in direct financing leases consists of research equipment. The components of the Company’s investment in direct financing leases as of June 30, 2014 and December 31, 2013 are as follows (in thousands):


	June 30, 2014			December 31, 2013
Total minimum lease payments receivable	$	32		$	54
Estimated residual values of leased equipment (unguaranteed)		—			—
Investment in direct financing leases		32			54
Less unearned income		(1	)		(3	)
Net investment in direct financing leases	$	31		$	51

At June 30, 2014, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):


	Operating Leases		Direct Financing Leases		Total
Six months ending December 31, 2014	$	5,313	$	20	$	5,333
Year ending December 31, 2015		9,923		12		9,935
2016		6,583		—		6,583
2017		4,522		—		4,522
2018		4,099		—		4,099
2019		1,492		—		1,492
Thereafter		677		—		677
	$	32,609	$	32	$	32,641

6. Related party transactions:

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

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

Each of AFS and ATEL Leasing Corporation (“ALC”) is a wholly-owned subsidiary of ATEL Capital Group and performs services for the Company 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.

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ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

6. Related party transactions: - (continued)

During the respective three and six months ended June 30, 2014 and 2013, the Managing Member and/or affiliates earned fees and commissions, and billed for reimbursements pursuant to the Operating Agreement as follows (in thousands):


	Three Months Ended June 30,					Six Months Ended June 30,
	2014			2013		2014		2013
Selling commissions, equal to 9% of the selling price of the Limited Liability Company Units, deducted from Other Members’ capital	$	—		$	701	$	—	$	1,392
Reimbursement of other syndication costs to Managing Member and/or affiliates, deducted from Other Members’ capital		—			514		—		1,122
Administrative costs reimbursed to Managing Member and/or affiliates		336			150		645		291
Asset management fees to Managing Member		120			33		244		64
Acquisition and initial direct costs paid to Managing Member		(88	)		451		256		718
	$	368		$	1,849	$	1,145	$	3,587

7. Syndication Costs:

Syndication costs are reflected as a reduction to Members’ capital as such costs are netted against the capital raised. The amount shown is primarily comprised of selling commissions as well as fees pertaining to the organization of the Fund, document preparation, regulatory filing fees, and accounting and legal costs. There were no syndication costs for the three and six months ended June 30, 2014 as such efforts and related costs ceased upon the termination of the Fund’s offering on October 28, 2013. By comparison, syndication costs totaled $1.2 million and $2.5 million for the respective three and six months ended June 30, 2013.

The Operating Agreement places a limit for cost reimbursements to the Managing Member and/or affiliates. When added to selling commissions, such cost reimbursements may not exceed a total equal to 15% of all offering proceeds. As of June 30, 2014, the Company had no syndication costs in excess of the limitation. The limitation on the amount of syndication costs pursuant to the Operating Agreement is determined on the date of termination of the offering. At such time, the Manager guarantees repayment of any excess syndication costs (above the limitation) which it may have collected from the Company, which guarantee is without recourse or reimbursement by the Fund.

8. Non-recourse debt:

At June 30, 2014, non-recourse debt consists of notes payable to a financial institution. The note payments are due in monthly installments. Interest on the notes range from 1.78% to 3.66% per annum. The notes are secured by assignments of lease payments and pledges of assets. At June 30, 2014, gross operating lease rentals and future payments on direct financing leases totaled approximately $17.7 million over the remaining lease terms; and the carrying value of the pledged assets is $28.7 million. The notes mature from 2015 through 2020.

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 lender on (and only on) the discounted lease transactions. The lender has 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

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ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

8. Non-recourse debt: - (continued)

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 lender, such as warranties as to genuineness of the transaction parties’ signatures, as to the genuineness of the respective lease chattel paper or the transaction as a whole, or as to the Company’s good title to or perfected interest in the secured collateral, as well as similar representations, warranties and covenants typically provided by non-recourse borrowers and customary in the equipment finance industry, and are viewed by such industry as being consistent with non-recourse discount financing obligations. Accordingly, as there are no financial covenants or ratios imposed on the Company in connection with the non-recourse debt, the Company has determined that there are no material covenants with respect to the non-recourse debt that warrant footnote disclosure.

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


	Principal		Interest		Total
Six months ending December 31, 2014	$	2,116	$	229	$	2,345
Year ending December 31, 2015		3,887		375		4,262
2016		3,025		277		3,302
2017		3,117		185		3,302
2018		3,211		91		3,302
2019		1,135		16		1,151
Thereafter		45		—		45
	$	16,536	$	1,173	$	17,709

9. Long-term debt:

As of June 30, 2014, the $2.1 million of long-term debt consists of a note payable to a lender. Such debt was utilized during the fourth quarter of 2013 to partially fund the marine vessel and related bareboat charter purchased by the Fund and its affiliate, ATEL 14, LLC. The note bears interest at a fixed-rate of 3.5% per annum, to accrue in arrears on a monthly basis. The full pro rata principal amount of $2.1 million plus all outstanding accrued and unpaid interest of approximately $400 thousand shall be paid in one payment of $2.5 million due on May 25, 2019. The note is recourse to the residual value of the vessel which is expected to be well in excess of the note amount. In addition, the lender has recourse to the Fund’s general assets up to $2.5 million. The note does not contain any material financial covenants and is guaranteed as a senior obligation of the Fund.

10. Borrowing facilities:

Effective May 25, 2012, the Company participates with AFS and certain of its affiliates in a revolving credit facility (the “Credit Facility”) with a syndicate of financial institutions. The Credit Facility is comprised of a working capital facility to AFS, an acquisition facility (the “Acquisition Facility”) and a warehouse facility (the “Warehouse Facility”) to AFS, the Company and affiliates, and a venture facility available to an affiliate. The Credit Facility was for an amount up to $60 million and set to expire in June 2014. During January 2014, the line was increased to $75 million, an affiliated participant added, and the expiration extended to June 2015. 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 under the Acquisition Facility, and on a pro-rata basis under the Warehouse Facility. Such Credit Facility includes certain financial covenants.

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ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

10. Borrowing facilities: - (continued)

As of June 30, 2014 and December 31, 2013, borrowings under the Credit Facility were as follows (in thousands):


	June 30, 2014			December 31, 2013
Total available under the financing arrangement	$	75,000		$	60,000
Amount borrowed by the Company under the acquisition facility		—			—
Amounts borrowed by affiliated partnerships and limited liability companies under the working capital, acquisition and warehouse facilities		(2,180	)		(7,310	)
Total remaining available under the working capital, acquisition and warehouse facilities	$	72,820		$	52,690

The Company and its affiliates pay an annual commitment fee to have access to this line of credit. As of June 30, 2014, 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 the Credit Facility is reduced.

As of June 30, 2014, the Company’s Tangible Net Worth requirement under the Credit Facility was $10.0 million, the permitted maximum leverage ratio was not to exceed 1.25 to 1, and the required minimum interest coverage ratio was not to be less than 2 to 1. The Company was in compliance with these financial covenants under the Credit Facility with a minimum Tangible Net Worth, leverage ratio and interest coverage ratio, as calculated per the Credit Facility agreement of $43.7 million, 0.43 to 1, and 18.20 to 1, respectively, as of June 30, 2014. As such, as of June 30, 2014, the Company was in compliance with all material financial covenants, and with all other material conditions of the Credit Facility. The Company does not anticipate any covenant violations nor does it anticipate that any of these covenants will restrict its operations or its ability to procure additional financing.

Fee and interest terms

The interest rate on the Credit Facility is based on either the LIBOR/Eurocurrency rate of 1-, 2-, 3- or 6-month maturity plus a lender designated spread, or the bank’s Prime rate, which re-prices daily. Principal amounts of loans made under the Credit Facility that are prepaid may be re-borrowed on the terms and subject to the conditions set forth under the Credit Facility. Since the effective date of its participation in the Credit Facility (May 25, 2012) through June 30, 2014, the Company has had no borrowings under the Credit Facility.

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 June 30, 2014, the investment program participants were ATEL 12, LLC, ATEL 14, LLC, the Company and ATEL 16, LLC. Pursuant to the Warehousing Trust, the benefit of the lease transaction assets, and the corresponding liabilities under the Warehouse Facility, inure to each of such entities based upon each entity’s pro-rata share in the Warehousing Trust estate. The “pro-rata share” is calculated as a ratio of the net worth of each entity over the aggregate net worth of all entities benefiting from the Warehousing Trust estate,

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ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

10. Borrowing facilities: - (continued)

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 partnerships and 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.

There were no borrowings under the Warehouse Facility as of June 30, 2014 and December 31, 2013.

11. Commitments:

At June 30, 2014, there were commitments to fund investments in notes receivable and purchase lease assets totaling approximately $3.0 million and $2.1 million, respectively. These amounts represent contract awards which may be canceled by the prospective borrower/investee or may not be accepted by the Company.

12. Guarantees:

The Company enters into contracts that contain a variety of indemnifications. The Company’s maximum exposure under these arrangements is unknown. However, based upon the Manager’s experience, there have not been any prior claims or losses pursuant to these types of contracts and the expectation of risk of loss is remote.

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

13. Members’ Capital:

A total of 6,620,971 Units were issued and outstanding at both June 30, 2014 and December 31, 2013, including the 50 Units issued to the initial Member (Managing Member). The Fund was authorized to issue up to 15,000,000 Units in addition to the Units issued to the initial Member.

The Company has the right, exercisable in the Manager’s discretion, but not the obligation, to repurchase Units of a Unitholder who ceases to be a U.S. Citizen, for a price equal to 100% of the holder’s capital account. The Company is otherwise permitted, but not required, to repurchase Units upon a holder’s request. The repurchase of Fund Units is made in accordance with Section 13 of the Amended and Restated Limited Liability Company Operating Agreement. The repurchase would be at the discretion of the Manager on terms it determines to be appropriate under given circumstances, in the event that the Manager 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.

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ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

13. Members’ Capital: - (continued)

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 shall be allocated 99% to the Managing Member and 1% to the initial Other Members. Commencing with the initial closing date, net income and net loss shall be allocated 92.5% to the Other Members and 7.5% to the Managing Member. In accordance with the terms of the Operating Agreement, an additional allocation of income was made to the Manager during the three and six months ended June 30, 2014 and 2013. The amount allocated was determined to bring the Manager’s ending capital account balance to zero at the end of the period.

Fund distributions are to be allocated 7.5% to the Managing Member and 92.5% to the Other Members. The Company commenced periodic distributions, based on cash flows from operations, during the first quarter of 2012.

Distributions to the Other Members for the three and six months ended June 30, 2014 and 2013 were as follows (in thousands, except as to Units and per Unit data):


	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Distributions declared	$	1,489	$	1,010	$	2,979	$	1,847
Weighted average number of Units outstanding		6,620,971		4,510,077		6,620,971		4,118,119
Weighted average distributions per Unit	$	0.22	$	0.22	$	0.45	$	0.45

14. Fair value measurements:

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.

At June 30, 2014 and December 31, 2013, only the Company’s warrants were measured on a recurring basis. As of the same dates, the Company had no assets or liabilities that require measurement at fair value on a non-recurring basis.

The Company’s valuation policy is determined by members of the Asset Management, Credit and Accounting departments. Whenever possible, the policy is to obtain quoted market prices in active markets to estimate fair values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes, information from third party remarketing agents, third party appraisals of collateral and/or other valuation techniques. These techniques are significantly affected by certain of the Company’s assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. As the Company is responsible for determining fair value, an analysis is performed on prices obtained from third parties. Such analysis is performed by asset management and credit department personnel who are

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ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

14. Fair value measurements: - (continued)

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.

The measurement methodology is as follows:

Warrants (recurring)

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are carried on the balance sheet at an estimated fair value at the end of the period. The valuation of the warrants was determined using a Black-Scholes formulation of value based upon the stock price(s), the exercise price(s), the volatility of comparable venture companies, and a risk free interest rate for the term(s) of the warrant exercise(s). As of June 30, 2014 and December 31, 2013, the calculated fair value of the Fund’s warrant portfolio approximated $640 thousand and $784 thousand, respectively. Such valuations are classified within Level 3 of the valuation hierarchy.

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


	Level 3 Assets
Balance at December 31, 2013	$	784
Unrealized loss on warrants, net recorded during the period		(144	)
Balance at June 30, 2014	$	640

The following tables summarize the valuation techniques and significant unobservable inputs used for the Company’s recurring fair value calculation categorized as Level 3 in the fair value hierarchy at June 30, 2014 and December 31, 2013:

June 30, 2014

Name

Valuation Frequency

Valuation Technique

Unobservable Inputs

Range of Input Values

Warrants

Recurring

Black-Scholes Model

Stock price

0.05 – $1,000.00

Exercise price

0.05 – $1,000.00

Time to maturity (in years)

2.12 – 9.85

Risk-free interest rate

0.50% – 2.51%

Annualized volatility

16.40% – 100.00%

December 31, 2013

Name

Valuation Frequency

Valuation Technique

Unobservable Inputs

Range of Input Values

Warrants

Recurring

Black-Scholes Model

Stock price

0.04 – $1,000.00

Exercise price

0.04 – $1,000.00

Time to maturity (in years)

2.62 – 10.01

Risk-free interest rate

0.61% – 3.04%

Annualized volatility

17.80% – 100.00%

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.

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ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

14. Fair value measurements: - (continued)

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

Cash and cash equivalents

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

Notes receivable

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

Investment in securities

The Company’s investment securities are not registered for public sale and are carried at cost which management believes approximates fair value, as appropriately adjusted for impairment.

Non-recourse and Long-term debt

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

Commitments and Contingencies

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

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

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ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

14. Fair value measurements: - (continued)

The following tables present estimated fair values of the Company’s financial instruments in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification at June 30, 2014 and December 31, 2013 (in thousands):


	June 30, 2014
	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	4,151	$	4,151	$	—	$	—	$	4,151
Notes receivable, net		4,560		—		—		4,560		4,560
Investment in securities		125		—		—		125		125
Fair value of warrants		640		—		—		640		640
Financial liabilities:
Non-recourse debt		16,536		—		—		16,586		16,586
Long-term debt		2,068		—		—		2,125		2,125


	December 31, 2013
	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	12,749	$	12,749	$	—	$	—	$	12,749
Notes receivable, net		4,970		—		—		4,970		4,970
Investment in securities		32		—		—		32		32
Fair value of warrants		784		—		—		784		784
Financial liabilities:
Non-recourse debt		17,584		—		—		17,507		17,507
Long-term debt		2,068		—		—		2,056		2,056

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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

The Company conducted a public offering of 15,000,000 Limited Liability Company Units (“Units”), at a price of $10 per Unit. As of December 21, 2011, 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 2012. Pennsylvania subscriptions are subject to a separate escrow and are released to the Fund only when aggregate subscriptions for all investors equal to not less than $7.5 million. Total contributions to the Fund exceeded $7.5 million on April 4, 2012, at which time a request was processed to release the Pennsylvania escrowed amounts. The offering was terminated on October 28, 2013.

As of June 30, 2014, cumulative contributions of $66.5 million (inclusive of the $500 initial Member’s capital investment), representing 6,653,171 Units, have been received. Through the same date, a net total of $242 thousand of such contributions (representing 32,200 Units) have been rescinded or repurchased (net of distributions paid and allocated syndication costs) by the Company. As of June 30, 2014, 6,620,971 Units were issued and outstanding.

Results of Operations

The three months ended June 30, 2014 versus the three months ended June 30, 2013

The Company had net losses of $132 thousand and $477 thousand for the three months ended June 30, 2014 and 2013, respectively. Results for the second quarter of 2014 reflect increases in both total revenues and total expenses when compared to the prior year period.

Revenues

Total revenues for the second quarter of 2014 increased by $1.4 million, or 124%, as compared to the prior year period. The increase was largely due to the $1.4 million growth in operating lease revenues. Such growth in operating lease revenues was primarily due to additional revenue from an approximate $37.6 million of operating lease assets acquired since June 30, 2013.

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Expenses

Total expenses for the second quarter of 2014 increased by $1.1 million, or 66%, as compared to the prior year period. The increase is consistent with the growth in total revenues and was largely a result of increases in depreciation expense, costs reimbursed to the Manager, interest expense and asset management fees paid to the Manager. Such increases in expenses were offset, in part, by a reduction in acquisition expense.

Depreciation expense increased by $1.1 million largely due to the addition of approximately $37.6 million of net equipment purchases for operating leases during the past twelve months. Costs reimbursed to the Manager increased by $186 thousand as a result of an increase in allocated costs consistent with the Fund’s expanded operations.

Moreover, interest expense increased by $135 thousand due to a $16.9 million increase in outstanding debt during the past twelve months; and, asset management fees to the manager increased by $87 thousand due to the increase in managed assets and related rents.

Partially offsetting the aforementioned increases in expenses was a $585 thousand decrease in acquisition expense. The decrease in acquisition expense was largely due to the reassignment of such costs to certain affiliate leasing activities.

The six months ended June 30, 2014 versus the six months ended June 30, 2013

The Company had net losses of $795 thousand and $787 thousand for the six months ended June 30, 2014 and 2013, respectively. Results for the first half of 2014 reflect increases in both total expenses and total revenues when compared to the prior year period.

Revenues

Total revenues for the first half of 2014 increased by $2.9 million, or 135%, as compared to the prior year period. The increase was largely due to the growth in operating lease revenues partially offset by an unrealized loss on the fair valuation of warrants.

Operating lease revenues increased by $2.9 million primarily due to additional revenue from an approximate $37.6 million of operating lease assets acquired since June 30, 2013.

The unrealized loss on fair valuation of warrants totaled $144 thousand and was primarily attributable to the revaluation of certain warrant positions in the Fund’s portfolio.

Expenses

Total expenses for the first half of 2014 increased by $2.9 million, or 99%, as compared to the prior year period. The increase was largely a result of increases in depreciation expense, costs reimbursed to the Manager, interest expense, asset management fees paid to the Manager, and other expense. Such increases in expenses were offset, in part, by a reduction in acquisition expense.

Depreciation expense increased by $2.4 million largely due to the addition of approximately $37.6 million of net equipment purchases for operating leases during the past twelve months. Costs reimbursed to the Manager increased by $354 thousand as a result of an increase in allocated costs consistent with the Fund’s expanded operations.

In addition, interest expense increased by $269 thousand due to a $16.9 million increase in outstanding debt during the past twelve months. Asset management fees to the manager increased by $180 thousand due to the increase in managed assets and related rents; and, other expense was higher by $64 thousand primarily due to increased bank charges relative to participation in a joint credit facility with affiliated companies.

Partially offsetting the aforementioned increases in expenses was a $597 thousand decrease in acquisition expense. The decrease in acquisition expense was largely due to the reassignment of such costs to certain affiliate leasing activities.

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Capital Resources and Liquidity

The Company’s cash and cash equivalents totaled $4.2 million and $12.7 million at June 30, 2014 and December 31, 2013, respectively. The liquidity of the Company will vary in the future, increasing to the extent cash flows from leases and proceeds of asset sales exceed expenses and decreasing as lease 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.

If inflation in the general economy becomes significant, it may affect the Company in as much as the residual (resale) values and rates on re-leases of the Company’s leased assets may increase as the costs of similar assets increase. However, the Company’s revenues from existing leases and notes would not increase as such rates are generally fixed for the terms of the leases and notes without adjustment for inflation. In addition, if interest rates increase significantly under such circumstances, the rates that the Company can obtain on future lease or financing transactions will be expected to increase as the cost of capital is a significant factor in the pricing of leases and investments in notes receivable. Leases and notes already in place, for the most part, would not be affected by changes in interest rates.

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

Cash Flows

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


	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Net cash provided by (used in):
Operating activities	$	1,737		$	405		$	2,564		$	763
Investing activities		(6,684	)		(2,633	)		(6,898	)		(5,060	)
Financing activities		(1,749	)		5,631			(4,264	)		11,610
Net (decrease) increase in cash and cash equivalents	$	(6,696	)	$	3,403		$	(8,598	)	$	7,313

The three months ended June 30, 2014 versus the three months ended June 30, 2013

During the three months ended June 30, 2014, the Company’s primary source of liquidity was cash flow from its portfolio of operating and direct financing lease contracts, and its investments in notes receivable. In addition, the Company utilized borrowings of $865 thousand and realized $211 thousand of proceeds from the sale of lease assets and early termination of certain notes receivable during the period.

By comparison, during the three months ended June 30, 2013, the Company’s primary source of liquidity was subscription proceeds from the public offering of Units, which totaled $7.9 million during the second quarter of 2013. During the same period, the Company also realized $333 thousand of proceeds from the sale of lease assets and early termination of certain notes receivable.

During the respective three month-periods ended June 30, 2014 and 2013, cash was primarily used to acquire lease assets totaling $5.8 million and $3.0 million, and to fund $1.5 million and $250 thousand of investments in notes receivable. Cash was also used to pay distributions to both Other Members and the Managing Member — totaling $1.6 million and $1.0 million during the respective three months ended June 30, 2014 and 2013; and, to pay down debt totaling $1.0 million and $207 thousand. In addition, during the prior year period, cash totaling $957 thousand was used to pay commissions and other syndication costs associated with the offering.

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The six months ended June 30, 2014 versus the six months ended June 30, 2013

During the six months ended June 30, 2014, the Company’s primary source of liquidity was cash flow from its portfolio of operating and direct financing lease contracts, and its investments in notes receivable. In addition, the Company utilized borrowings of $865 thousand and realized $801 thousand of proceeds from the sale of lease assets and early termination of certain notes receivable during the period.

By comparison, during the six months ended June 30, 2013, the Company’s primary source of liquidity was subscription proceeds from the public offering of Units, which totaled $15.5 million during the first half of 2013. During the same period, the Company also realized $333 thousand of proceeds from the sale of lease assets and early termination of certain notes receivable.

During the respective six month-periods ended June 30, 2014 and 2013, cash was primarily used to acquire lease assets totaling $7.2 million and $5.8 million, and to fund $1.5 million and $300 thousand of investments in notes receivable. Cash was also used to pay distributions to both Other Members and the Managing Member — totaling $3.2 million and $1.8 million during the respective six months ended June 30, 2014 and 2013; and, to pay down debt totaling $1.9 million and $413 thousand. Moreover, during the prior year period, cash totaling $1.6 million was used to pay commissions and other syndication costs associated with the offering.

Revolving credit facility

Effective May 25, 2012, the Company participated with AFS and certain of its affiliates in a revolving credit facility (the “Credit Facility”) with a syndicate of financial institutions. The Credit Facility is comprised of a working capital facility to AFS, an acquisition facility (the “Acquisition Facility”) and a warehouse facility (the “Warehouse Facility”) to AFS, the Company and affiliates, and a venture facility available to an affiliate. Such Credit Facility was for an amount up to $60 million and set to expire in June 2014. During January 2014, the line was increased to $75 million, an affiliated participant added, and expiration extended to June 2015.

Compliance with covenants

The Credit Facility includes certain financial and non-financial covenants applicable to each borrower, including the Company. Such covenants include covenants typically found in credit facilities of the size and nature of the Credit Facility, such as accuracy of representations, good standing, absence of liens and material litigation, etc. The Company was in compliance with all applicable covenants under the Credit Facility as of June 30, 2014. The Company considers certain financial covenants to be material to its ongoing use of the Credit Facility and these covenants are described below.

Material financial covenants

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

As of June 30, 2014, the material financial covenants are summarized as follows:

Minimum Tangible Net Worth: $10.0 million
Leverage Ratio (leverage to Tangible Net Worth): Not to exceed 1.25 to 1
Collateral Value: Collateral value under the Warehouse Facility must be no less than the outstanding borrowings under that facility
EBITDA to Interest Ratio: Not to be less than 2 to 1 for the four fiscal quarters just ended

“EBITDA” is defined under the Credit Facility as, for the relevant period of time (1) gross revenues (all payments from leases and notes receivable) for such period minus (2) expenses deducted in determining net income for such period plus (3) to the extent deducted in determining net income for such period (a) provision for income taxes and (b) interest expense, and (c) depreciation, amortization and other non-cash charges. Extraordinary items and gains or losses on (and proceeds from) sales or dispositions of assets outside of the ordinary course of business are excluded in the calculation of

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EBITDA. “Tangible Net Worth” is defined as, as of the date of determination, (i) the net worth of the Company, after deducting therefrom (without duplication of deductions) the net book amount of all assets of the Company, after deducting any reserves and other amounts for assets which would be treated as intangibles under accounting principles generally accepted in the United States of America (“GAAP”), and after certain other adjustments permitted under the agreements.

The financial covenants referred to above are applicable to the Company only to the extent that the Company has borrowings outstanding under the Credit Facility. The Company was in compliance with these financial covenants under the Credit Facility with a minimum Tangible Net Worth, leverage ratio and interest coverage ratio, as calculated per the Credit Facility agreement of $43.7 million, 0.43 to 1, and 18.20 to 1, respectively, as of June 30, 2014. As such, as of June 30, 2014, the Company was in compliance with all such material financial covenants.

Reconciliation to GAAP of EBITDA

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

As previously discussed, the Fund became a party to the Credit Facility effective May 25, 2012. The following is a reconciliation of net loss to EBITDA, as defined in the loan agreement, for the twelve months ended June 30, 2014 (in thousands):


Net loss – GAAP basis	$	(1,233	)
Interest expense		396
Depreciation and amortization		6,765
Amortization of initial direct costs		49
Provision for doubtful accounts		44
Unrealized gain on fair valuation of warrants		(640	)
Principal payments received on direct financing leases		39
Principal payments received on notes receivable		1,787
EBITDA (for Credit Facility financial covenant calculation only)	$	7,207

Events of default, cross-defaults, recourse and security

The terms of the Credit Facility include standard events of default by the Company which, if not cured within applicable grace periods, could give lenders remedies against the Company, including the acceleration of all outstanding borrowings and a demand for repayment in advance of their stated maturity. If a breach of any material term of the Credit Facility should occur, the lenders may, at their option, increase borrowing rates, accelerate the obligations in advance of their stated maturities, terminate the facility, and exercise rights of collection available to them under the express terms of the facility, or by operation of law. The lenders also retain the discretion to waive a violation of any covenant at the Company’s request.

The Company is currently in compliance with its obligations under the Credit Facility. In the event of a technical default (e.g., the failure to timely file a required report, or a one-time breach of a financial covenant), the Company believes it has ample time to request and be granted a waiver by the lenders, or, alternatively, cure the default under the existing provisions of its debt agreements, including, if necessary, arranging for additional capital from alternate sources to satisfy outstanding obligations.

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 under the Acquisition Facility, and on a pro-rata basis under the Warehouse Facility.

The Acquisition Facility is generally recourse solely to the Company, and is not cross-defaulted to any other obligations of affiliated companies under the Credit Facility, except as described in this paragraph. The Credit Facility is cross-defaulted to a default in the payment of any debt (other than non-recourse debt) or any other agreement or condition beyond the period of grace (not exceeding 30 days), the effect

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of which would entitle the lender under such agreement to accelerate the obligations prior to their stated maturity in an individual or aggregate principal amount in excess of 15% of the Company’s consolidated Tangible Net Worth. Also, a bankruptcy of AFS will trigger a default for the Company under the Credit Facility.

Non-Recourse Long-Term Debt

As of June 30, 2014 and December 31, 2013, the Company had non-recourse long-term debt totaling $16.5 million and $17.6 million, respectively. Such non-recourse notes payable do not contain any material financial covenants. The notes are secured by a specific 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. For detailed information on the Company’s debt obligations, see Notes 8 through 10 to the financial statements as set forth in Part I, Item 1, Financial Statements (Unaudited).

Long-Term Debt

As of June 30, 2014, the Company had long-term debt totaling $2.1 million. The debt was utilized during the fourth quarter of 2013 to partially fund the marine vessel and related bareboat charter purchased by the Fund and its affiliate, ATEL 14, LLC. The full pro rata principal amount of $2.1 million plus all outstanding accrued and unpaid interest of approximately $400 thousand shall be paid in one payment of $2.5 million due on May 25, 2019. The note is recourse to the residual value of the vessel which is expected to be well in excess of the note amount. In addition, the lender has recourse to the Fund’s general assets up to $2.5 million. The note does not contain any material financial covenants and is guaranteed as a senior obligation of the Fund.

Distributions

The Unitholders of record are entitled to certain distributions as provided under the Operating Agreement. The Company commenced periodic distributions beginning with the month of January 2012. Additional distributions have been made consistently through June 2014.

Cash distributions were made by the Fund to Unitholders of record as of May 31, 2014 and paid through June 30, 2014. 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 — Reinvestment.” Accordingly, the amount of cash flow from Fund investments distributed to Unitholders will not be available for reinvestment in additional portfolio assets.

The cash distributions were based on current and anticipated gross revenues from the leases and loans acquired. During the Fund’s acquisition and operating stages, the Fund may incur short term borrowing to fund regular distributions of such gross revenues to be generated by newly acquired transactions during their respective initial fixed terms. As such, all Fund periodic cash distributions made during these stages have been, and are expected in the future to be, based on the Fund’s actual and anticipated gross revenues to be generated from the binding initial terms of the leases and loans acquired.

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The following table summarizes distribution activity for the Fund from inception through June 30, 2014 (in thousands, except as to Units and per Unit data):



Distribution Period⁽¹⁾	Paid		Return of Capital				Distribution of Income				Total Distribution				Total Distribution per Unit⁽²⁾		Weighted Average Units Outstanding⁽³⁾
Monthly and quarterly distributions
Oct 2011 – Dec 2011 (Distribution of escrow interest)		Feb 2012 – Jun 2012	$	—			$	—			$	—				n/a		n/a
Jan 2012 – Nov 2012		Feb 2012 – Dec 2012		1,173				—				1,173				0.79		1,476,249
Dec 2012 – Nov 2013		Jan 2013 – Dec 2013		4,192				—				4,192				0.88		4,758,784
Dec 2013 – May 2014		Jan 2014 – Jun 2014		2,975				—				2,975				0.45		6,620,971
			$	8,340			$	—			$	8,340			$	2.12
Source of distributions
Lease and loan payments and sales proceeds received			$	8,340	100.00	%	$	—	0.00	%	$	8,340	100.00	%
Interest Income				—	0.00	%		—	0.00	%		—	0.00	%
Debt against non-cancellable firm term payments on leases and loans				—	0.00	%		—	0.00	%		—	0.00	%
			$	8,340	100.00	%	$	—	0.00	%	$	8,340	100.00	%

(1)

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

(2)

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

(3)

Balances shown represent weighted average units for the period from January 1, 2012 to November 30, 2012, December 1, 2012 to November 30, 2013, and December 1, 2013 to May 31, 2014, respectively.

Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies

Off-Balance Sheet Transactions

None.

Recent Accounting Pronouncements

Recent accounting standards updates as issued by the Financial Accounting Standards Board (FASB) were evaluated and determined to be not applicable to the Company.

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Critical Accounting Policies and Estimates

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

The Company’s critical accounting policies are described in its Annual Report on Form 10-K for the year ended December 31, 2013. There have been no material changes to the Company’s critical accounting policies since December 31, 2013.

Item 4. Controls and procedures.

Evaluation of disclosure controls and procedures

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

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

Changes in internal control

There were no changes in the Managing Member’s internal control over financial reporting, as it is applicable to the Company, during the quarter ended June 30, 2014 that have materially affected, or are reasonably likely to materially affect, the Managing Member’s internal control over financial reporting, as it is applicable to the Company.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

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

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

(a)

Documents filed as a part of this report

Financial Statement Schedules

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

Other Exhibits


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

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 13, 2014

ATEL 15, LLC
(Registrant)


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

ATEL 15, LLC - FORM 10-Q - August 13, 2014

Attached files

Form 10-Q

For the quarterly period ended June 30, 2014

For the transition period from to

Commission File number 333-174418

ATEL 15, LLC

DOCUMENTS INCORPORATED BY REFERENCE

ATEL 15, LLC Index

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

1. Organization and Limited Liability Company matters:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

2. Summary of significant accounting policies:

Basis of presentation:

Use of Estimates:

Segment reporting:

Investment in securities:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

2. Summary of significant accounting policies: - (continued)

Purchased securities

Warrants

Per Unit data:

Recent accounting pronouncements:

3. Notes receivable, net:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

3. Notes receivable, net: - (continued)

4. Allowance for credit losses:

5. Investment in equipment and leases, net:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

5. Investment in equipment and leases, net: - (continued)

Impairment of investments in leases:

Operating leases:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

5. Investment in equipment and leases, net: - (continued)

Direct financing leases:

6. Related party transactions:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

6. Related party transactions: - (continued)

7. Syndication Costs:

8. Non-recourse debt:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

8. Non-recourse debt: - (continued)

9. Long-term debt:

10. Borrowing facilities:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

10. Borrowing facilities: - (continued)

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

10. Borrowing facilities: - (continued)

11. Commitments:

12. Guarantees:

13. Members’ Capital:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

13. Members’ Capital: - (continued)

14. Fair value measurements:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

14. Fair value measurements: - (continued)

Warrants (recurring)

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

14. Fair value measurements: - (continued)

Cash and cash equivalents

Notes receivable

Investment in securities

Non-recourse and Long-term debt

Commitments and Contingencies

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

14. Fair value measurements: - (continued)

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

Overview

Results of Operations

The three months ended June 30, 2014 versus the three months ended June 30, 2013

Revenues

Expenses

The six months ended June 30, 2014 versus the six months ended June 30, 2013

Revenues

Expenses

Capital Resources and Liquidity

Cash Flows

The three months ended June 30, 2014 versus the three months ended June 30, 2013

ATEL 15, LLC

Index

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 15, LLC
(Registrant)