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 September 30, 2015


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 October 31, 2015 was 6,606,921.

DOCUMENTS INCORPORATED BY REFERENCE

None.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

ATEL 15, LLC

BALANCE SHEETS

SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
(in thousands)


	September 30, 2015		December 31, 2014
	(Unaudited)
ASSETS
Cash and cash equivalents	$	6,556	$	7,214
Accounts receivable, net of allowance for doubtful accounts of $0 at September 30, 2015 and $1 at December 31, 2014		194		166
Notes receivable, net of unearned interest income of $266 and allowance for credit losses of $50 at September 30, 2015 and net of unearned interest income of $580 and allowance for credit losses of $0 at December 31, 2014		2,128		3,786
Investment in securities		125		125
Fair value of warrants		892		848
Investments in equipment and leases, net of accumulated depreciation of $17,379 at September 30, 2015 and $11,524 at December 31, 2014		43,568		48,823
Prepaid expenses and other assets		37		51
Total assets	$	53,500	$	61,013
LIABILITIES AND MEMBERS’ CAPITAL
Accounts payable and accrued liabilities:
Managing Member	$	55	$	51
Affiliates		24		8
Accrued distributions to Other Members		622		625
Other		202		166
Non-recourse debt		14,821		17,362
Long-term debt		2,068		2,068
Unearned operating lease income and/or advance payments		620		421
Total liabilities		18,412		20,701
Commitments and contingencies
Members’ capital:
Managing Member		—		—
Other Members		35,088		40,312
Total Members’ capital		35,088		40,312
Total liabilities and Members’ capital	$	53,500	$	61,013

See accompanying notes.

ATEL 15, LLC

STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 2015 AND 2014
(in thousands except units and per unit data)
(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Revenues:
Leasing and lending activities:
Operating leases	$	2,535		$	2,377		$	7,597		$	7,112
Direct financing leases		—			1			—			3
Interest on notes receivable		79			137			279			401
Gain on sales of lease assets and early termination of notes		55			420			123			441
Gain on sales or dispositions of investment in securities		—			5			6			48
Unrealized (loss) gain on fair valuation of warrants		(6	)		—			44			(144	)
Other		14			9			39			46
Total revenues		2,677			2,949			8,088			7,907
Expenses:
Depreciation of operating lease assets		2,004			2,050			5,993			6,041
Asset management fees to Managing Member		137			135			387			379
Acquisition expense		14			61			(15	)		150
Cost reimbursements to Managing Member and/or affiliates		303			374			1,007			1,019
Provision (reversal of provision) for credit losses		12			(39	)		49			5
Amortization of initial direct costs		33			23			96			56
Interest expense		134			141			420			427
Professional fees		18			25			97			103
Outside services		16			10			45			44
Railcar maintenance		30			52			90			135
Bank charges		28			54			122			159
Other		53			65			146			186
Total expenses		2,782			2,951			8,437			8,704
Net loss	$	(105	)	$	(2	)	$	(349	)	$	(797	)
Net income (loss):
Managing Member	$	121		$	121		$	362		$	362
Other Members		(226	)		(123	)		(711	)		(1,159	)
	$	(105	)	$	(2	)	$	(349	)	$	(797	)
Net loss per Limited Liability Company Unit (Other Members)	$	(0.03	)	$	(0.02	)	$	(0.11	)	$	(0.18	)
Weighted average number of Units outstanding		6,610,682			6,620,400			6,613,517			6,620,779

See accompanying notes.

ATEL 15, LLC

STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2014
AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2015
(in thousands except units and per unit data)


	Units			Amount						Total
	Units			Other Members			Managing Member			Total
Balance December 31, 2013		6,620,971		$	47,717		$	—		$	47,717
Repurchases of Units		(5,750	)		(41	)		—			(41	)
Distributions to Other Members ($0.90 per Unit)		—			(5,957	)		—			(5,957	)
Distributions to Managing Member		—			—			(483	)		(483	)
Net (loss) income		—			(1,407	)		483			(924	)
Balance December 31, 2014		6,615,221			40,312			—			40,312
Rescissions of Units		(800	)		(6	)		—			(6	)
Repurchases of Units		(7,500	)		(45	)		—			(45	)
Distributions to Other Members ($0.67 per Unit)		—			(4,462	)		—			(4,462	)
Distributions to Managing Member		—			—			(362	)		(362	)
Net (loss) income		—			(711	)		362			(349	)
Balance September 30, 2015 (Unaudited)		6,606,921		$	35,088		$	—		$	35,088

See accompanying notes.

ATEL 15, LLC

STATEMENTS OF CASH FLOWS

FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2015 AND 2014
(in thousands)
(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Operating activities:
Net loss	$	(105	)	$	(2	)	$	(349	)	$	(797	)
Adjustment to reconcile net loss to cash provided by operating activities:
Gain on sales of lease assets and early termination of notes		(55	)		(420	)		(123	)		(441	)
Depreciation of operating lease assets		2,004			2,050			5,993			6,041
Amortization of initial direct costs		33			23			96			56
Provision (reversal of provision) for credit losses		12			(39	)		49			5
Gain on sales or dispositions of investment in securities		—			(5	)		(6	)		(48	)
Unrealized loss (gain) on fair valuation of warrants		6			—			(44	)		144
Changes in operating assets and liabilities:
Accounts receivable		(74	)		86			(27	)		8
Prepaid expenses and other assets		5			(23	)		14			(42	)
Accounts payable, Managing Member		6			5			4			(26	)
Accounts payable, other		26			(7	)		36			43
Accrued liabilities, affiliates		603			153			16			(534	)
Unearned fee income related to notes receivable		(5	)		(6	)		(13	)		(18	)
Unearned operating lease income and/or advance payments		292			402			199			390
Net cash provided by operating activities		2,748			2,217			5,845			4,781
Investing activities:
Purchases of equipment on operating leases		—			(801	)		(798	)		(8,023	)
Purchase of securities		—			—			—			(93	)
Proceeds from sales of lease assets and early termination of notes		580			2,095			681			2,896
Proceeds from sales or dispositions of investment in securities		—			5			6			48
Payments of initial direct costs		(1	)		(57	)		(43	)		(224	)
Principal payments received on direct financing leases		—			11			13			31
Note receivable advances		(250	)		(193	)		(250	)		(1,643	)
Principal payments received on notes receivable		417			452			1,307			1,622
Net cash provided by (used in) investing activities		746			1,512			916			(5,386	)
Financing activities:
Borrowings under non-recourse debt		—			2,721			1,558			3,586
Repayments under non-recourse debt		(1,449	)		(1,832	)		(4,099	)		(3,745	)
Distributions to Other Members		(1,487	)		(1,490	)		(4,465	)		(4,465	)
Distributions to Managing Member		(121	)		(121	)		(362	)		(362	)
Rescissions of Units		—			—			(6	)		—
Repurchases of Units		(42	)		(6	)		(45	)		(6	)
Net cash used in financing activities		(3,099	)		(728	)		(7,419	)		(4,992	)
Net increase (decrease) in cash and cash equivalents		395			3,001			(658	)		(5,597	)
Cash and cash equivalents at beginning of period		6,161			4,151			7,214			12,749
Cash and cash equivalents at end of period	$	6,556		$	7,152		$	6,556		$	7,152
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	115		$	87		$	364		$	378
Cash paid during the period for taxes	$	—		$	—		$	22		$	8
Schedule of non-cash investing and financing transactions:
Distributions payable to Other Members at period-end	$	622		$	624		$	622		$	624
Distributions payable to Managing Member at period-end	$	50		$	50		$	50		$	50
Purchases of equipment, included in accounts payable, other	$	—		$	4		$	—		$	4

See accompanying notes.

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

1. Organization and Limited Liability Company matters:

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

As of 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 September 30, 2015, 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 $334 thousand of such contributions (representing 46,250 Units) have been rescinded or repurchased (net of distributions paid and allocated syndication costs) by the Company. As of September 30, 2015, 6,606,921 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 have 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, 2014, filed with the Securities and Exchange Commission.

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 nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the full year. Certain prior period amounts may have been reclassified to conform to the current period presentation. These reclassifications had no significant effect on the reported financial position or results of operations.

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

In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after September 30, 2015 up until the issuance of the financial statements. No events were noted which would require additional 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.

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

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

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.

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 of purchased securities at both September 30, 2015 and December 31, 2014. There were no sales or dispositions of purchased securities during the three and nine months ended September 30, 2015 and 2014.

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. During the three and nine months ended September 30, 2015, the Company recorded unrealized losses of $6 thousand and unrealized gains of $44 thousand, respectively, on fair valuation of its warrants. By comparison, the Company recorded unrealized losses of $144 thousand on fair valuation of its warrants during the first nine months of 2014, none of which was related to the third quarter. As of September 30, 2015 and December 31, 2014, the estimated fair value of the Company’s portfolio of warrants amounted to $892 thousand and $848 thousand. The Company also recognized gains on the net exercise of warrants totaling $6 thousand for the nine-month period ended September 30, 2015, none of which was related to the third quarter. Such gains totaled $5 thousand and $48 thousand for the respective three and nine months ended September 30, 2014.

Per Unit data:

Net income (loss) and distributions per Unit is based upon the weighted average number of Other Members Units outstanding during the period.

Recent accounting pronouncements:

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. On July 9, 2015, the FASB approved the deferral of the effective date of ASU 2014-09 by one year and in August 2015, issued Revenue from Contracts from Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”). ASU 2015-14 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 31, 2016, including interim reporting periods within that reporting period. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company evaluated the impact of the new standard on its financial statements and has determined that such impact is virtually non-existent as the new revenue guideline does not affect revenues from leases and loans, which comprise the majority of the Company’s revenues.

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

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

In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements — Going Concern (subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU-2014-15”). The new standard provides guidance relative to management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. Management does not expect the adoption of ASU 2014-15 to have a material impact on the Company’s financial statements or related disclosures.

3. Notes receivable, net:

The Company has various notes receivables from borrowers who have financed the purchase of equipment through the Company. As of September 30, 2015, the terms of the notes receivable are from 30 to 42 months and bear interest at rates ranging from 11.26% to 18.00% per annum. The notes are secured by the equipment financed. The notes mature from 2015 through 2018.

As of December 31, 2014, the Company had three notes receivable which were on non-accrual status, one of which was fully paid on February 24, 2015 with the remaining two still on non-accrual status at September 30, 2015.

The note fully paid in February 2015 was originally placed on non-accrual status during the second quarter of 2014. Such note had a net recorded investment approximating $85 thousand as of December 31, 2014 and was considered impaired relative to its payment term. The term of this 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 the resumption of principal and interest payments in November 2014, the 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. Payments received on this note were fully applied against principal pursuant to the Company’s policy on non-accrual notes. Interest not recorded relative to the original term of the non-accrual note approximated $8 thousand from June 2014 to February 2015. The note remained current with respect to its restructured term; and, management determined that no adjustment was necessary to reflect fair value through its termination date. The Fund recognized a gain of $52 thousand from the February 24, 2015 settlement of the note on proceeds of $81 thousand.

With regards to the two notes remaining on non-accrual status as of September 30, 2015, their combined net recorded investment totaled $83 thousand and $92 thousand as of September 30, 2015 and December 31, 2014, respectively. Both notes have a stated annual interest rate of 11.73%. There were no related fair value adjustments recorded through December 31, 2014. During the first nine months of 2015, the Company recorded $50 thousand of fair value adjustments, of which, $23 thousand was recorded during the third quarter. As of September 30, 2015, management continued to deem the notes impaired. As of the same date, the fair value of such notes was $33 thousand. Effective January 1, 2015, the notes were modified to defer the repayment of principal while maintaining interest-only payments at their original rates through June 30, 2015. During the second quarter of 2015, an additional modification was made to the notes which extended the interest only payments through October 31, 2015. As of November 1, 2015, the entire balance outstanding on these notes will be due. The payments will be adjusted such that the ultimate amounts paid will 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. Payments received on these non-accrual notes have been fully applied against principal pursuant to the Company’s policy on non-accrual notes. Interest not recorded relative to the original terms of the non-accrual notes approximated $6 thousand from December 2014 to September 2015.

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

3. Notes receivable, net: - (continued)

As of September 30, 2015, the minimum future payments receivable are as follows (in thousands):


Three months ending December 31, 2015	$	531
Year ending December 31, 2016		1,469
2017		379
2018		60
		2,439
Less: portion representing unearned interest income		(266	)
		2,173
Unamortized initial direct costs		5
Less: allowance for credit losses		(50	)
Notes receivable, net	$	2,128

Initial direct costs (“IDC”) amortization expense related to notes receivable and the Company’s operating and direct financing leases for the three and nine months ended September 30, 2015 and 2014 are as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
IDC amortization – notes receivable	$	4	$	4	$	11	$	13
IDC amortization – lease assets		29		19		85		43
Total	$	33	$	23	$	96	$	56

4. Allowance for credit losses:

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


	Accounts Receivable Allowance for Doubtful Accounts							Valuation Adjustments on Financing Receivables				Total Allowance for Credit Losses
	Notes Receivable		Finance Leases		Operating Leases			Notes Receivable		Finance Leases		Total Allowance for Credit Losses
Balance December 31, 2013	$	—	$	—	$	—		$	—	$	—	$	—
Provision for credit losses		—		—		1			—		—		1
Balance December 31, 2014		—		—		1			—		—		1
(Reversal of) provision for credit losses		—		—		(1	)		50		—		49
Balance September 30, 2015	$	—	$	—	$	—		$	50	$	—	$	50

Accounts receivable

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

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

Accounts receivable are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management periodically reviews the creditworthiness of companies with lease or note payments outstanding less than 90 days. Based upon management’s judgment,

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

4. Allowance for credit losses: - (continued)

such leases or notes may be placed in non-accrual status. Leases or notes placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid receivable is probable. Until such time, revenues on operating leases are recognized on a cash basis. All payments received on amounts billed under direct financing leases and notes receivable are applied only against outstanding principal balances.

Financing receivables

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

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

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

The Company’s allowance for credit losses (related solely to financing receivables) and its recorded investment in financing receivables as of September 30, 2015 and December 31, 2014 were as follows (in thousands):


September 30, 2015	Notes Receivable		Finance Leases		Total
Allowance for credit losses:
Ending balance	$	50	$	—	$	50
Ending balance: individually evaluated for impairment	$	50	$	—	$	50
Ending balance: collectively evaluated for impairment	$	—	$	—	$	—
Ending balance: loans acquired with deteriorated credit quality	$	—	$	—	$	—
Financing receivables:
Ending balance	$	2,178¹	$	—	$	2,178
Ending balance: individually evaluated for impairment	$	2,178	$	—	$	2,178
Ending balance: collectively evaluated for impairment	$	—	$	—	$	—
Ending balance: loans acquired with deteriorated credit quality	$	—	$	—	$	—

Includes $5 of unamortized initial direct costs.

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

4. Allowance for credit losses: - (continued)


December 31, 2014	Notes Receivable		Finance Leases		Total
Allowance for credit losses:
Ending balance	$	—	$	—	$	—
Ending balance: individually evaluated for impairment	$	—	$	—	$	—
Ending balance: collectively evaluated for impairment	$	—	$	—	$	—
Ending balance: loans acquired with deteriorated credit quality	$	—	$	—	$	—
Financing receivables:
Ending balance	$	3,786²	$	13	$	3,799
Ending balance: individually evaluated for impairment	$	3,786	$	13	$	3,799
Ending balance: collectively evaluated for impairment	$	—	$	—	$	—
Ending balance: loans acquired with deteriorated credit quality	$	—	$	—	$	—

Includes $16 of unamortized initial direct costs.

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

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

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

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

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

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

4. Allowance for credit losses: - (continued)

At September 30, 2015 and December 31, 2014, the Company’s financing receivables by credit quality indicator and by class of financing receivables are as follows (excludes initial direct costs) (in thousands):


	Notes Receivable				Finance Leases
	September 30, 2015		December 31, 2014		September 30, 2015		December 31, 2014
Pass	$	2,090	$	2,911	$	—	$	13
Special mention		—		859		—		—
Substandard		83		—		—		—
Doubtful		—		—		—		—
Total	$	2,173	$	3,770	$	—	$	13

As of September 30, 2015, the Company’s impaired loans were as follows (in thousands):


	Impaired Loans
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded
Notes receivable	$	—	$	—	$	—	$	—	$	—
With an allowance recorded
Notes receivable		83		83		50		86		—
Total	$	83	$	83	$	50	$	86	$	—

There were no impaired loans as of December 31, 2014.

At September 30, 2015 and December 31, 2014, investment in financing receivables is aged as follows (in thousands):


September 30, 2015	31 – 60 Days Past Due		61 – 90 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Financing Receivables		Recorded Investment > 90 Days and Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	2,173	$	2,173	$	—
Total	$	—	$	—	$	—	$	—	$	2,173	$	2,173	$	—


December 31, 2014	31 – 60 Days Past Due		61 – 90 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Financing Receivables		Recorded Investment > 90 Days and Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	3,770	$	3,770	$	—
Finance leases		—		—		—		—		13		13		—
Total	$	—	$	—	$	—	$	—	$	3,783	$	3,783	$	—

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

5. Investment in equipment and leases, net:

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


	Balance December 31, 2014		Reclassifications & Additions/ Dispositions		Depreciation/ Amortization Expense or Amortization of Leases			Balance September 30, 2015
Net investment in operating leases	$	48,480	$	794	$	(5,993	)	$	43,281
Net investment in direct financing leases		13		—		(13	)		—
Initial direct costs, net of accumulated amortization of $170 at September 30, 2015 and $85 at December 31, 2014		330		42		(85	)		287
Total	$	48,823	$	836	$	(6,091	)	$	43,568

Impairment of investments in leases:

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

As a result of these reviews, management determined that no impairment losses existed during the three and nine months ended September 30, 2015 and 2014.

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 was $2.0 million and $2.1 million for the respective three months ended September 30, 2015 and 2014, and was approximately $6.0 million for each of the nine months ended September 30, 2015 and 2014.

IDC amortization expense related to the Company’s operating leases and direct financing leases totaled $29 thousand and $19 thousand for the respective three months ended September 30, 2015 and 2014, and $85 thousand and $43 thousand for the respective nine months ended September 30, 2015 and 2014 (see Note 3).

All of the Company’s leased property was acquired beginning in January 2012 through September 2015.

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

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

Operating leases:

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


	Balance December 31, 2014			Additions			Reclassifications or Dispositions			Balance September 30, 2015
Marine vessel	$	19,410		$	—		$	—		$	19,410
Transportation, rail		10,930			29			—			10,959
Manufacturing		7,836			—			—			7,836
Food processing		5,200			—			—			5,200
Coal terminal		5,084			—			—			5,084
Materials handling		4,147			—			—			4,147
Construction		2,590			—			—			2,590
Research		2,250			—			—			2,250
Agriculture		1,786			326			—			2,112
Aviation		279			443			—			722
Computer		393			—			(142	)		251
Cleaning & maintenance		51			—			—			51
Transportation		48			—			—			48
		60,004			798			(142	)		60,660
Less accumulated depreciation		(11,524	)		(5,993	)		138			(17,379	)
Total	$	48,480		$	(5,195	)	$	(4	)	$	43,281

The average estimated residual value for assets on operating leases was 43% and 44% of the assets’ original cost at September 30, 2015 and December 31, 2014, respectively. There were no operating leases in non-accrual status as of September 30, 2015 and December 31, 2014.

Direct financing leases:

As of September 30, 2015, the Company had no investment in direct financing leases, as its remaining finance lease matured on January 1, 2015. As of December 31, 2014, such investment consisted of research equipment with minimum lease payments totaling $13 thousand.

At September 30, 2015, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):


	Operating Leases
Three months ending December 31, 2015	$	2,186
Year ending December 31, 2016		7,051
2017		4,959
2018		4,392
2019		1,702
2020		330
Thereafter		609
	$	21,229

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

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

The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of September 30, 2015, the respective useful lives of each category of lease assets in the Company’s portfolio are as follows (in years):


Equipment category	Useful Life
Coal terminal		50 – 60
Transportation, rail		35 – 40
Marine vessel		20 – 30
Aviation		15 – 20
Manufacturing		10 – 15
Agriculture		7 – 10
Cleaning & maintenance		7 – 10
Construction		7 – 10
Food processing		7 – 10
Materials handling		7 – 10
Transportation		7 – 10
Research		5 – 7
Computer		3 – 5

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.

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

6. Related party transactions: - (continued)

During the respective three and nine months ended September 30, 2015 and 2014, the Managing Member and/or affiliates earned fees and billed for reimbursements of costs and expenses pursuant to the Operating Agreement as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Administrative costs reimbursed to Managing Member and/or affiliates	$	303	$	374	$	1,007	$	1,019
Asset management fees to Managing Member		137		135		387		379
Acquisition and initial direct costs paid to Managing Member		15		118		28		374
	$	455	$	627	$	1,422	$	1,772

7. Non-recourse debt:

At September 30, 2015, non-recourse debt consists of notes payable to financial institutions. The note payments are due in monthly installments. Interest on the notes range from 1.89% to 3.66% per annum. The notes are secured by assignments of lease payments and pledges of assets. At September 30, 2015, gross operating lease rentals and future payments on direct financing leases totaled approximately $15.6 million over the remaining lease terms; and the carrying value of the pledged assets is $30.6 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 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, 2015	$	1,459	$	105	$	1,564
Year ending December 31, 2016		5,030		327		5,357
2017		3,655		200		3,855
2018		3,486		94		3,580
2019		1,146		16		1,162
2020		45		—		45
	$	14,821	$	742	$	15,563

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

8. Long-term debt:

As of September 30, 2015, 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.

9. 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 $60.0 million and set to expire in June 2014. During January 2014, the line was increased to $75.0 million, an affiliated participant added, and the expiration extended to June 2015. During April 2015, the line was reduced to $56.0 million and an affiliated company, ATEL 12, LLC, was removed effective December 30, 2014. At June 30, 2015, the line was further reduced to $41.1 million coincidental with a restructure of the lending group; and, the expiration extended to September 2015. As of September 30, 2015, the Credit Facility was amended to increase the line to $75.0 million, add certain institutional fund affiliates as borrowers and extend the expiration date to June 30, 2017. 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.

As of September 30, 2015 and December 31, 2014, borrowings under the Credit Facility were as follows (in thousands):


	September 30, 2015			December 31, 2014
Total available under the financing arrangement	$	75,000		$	75,000
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		(11,807	)		(1,150	)
Total remaining available under the working capital, acquisition and warehouse facilities	$	63,193		$	73,850

The Company and its affiliates pay an annual commitment fee to have access to this line of credit. As of September 30, 2015, 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 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, 2015, 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

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

9. Borrowing facilities: - (continued)

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 $35.1 million, 0.48 to 1, and 17.27 to 1, respectively, as of September 30, 2015. As such, as of September 30, 2015, 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 September 30, 2015, 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 September 30, 2015, the investment program participants were ATEL 14, LLC, the Company and ATEL 16, LLC. Effective December 30, 2014, ATEL 12, LLC was formally removed as a participant of the Credit Facility. 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 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 September 30, 2015 and December 31, 2014.

10. Commitments:

At September 30, 2015, there were commitments to fund an approximate $950 thousand of investments in notes receivable. These amounts represent contract awards which may be canceled by the prospective borrower/investee or may not be accepted by the Company.

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

11. 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.

12. Members’ Capital:

A total of 6,606,921 Units and 6,615,221 Units were issued and outstanding at September 30, 2015 and December 31, 2014, respectively, 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.

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 nine months ended September 30, 2015 and 2014. 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.

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

12. Members’ Capital: - (continued)

Distributions to the Other Members for the three and nine months ended September 30, 2015 and 2014 were as follows (in thousands, except as to Units and per Unit data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Distributions declared	$	1,486	$	1,490	$	4,462	$	4,469
Weighted average number of Units outstanding		6,610,682		6,620,400		6,613,517		6,620,779
Weighted average distributions per Unit	$	0.22	$	0.23	$	0.67	$	0.67

13. 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 September 30, 2015 and December 31, 2014, only the Company’s warrants were measured on a recurring basis. In addition, during the first nine months and the third quarter of 2015, the Company recorded non-recurring adjustments to reflect the fair value of certain impaired notes receivable. The Company had not recorded any non-recurring fair value adjustments prior to the first quarter of 2015.

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.

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

13. Fair value measurements: - (continued)

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). The calculated fair value of the Fund’s warrant portfolio approximated $892 thousand and $848 thousand, respectively, at September 30, 2015 and December 31, 2014. 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, 2014	$	848
Unrealized gain on warrants, net recorded during the period		44
Balance at September 30, 2015	$	892

Impaired notes receivable

The fair value of the Company’s notes receivable, when impairment adjustments are required, is estimated using either third party appraisals or estimations of the value of collateral (for collateral dependent loans) or discounted cash flow analyses (by discounting estimated future cash flows) using the effective interest rate contained in the terms of the original loan. During the first nine months of 2015, the Company recorded fair value adjustments totaling $50 thousand relative to two impaired notes. Such adjustments were recorded during the first quarter and third quarter of 2015. The Company had no fair value adjustments relative to impaired notes receivable during the first nine months of 2014 and through December 31, 2014.

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

The following table presents the fair value measurement of impaired assets measured at fair value on a non-recurring basis and the level within the hierarchy in which the fair value measurements fall at September 30, 2015 (in thousands):


	September 30, 2015		Level 1 Estimated Fair Value		Level 2 Estimated Fair Value		Level 3 Estimated Fair Value
Impaired notes receivable, net	$	33	$	—	$	—	$	33

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

13. Fair value measurements: - (continued)

The following tables summarize the valuation techniques and significant unobservable inputs used for the Company’s recurring and non-recurring fair value calculation categorized as Level 3 in the fair value hierarchy at September 30, 2015 and December 31, 2014:

September 30, 2015

Name

Valuation
Frequency

Valuation Technique

Unobservable Inputs

Range of Input Values

Warrants

Recurring

Black-Scholes formulation

Stock price

$0.15 – $1,000.00

Exercise price

$0.05 – $1,000.00

Time to maturity (in years)

0.87 – 8.60

Risk-free interest rate

0.25% – 1.91%

Annualized volatility

100.00%

Notes Receivable

Non-recurring

Market Approach

Third Party Agents’ estimate of
the value of collateral

$5,174 – $12,065

Condition of collateral
(equipment)

Poor to Average

December 31, 2014

Name

Valuation
Frequency

Valuation Technique

Unobservable Inputs

Range of Input Values

Warrants

Recurring

Black-Scholes formulation

Stock price

$0.05 – $1,000.00

Exercise price

$0.05 – $1,000.00

Time to maturity (in years)

1.62 – 6.98

Risk-free interest rate

0.50% – 1.97%

Annualized volatility

25.67% – 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.

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.

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

13. Fair value measurements: - (continued)

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.

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, 2015 and December 31, 2014 (in thousands):


	September 30, 2015
	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	6,556	$	6,556	$	—	$	—	$	6,556
Notes receivable, net		2,128		—		—		2,128		2,128
Investment in securities		125		—		—		125		125
Fair value of warrants		892		—		—		892		892
Financial liabilities:
Non-recourse debt		14,821		—		—		14,964		14,964
Long-term debt		2,068		—		—		2,258		2,258


	December 31, 2014
	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	7,214	$	7,214	$	—	$	—	$	7,214
Notes receivable, net		3,786		—		—		3,786		3,786
Investment in securities		125		—		—		125		125
Fair value of warrants		848		—		—		848		848
Financial liabilities:
Non-recourse debt		17,362		—		—		17,428		17,428
Long-term debt		2,068		—		—		2,170		2,170

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.

Results of Operations

The three months ended September 30, 2015 versus the three months ended September 30, 2014

The Company had net losses of $105 thousand and $2 thousand for the three months ended September 30, 2015 and 2014, respectively. Results for the third quarter of 2015 reflect decreases in both total revenues and total expenses when compared to the prior year period.

Revenues

Total revenues for the third quarter of 2015 decreased by $272 thousand, or 9%, as compared to the prior year period. Such decline was largely due to decreases in gain on sales of lease assets and early termination of notes, and interest on notes receivable offset, in part, by an increase in operating lease revenues.

Gains recognized on sales of lease assets and early termination of notes declined by $365 thousand and was mainly due to a change in the mix of assets sold. The decrease in interest on notes receivable was primarily due to loan maturities and the early termination of certain loans since September 30, 2014.

Partially offsetting the aforementioned decreases in revenues was a $158 thousand increase in operating lease revenues. Such increase was largely attributable to additional revenue from an approximate $1.4 million of operating lease assets acquired since September 30, 2014.

Expenses

Total expenses for the third quarter of 2015 decreased by $169 thousand, or 6%, as compared to the prior year period. The net decrease in expenses was primarily the result of reductions in cost reimbursements paid to the Managing Member, acquisition expense, and depreciation expense partially offset by an increase in provision for credit losses.

The decrease in cost reimbursements paid to the Managing Member totaled $71 thousand and was a result of lower allocated costs based, in part, on the Fund’s declining asset base. The decline in acquisition expense totaled $47 thousand and was primarily attributable to the decline in lease and loan origination activities; and, the decline in depreciation expense totaled $46 thousand and was largely a result of run-off and sales of lease assets.

Partially offsetting the aforementioned decreases in expenses was a $51 thousand increase in provision for credit losses. Such increase was largely attributable to the fair value adjustments recorded on two impaired notes.

The nine months ended September 30, 2015 versus the nine months ended September 30, 2014

The Company had net losses of $349 thousand and $797 thousand for the nine months ended September 30, 2015 and 2014, respectively. Results for the first nine months of 2015 reflect an increase in total revenues and a decrease in total expenses when compared to the prior year period.

Revenues

Total revenues for the first nine months of 2015 increased by $181 thousand, or 2%, as compared to the prior year period. Such increase was largely due to the growth in operating lease revenues and a favorable change in unrealized gains or losses recorded on the Fund’s portfolio of warrants offset, in part, by decreases in gain on sales of lease assets and early termination of notes, and interest on notes receivable.

The increase in operating lease revenues totaled $485 thousand and was primarily a result of additional revenue from an approximate $1.4 million of operating lease assets acquired since September 30, 2014. The favorable change in unrealized gains or losses recorded on the Fund’s portfolio of warrants totaled $188 thousand and was attributable to the required periodic revaluation of the warrants in the Company’s portfolio of investments.

Partially offsetting the aforementioned increases in revenues were decreases in gain on sales of lease assets and early termination of notes, and interest on notes receivable totaling $318 thousand and $122 thousand, respectively. The decrease in gain on sales of lease assets and early termination of notes was mainly due to a reduction in volume and change in the mix of asset sold; while the reduction in interest on notes receivable was primarily due to loan maturities and the early termination of certain loans since September 30, 2014.

Expenses

Total expenses for the first nine months of 2015 decreased by $267 thousand, or 3%, as compared to the prior year period. The decrease was largely a result of a favorable change in acquisition expense and decreases in depreciation expense, railcar maintenance expense, other expense and bank charges offset, in part, by increases in the provision for credit losses and amortization of initial direct costs.

The favorable variance in acquisition expense totaled $165 thousand and was largely due to the year-to-date adjustment of allocated costs to more closely match acquisition activities among the Company and its affiliates. Depreciation expense declined by $48 thousand largely due to run-off and sales of lease assets; while railcar maintenance expense decreased by $45 thousand as the prior year period amount included costs of repainting certain railcars in the Fund’s portfolio. In addition, other expense was reduced by $40 thousand primarily due to a decrease in business development costs; and, bank charges declined by $37 thousand due to lower fees associated with the Fund’s Credit Facility.

Partially offseting the aforementioned decreases in expenses were increases in the provision for credit losses and amortization of initial direct costs totaling $44 thousand and $40 thousand, respectively. The increase in

the provision for credit losses was largely attributable to the fair value adjustments recorded on two impaired notes; and, the increase in amortization of initial direct costs reflect higher incremental expenses related to newly capitalized initial direct costs associated with lease and loan originations since September 30, 2014.

Capital Resources and Liquidity

The Company’s cash and cash equivalents totaled $6.6 million and $7.2 million at September 30, 2015 and December 31, 2014, 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.

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 September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net cash provided by (used in):
Operating activities	$	2,748		$	2,217		$	5,845		$	4,781
Investing activities		746			1,512			916			(5,386	)
Financing activities		(3,099	)		(728	)		(7,419	)		(4,992	)
Net increase (decrease) in cash and cash equivalents	$	395		$	3,001		$	(658	)	$	(5,597	)

The three months ended September 30, 2015 versus the three months ended September 30, 2014

During the three months ended September 30, 2015 and 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. The Company also realized $580 thousand and $2.1 million of proceeds from the sales of lease assets and/or the early termination of notes receivable during the respective three months ended September 30, 2015 and 2014. In addition, during the prior year period, the Company utilized borrowings of $2.7 million. There were no such borrowings during the current year period.

During the same comparative periods, cash was primarily used to pay distributions, to pay down debt and to fund investments in notes receivable. Distributions paid to both Other Members and the Managing Member totaled $1.6 million for each of the three months ended September 30, 2015 and 2014. Cash used to pay down debt totaled $1.4 million and $1.8 million for the respective three months ended September 30, 2015 and 2014; while cash used to fund investments in notes receivable totaled $250 thousand and $193 thousand, respectively. In addition, during the prior year period, cash was used to acquire $801 thousand of lease assets. There were no lease assets acquired during the current year period.

The nine months ended September 30, 2015 versus the nine months ended September 30, 2014

During the nine months ended September 30, 2015 and 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 $1.6 million and $3.6 million during the respective nine months ended September 30, 2015 and 2014, and realized $681 thousand and $2.9 million, respectively, of proceeds from the sale of lease assets and early termination of certain notes receivable.

During the same comparative periods, cash was primarily used to pay distributions, pay down debt, acquire lease assets and fund investments in notes receivable. Distributions paid to both Other Members and the Managing Member totaled $4.8 million for each of the nine months ended September 30, 2015 and 2014.

Cash used to pay down debt totaled $4.1 million and $3.7 million for the respective nine months ended September 30, 2015 and 2014; while lease assets acquired totaled $798 thousand and $8.0 million, respectively. In addition, cash totaling $250 thousand and $1.6 million was used to fund investments in notes receivable during the respective nine months ended September 30, 2015 and 2014.

Revolving credit facility

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 September 30, 2015. 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 September 30, 2015, 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 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 $35.1 million, 0.48 to 1, and 17.27 to 1, respectively, as of September 30, 2015. As such, as of September 30, 2015, the Company was in compliance with all such material financial covenants.

Reconciliation to GAAP of EBITDA

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

The following is a reconciliation of net loss to EBITDA, as defined in the loan agreement, for the twelve months ended September 30, 2015 (in thousands):


Net loss – GAAP basis	$	(476	)
Interest expense		570
Depreciation and amortization		7,986
Amortization of initial direct costs		125
Provision for credit losses		45
Unrealized gain on fair valuation of warrants		(252	)
Principal payments received on direct financing leases		20
Principal payments received on notes receivable		1,826
EBITDA (for Credit Facility financial covenant calculation only)	$	9,844

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 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 September 30, 2015 and December 31, 2014, the Company had non-recourse long-term debt totaling $14.8 million and $17.4 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 7 through 9 to the financial statements as set forth in Part I, Item 1, Financial Statements (Unaudited).

Long-Term Debt

As of September 30, 2015, 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 September 2015.

Cash distributions were made by the Fund to Unitholders of record as of August 31, 2015 and paid through September 30, 2015. 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.

The following table summarizes distribution activity for the Fund from inception through September 30, 2015 (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		4,191				—				4,191				0.88		4,758,784
Dec 2013 – Nov 2014		Jan 2014 – Dec 2014		5,952				—				5,952				0.90		6,620,428
Dec 2014 – Aug 2015		Jan 2015 – Sep 2015		4,465				—				4,465				0.68		6,614,390
			$	15,781			$	—			$	15,781			$	3.25
Source of distributions
Lease and loan payments and sales proceeds received			$	15,781	100.00	%	$	—	0.00	%	$	15,781	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	%
			$	15,781	100.00	%	$	—	0.00	%	$	15,781	100.00	%

(1)

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

(2)

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

(3)

Balances shown represent weighted average units for the period from January 1, 2012 to November 30, 2012, December 1, 2012 to November 30, 2013, December 1, 2013 to November 30, 2014 and December 1, 2014 to August 31, 2015, respectively.

Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies

Off-Balance Sheet Transactions

None.

Recent Accounting Pronouncements

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, 2014. There have been no material changes to the Company’s critical accounting policies since December 31, 2014.

Item 4. Controls and procedures.

Evaluation of disclosure controls and procedures

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

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

Changes in internal control

There were no changes in the Managing Member’s internal control over financial reporting, as it is applicable to the Company, during the quarter ended September 30, 2015 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.

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

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: November 12, 2015

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)


Part I. Financial Information			3
Item 1. Financial Statements (Unaudited)			3
Balance Sheets, September 30, 2015 and December 31, 2014			3
Statements of Operations for the three and nine months ended September 30, 2015 and 2014			4
Statements of Changes in Members’ Capital for the year ended December 31, 2014 and for the nine months ended September 30, 2015			5
Statements of Cash Flows for the three and nine months ended September 30, 2015 and 2014			6
Notes to the Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			26
Item 4. Controls and Procedures			33
Part II. Other Information			34
Item 1. Legal Proceedings			34
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			34
Item 3. Defaults Upon Senior Securities			34
Item 4. Mine Safety Disclosures			34
Item 5. Other Information			34
Item 6. Exhibits			34

Form 10-Q

For the quarterly period ended September 30, 2015

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:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

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

Investment in securities:

Purchased securities

Warrants

Per Unit data:

Recent accounting pronouncements:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

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

3. Notes receivable, net:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

3. Notes receivable, net: - (continued)

4. Allowance for credit losses:

Accounts receivable

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

4. Allowance for credit losses: - (continued)

Financing receivables

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

4. Allowance for credit losses: - (continued)

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

4. Allowance for credit losses: - (continued)

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

5. Investment in equipment and leases, net:

Impairment of investments in leases:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

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

Operating leases:

Direct financing leases:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

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

6. Related party transactions:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

6. Related party transactions: - (continued)

7. Non-recourse debt:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

8. Long-term debt:

9. Borrowing facilities:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

9. Borrowing facilities: - (continued)

10. Commitments:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

11. Guarantees:

12. Members’ Capital:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

12. Members’ Capital: - (continued)

13. Fair value measurements:

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

13. Fair value measurements: - (continued)

Warrants (recurring)

Impaired notes receivable

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

13. Fair value measurements: - (continued)

Cash and cash equivalents

Notes receivable

ATEL 15, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

13. Fair value measurements: - (continued)

Investment in securities

Non-recourse and Long-term debt

Commitments and Contingencies

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

Overview

Results of Operations

The three months ended September 30, 2015 versus the three months ended September 30, 2014

Revenues

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

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)