ATEL GROWTH CAPITAL FUND 8, LLC
 
Index

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

ATEL GROWTH CAPITAL FUND 8, LLC
 
BALANCE SHEETS
 
MARCH 31,JUNE 30, 2018 AND DECEMBER 31, 2017

(in thousands)

		March 31, 2018				December 31, 2017				June 30, 2018				December 31, 2017
		(Unaudited)								(Unaudited)
ASSETS
Cash and cash equivalents		$	703			$	1,255			$	357			$	1,255
Due from affiliate			41				150
Due from affiliates											78				150
Accounts receivable			—				13				—				13
Notes receivable, net			3,155				3,021				3,125				3,021
Investment in securities			384				243				341				243
Warrants, fair value			521				489				542				489
Prepaid expenses and other assets			2				4				10				4
Total assets		$	4,806			$	5,175			$	4,453			$	5,175
LIABILITIES AND MEMBERS’ CAPITAL
Accounts payable and accrued liabilities:
Managing Member		$	28			$	56			$	17			$	56
Accrued distributions to Other Members			248				248				248				248
Other			—				1				16				1
Total liabilities			276				305				281				305
Commitments and contingencies
Members’ capital:
Managing Member			—				—				—				—
Other Members			4,530				4,870				4,172				4,870
Total Members’ capital			4,530				4,870				4,172				4,870
Total liabilities and Members’ capital		$	4,806			$	5,175			$	4,453			$	5,175

ATEL GROWTH CAPITAL FUND 8, LLC
 
STATEMENTS OF INCOMEOPERATIONS
 
FOR THE THREE AND SIX MONTHS ENDED
MARCH 31,JUNE 30, 2018 AND 2017

(in thousands except units and per unit data)

(Unaudited)

		Three Months Ended March 31,								Three Months Ended June 30,								Six Months Ended June 30,
		2018				2017				2018				2017				2018				2017
Revenues:
Notes receivable interest income, including accretion of net note origination costs and discounts		$	122			$	144			$	132			$	123			$	254			$	267
Gain on early termination of notes receivable			—				70				—				—				—				70
Gain on sales or dispositions of investment in securities			—				1				—				—				—				1
Unrealized gain on fair value and observable price adjustments for investment in securities			141				—
Unrealized gain on fair value adjustment for warrants			10				29
Unrealized gain (loss) on fair value adjustment for warrants											9				(2	)			19				27
Unrealized (loss) gain on fair value adjustment for investment in securities											(43	)			—				98				—
Other			3				9				7				4				10				13
Total revenues			276				253				105				125				381				378
Expenses:
Asset management fees to Managing Member			13				18				12				14				25				32
Acquisition expense			26				64				6				41				33				105
Cost reimbursements to affiliates			44				72				32				63				76				135
Reversal of provision for credit losses			(24	)			—
(Reversal of) provision for credit losses											(9	)			(24	)			(33	)			(24	)
Professional fees			27				21				9				36				36				57
Outside services			29				20				14				19				43				39
Taxes on income and franchise fees			—				2				3				—				3				2
Bank charges			5				5				5				5				10				10
Other			6				7				7				8				12				15
Total expenses			126				209				79				162				205				371
Net income		$	150			$	44
Net income (loss)										$	26			$	(37	)		$	176			$	7
Net income (loss):
Managing Member		$	49			$	49			$	38			$	50			$	87			$	99
Other Members			101				(5	)			(12	)			(87	)			89				(92	)
		$	150			$	44			$	26			$	(37	)		$	176			$	7
Net income per Limited Liability Company Unit (Other Members)		$	0.06			$	(0.00	)
Net income (loss) per Limited Liability Company Unit (Other Members)										$	(0.01	)		$	(0.05	)		$	0.06			$	(0.06	)
Weighted average number of Units outstanding			1,612,396				1,617,156				1,612,396				1,615,475				1,612,396				1,616,311

ATEL GROWTH CAPITAL FUND 8, LLC
 
STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL
 
FOR THE YEAR ENDED DECEMBER 31, 2017
AND FOR THE THREESIX MONTHS ENDED
MARCH 31,JUNE 30, 2018

(in thousands except units and per unit data)

		Units				Amount								Total								Amount
						Other Members				Managing Member								Units				Other Members				Managing Member				Total
Balance December 31, 2016			1,618,296			$	7,011			$	—			$	7,011				1,618,296			$	7,011			$	—			$	7,011
Repurchase of Units			(5,900	)			(30	)			—				(30	)			(5,900	)			(30	)			—				(30	)
Distributions to Other Members ($1.10 per Unit)			—				(1,774	)			—				(1,774	)			—				(1,774	)			—				(1,774	)
Distributions to Managing Member			—				—				(198	)			(198	)			—				—				(198	)			(198	)
Net (loss) income			—				(337	)			198				(139	)			—				(337	)			198				(139	)
Balance December 31, 2017			1,612,396				4,870				—				4,870				1,612,396				4,870				—				4,870
Distributions to Other Members ($.27 per Unit)			—				(441	)			—				(441	)
Distributions to Other Members ($0.49 per Unit)																			—				(787	)			—				(787	)
Distributions to Managing Member			—				—				(49	)			(49	)			—				—				(87	)			(87	)
Net income			—				101				49				150				—				89				87				176
Balance March 31, 2018 (unaudited)			1,612,396			$	4,530			$	—			$	4,530
Balance June 30, 2018 (unaudited)																			1,612,396			$	4,172			$	—			$	4,172

ATEL GROWTH CAPITAL FUND 8, LLC
 
STATEMENTS OF CASH FLOWS
 
FOR THE THREE AND SIX MONTHS ENDED
MARCH 31,JUNE 30, 2018 AND 2017

(in thousands)

(Unaudited)

		Three Months Ended March 31,								Three Months Ended June 30,								Six Months Ended June 30,
		2018				2017				2018				2017				2018				2017
Operating activities:
Net income		$	150			$	44
Adjustment to reconcile net income to cash provided by (used) in operating activities:
Net income (loss)										$	26			$	(37	)		$	176			$	7
Adjustment to reconcile net income (loss) to cash provided by (used in) operating activities:
Accretion of note discount – warrants			(11	)			(13	)			(13	)			(10	)			(24	)			(23	)
Amortization of net note origination costs			9				5				8				3				17				8
Gain on early termination of notes receivable			—				(70	)			—				—				—				(70	)
Gain on sales or dispositions of investment in securities			—				(1	)			—				—				—				(1	)
Reversal of provision for credit losses			(24	)			—				(9	)			(24	)			(33	)			(24	)
Unrealized gain on fair value and observable price adjustments for investment in securities			(141	)			—
Unrealized gain on fair value adjustment for warrants			(10	)			(29	)
Unrealized (gain) loss on fair value adjustment for warrants											(9	)			2				(19	)			(27	)
Unrealized loss (gain) on fair value adjustment for securities											43				—				(98	)			—
Changes in operating assets and liabilities:
Accounts receivable			13				7				—				—				13				7
Due from affiliates			109				26				(37	)			(24	)			72				2
Prepaid expenses and other assets			2				—				(8	)			(2	)			(6	)			(2	)
Accounts payable, Managing Member			(28	)			—				(11	)			—				(39	)			—
Accounts payable, other			(2	)			(3	)			17				—				15				(3	)
Unearned fee income related to notes receivable			—				(9	)			(4	)			(4	)			(4	)			(13	)
Net cash provided by (used) in operating activities			67				(43	)
Net cash provided by (used in) operating activities											3				(96	)			70				(139	)
Investing activities:
Advance payments			(64	)			(56	)			—				—				(64	)			(56	)
Proceeds from early termination of notes receivable			—				130				—				—				—				130
Proceeds from sales or dispositions of investment in securities			—				1				—				—				—				1
Payments of note origination costs			(2	)			—				—				—				(2	)			—
Note receivable origination and warrants			(600	)			—
Note receivable advances											(416	)			—				(1,016	)			—
Principal payments received on notes receivable			537				780				451				554				988				1,334
Net cash (used in) provided by investing activities			(129	)			855
Net cash provided by (used in) investing activities											35				554				(94	)			1,409
Financing activities:
Distributions to Other Members			(441	)			(444	)			(346	)			(444	)			(787	)			(888	)
Distributions to Managing Member			(49	)			(60	)			(38	)			(50	)			(87	)			(110	)
Repurchase of Units			—				(16	)			—				(2	)			—				(18	)
Net cash used in financing activities			(490	)			(520	)			(384	)			(496	)			(874	)			(1,016	)
Net (decrease) increase in cash and cash equivalents			(552	)			292				(346	)			(38	)			(898	)			254
Cash and cash equivalents at beginning of period			1,255				1,860				703				2,152				1,255				1,860
Cash and cash equivalents at end of period		$	703			$	2,152			$	357			$	2,114			$	357			$	2,114
Supplemental disclosures of cash flow information:
Cash paid during the period for taxes		$	—			$	3			$	—			$	—			$	—			$	3
Schedule of non-cash investing and financing transactions:
Distributions payable to Other Members at period-end		$	248			$	250			$	—			$	250			$	248			$	250
Distributions payable to Managing Member at period-end		$	44			$	28			$	—			$	28			$	17			$	28

ATEL GROWTH CAPITAL FUND 8, LLC
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

1. Organization and Limited Liability Company matters:

ATEL Growth Capital Fund 8, LLC (the “Company” or the “Fund”) was formed under the laws of the state of California on December 8, 2011 for the purpose of providing financing for the acquisition of equipment and other goods and services used by emerging growth companies and established privately held companies without publicly traded securities, and for providing other forms of financing for, and to acquire equity interests and warrants and rights to purchase equity interests in such companies. The Fund may continue until it is terminated in accordance with the ATEL Growth Capital Fund 8, LLC limited liability company operating agreement dated December 13, 2011 (the “Operating Agreement”). The Managing Member of the Company is AGC Managing Member, LLC (the “Managing Member” or “Manager”), the renamed AGC 8 Managing Member, LLC which was formed in December 2011 as a Nevada limited liability company. Such name change is the result of an amendment to the articles of incorporation filed with the State of Nevada effective March 18, 2014. Contributions in the amount of $500 were received as of December 31, 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 was terminated on August 20, 2014. Through March 31,June 30, 2018, cumulative contributions, net of rescissions and related distributions paid, totaling $16.2 million (inclusive of the $500 initial Member’s capital investment) have been received. As of March 31,June 30, 2018, a total of 1,612,396 Units were issued and outstanding.

Prior to the termination of its offering, the Fund, or Managing Member on behalf of the Fund, incurred costs in connection with the organization, registration and issuance of the Units. The amount of such costs borne by the Fund was limited by certain provisions of the Operating Agreement.

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, 2017, filed with the Securities and Exchange Commission.

2. Summary of Significant Accounting Policies:

Basis of presentation:

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q as mandated by the Securities and Exchange Commission. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the Managing Member, necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three and six months ended March 31,June 30, 2018 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 March 31,June 30, 2018, up until the issuance of the financial statements. No events were noted which would require additional disclosure in the footnotes to the financial statements or adjustments thereto.

Cash and cash equivalents:

Cash and cash equivalents include cash in banks and cash equivalent investments such as U.S. Treasury instruments with original and/or purchased maturities of ninety days or less.

7

ATEL GROWTH CAPITAL FUND 8, LLC
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

2. Summary of Significant Accounting Policies: - (continued)

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 credit losses on notes receivable and the fair valuation of equity securities and warrants.

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 primary geographic region in which the Company seeks financing opportunities is North America. Currently, 100% of the Company’s operating revenues are from customers domiciled in the United States.

Allowance for Doubtful Accounts

Accounts receivable represent the amounts billed under 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 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 note payments outstanding less than 90 days. Based upon management’s judgment, such notes may be placed in non-accrual status. Notes placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid receivable is probable. All payments received on amounts billed under notes receivable are applied only against outstanding principal balances.

Valuation Adjustments

In addition to the allowance established for delinquent accounts receivable, the total allowance also includes probable impairment charges on notes receivable.

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

Investment in securities:

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

8

ATEL GROWTH CAPITAL FUND 8, LLC
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

2. Summary of Significant Accounting Policies: - (continued)

Purchased securities

The Company’s purchased securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company's results of operations. The Company’s purchased securities not registered for public sale that do not have readily determinable fair values are measured at cost minus impairment, and adjusted for changes in observable prices. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. As of March 31,June 30, 2018 and December 31, 2017, investments in equity securities totaled $384$341 thousand and $243 thousand, respectively. Sales or dispositions of securities duringDuring the three and six months ended March 31,June 30, 2018, the Company recorded fair value adjustments of $43 thousand of unrealized losses and 2017 were$98 thousand of unrealized gains, respectively. The Company recorded $0 and $1 thousand respectively. Unrealized gainsof gain on fair value adjustment forsales or disposition of investment in securities were $141 thousand and $0 forduring the respective threesix months ended March 31,June 30, 2018 and 2017.

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. At March 31,June 30, 2018 and December 31, 2017, the Managing Member estimated the fair value of warrants to be $521$542 thousand and $489 thousand, respectively. During the three months ended March 31,June 30, 2018 and 2017, the Company recorded unrealized gains of $10$9 thousand and $29unrealized losses of $2 thousand, respectively, on the fair valuation of its warrants. The Company also realized $0 and $1 thousand of gains onDuring the net exercise of certain warrants during threesix months ended March 31,June 30, 2018 and 2017, respectively.the Company recorded unrealized gains of $19 thousand and $27 thousand, respectively, on the fair valuation of its warrants. There were no exercises of warrants during the three and six months ended June 30, 2018 and 2017.

Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, notes receivable and accounts receivable. The Company places the majority of its cash deposits in non-interest bearing accounts with financial institutions that have no less than $10 billion in assets. Such deposits are insured up to $250,000. The remainder of the Funds’ cash is temporarily invested in U.S. Treasury denominated instruments. The concentration of such deposits and temporary cash investments is not deemed to create a significant risk to the Company. Accounts receivable represent amounts due from various industries.

Per Unit data:

The Company issues only one class of Units, none of which are considered dilutive. Net income (loss) per Unit is based upon the weighted average number of Other Members Units outstanding during the period.

Fair value:

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

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

9

ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

2. Summary of Significant Accounting Policies: - (continued)

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.

ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

2. Summary of Significant Accounting Policies: - (continued)

changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the method(s) and

ATEL GROWTH CAPITAL FUND 8, LLC
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

3. Notes receivable, net: - (continued)

At March 31,June 30, 2018, four of the Company’sCompany had no notes receivable were removed fromon non-accrual status. As of December 31, 2017, four (Notes A and C) of the Company’s notes receivable were on non-accrual status. Details are as follows, in thousands, except for the number of notes receivable and the annual interest rate:

		Notes receivable A				Notes receivable A
		December 31, 2017				December 31, 2017
Number of notes			3				3
Net investment value		$	33			$	33
Annual interest rate			18.00	%			18.00	%
Fair value adjustments		$	33			$	33
Fair value amount		$	—			$	—
Interest income not recorded relative to original terms		$	16			$	16

ATEL GROWTH CAPITAL FUND 8, LLC
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

3. Notes receivable, net: - (continued)

As of March 31, 2018, the minimum future payments receivable are as follows (in thousands):

Nine months ending December 31, 2018		$	1,671
Year ending December 31, 2019			1,608
2020			524
2021			75
			3,878
Less: portion representing unearned interest income, net			(635	)
			3,243
Accretion of warrants			(98	)
Unamortized initial direct costs			19
Less: Allowance for credit losses			(9	)
Notes receivable, net		$	3,155

4. Allowance for credit losses:

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

		Valuation Adjustments –  Notes Receivable				Valuation Adjustments –  Notes Receivable
Balance December 31, 2016		$	717			$	717
Note receivable disposal			(611	)			(611	)
Reversal of provision for credit losses			(73	)			(73	)
Balance December 31, 2017			33				33
Reversal of provision for credit losses			(24	)			(33	)
Balance March 31, 2018		$	9
Balance June 30, 2018						$	—

ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

4. Allowance for credit losses: - (continued)

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

At March 31,June 30, 2018 and December 31, 2017, the Company’s notes receivables by credit quality indicator and by class of financing receivables are as follows (in thousands):

		Notes Receivable								Notes Receivable
		March 31, 2018				December 31, 2017				June 30, 2018				December 31, 2017
Pass		$	3,048			$	2,547			$	3,015			$	2,547
Special mention			116				392				8				392
Substandard							115				102				115
Doubtful			—				—				—				—
Total		$	3,164			$	3,054			$	3,125			$	3,054

ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

5. 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.

ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

8. Fair value measurements:

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

At March 31,June 30, 2018 and December 31, 2017, the Company’s warrants and investment securities were measured on a recurring basis. At December 31, 2017, only the Company’s warrants were measured on a recurring basis.

ATEL GROWTH CAPITAL FUND 8, LLC
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

8. 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 March 31,June 30, 2018 and December 31, 2017:

March 31,June 30, 2018

Name

Valuation Frequency

Valuation Technique

Unobservable Inputs

Range of Input Values

Warrants

Recurring

Black-Scholes formulation

Stock price

$

$0.00 – $14.75

Exercise price

$

$0.01 – $25.76

Time to maturity (in years)

2.742.49 – 14.6314.38

Risk-free interest rate

2.36%2.58% – 2.79%2.88%

Annualized volatility

1%25.13% – 88.34%292.22%

December 31, 2017

Name

Valuation Frequency

Valuation Technique

Unobservable Inputs

Range of Input Values

Warrants

Recurring

Black-Scholes formulation

Stock price

$

$0.00 – $14.75

Exercise price

$

$0.01 – $25.76

Time to maturity (in years)

2.99 – 14.88

Risk-free interest rate

1.98% – 2.49%

Annualized volatility

27.78% – 83.30%

Impaired Investment Securities

Non-recurring

Market Approach

Qualitative and quantitative information (Investee Management)

Not Applicable

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. 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.

1817

ATEL GROWTH CAPITAL FUND 8, LLC
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

8. Fair value measurements: - (continued)

Investment in securities

Investment securities (recurring)

The Company’s investment securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company's results of operations. The 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 fair value of investment securities that were accounted for on a recurring basis as of the three monthand six months ended March 31,June 30, 2018 and classified as Level 1 are as follows (in thousands):

						Three Months Ended June 30, 2018				Six Months Ended June 30, 2018
Fair value of securities at beginning of period		$	92			$	218			$	92
Unrealized gain on fair value of securities			126
Unrealized (loss) gain on fair value of securities							(42	)			84
Fair value of investment securities at end of period		$	218			$	176			$	176

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, changes in general economic conditions, including significant rates of inflation and fluctuations in interest rates may result in reduced returns on invested capital. The Company’s performance is subject to risks relating to borrower defaults and the creditworthiness of its borrowers. Investors are cautioned not to attribute undue certainty to these forward-looking statements, which speak only as of the date of this Form 10-Q. We undertake no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect the occurrence of unanticipated events, other than as required by law.

Overview

ATEL Growth Capital Fund 8, LLC (the “Company” or the “Fund”) was formed under the laws of the state of California on December 8, 2011 for the purpose of providing financing for the acquisition of equipment and other goods and services used by emerging growth companies and established privately held companies without publicly traded securities, and for providing other forms of financing for, and to acquire equity interests and warrants and rights to purchase equity interests in such companies.

Through March 31,June 30, 2018, cumulative contributions, net of rescissions and related distributions paid, totaling $16.2 million (inclusive of the $500 initial Member’s capital investment) have been received. As of March 31,June 30, 2018, a total of 1,612,396 Units were issued and outstanding.

Results of Operations

The three months ended March 31,June 30, 2018 versus the three months ended March 31,June 30, 2017

The Company reportedhad net income of $150$26 thousand and $44net loss $37 thousand for the respective three month periodsmonths ended March 31,June 30, 2018 and 2017. WhenThe results for the second quarter of 2018 reflect decreases in total revenues and total operating expenses when compared to the prior year period results, the current year quarter reflects an increase in revenues and a decrease in expenses.period.

Revenues

Total revenues for the three month period ended March 31,second quarter of 2018 increaseddecreased by $23$20 thousand, or 9%16%, whenas compared to the prior year period. Such decrease was largely due to a $43 thousand unfavorable change in the fair value adjustment for investment in securities; offset, in part, by an $11 thousand favorable change in the fair value adjustments for warrants; and a $9 thousand, or 7%, increase in interest income on new investments in notes receivable.

Expenses

Total expenses for the second quarter ended June 30, 2018 decreased by $83 thousand, or 51%, as compared to the prior year period. The net decrease in total expenses was largely due to a $35 thousand, or 85%, decrease in acquisition expense related to the financing of equipment which was not consummated; a $31 thousand, or 49%, decrease in cost reimbursement to affiliates, due to a refinement in cost methodology; and a $27 thousand or 75% decrease in professional fees, related to year over year differences in timing and related billings for professional audit and tax services; offset, in part, by a $15 thousand, or 63%, unfavorable change in the provision for credit losses, due to delinquent accounts.

The six months ended June 30, 2018 versus the six months ended June 30, 2017

The Company had net income of $176 thousand and $7 thousand for the respective six month periods ended June 30, 2018 and 2017. The results for the six months ended June 30, 2018 reflect an increase in total revenues and a decrease in total operating expenses when compared to the prior year period.

19

Revenues

Total revenues for the first half of 2018 increased by $3 thousand, or 1% as compared to the prior year period. Such increase was largely due to a $122$98 thousand or 421%, net increasefavorable change in unrealized gaingains on fair value adjustment for warrants and investment in securities; offset, in part, by a $70 thousand, or 100%, decrease in gain on early termination of notes receivable, as there was no note termination in thisduring the current period; and by a $22$13 thousand, or 15%5%, decrease in notes receivable interest income largely due to run-off of the loan portfolio.on investments in notes receivable.

Expenses

Total expenses for the three month periodsix months ended March 31,June 30, 2018 decreased by $83$166 thousand, or 40%45%, as compared to the prior year period. The net decrease in operating expenses were primarilyis mostly due to a $38$72 thousand, or 59%69%, decrease in acquisition expense relativerelated to venture origination allocations during the current period;financing of equipment which was not consummated; a $28$59 thousand, or 39%44%, decrease in cost reimbursements to affiliates, relativedue to indirecta refinement in cost allocations;methodology; and a recognition of a $24 thousand favorable change in the reversal of provision for credit losses, due to customers’ payment of outstanding balances; offset in part, by a $9$21 thousand, or 45%37%, increasedecrease in outside services, indicative of additional efforts requiredprofessional fees, related to comply with certain regulatory requirements.year over year differences in timing and related billings for professional audit and tax services.

Capital Resources and Liquidity

The Company’s cash and cash equivalents totaled $0.7$0.4 million and $1.3 million at March 31,June 30, 2018 and December 31, 2017, respectively. The liquidity of the Company varies, increasing to the extent cash flows from its portfolio investments exceed expenses and decreasing as portfolio investments are acquired, as distributions are made to the Members and to the extent expenses exceed cash flows from its portfolio investments.

Cash was primarily used to pay distributions to both the Other Members and the Managing Member, totaling $490$874 thousand and $504$998 thousand for the threesix months ended March 31,June 30, 2018 and 2017, respectively. In addition, cash was used to pay invoices related to management fees and expenses, and other payables.

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 November 2012. Additional distributions have been made through March 31,June 30, 2018.

Cash distributions were paid by the Fund to Unitholders of record as of February 28, 2018, and paid through March 31,June 30, 2018. The distributions may be characterized for tax, accounting and economic purposes as a return of capital, a return on capital (including escrow interest) or a portion of each. Generally, the portion of each cash distribution by a company which exceeds its net income for the fiscal period would constitute a return of capital. The Fund is required by the terms of its Operating Agreement to distribute the net cash flow generated by its investments in certain minimum amounts during the Reinvestment Period before it can reinvest its operating cash flow in additional portfolio assets. See the discussion in the ATEL Growth Capital Fund 8, LLC Prospectus dated August 20, 2012 (“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 loans funded and equity investments acquired. During the Fund’s acquisition and operating stages, the Fund may incur short term borrowing to fund regular distributions of such gross revenues to be generated by newly acquired transactions during their respective initial fixed terms. As such, all Fund periodic cash distributions made during these stages have been, and are expected in the future to be, based on the Fund’s actual and anticipated gross revenues to be generated from the binding initial terms of the loans and investments funded.