Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

☒

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

For the quarterly period ended ~~September~~June 30, ~~2019~~ 2020

☐◻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 ~~000‑55217~~000-55217

ATEL GROWTH CAPITAL FUND 8, LLC

(Exact name of registrant as specified in its charter)


California		~~37‑1656343~~37-1656343
(State or other jurisdiction of ~~Incorporation~~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~~ code: (415) ~~989‑8800~~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

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:	Trading Symbol	Name of each exchange on which registered:
N/A	N/A	N/A

Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒⌧ No ☐◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒⌧ No ☐◻

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


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

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

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

The number of Limited Liability Company Units outstanding as of ~~October~~July 31, ~~2019~~2020 was 1,612,396.

DOCUMENTS INCORPORATED BY REFERENCE

None.

Table of Contents

ATEL GROWTH CAPITAL FUND 8, LLC

Index


Part I.	Financial Information	3
~~Part I.~~	~~Financial Information~~	3

Item 1.	Financial Statements (Unaudited)	3
	Balance Sheets, ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~2019	3
	Statements of ~~Operations~~Income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019	4
	Statements of Changes in Members’ Capital for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019	5
	Statements of Cash Flows for the ~~three and nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019	6
	Notes to the Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18 20

Item 4.	Controls and Procedures	21 24

Part II.	Other Information	22 25

Item 1.	Legal Proceedings	22 25

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22 25

Item 3.	Defaults Upon Senior Securities	22 25

Item 4.	Mine Safety Disclosures	22 25

Item 5.	Other Information	22 25

Item 6.	Exhibits	22 25

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

ATEL GROWTH CAPITAL FUND 8, LLC

BALANCE SHEETS

~~SEPTEMBER~~JUNE 30, ~~2019~~2020 AND DECEMBER 31, ~~2018~~2019

(In Thousands)


	September 30,		December 31,
	2019		2018
	(Unaudited)

					June 30,		December 31,
					2020		2019
					(Unaudited)
ASSETS
Cash and cash equivalents	$	333	$	214	$	25	$	70
Due from Managing Member and affiliates		—		34
Accounts receivable						11		11
Notes receivable, net		719		2,188		242		514
Investment in securities		423		281		572		314
Warrants, fair value		384		561		491		588
Prepaid expenses and other assets		5		7		2		4
Total assets	$	1,864	$	3,285	$	1,343	$	1,501


LIABILITIES AND MEMBERS’ CAPITAL


Accounts payable and accrued liabilities:
Due to Managing Member and affiliates	$	54	$	63	$	26	$	14
Accrued distributions to Other Members		249		249		—		99
Other		11		—		2		6
Total liabilities		314		312		28		119


Commitments and contingencies


Members’ capital:
Managing Member		—		—		—		—
Other Members		1,550		2,973		1,315		1,382
Total Members’ capital		1,550		2,973		1,315		1,382
Total liabilities and Members’ capital	$	1,864	$	3,285	$	1,343	$	1,501

See accompanying notes.

Table of Contents

ATEL GROWTH CAPITAL FUND 8, LLC

STATEMENTS OF ~~OPERATIONS~~INCOME

FOR THE THREE AND ~~NINE~~SIX MONTHS ENDED

~~SEPTEMBER~~JUNE 30, ~~2019~~2020 AND ~~2018~~

~~(In Thousands Except for Units and Per Unit Data)~~

~~(Unaudited)~~

Three Months Ended

Nine Months Ended

September 30,

September 30,


2019

2018

2019

2018

Revenues:









Notes receivable interest income, including accretion of net note origination costs and discounts

$
60

$
128

$
245

$
382

Gain on early termination of notes receivable

3

—

55

—

Gain on sales or dispositions of investment in securities

—

—

161

—

Unrealized (loss) gain on fair value adjustment for investment in securities

(30)

(33)

(26)

65

Unrealized (loss) gain on fair value adjustment for warrants

(2)

(1)

(37)

18

Other

1

2

3

12

Total revenues

32

96

401

477

Expenses:









Asset management fees to Managing Member

6

13

24

38

Acquisition expense

—

2

—

35

Cost reimbursements to affiliates

30

19

104

95

Provision for (reversal of) credit losses

—

—

27

(33)

Professional fees

40

29

98

65

Outside services

21

22

55

65

Taxes on income and franchise fees

—

—

1

3

Bank charges

5

5

13

15

Printing and photocopying

3

3

7

6

Other

5

3

16

12

Total expenses

110

96

345

301

Net (loss) income

$
(78)

$
—

$
56

$
176

Net income (loss):









Managing Member

$
28

$
61

$
148

$
148

Other Members

(106)

(61)

(92)

28

$
(78)

$
—

$
56

$
176

Net (loss) income per Limited Liability Company Unit (Other Members)

$
(0.07)

$
(0.04)

$
(0.06)

$
0.02

Weighted average number of Units outstanding

1,612,396

1,612,396

1,612,396

1,612,396

~~See accompanying notes.~~

~~Table of Contents~~

~~ATEL GROWTH CAPITAL FUND 8, LLC~~

~~STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL~~

~~FOR THE THREE AND NINE MONTHS ENDED~~

~~SEPTEMBER 30,~~ 2019 ~~AND 2018~~

(In Thousands Except for Units and Per Unit Data)

(Unaudited)

Three Months Ended September 30, 2019

Other Members

Managing


Units

Amount

Member

Total

Balance June 30, 2019

1,612,396

$
2,099

$
—

$
2,099

Distributions to Other Members ($0.27 per unit)

—

(443)

—

(443)

Distributions to Managing Member

—

—

(28)

(28)

Net (loss) income

—

(106)

28

(78)

Balance September 30, 2019

1,612,396

$
1,550

$
—

$
1,550

Nine Months Ended September 30, 2019

Other Members

Managing

Units

Amount

Member

Total

Balance December 31, 2018

1,612,396

$
2,973

$
—

$
2,973

Distributions to Other Members ($0.83 per unit)

—

(1,331)

—

(1,331)

Distributions to Managing Member

—

—

(148)

(148)

Net (loss) income

—

(92)

148

56

Balance September 30, 2019

1,612,396

$
1,550

$
—

$
1,550

Three Months Ended September 30, 2018

Other Members

Managing


Units

Amount

Member

Total

Balance June 30, 2018

1,612,396

$
4,172

$
—

$
4,172

Distributions to Other Members ($0.34 per unit)

—

(541)

—

(541)

Distributions to Managing Member

—

—

(61)

(61)

Net (loss) income

—

(61)

61

—

Balance September 30, 2018

1,612,396

$
3,570

$
—

$
3,570

Nine Months Ended September 30, 2018

Other Members

Managing

Units

Amount

Member

Total

Balance December 31, 2017

1,612,396

$
4,870

$
—

$
4,870

Distributions to Other Members ($0.82 per unit)

—

(1,328)

—

(1,328)

Distributions to Managing Member

—

—

(148)

(148)

Net income

—

28

148

176

Balance September 30, 2018

1,612,396

$
3,570

$
—

$
3,570


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating revenues:
Notes receivable interest income, net	$	14	$	81	$	33	$	185
Gain on early termination of notes receivable		—		4		—		52
Other		—		1		—		2
Total operating revenues		14		86		33		239

Operating expenses:
Asset management fees to Managing Member		2		9		6		18
Cost reimbursements to affiliates		17		38		40		74
Provision for credit losses		—		14		—		27
Professional fees		43		25		69		58
Outside services		11		12		18		34
Taxes on income and franchise fees		1		—		1		1
Dues and subscriptions		4		—		8		—
Bank charges		6		3		14		8
Printing and photocopying		1		1		2		4
Other		—		5		8		11
Total operating expenses		85		107		166		235
Net (loss) income from operations		(71)		(21)		(133)		4

Other income:
Gain on sales or dispositions of investment in securities		—		—		—		161
Unrealized gain on fair value adjustment for investment in securities		219		4		251		4
Unrealized (loss) gain on fair value adjustment for warrants		(86)		67		(97)		(35)
Total other income		133		71		154		130
Net income	$	62	$	50	$	21	$	134

Net income (loss):
Managing Member	$	—	$	60	$	7	$	120
Other Members		62		(10)		14		14
	$	62	$	50	$	21	$	134

Net income (loss) per Limited Liability Company Unit (Other Members)	$	0.04	$	(0.01)	$	0.01	$	0.01
Weighted average number of Units outstanding		1,612,396		1,612,396		1,612,396		1,612,396

See accompanying notes.

Table of Contents

ATEL GROWTH CAPITAL FUND 8, LLC

STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL

FOR THE THREE AND SIX MONTHS ENDED

JUNE 30, 2020 AND 2019

(In Thousands Except for Units and Per Unit Data)

(Unaudited)


	Three Months Ended June 30, 2020
		Amount
		Other		Managing
	Units	Members		Member		Total
Balance March 31, 2020	1,612,396	$	1,253	$	—	$	1,253
Net income	—		62		—		62
Balance June 30, 2020	1,612,396	$	1,315	$	—	$	1,315

	Six Months Ended June 30, 2020
		Amount
		Other		Managing
	Units	Members		Member		Total
Balance December 31, 2019	1,612,396	$	1,382	$	—	$	1,382
Distributions to Other Members ($0.05 per unit)	—		(81)		—		(81)
Distributions to Managing Member	—		—		(7)		(7)
Net income	—		14		7		21
Balance June 30, 2020	1,612,396	$	1,315	$	—	$	1,315

	Three Months Ended June 30, 2019
		Amount
		Other		Managing
	Units	Members		Member		Total
Balance March 31, 2019	1,612,396	$	2,553	$	—	$	2,553
Distributions to Other Members ($0.28 per unit)	—		(444)		—		(444)
Distributions to Managing Member	—		—		(60)		(60)
Net (loss) income	—		(10)		60		50
Balance June 30, 2019	1,612,396	$	2,099	$	—	$	2,099

	Six Months Ended June 30, 2019
		Amount
		Other		Managing
	Units	Members		Member		Total
Balance December 31, 2018	1,612,396	$	2,973	$	—	$	2,973
Distributions to Other Members ($0.55 per unit)	—		(888)		—		(888)
Distributions to Managing Member	—		—		(120)		(120)
Net income	—		14		120		134
Balance June 30, 2019	1,612,396	$	2,099	$	—	$	2,099

See accompanying notes.

Table of Contents

ATEL GROWTH CAPITAL FUND 8, LLC

STATEMENTS OF CASH FLOWS

FOR THE ~~THREE AND NINE~~SIX MONTHS ENDED

~~SEPTEMBER~~JUNE 30, ~~2019~~2020 AND ~~2018~~2019

(In Thousands)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018

									Six Months Ended
									June 30,
									2020		2019
Operating activities:
Net (loss) income	$	(78)	$	—	$	56	$	176
Adjustment to reconcile net (loss) income to cash provided by (used in) operating activities:
Net income									$	21	$	134
Adjustment to reconcile net income to cash used in operating activities:
Accretion of note discount - warrants		(11)		(10)		(40)		(34)		(13)		(29)
Amortization of net note origination costs		4		5		4		22
Gain on early termination of notes receivable		(3)		—		(55)		—		—		(52)
Gain on sales or dispositions of investment in securities		—		—		(161)		—		—		(161)
Provision for (reversal of) credit losses		—		—		27		(33)
Unrealized loss (gain) on fair value adjustment for warrants		2		1		37		(18)
Unrealized loss (gain) on fair value adjustment for investment in securities		30		33		26		(65)
Provision for credit losses										—		27
Unrealized gain on fair value adjustment for investment in securities										(251)		(4)
Unrealized loss on fair value adjustment for warrants										97		35
Changes in operating assets and liabilities:
Accounts receivable		—		(4)		—		9
Due from Managing Member and affiliates		92		55		34		55
Due from affiliates										—		(58)
Prepaid expenses and other assets		(1)		(19)		2		(25)		2		3
Due to Managing Member and affiliates		34		37		12		70		23		(22)
Accounts payable, other		10		(15)		11		—		(4)		1
Unearned fee income related to notes receivable		(1)		(1)		(3)		(5)		(21)		(2)
Net cash provided by (used in) operating activities		78		82		(50)		152

Net cash used in operating activities										(146)		(128)

Investing activities:
Advance payments		—		—		—		(64)
Purchase of securities		(27)		—		(27)		—		(7)		—
Proceeds from early termination of notes receivable		81		—		554		—		—		473
Proceeds from sales or disposition of investment in securities		—		—		161		—		—		161
Payments of note origination costs		—		(2)		—		(4)
Notes receivable advances		—		—		(26)		(1,016)		—		(26)
Principal payments received on notes receivable		271		424		1,007		1,412		306		736
Net cash provided by investing activities		325		422		1,669		328		299		1,344


Financing activities:
Distributions to Other Members		(443)		(541)		(1,331)		(1,328)		(180)		(888)
Distributions to Managing Member		(71)		(61)		(169)		(148)		(18)		(98)
Net cash used in financing activities		(514)		(602)		(1,500)		(1,476)		(198)		(986)


Net (decrease) increase in cash and cash equivalents		(111)		(98)		119		(996)		(45)		230
Cash and cash equivalents at beginning of period		444		357		214		1,255		70		214
Cash and cash equivalents at end of period	$	333	$	259	$	333	$	259	$	25	$	444


Schedule of non-cash investing and financing transactions:
Distributions payable to Other Members at period-end	$	249	$	249	$	249	$	249	$	—	$	249
Distributions payable to Managing Member at period-end	$	28	$	28	$	28	$	28	$	—	$	27
Conversion of warrants to equity securities	$	—	$	—	$	140	$	—	$	—	$	140

See accompanying notes.

Table of Contents

ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS

~~(Unaudited)~~

(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 of the Company was granted effectiveness by the Securities and Exchange Commission as of August 20, 2012. As of November 14, 2012, subscriptions for the minimum number of Units (120,000, representing $1.2 million), excluding subscriptions from Pennsylvania investors, had been received and the Fund requested subscription proceeds to be released from escrow. On that date, the Company commenced initial operations. Pennsylvania subscriptions were subject to a separate escrow and were released to the Fund only at such time as total subscription proceeds received by the Fund from all subscribers, including the escrowed Pennsylvania subscriptions, equal to not less than $3.75 million in gross proceeds. Total contributions to the Fund exceeded $3.75 million on March 13, 2013, at which time a request was processed to release the Pennsylvania escrowed amounts. The offering was terminated on August 20, 2014. ~~Through September~~

As of June 30, ~~2019,~~2020, 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 ~~September 30, 2019,~~such date, a total of 1,612,396 Units were issued and outstanding.

~~Prior~~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), (iii) provide additional distributions to Unitholders from any proceeds from sales of Equity interests and (iv) provide total cash distributions to Unitholders equal to a desirable rate of return on their investment capital. The Company is governed by the Operating agreement.

Pursuant to the ~~termination~~terms of ~~its offering,~~ the ~~Fund, or~~Operating Agreement, the Managing Member and/or its affiliates receives compensation for services rendered and reimbursements for costs incurred on behalf of the ~~Fund, incurred costs in connection with~~Company (Note 5). The Company is required to maintain reasonable cash reserves for working capital, the ~~organization, registration~~repurchase of Units and ~~issuance~~contingencies. The repurchase of Units is solely at the discretion of the ~~Units. The amount of such costs borne by the Fund was limited by certain provisions of the Operating Agreement.~~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~~10-K for the year ended December 31, ~~2018,~~2019, filed with the Securities and Exchange Commission.

Table of Contents

ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

2. Summary of ~~Significant Accounting Policies:~~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”~~(‘‘GAAP’’) for interim financial information and with the instructions to Form ~~10‑Q~~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~~six months ended ~~September~~June 30, ~~2019~~2020 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~~June 30, ~~2019,~~2020, 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~~.

~~Table of Contents~~

~~ATEL GROWTH CAPITAL FUND 8, LLC~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~(Unaudited)~~

statements.

Cash and cash equivalents:

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

Use of ~~estimates:~~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:

Accounts receivable represent the amounts billed under notes receivable which are currently due to the Company.

Allowances for ~~doubtful accounts~~credit losses are typically established based ~~upon their aging and~~on historical charge off and collection experience and the ~~creditworthiness~~collectability 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~~Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, notes receivable ~~are generally placed~~and accounts receivable. The Company places the majority of its cash deposits in ~~a non-accrual status (i.e.,~~noninterest-bearing accounts with financial institutions that have 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~~$10 billion in ~~non-accrual status. Notes placed on non-accrual status~~assets. Such deposits are ~~only returned~~insured up to ~~an accrual status when the account has been brought current and management believes recovery~~$250 thousand. The remainder of the ~~remaining unpaid~~Funds’ cash is temporarily invested in U.S. Treasury instruments. The concentration of such deposits and temporary cash investments is not deemed to create a significant risk to the Company. Accounts and notes receivable represent amounts due from borrowers in various industries related to equipment financed through notes receivable.

Table of Contents

ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Notes receivable, unearned interest income and related revenue recognition:

The Company records all future payments of principal and interest on notes as notes receivable, which are then offset by the amount of any related unearned interest income. For financial statement purposes, the Company reports the net investment in the notes on the balance sheet. Such net investment is ~~probable. All~~comprised of the amount advanced on the loans, adjusting for net deferred loan fees or costs incurred at origination, amounts allocated to warrants received upon origination, and any payments received in advance. The unearned interest is recognized over the term of the notes and the income portion of each note payment is calculated so as to generate a constant rate of return on ~~amounts billed under~~the net balance outstanding. Net deferred loan fees or costs, together with discounts recognized in connection with warrants acquired at origination, are accreted as an adjustment to yield over the term of the loan.

Allowances for losses on notes receivable are ~~applied only against outstanding principal balances.~~

~~Valuation Adjustments:~~

~~In addition to~~typically established based on historical charge off and collection experience and the ~~allowance established for delinquent accounts receivable, the total allowance also includes probable impairment charges on notes receivable.~~

collectability of specifically identified borrowers and billed and unbilled receivables. 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 payments 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.

Notes 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, the related notes may be placed on 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. Until such time, all payments received are applied only against outstanding principal balances.

Note origination costs:

The Company capitalizes note origination costs and deferred loan fees associated with the origination and funding of investments in notes receivable. Costs incurred include both internal costs (e.g., the costs of employees’ activities in connection with successful loan originations) and any external broker fees incurred with such originations. These costs are amortized on a note by note basis over the actual contract term using the effective interest rate method. Upon termination of the underlying notes receivable, any of the remaining net note origination fees or costs are relieved. Likewise, the accumulated amortization related to the deferred costs is relieved. Costs related to notes receivable that are not consummated are not eligible for capitalization as note origination costs and are expensed as acquisition expense in the period of expenditure.

Acquisition expense:

Acquisition expense represents costs which include, but are not limited to, legal fees and expenses, travel and communication expenses, cost of appraisals, accounting fees and expenses and miscellaneous expenses related to the selection and acquisition or financing of equipment and equity investment transactions which were not consummated. Such costs are reimbursable to the Managing Member under the terms of the Operating Agreement. As the costs are not eligible for capitalization as note origination costs, such amounts are expensed as incurred.

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ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS

~~(Unaudited)~~

(Unaudited)

Segment reporting:

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 financing business operates as one reportable segment because: a) the Company measures profit and loss at the portfolio assets level as a whole; b) the principal decision makers do not review information based on any operating segment other than the equipment 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 financing; and e) the Company has not chosen to organize its business around geographic areas.

The primary geographic region in which the Company seeks financing opportunities is North America. All of the Company’s current operating revenues for the respective three and six months ended June 30, 2020 and 2019, and long-lived tangible assets as of June 30, 2020 and December 31, 2019 relate to customers domiciled in the United States.

Investment in securities:

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

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 ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, investments in equity securities totaled ~~$42~~3$572 thousand and ~~$281~~$314 thousand, respectively. ~~During~~For the respective three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, the Company recorded ~~$30~~$219 thousand and ~~$33~~$4 thousand of unrealized ~~losses~~gains on investment in securities ~~respectively. During~~with readily determinable fair values. For the ~~nine~~respective six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, the Company recorded unrealized ~~losses~~gains of $26$251 thousand and unrealized ~~gains~~losses of ~~$65~~$31 thousand on ~~investments~~such securities. In addition, during the six months ended June 30, 2020 and 2019, the Company recorded $36 thousand and $35 thousand of unrealized gains on investment securities that do not have readily determinable fair values based on changes in observable prices. All of such unrealized gains were recorded during the first quarters of 2020 and 2019. There were no such fair value adjustments recorded during the current quarter and three and six-month periods ended June 30, 2019. Cumulatively, a total of $52 thousand was recorded to increase the value of such investment securities ~~respectively. The~~held at June 30, 2020 based on changes in observable prices. Also, during the six months ended June 30, 2019, the Company ~~also~~ recorded $161 thousand of realized gains on sales ~~or disposition~~ of investment in securities, all of which were recorded during the ~~nine months ended~~ ~~September 30,~~first quarter of 2019. There were no ~~gains or loss on~~ sales or dispositions of ~~investments in~~investment securities ~~for~~during the three and six months ended ~~September~~June 30, ~~2019 and 2018.~~2020.

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ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Warrants

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are reflected at an estimated fair value on the balance sheet as determined by the Managing Member. At ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the Managing Member estimated the fair value of warrants to be ~~$384~~$491 thousand and $561$588 thousand, respectively. During the respective three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, the Company recorded $86 thousand of unrealized losses ~~of $2~~and $67 thousand ~~and $1 thousand on warrants. During the nine months ended September 30, 2019 and 2018, the Company recorded unrealized losses~~ of ~~$37 thousand and~~ unrealized gains ~~of $18 thousand, respectively,~~ on the fair valuation of its warrants. ~~In addition,~~During the respective six months ended June 30, 2020 and 2019, unrealized losses of $97 thousand and $35 thousand were recorded. Additionally, there was a net exercise of warrants in exchange for equity securities of $140 thousand induring the six months ended June 30, 2019, all of which occurred during the first quarter of 2019. NoThere were no such exercises of any kind ~~occurred~~ during the ~~comparative prior year period.~~three and six months ended June 30, 2020.

~~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 Fund’s 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:~~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.

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~~ATEL GROWTH CAPITAL FUND 8, LLC~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Fair ~~value:~~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 and six levels of inputs within the fair value hierarchy are defined as follows:

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

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

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

The Company’s valuation policy is determined by members of the Asset Management, Credit and Accounting departments. Whenever possible, the policy is to obtain quoted market prices in active markets to estimate fair values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes and 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 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.

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ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Recent accounting pronouncements:

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

In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments — Credit Losses (Topic 326) (“ASU 2016-13”). The main objective of this Update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets and ~~net investment in~~equipment under operating leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, ~~net investments in~~equipment under operating leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. Management is currently evaluating the standard and expects the ~~Update~~update may potentially result in anthe increase in the allowance for credit losses given the change to estimated losses over the contractual life adjusted for expected prepayments.

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~~ATEL GROWTH CAPITAL FUND 8, LLC~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~(Unaudited)~~

In November 2018, the FASB issued Accounting Standards Update 2018-19, Codification Improvements to Topic 326, Financial Instruments — Credit Losses (“ASU 2018-19”). The new standard clarifies certain aspects of the new ~~current expected credit losses (CECL)~~CECL impairment model in ASU 2016-13. The amendment clarifies that receivables arising from operating leases are within the scope of ASC 842, rather than ASC 326; however, it will be applicable to our note receivables and direct financing leases, if any. The effective date and transition requirements in this Update are the same as the effective dates and transition requirements in Update 2016-13, as amended by this Update, which is for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.326. Management is currently evaluating the impact of the standard on the financial statements and related disclosure requirements.

On August 15, 2019, the FASB issued a proposed ASU that would grant certain companies additional time to implement FASB standards on CECL and hedging. The proposed ASU defers the effective date for CECL to fiscal periods beginning after December 15, 2022, including interim periods within those fiscal years; and defers the effective dates for hedging to fiscal periods beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The ASU was approved on October 16, 2019. In February 2020, the FASB issued ASU 2020-02 and delayed the effective date of Topic 326 until fiscal year beginning after December 15, 2022.

In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (“ASU 2018-13”), which amends the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. This ASU modifies disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. ~~Early~~The Fund adopted ASU 2018-13 on January 1, 2020. Such adoption ~~is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of~~did not have a significant impact on the ~~additional disclosures until their effective date. Management is currently evaluating the impact of this standard on the~~Fund’s financial statements and related disclosure requirements.

Table of Contents

On August 15, 2019, the FASB issued a proposed ASU that would grant private companies, not-for-profit organizations, and certain small public companies additional time to implement FASB standards on CECL. The proposed ASU defers the effective date for CECL to fiscal periods beginning after December 15, 2022, including interim periods within those fiscal years. The ASU was approved on October 16, 2019.ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

3. Notes receivable, net:

The Company has various notes receivable from borrowers who have financed the purchase of equipment through the Company. ~~As of September 30, 2019, the original~~The terms of the notes receivable are ~~from 24 to 84~~ 42 months and bear interest at implicit or stated rates ranging from 11.37% to ~~18.00%~~13.96% per annum. The notes are secured by the equipment financed and have maturity dates ranging from ~~2019~~2021 through ~~2021.~~ 2022.

At ~~September~~June 30, 2020 and December 31, 2019, the Company had no notes receivable on non-accrual status.

As of ~~September~~June 30, ~~2019,~~2020, the minimum future ~~minimum~~ payments receivable ~~are~~were as follows (in thousands):

Three months ending December 31, 2019

$
262
Year ending December 31, 2020

421
2021

155

838
Less: portion representing unearned interest income, net

(83)

755
Unamortized discount on warrants received

(37)
Unamortized initial direct costs

1
Notes receivable, net

$
719


Six months ending December 31, 2020	$	116
Year ending December 31, 2021		155
		271
Less: portion representing unearned interest income, net		(18)
		253
Unamortized discount on warrants received		(11)
Notes receivable, net	$	242

~~Table of Contents~~

~~ATEL GROWTH CAPITAL FUND 8, LLC~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~(Unaudited)~~

4. Allowance for credit losses:

The Company had no allowance for credit losses at June 30, 2020.

The Company’s allowance for credit losses ~~are~~at June 30, 2019 were as follows (in thousands):

Valuation Adjustments -

Notes Receivable
Balance December 31, 2017

$
33
Reversal of provision for credit losses

(33)
Balance September 30, 2018

$
—

Valuation Adjustments -

Notes Receivable
Balance December 31, 2018

$
133
Provision for credit losses

27
Write-off

(160)
Balance September 30, 2019

$
—


	Valuation Adjustments -
	Notes Receivable
Balance December 31, 2018	$	133
Note receivable disposal		27
Write-off		(160)
Balance June 30, 2019	$	—

Allowance for Doubtful Accounts

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 anticipated impairment charges on notes receivable.

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ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

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 Company’s allowance for credit losses and its recorded investment in notes receivable ~~at September~~as of June 30, ~~2019~~2020 and December 31, ~~2018 are~~2019 were as follows (in thousands):


	Notes
September 30, 2019	Receivable

			Notes Receivable
			June 30, 2020		December 31, 2019
Allowance for credit losses:
Ending balance	$	—	$	—	$	—
Ending balance: individually evaluated for impairment	$	—	$	—	$	—
Ending balance: collectively evaluated for impairment	$	—	$	—	$	—

Notes receivables:

Notes receivable:
Ending balance	$	755	$	242	$	514
Ending balance: individually evaluated for impairment	$	755	$	242	$	514
Ending balance: collectively evaluated for impairment	$	—	$	—	$	—

Notes
December 31, 2018

Receivable
Allowance for credit losses:


Ending balance

$
133
Ending balance: individually evaluated for impairment

$
133
Ending balance: collectively evaluated for impairment

$
—

Notes receivables:


Ending balance

$
2,321
Ending balance: individually evaluated for impairment

$
2,321
Ending balance: collectively evaluated for impairment

$
—

~~Table of Contents~~

~~ATEL GROWTH CAPITAL FUND 8, LLC~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~(Unaudited)~~

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

Pass – Any account whose debtor, co-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 and six 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 and six 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

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ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

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 as applicable.

At ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the Company’s notes ~~receivables~~receivable by credit quality indicator and by class of notes ~~receivables (excluding unamortized discount on warrant and unamortized initial direct costs) are~~receivable were as follows (in thousands):


	Notes Receivable
	September 30, 2019		December 31, 2018

					Notes Receivable
					June 30, 2020		December 31, 2019
Pass	$	755	$	2,188	$	242	$	514
Special mention		—		—
Substandard		—		—
Doubtful		—		133		—		—
Total	$	755	$	2,321	$	242	$	514

As of ~~September~~June 30, ~~2019, there is no impaired investment in notes receivable. As of~~2020 and December 31, ~~2018,~~2019, there were no impaired investments in notes ~~receivable are as follows (in thousands):~~

Impaired Investment in Notes Receivables




Unpaid



Average

Interest

Recorded

Principal

Related

Recorded

Income
December 31, 2018

Investment

Balance

Allowance

Investment

Recognized
With no related allowance recorded










Notes receivable

$
—

$
—

$
—

$
—

$
—
With an allowance recorded










Notes receivable

133

133

133

133

—
Total

$
133

$
133

$
133

$
133

$
—

receivable.

~~Table of Contents~~

~~ATEL GROWTH CAPITAL FUND 8, LLC~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~As of September~~At June 30, 2020 and December 31, 2019, investment in notes ~~receivables~~receivable is aged as follows (in thousands):


													Recorded
					Greater						Total		Investment>90
	31‑60 Days		61‑90 Days		Than 90		Total				Notes		Days and
September 30, 2019	Past Due		Past Due		Days		Past Due		Current		Receivables		Accruing

																											Recorded
																			Greater						Total		Investment>90
															31‑60 Days		61‑90 Days		Than 90		Total				Notes		Days and
June 30, 2020															Past Due		Past Due		Days		Past Due		Current		Receivable		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	755	$	755	$	—	$	—	$	—	$	—	$	—	$	242	$	242	$	—


													Recorded
					Greater						Total		Investment>90
	31‑60 Days		61‑90 Days		Than 90		Total				Notes		Days and
December 31, 2018	Past Due		Past Due		Days		Past Due		Current		Receivables		Accruing

																											Recorded
																			Greater						Total		Investment>90
															31‑60 Days		61‑90 Days		Than 90		Total				Notes		Days and
December 31, 2019															Past Due		Past Due		Days		Past Due		Current		Receivable		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	2,321	$	2,321	$	—	$	—	$	—	$	—	$	—	$	514	$	514	$	—

~~As of~~ ~~September 30, 2019~~ ~~and December 31, 2018, the Company had no notes receivable on non-accrual status.~~

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~~gross financing revenues, and for management of the ~~Company.~~Company and its investment portfolio.

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.

Cost reimbursements to the Managing Member or its affiliates are based on its costs incurred in performing administrative services for the Company. These costs are allocated to each managed entity based on certain criteria such as total assets, number of investors or contributed capital based upon the type of cost incurred. The Managing Member believes that the costs reimbursed are the lower of (i) actual costs incurred on behalf of the Company or (ii) the amount the Company would be required to pay independent parties for comparable administrative services in the same geographic location.

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ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

During the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, the Managing Member and/or affiliates earned ~~commissions and~~ fees and billed for reimbursements ~~of costs and expenses~~ pursuant to the Operating Agreement as follows (in thousands):


	Three Months Ended				Nine Months Ended
		September 30,			September 30,
	2019		2018		2019		2018

									Three Months Ended				Six Months Ended
										June 30,			June 30,
									2020		2019		2020		2019
Administrative costs reimbursed to Managing Member and/or affiliates	$	30	$	19	$	104	$	95	$	17	$	38	$	40	$	74
Asset management fees to Managing Member		6		13		24		38		2		9		6		18
Acquisition costs and note origination fees paid to Managing Member		—		4		—		39
	$	36	$	36	$	128	$	172
									$	19	$	47	$	46	$	92

6. C~~ommitments:~~Commitments:

At ~~September~~June 30, ~~2019,~~2020, there ~~were commitments~~was no commitment to fund investments in notes ~~receivable totaling $750 thousand. These amounts represent contract awards which may be canceled by the prospective borrower/investee or may not be accepted by the Company.~~

~~Table of Contents~~

~~ATEL GROWTH CAPITAL FUND 8, LLC~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~(Unaudited)~~

receivable.

7. Members’ Capital:

A total of 1,612,396 Units were issued and outstanding ~~as of September~~at both June 30, ~~2019~~2020 and December 31, ~~2018.~~2019. The Fund is authorized to issue up to 7,500,000 additional Units in addition to the Units issued to the initial ~~member~~Member (50 Units).

From the commencement of the Fund until the initial closing date, as defined in the Operating Agreement, the Company’s net income and net losses are allocated 100% to the Manager. Commencing with the initial closing date, net income and net losses are allocated 100% to the Members. An amount equal to 5% of all distributions of cash available for distribution and net disposition proceeds will be allocated to the Manager as the carried interest. An amount equal to (i) an additional 5% of all distributions from cash available for distribution and 1% of all distributions of net disposition proceeds will be paid to the Manager as a promotional interest until investors have received total distributions in amounts equal to their capital contributions plus an amount equal to a priority return of 8% per annum as defined in the Operating Agreement; and (ii) then 15% of all subsequent distributions will be allocated to the Manager as a promotional interest. Distributions not allocated to the Manager as carried or promotional interests will be allocated and paid to the Unitholders.

Distributions to the Other Members for ~~the three~~June 30, 2020 and ~~nine months ended September 30,~~ 2019 ~~and 2018 are~~were as follows (in thousands, except ~~for~~as to Units and per Unit data):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018

									Three Months Ended				Six Months Ended
									June 30,				June 30,
									2020		2019		2020		2019
Distributions declared	$	443	$	541	$	1,331	$	1,328	$	—	$	444	$	81	$	888
Weighted average number of Units outstanding		1,612,396		1,612,396		1,612,396		1,612,396		1,612,396		1,612,396		1,612,396		1,612,396
Weighted average distributions per Unit	$	0.27	$	0.34	$	0.83	$	0.82	$	—	$	0.28	$	0.05	$	0.55

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 ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the Company’s warrants and investment securities were measured on a recurring basis.

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ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

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 volatility of respective similar publicly traded companies, a risk free interest rate ~~time to maturity, stock prices,~~for the term(s) of the warrant exercise(s), and the respective exercise prices and number of warrants.

As of ~~September~~June 30, ~~2019~~2020 and ~~2018,~~December 31, 2019, the calculated fair value of the Fund’s warrant portfolio totaled ~~$38~~4$491 thousand and ~~$541~~$588 thousand, respectively. Such valuation is classified within Level 3 of the valuation hierarchy.

The fair value of warrants that were accounted for on a recurring basis ~~as of~~during the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019, and classified as Level 3, are as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018

									Three Months Ended				Six Months Ended
									June 30,				June 30,
									2020		2019		2020		2019
Fair value of warrants at beginning of period	$	386	$	542	$	561	$	489	$	577	$	319	$	588	$	561
Fair value of new warrants, recorded during the period (included as a discount on notes receivable)		—		—		—		34
Warrants converted to securities		—		—		(140)		—		—		—		—		(140)
Unrealized gain (loss) on fair value adjustment for warrants		(2)		(1)		(37)		18		(86)		67		(97)		(35)
Fair value of warrants at end of period	$	384	$	541	$	384	$	541	$	491	$	386	$	491	$	386

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. As of June 30, 2020 and December 31, 2019, the fair value of such securities totaled $323 thousand and $64 thousand, respectively.

The fair value of investment securities that were accounted for on a recurring basis during the three and six month periods ended June 30, 2020 and 2019, classified as Level 1 are as follows (in thousands):


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2020		2019			2020	2019
Fair value of investment in securities at beginning of period	$	60	$	82	$	64	$	117
Unrealized gain (loss) on fair market valuation of securities		219		4		215		(31)
Conversion of previously held private securities		44		—		44		—
Fair value of investment in securities at end of period	$	323	$	86	$	323	$	86

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~~ATEL GROWTH CAPITAL FUND 8, LLC~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Impaired notes receivable (non-recurring)

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.

There were no fair value adjustments recorded on the notes receivable during the respective three and six months ended June, 30 2020. During the ~~nine~~three and six months ended ~~September~~June 30, 2019, the Company recorded fair value adjustments totaling $14 thousand and $27 thousand, respectively, for impaired notes. ~~In contrast, the Company reversed $33,000~~

Table of credit losses during the prior year nine month period as delinquent notes receivable previously reserved for were recovered. There were no adjustments for the three months ended September 30, 2019 and 2018. Contents

ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

The fair value adjustments recorded in ~~both years~~portfolio 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 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~~June 30, ~~2019~~2020 and December 31, ~~2018:~~2019:


June 30, 2020
~~September 30, 2019~~	Valuation	Valuation	Unobservable	Range of Input Values
Name	~~Valuation~~ Frequency	~~Valuation~~Technique	~~Unobservable~~Inputs	~~Range of~~
~~Name~~	~~Frequency~~	~~Technique~~	~~Inputs~~	~~Input Values~~(Weighted Average)
Warrants	Recurring	Black-Scholes formulation	Stock price	$~~0.11~~0.01 - ~~$14.50~~$16.95 ($0.60)
			Exercise price	$0.02 - ~~$38.64~~$25.76 ($0.34)
			Time to maturity (in years)	~~1.24~~0.49 - ~~12.20~~11.45 (6.86)
			Risk-free interest rate	~~1.55%~~0.17% - ~~1.74%~~1.58% (0.51%)
			Annualized volatility	~~32.54%~~29.90% - ~~114.48%~~205.61% (50.53%)


December 31, 2019
~~Warrant~~	~~Recurring~~Valuation	~~Market valuation~~Valuation	~~Stock price~~Unobservable	~~$0.10~~

				Range of Input Values
~~December 31, 2018~~
Name	~~Valuation~~ Frequency	~~Valuation~~Technique	~~Unobservable~~Inputs	~~Range of~~
~~Name~~	~~Frequency~~	~~Technique~~	~~Inputs~~	~~Input Values~~(Weighted Average)
Warrants	Recurring	Black-Scholes formulation	Stock price	$~~0.00~~0.11 - ~~$14.50~~$16.07 (S0.66)
			Exercise price	$~~0.21~~0.02 - $38.64 ($0.34)
			Time to maturity (in years)	~~1.99~~0.99 - ~~13.88~~11.95 (7.31)
			Risk-free interest rate	~~2.48%~~1.59% - ~~2.76%~~1.99% (1.82%)
			Annualized volatility	~~23.58%~~32.21% - ~~292.35%~~114.44% (47.97%)

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.

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~~ATEL GROWTH CAPITAL FUND 8, LLC~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~(Unaudited)~~

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.

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ATEL GROWTH CAPITAL FUND 8, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Investment in 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. These investment securities are valued based on their quoted market prices.

~~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~~Commitments and ~~indications of the issuer’s subsequent ability to raise capital.~~Contingencies

The fair value of ~~investment securities~~contingent liabilities (or guarantees) is not considered material because management believes there has been no event that ~~were accounted for on~~has occurred wherein a ~~recurring basis as of the three and nine months ended September 30, 2019 and 2018 and classified as Level 1 are as follows (in thousands):~~

Three Months Ended

Nine Months Ended

September 30,

September 30,


2019

2018

2019

2018
Fair value of investment in securities at beginning of period

$
86

$
176

$
117

$
92
Unrealized gain (loss) on fair market valuation of securities

(30)

(33)

(61)

51
Fair value of investment in securities at end of period

$
56

$
143

$
56

$
143

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~~June 30, ~~2019~~2020 and December 31, ~~2018~~2019 (in thousands):


	September 30, 2019
	Carrying
	Amount		Level 1		Level 2		Level 3		Total

											June 30, 2020
											Carrying
											Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	333	$	333	$	—	$	—	$	333	$	25	$	25	$	—	$	—	$	25
Notes receivable, net		719		—		—		746		746		242		—		—		246		246
Investment in securities		56		56		—		—		56		323		323		—		—		323
Warrants		384		—		—		384		384		491		—		—		491		491


	December 31, 2018
	Carrying
	Amount		Level 1		Level 2		Level 3		Total

											December 31, 2019
											Carrying
											Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	214	$	214	$	—	$	—	$	214	$	70	$	70	$	—	$	—	$	70
Notes receivable, net		2,188		—		—		2,266		2,266		514		—		—		516		516
Investment in securities		117		117		—		—		117		64		64		—		—		64
Warrants		561		—		—		561		561		588		—		—		588		588

9. Global health emergency:

On January 30, 2020, the World Health Organization declared the novel coronavirus outbreak a public health emergency. The Fund’s operations is located in California, which has restricted gatherings of people due to the coronavirus outbreak. At present, the Fund’s operations have not been adversely affected and continues to function effectively. Due to the dynamic nature of these unprecedented circumstances and possible business disruption, the Fund will continue to monitor the situation closely, but given the uncertainty about the situation, an estimate of the future impact, if any, cannot be made at this time.

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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,~~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.~~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~~10-Q or to reflect the occurrence of unanticipated events, other than as required by law.

Overview

Through ~~September~~June 30, ~~2019,~~2020, 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 ~~September~~June 30, ~~2019,~~2020, a total of 1,612,396 Units were issued and outstanding.

Results of Operations

The ~~Fund~~three months ended June 30, 2020 versus the three months ended June 30, 2019

The Company had ~~a net loss of $78 thousand and~~ net income of ~~$56~~$62 thousand and $50 thousand for the respective three ~~and nine~~ months ended ~~September~~June 30, 2020 and 2019.

~~Total net revenues were $32 thousand~~The results for the second quarter of 2020 reflect decreases in total operating revenues and expenses, and an increase in other income when compared to ~~date~~the prior year period.

Total operating revenues for the three months ended June 30, 2020 and ~~$401~~2019 were $14 thousand ~~year~~and $86 thousand, respectively. The $72 thousand, or 84%, decline in operating revenues was largely due to ~~date. Revenues were comprised of~~a $67 thousand decrease in notes receivable interest income, onwhich was attributable to loan maturities and early termination of certain notes ~~receivables, gain on sales or dispositions of investment~~receivable. The Fund is in ~~securities and net adjustments recorded to reflect fair values of warrants and investment securities. Interest income on notes receivables~~ were $60 thousand and $245 thousand for the respective three and nine month periods ended September 30, 2019; there were also $161 thousand of gains on sales or dispositions of investment in securities during the year to date 2019 period. The fund is on the precipice of entering its liquidating stage where notes receivable are increasingly ~~nearing~~reaching maturity and new loans are not placed to generate future income. ~~With respect to net adjustments recorded to reflect fair values of warrants, net unrealized loss adjustments of $2~~

Total operating expenses were $85 thousand and ~~$37~~$107 thousand ~~were recorded~~ for the three months ended June 30, 2020 and ~~nine month periods,~~2019, respectively. The ~~Company also recorded unrealized losses~~reduction of ~~$30~~$22 thousand, ~~and $26 thousand on fair value adjustments on investment securities for the respective three and nine months ended September 30, 2019.~~

~~Total net operating expenses were $110 thousand for the quarter and $345 thousand year~~or 21%, was mainly due to ~~date. The main components of such net operating expenses were~~decrease in cost reimbursements and provision for credit losses partially offset by an increase in professional ~~fees and outside services. These were offset, in part,~~fees.

Cost reimbursement to affiliates decreased by ~~the absence of acquisition expenses, which reflects a reduced focus on acquisitions as the fund nears its liquidation stage. Cost reimbursements~~$21 thousand due to ~~Managing Member and/or affiliates of $30 thousand and $104 thousand were recorded for the respective three and nine month periods ended September 30, 2019. Compared to prior periods, the~~lower allocated cost. Such decline in ~~cost reimbursements~~allocated costs is consistent with a fund in its liquidating stage and is reflective of a diminishing baseline allocation of common costs among the ~~fund~~Fund and its affiliates. ~~Professional~~The provision for credit losses was reduced by $14 thousand as the prior year period amount included credit loss adjustments of the same amount related to certain notes deemed impaired. There were no such adjustments during the current quarter. These decreases in expenses were partially offset by an $18 thousand increase in the professional fees, which was mainly a result of ~~$40 thousand~~higher audit-related and ~~$98 thousand, and outside~~tax services ~~of $21 thousand and $55 thousand for~~fees.

During the respective three ~~and nine~~ months ended ~~September~~June 30, 2020 and 2019, ~~represent direct ATEL Growth Capital Fund 8, LLC specific core costs~~the Company recorded other income of ~~preparation, printing, filing~~$133 thousand and ~~distribution of annual Form 1065 tax and shareholder reports on Form K-1. In addition, such costs also include costs attributable~~$71 thousand related to the ~~annual / quarterly tax preparation,~~fair valuation ~~reports~~of its investment securities and ~~mandated periodic regulatory filings with~~warrants. The $62 thousand change in other income reflects a $215 thousand increase in unrealized gains on the ~~Security Exchange Commission.~~

Company’s investment securities offset by a $153 thousand increase in unrealized losses on the warrant portfolio. The increase in the fair value of investment securities was primarily related to a significant change in the market value of investments in a privately held company, which had recently completed an initial public offering. The decrease in the fair value of the warrants portfolio

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was mostly due to declines in stock prices of underlying securities, shorter time to maturity period, and the overall lower interest rate environment.

~~Cash balances~~

The six months ended June 30, 2020 versus the six months ended June 30, 2019

The Company had a net ~~decrease~~income of ~~$111~~$21 thousand and $134 thousand for the ~~quarter~~respective six month periods ended June 30, 2020 and ~~a net~~2019. The results for the six months ended June 30, 2020 reflect decreases in both total operating revenues and expenses, and an increase in other income when compared to the prior year period.

Total operating revenues for the six months ended June 30, 2020 and 2019 were $33 thousand and $239 thousand, respectively. The $206 thousand, or 86%, decline in revenues was primarily due to decreases in notes receivable interest income and gains on early termination of ~~$119~~notes receivable.

The decrease in notes receivable interest income totaled $152 thousand ~~year to date. This~~and was mainly ~~the~~a result of the ~~aforementioned items~~continued loan maturities, consistent with a Fund in its liquidating stage, and early termination of ~~net~~certain notes receivable. During the first half of 2019, the Company realized $52 thousand of gains on early termination of notes receivable. There was no such termination of notes during the current six-month period.

Total operating expenses were $166 thousand and $235 thousand for the six months ended June 30, 2020 and 2019, respectively. The reduction of $69 thousand, or 29%, was primarily attributable to decrease in cost reimbursements to affiliates, provision for credit losses and outside services costs.

Cost reimbursements to affiliates declined by $34 thousand due to lower allocated costs. The provision for credit losses decreased by $27 thousand as the prior year period amount included credit loss adjustments of the same amount related to certain notes deemed impaired. There were no such adjustments during the current six-month period. Costs related to outside services fell by $16 thousand largely due to lower consulting expenses.

During the respective six months ended June 30, 2020 and 2019, the Company recorded other income of $154 thousand and ~~distributions~~$130 thousand. The $24 thousand increase in other income was comprised of a $247 thousand increase in unrealized gains on the fair valuation of the Company’s investment securities offset by a $161 thousand decrease in gains on dispositions of investment securities, and a $62 thousand reduction in the fair value of the Company’s warrant portfolio. The increase in the fair value of investment securities was primarily related to a significant change in the market value of investments in a privately held company, which had completed an initial public offering during the second quarter of 2020. Gains on dispositions of investment securities declined as, during the prior year period, the Company realized $161 thousand of gains on the exercise and disposition of such securities. There were no exercises or dispositions during the current six-month period. The decrease in the fair value of the warrants portfolio was primarily due to unfavorable changes in stock prices of underlying securities, shorter time to maturity period, and the overall lower interest rate environment.

Capital Resources and Liquidity

At June 30, 2020 and December 31, 2019, the Company’s cash and cash equivalents totaled $25 thousand and $70 thousand, respectively. The liquidity of the Company varies, increasing to the ~~Managing Member~~extent that cash flows from its portfolio of investments exceed expenses and decreasing as portfolio investments mature or are converted to ~~Other Members~~cash used to meet operating expense requirements.

The Company currently believes it has adequate reserves available to meet its immediate cash requirements and those of the next twelve months, but in the event those reserves were found to be inadequate, the Company would likely be in a position to borrow against its current portfolio to meet such requirements.

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Cash Flows

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


	Six Months Ended
	June 30,
	2020		2019
Net cash (used in) provided by:
Operating activities	$	(146)	$	(128)
Investing activities		299		1,344
Financing activities		(198)		(986)
Net (decrease) increase in cash and cash equivalents	$	(45)	$	230

During the six months ended June 30, 2020 and 2019, the Company’s primary source of liquidity was principal payments received on notes receivable totaling ~~$443~~$306 thousand and ~~$1.3 million~~$736 thousand, respectively. In addition, during the ~~respective quarter to date and year to date periods.~~

~~During both quarterly and year to date periods, cash was also impacted by~~six months ended June 30, 2019, the Company realized $473 thousand of proceeds from the early termination of notes receivable ~~and/or~~and $161 thousand of proceeds from sales or dispositions of ~~investments~~investment in securities. Proceeds from the early termination of notes totaled $554 thousand for the year to date period, of which $81 thousand was recorded during the current quarter. Proceeds from sale of investments in securities totaled $161 thousand for the year to date period. There were no such proceeds during the current six-month period.

During the same respective periods, cash was primarily used to pay distributions to both the Other Members and the Managing Member, totaling $198 thousand and $986 thousand for the ~~current quarter.~~respective six months ended June 30, 2020 and 2019. Cash was also used to pay invoices related to management fees and expenses, and other payables during both three and six-month periods.

Distributions

The Unitholders of record are entitled to certain distributions as provided under the Operating Agreement. The Company commenced periodic distributions beginning with the month of November 2012. Additional distributions have been made through ~~September~~June 30, ~~2019.~~

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.

2020.

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The following table summarizes distribution activity for the Fund from inception through ~~September~~June 30, ~~2019~~2020 (in ~~thousands)~~thousands, except as to Units and per Unit data):


														Total		Weighted
		Return of				Distribution				Total				Distribution		Average Units

																														Total		Weighted
																		Return of				Distribution				Total				Distribution		Average Units
Distribution Period (1)	Paid	Capital				of Income				Distribution				per Unit(2)		Outstanding(3)	Paid	Capital				of Income				Distribution				per Unit⁽²⁾		Outstanding⁽³⁾
Monthly and quarterly distributions
Oct 2012 - Mar 2013 (Distribution of all escrow interest)	July 2013	$	—			$	—			$	—				n/a	n/a	July 2013	$	—			$	—			$	—				n/a	n/a
Nov 14, 2012 - Nov 30, 2012	Dec 2012		3				—				3			$	0.43	6,306	Dec 2012		3				—				3			$	0.43	6,306
Dec 2012 - Nov 2013	Jan - Dec 2013		866				—				866				1.57	551,608	Jan - Dec 2013		866				—				866				1.57	551,608
Dec 2013 - Nov 2014	Jan - Dec 2014		1,452				—				1,452				1.08	1,349,575	Jan - Dec 2014		1,452				—				1,452				1.08	1,349,575
Dec 2014 - Nov 2015	Jan - Dec 2015		1,779				—				1,779				1.10	1,618,296	Jan - Dec 2015		1,779				—				1,779				1.10	1,618,296
Dec 2015 - Nov 2016	Jan - Dec 2016		1,780				—				1,780				1.10	1,618,296	Jan - Dec 2016		1,780				—				1,780				1.10	1,618,296
Dec 2016 - Nov 2017	Jan - Dec 2017		1,776				—				1,776				1.10	1,615,306	Jan - Dec 2017		1,776				—				1,776				1.10	1,615,306
Dec 2017 - Nov 2018	Jan - Dec 2018		1,772				—				1,772				1.10	1,612,396	Jan - Dec 2018		1,772				—				1,772				1.10	1,612,396
Dec 2018 - Aug 2019	Jan - Sept 2019		1,331				—				1,331				0.83	1,612,396
		$	10,759			$	—			$	10,759			$	8.31

Dec 2018 - Nov 2019																	Jan - Dec 2019		1,677				—				1,677				1.04	1,612,396
Dec 2019 - June 2020																	Jan - June 2020		180				—				180				0.11	1,612,396
																		$	11,285			$	—			$	11,285			$	8.63

Source of distributions
Lease and loan payments/payoffs		$	10,759	100.00	%	$	—	0.00	%	$	10,759	100.00	%					$	11,285	100.00	%	$	—	0.00	%	$	11,285	100.00	%
Interest income			—	0.00	%		—	0.00	%		—	0.00	%						—	0.00	%		—	0.00	%		—	0.00	%
		$	10,759	100.00	%	$	—	0.00	%	$	10,759	100.00	%
																		$	11,285	100.00	%	$	—	0.00	%	$	11,285	100.00	%

(1)

Investors may elect to receive their distributions either monthly or ~~quarterly (See "Timing~~quarterly. See “Timing and Method of ~~Distributions"~~Distributions” on Page 46 of the ~~Prospectus).~~

Prospectus.

(2)

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

(3)

~~Balances~~Balance shown represent weighted average units for the period from November 14 (date escrow requirement was met) – November 30, 2012, December 1, 2012 – November 30, 2013, December 1, 2013 – November 30, 2014, December 1, 2014 – November 30, 2015, December 1, 2015 – November 30, 2016, December 1, 2016 – November 30, 2017, ~~December 1, 2017 – November 30, 2018,~~ and December 1, 2018 – ~~August 31,~~November 30, 2019, and December 1, 2019 – June 30, 2020, respectively.

Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies

At ~~September~~June 30, ~~2019,~~2020, there were no commitments to fund investments in notes ~~receivable totaling $750 thousand. These amounts represent contract awards which may be canceled by the prospective borrower/investee or may not be accepted by the Company.~~receivable.

Off-Balance Sheet Transactions

None.

Recent Accounting Pronouncements

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

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Significant Accounting Policies and Estimates

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

The Company’s significant accounting policies are described in its Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. There have been no material changes to the Company’s significant accounting policies since December 31, ~~2018, except as disclosed in Note 2 related to the new lease accounting guidance adopted on January 1,~~ 2019.

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Item 4. Controls and Procedures.

Evaluation of disclosure controls and ~~procedures~~procedures

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

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

Changes in internal control

There were no changes in the Managing Member’s internal control over financial reporting, as it is applicable to the Company, during the quarter ended ~~September~~June 30, ~~2019~~2020 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.

Table of Contents

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~~

(a)Documents filed as a part of this report


		1.		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.


		2.		Other Exhibits


~~31.1~~	~~Rule 13a‑14(a)/ 15d‑14(a)~~ (31.1)	Certification of Dean L. Cash pursuant to Rules 13a-14(a)/15d-14(a)
~~31.2~~	~~Rule 13a‑14(a)/ 15d‑14(a)~~ (31.2)	Certification of Paritosh K. Choksi pursuant to Rules 13a-14(a)/15d-14(a)
~~32.1~~	(32.1)	Certification ~~Pursuant~~of Dean L. Cash pursuant to 18 U.S.C. section 1350 ~~of Dean L. Cash~~
~~32.2~~	(32.2)	Certification ~~Pursuant~~of Paritosh K. Choksi pursuant to 18 U.S.C. section 1350 ~~of Paritosh K. Choksi~~
~~101.INS~~	(101.INS)	XBRL Instance Document
~~101.SCH~~	(101.SCH)	XBRL Taxonomy Extension Schema Document
~~101.CAL~~	(101.CAL)	XBRL Taxonomy Extension Calculation Linkbase Document
~~101.DEF~~	(101.DEF)	XBRL Taxonomy Extension Definition Linkbase Document
~~101.LAB~~	(101.LAB)	XBRL Taxonomy Extension Label Linkbase Document
~~101.PRE~~	(101.PRE)	XBRL Taxonomy Extension Presentation Linkbase Document

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: ~~November~~August 13, ~~2019~~2020

ATEL GROWTH CAPITAL FUND 8, LLC

(Registrant)


	By:	AGC 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 AGC 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 AGC Managing Member, LLC (Managing Member)


By:	/s/ Samuel Schussler
	Samuel Schussler
	Senior Vice President and Chief Accounting Officer of AGC Managing Member, LLC (Managing Member)


	Three Months Ended September 30, 2019
	Other Members			Managing
	Units	Amount		Member		Total
Balance June 30, 2019	1,612,396	$	2,099	$	—	$	2,099
Distributions to Other Members ($0.27 per unit)	—		(443)		—		(443)
Distributions to Managing Member	—		—		(28)		(28)
Net (loss) income	—		(106)		28		(78)
Balance September 30, 2019	1,612,396	$	1,550	$	—	$	1,550

	Nine Months Ended September 30, 2019
	Other Members			Managing
	Units	Amount		Member		Total
Balance December 31, 2018	1,612,396	$	2,973	$	—	$	2,973
Distributions to Other Members ($0.83 per unit)	—		(1,331)		—		(1,331)
Distributions to Managing Member	—		—		(148)		(148)
Net (loss) income	—		(92)		148		56
Balance September 30, 2019	1,612,396	$	1,550	$	—	$	1,550

	Three Months Ended September 30, 2018
	Other Members			Managing
	Units	Amount		Member		Total
Balance June 30, 2018	1,612,396	$	4,172	$	—	$	4,172
Distributions to Other Members ($0.34 per unit)	—		(541)		—		(541)
Distributions to Managing Member	—		—		(61)		(61)
Net (loss) income	—		(61)		61		—
Balance September 30, 2018	1,612,396	$	3,570	$	—	$	3,570

	Nine Months Ended September 30, 2018
	Other Members			Managing
	Units	Amount		Member		Total
Balance December 31, 2017	1,612,396	$	4,870	$	—	$	4,870
Distributions to Other Members ($0.82 per unit)	—		(1,328)		—		(1,328)
Distributions to Managing Member	—		—		(148)		(148)
Net income	—		28		148		176
Balance September 30, 2018	1,612,396	$	3,570	$	—	$	3,570


Three months ending December 31, 2019	$	262
Year ending December 31, 2020		421
2021		155
		838
Less: portion representing unearned interest income, net		(83)
		755
Unamortized discount on warrants received		(37)
Unamortized initial direct costs		1
Notes receivable, net	$	719


	Valuation Adjustments -
	Notes Receivable
Balance December 31, 2017	$	33
Reversal of provision for credit losses		(33)
Balance September 30, 2018	$	—

	Valuation Adjustments -
	Notes Receivable
Balance December 31, 2018	$	133
Provision for credit losses		27
Write-off		(160)
Balance September 30, 2019	$	—


	Impaired Investment in Notes Receivables
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
December 31, 2018	Investment		Balance		Allowance		Investment		Recognized
With no related allowance recorded
Notes receivable	$	—	$	—	$	—	$	—	$	—
With an allowance recorded
Notes receivable		133		133		133		133		—
Total	$	133	$	133	$	133	$	133	$	—