Atel 15 10-Q 2019 Q3 Quarterly report

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Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

☒Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of  1934.

For the quarterly period ended September 30, 2019

☐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 000‑54931

ATEL 15, LLC

(Exact name of registrant as specified in its charter)

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

The Transamerica Pyramid, 600 Montgomery Street, 9th Floor, San Francisco, California 94111

(Address of principal executive offices)

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

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

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

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 files).  Yes ☒  No ☐

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

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

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

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

The number of Limited Liability Company Units outstanding as of October 31, 2019 was 6,542,557.

DOCUMENTS INCORPORATED BY REFERENCE

None.

ATEL 15, LLC

Index

Part I.	Financial Information	3
Item 1.	Financial Statements (Unaudited)	3
	Balance Sheets, September 30, 2019 and December 31, 2018	3
	Statements of Operations for the three and nine months ended September 30, 2019 and 2018	4
	Statements of Changes in Members’ Capital for the three and nine months ended September 30, 2019 and 2018	5
	Statements of Cash Flows for the three and nine months ended September 30, 2019 and 2018	6
	Notes to the Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 4.	Controls and Procedures	31
Part II.	Other Information	32
Item 1.	Legal Proceedings	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	32

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

ATEL 15, LLC

BALANCE SHEETS

SEPTEMBER 30, 2019 AND DECEMBER 31, 2018

(In Thousands)

	September 30,		December 31,
	2019		2018
	(Unaudited)
ASSETS
Cash and cash equivalents	$	4,453	$	1,716
Accounts receivable, net		50		75
Due from Managing Member and affiliates		—		1
Investment in securities		301		144
Warrants, fair value		199		376
Equipment under operating leases, net		18,981		22,777
Prepaid expenses and other assets		23		25
Total assets	$	24,007	$	25,114
LIABILITIES AND MEMBERS’ CAPITAL
Accounts payable and accrued liabilities:
Due to Managing Member and affiliates	$	182	$	42
Accrued distributions to Other Members		1,471		—
Other		109		463
Non-recourse debt		4,426		1,191
Senior long-term debt		—		2,068
Unearned operating lease income		206		61
Total liabilities		6,394		3,825
Commitments and contingencies
Members’ capital:
Managing Member		—		—
Other Members		17,613		21,289
Total Members’ capital		17,613		21,289
Total liabilities and Members’ capital	$	24,007	$	25,114

See accompanying notes.

3

ATEL 15, LLC

STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2019 AND 2018

(In  Thousands Except Units and Per Unit Data)

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Revenues:
Leasing and lending activities:
Operating leases revenue, net	$	1,021	$	1,665	$	3,521	$	5,014
Interest on notes receivable		14		16		41		34
(Loss) gain on sale of operating lease assets and early termination of notes receivable		(541)		—		(542)		1,697
Unrealized (loss) gain on investment in securities		(33)		(36)		(25)		55
Unrealized gain (loss) on fair value adjustment for warrants		4		7		(9)		5
Other		12		5		603		149
Total revenues		477		1,657		3,589		6,954
Expenses:
Depreciation of operating lease assets		872		1,012		2,663		3,221
Asset management fees to Managing Member		56		42		161		190
Cost reimbursements to Managing Member and/or affiliates		146		167		438		624
(Reversal of) provision for credit losses		(17)		—		13		(56)
Impairment losses on investment in securities		—		—		—		17
Amortization of initial direct costs		23		13		23		47
Interest expense		40		41		103		154
Professional fees		56		35		186		126
Outside services		28		27		70		83
Taxes on income and franchise fees		10		3		141		8
Freight and shipping		5		—		34		67
Railcar maintenance		31		63		50		63
Storage fees		44		21		91		81
Other		39		15		96		95
Total expenses		1,333		1,439		4,069		4,720
Net (loss) income	$	(856)	$	218	$	(480)	$	2,234
Net income (loss):
Managing Member	$	119	$	—	$	239	$	106
Other Members		(975)		218		(719)		2,128
	$	(856)	$	218	$	(480)	$	2,234
Net (loss) income per Limited Liability Company Unit (Other Members)	$	(0.15)	$	0.03	$	(0.11)	$	0.33
Weighted average number of Units outstanding		6,542,557		6,542,557		6,542,557		6,544,562

See accompanying notes.

4

ATEL 15, LLC

STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2019 AND 2018

(In Thousands Except Units and Per Unit Data)

(Unaudited)

	Three Months Ended September 30, 2019
	Other Members			Managing
	Units	Amount		Member		Total
Balance June 30, 2019	6,542,557	$	20,059	$	—	$	20,059
Distributions to Other Members ( $0.22 per Unit)	—		(1,471)		—		(1,471)
Distributions to Managing Member	—		—		(119)		(119)
Net (loss) income	—		(975)		119		(856)
Balance September 30, 2019	6,542,557	$	17,613	$	—	$	17,613
	Nine Months Ended September 30, 2019
	Other Members			Managing
	Units	Amount		Member		Total
Balance December 31, 2018	6,542,557	$	21,289	$	—	$	21,289
Distributions to Other Members ( $0.45 per unit)	—		(2,957)		—		(2,957)
Distributions to Managing Member	—		—		(239)		(239)
Net (loss) income	—		(719)		239		(480)
Balance September 30, 2019	6,542,557	$	17,613	$	—	$	17,613
	Three Months Ended September 30, 2018
	Other Members			Managing
	Units	Amount		Member		Total
Balance June 30, 2018	6,542,557	$	20,982	$	—	$	20,982
Net income	—		218		—		218
Balance September 30, 2018	6,542,557	$	21,200	$	—	$	21,200
	Nine Months Ended September 30, 2018
	Other Members			Managing
	Units	Amount		Member		Total
Balance December 31, 2017	6,557,057	$	20,434	$	—	$	20,434
Repurchases of Units	(14,500)		(59)		—		(59)
Distributions to Other Members ( $0.20 per Unit)	—		(1,303)		—		(1,303)
Distributions to Managing Member	—		—		(106)		(106)
Net income	—		2,128		106		2,234
Balance September 30, 2018	6,542,557	$	21,200	$	—	$	21,200

See accompanying notes.

5

ATEL 15, LLC

STATEMENTS OF CASH FLOWS

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2019 AND 2018

(In  Thousands)

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Operating activities:
Net (loss) income	$	(856)	$	218	$	(480)	$	2,234
Adjustment to reconcile net (loss) income to cash provided by operating activities:
Loss (gain) on sales of equipment under operating lease		541		—		542		(1,697)
Depreciation of operating lease assets		872		1,012		2,663		3,221
Amortization of initial direct costs		23		13		23		47
(Reversal of) provision for credit losses		(17)		—		13		(56)
Impairment losses on investment in securities		—		—		—		17
Unrealized loss (gain) on fair value adjustment for investment in securities		33		36		25		(55)
Unrealized (gain) loss on fair value adjustment for warrants		(4)		(7)		9		(5)
Changes in operating assets and liabilities:
Accounts receivable		(2)		24		12		74
Due from Managing Member and affiliates		—		(162)		1		(162)
Prepaid expenses and other assets		(19)		(3)		2		(13)
Due to Managing Member and affiliates		30		215		21		(141)
Accrued distributions to Other Members		—		—		—		(615)
Accounts payable, other		29		(3)		(352)		(91)
Unearned operating lease income		105		157		145		92
Net cash provided by operating activities		735		1,500		2,624		2,850
Investing activities:
Purchase of securities		(14)		—		(14)		(2)
Proceeds from sales of equipment under operating leases and early termination of notes		323		—		563		4,064
Principal payments received on direct financing leases		1		1		3		2
Note receivable advances		—		(3)		—		(3)
Principal payments received on notes receivable		—		8		—		69
Net cash provided by investing activities		310		6		552		4,130
Financing activities:
Borrowing under non-recourse debt		—		—		4,624		—
Repayments under non-recourse debt		(412)		(854)		(1,389)		(2,660)
Repayment under credit facility		—		—		(2,068)		(2,250)
Distributions to Other Members		—		—		(1,486)		(1,303)
Distributions to Managing Member		—		—		(120)		(106)
Repurchases of Units		—		1		—		(59)
Net cash used in financing activities		(412)		(853)		(439)		(6,378)
Net increase in cash and cash equivalents		633		653		2,737		602
Cash and cash equivalents at beginning of period		3,820		881		1,716		932
Cash and cash equivalents at end of period	$	4,453	$	1,534	$	4,453	$	1,534
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	40	$	20	$	69	$	95
Cash paid during the period for taxes	$	—	$	—	$	121	$	13
Conversion of warrants to equity securities	$	—	$	—	$	168	$	—
Schedule of non-cash investing and financing transactions:
Distributions payable to Other Members at period-end	$	1,471	$	—	$	1,471	$	—
Distributions payable to Managing Member at period-end	$	119	$	—	$	119	$	—

 See accompanying notes.

6

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Limited Liability Company matters:

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

As of September 30, 2019, cumulative gross contributions, less rescissions and repurchases (net of distributions paid and allocated syndication costs, as applicable), totaling $66.0 million (inclusive of the $500 initial Member’s capital investment) have been received. As of the same date, 6,542,557 Units were issued and outstanding.

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

These unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto contained in the report on Form 10‑K for the year ended December 31, 2018, filed with the Securities and Exchange Commission.

2. Summary of significant accounting policies:

Basis of presentation:

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10‑Q as mandated by the Securities and Exchange Commission. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the Managing Member, necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three and nine months ended September 30, 2019 and 2018 are not necessarily indicative of the results to be expected for the full year. Certain prior period amounts may have been reclassified to conform to the current period presentation. These reclassifications had no significant effect on the reported financial position or results of operations.

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

In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after September 30, 2019 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.

7

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Cash and cash equivalents:

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

Use of Estimates:

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

Segment reporting:

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

The primary geographic region in which the Company seeks leasing and financing opportunities is U.S. All of the Company’s current operating revenues for the three and nine months ended September 30, 2019 and 2018, and long-lived tangible assets as of September 30, 2019 and December 31, 2018 relate to customers domiciled in the United States.

Accounts receivable:

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

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

Accounts receivable are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management periodically reviews the creditworthiness of companies with lease or note payments outstanding less than 90 days. Based upon management’s judgment, such leases or notes may be placed in non-accrual status. Leases or notes placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid receivable is probable. Until such time, revenues on operating leases are recognized on a cash basis. All payments received on amounts billed under direct financing leases and notes receivable are applied only against outstanding principal balances.

8

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Financing receivables:

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

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

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

Investment in securities:

From time to time, the Company may purchase securities of its borrowers 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 that do not have readily determinable fair values are measured at cost minus impairment, and adjusted for changes in observable prices. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. The Company had $301 thousand and $144 thousand of purchased securities at September 30, 2019 and December 31, 2018, respectively. Based upon the Company’s review of its portfolio, unrealized losses of $33 thousand and $25 thousand were recorded for the respective three and nine months ended September 30, 2019; and unrealized losses of $36 thousand and unrealized gains of $55 thousand were recorded for the respective three and nine months ended September 30, 2018.

9

ATEL 15, 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. As of September 30, 2019 and December 31, 2018, the estimated fair value of the Company’s portfolio of warrants was $199 thousand and $376 thousand, respectively. During the respective three and nine months ended September 30, 2019, the Company recorded unrealized gains of $4 thousand and unrealized losses of $9 thousand on fair valuation of its warrants. By comparison, the Company recorded unrealized gains of $7 thousand and $5 thousand on fair valuation of its warrants for the respective three and nine months ended September 30, 2018.  There was a net $168 thousand exercise of warrants in exchange for securities in the first quarter of 2019. No exercises of any kind occurred during the comparative prior year period.

Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, operating and direct financing lease receivables, 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 thousand. 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 in various industries, related to equipment on operating leases.

Equipment under operating leases, net and related revenue recognition:

Equipment subject to operating leases is stated at cost. Depreciation is being recognized on a straight-line method over the terms of the related leases to the equipment’s estimated residual values. Off-lease equipment is generally not subject to depreciation. The Company depreciates all lease assets, in accordance with guidelines consistent with ASC 360‑10‑35‑3, over the periods of the lease terms contained in each asset’s respective lease contract to the estimated residual value at the end of the lease contract. All lease assets are purchased only concurrent with the execution of a lease commitment by the lessee. Thus, the original depreciation period corresponds with the term of the original lease. Once the term of an original lease contract is completed, the subject property is typically sold to the existing user, re-leased to the existing user, or, when off-lease, is held for sale. Assets which are re-leased continue to be depreciated using the terms of the new lease agreements and the estimated residual values at the end of the new lease terms, adjusted downward as necessary. Assets classified as held-for-sale are carried at the lower of carrying amount, or the fair value less cost to sell (ASC 360‑10‑35‑43).

The Company does not use the equipment held in its portfolio, but holds it solely for lease and ultimate sale. In the course of marketing equipment that has come off-lease, management may determine at some point that re-leasing the assets may provide a superior return for investors and would then execute another lease. Upon entering into a new lease contract, management will estimate the residual value once again and resume depreciation. If, and when, the Company, at any time, determines that depreciation in value may have occurred with respect to an asset held-for-sale, the Company would review the value to determine whether a material reduction in value had occurred and recognize any appropriate impairment. All lease assets, including off-lease assets, are subject to the Company’s quarterly impairment analysis, as described below. Maintenance costs associated with the Fund’s portfolio of leased assets are expensed as incurred. Major additions and betterments are capitalized.

10

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Operating lease revenue is recognized on a straight-line basis over the term of the underlying leases. The initial lease terms will vary as to the type of equipment subject to the leases, the needs of the lessees and the terms to be negotiated, but initial leases are generally on terms from 36 to 120 months. The difference between rent received and rental revenue recognized is recorded as unearned operating lease income on the balance sheet. Operating leases are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management considers the equipment underlying the lease contracts for impairment and periodically reviews the credit worthiness of all operating lessees with payments outstanding less than 90 days. Based upon management’s judgment, the related operating leases may be placed on non-accrual status. Leases placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid lease payments is probable. Until such time, revenues are recognized on a cash basis.

Initial direct costs:

With the adoption of ASU No. 2016-02 certain costs associated with the execution of the Company’s leases, which were previously capitalized and amortized over the life of their respective leases, are expensed as incurred effective January 1, 2019. In 2018 and prior, the Company capitalized initial direct costs (“IDC”) associated with the origination of lease assets. IDC includes both internal costs (e.g., the costs of employees’ activities in connection with successful lease originations) and external broker fees incurred with such originations. The costs are amortized on a lease by lease basis based on actual contract term using a straight-line method for operating leases. Upon disposal of the underlying lease assets, both the initial direct costs and the associated accumulated amortization are relieved. Costs related to leases that are not consummated are not eligible for capitalization as initial direct costs and are expensed as acquisition expense.

Per Unit data:

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

Fair Value:

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

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

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.

11

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

The Company’s valuation policy is determined by members of the Asset Management, Credit and Accounting departments. The Company’s purchased securities registered for public sale with readily determinable fair value are carried at fair value. The Company elected to record equity investments without readily determinable fair values at cost, less impairment, and adjusted for changes in observable prices. Any changes in the basis of these equity investments are reported in current earnings. Whenever possible, the policy is to obtain quoted market prices in active markets to estimate fair values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes, information from third party remarketing agents, third party appraisals of collateral and/or other valuation techniques. These techniques are significantly affected by certain of the Company’s assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. As the Company is responsible for determining fair value, an analysis is performed on prices obtained from third parties. Such analysis is performed by asset management and credit department personnel who are familiar with the Company’s investments in equipment, notes receivable and equity securities of venture companies. The analysis may include a periodic review of price fluctuations and validation of numbers obtained from a specific third party by reference to multiple representative sources.

Recent accounting pronouncements:

In February 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-02, Leases. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases Topic 842: Targeted Improvements.  In December 2018, the FASB issued ASU No. 2018-20, Leases Topic 842, Narrow-Scope Improvements for Lessors. In March 2019, the FASB issued ASU No. 2019-01, Leases: Codification Improvements. Collectively referred to hereafter as ASU No. 2016-02, these standards set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract to control an asset (i.e., lessees and lessors). The Company does not have any non-cancelable leases where it is a lessee.

ASU No. 2016-02 requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. These standards were effective as of January 1, 2019. Upon adoption, the Company applied the package of practical expedients that has allowed the Company to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases and (iii) initial direct costs for any expired or existing leases. Furthermore, the Company applied the optional transition method in ASU No. 2018-11, which has allowed the Company to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the adoption period, although the Company did not have an adjustment. Additionally, the Company’s leases met the criteria in ASU No. 2018-11 to not separate non-lease components from the related lease component; therefore, the accounting for these leases remained largely unchanged from the previous standard. 

The adoption of ASU No. 2016-02 and the related improvements did not have a material impact in the Company’s financial statements. Upon adoption, (i) amounts previously recognized as lessee reimbursements and other income, for the nine months ended September 30, 2019, have been classified as lease or financing income, (ii) allowances for bad debts are now recognized as a direct reduction of operating lease income, and (iii) certain costs associated with the execution of the Company’s leases, which were previously capitalized and amortized over the life of their respective leases, are expensed as incurred. Subsequent to January 1, 2019, provisions for credit losses relating to operating leases are now included in lease income in the Company’s financial statements.  Provisions for credit losses prior to January 1, 2019 were previously included in operating expenses in the financial statements and prior periods are not reclassified to conform to the current presentation.

12

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

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 leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in 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 may potentially result in an increase in the allowance for credit losses given the change to estimated losses over the contractual life adjusted for expected prepayments.

In November 2018, the FASB issued 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) 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 the 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. Management is currently evaluating the impact of the standard on the financial statements and related disclosure requirements.

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 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 the additional disclosures until their effective date. Management is currently evaluating the impact of this standard on the financial statements and related disclosure requirements.

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, leases 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 both leases and 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.

13

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

3. Notes receivable, net:

The Company has various notes receivables from borrowers who have financed the purchase of equipment through the Company. As of September 30, 2019, the original terms of the notes receivable are 84 to 90 months and bear interest at 18.00% per annum. The notes are secured by the equipment financed. The notes mature in 2020.

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

Three months ending December 31, 2019	$	14
Less: portion representing unearned interest income		(14)
Notes receivable, net	$	—

Initial direct costs (“IDC”) amortization expense related to notes receivable and the Company’s operating leases for the three months and nine months ended September 30, 2019 and 2018 are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
IDC amortization – notes receivable	$	—	$	1	$	—	$	7
IDC amortization – lease assets		23		12		23		40
Total	$	23	$	13	$	23	$	47

4. Allowance for credit losses:

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

	Allowance for		Valuation
	Doubtful		Adjustments		Total
	Accounts		on		Allowance for
	Operating Leases		Notes Receivable		Credit Losses
Balance December 31, 2017	$	44	$	12	$	56
(Reversal of) provision for credit losses		(44)		(12)		(56)
Balance September 30, 2018	$	—	$	—	$	—
Balance December 31, 2018	$	—	$	67	$	67
Provision for credit losses		—		13		13
Write-off		—		(80)		(80)
Balance September 30, 2019	$	—	$	—	$	—

14

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

The Company’s allowance for credit losses (related solely to financing receivables) and its recorded investment in financing receivables as of September 30, 2019 was zero and December 31, 2018 were as follows (in thousands):

	Notes
December 31, 2018	Receivable
Allowance for credit losses:
Ending balance	$	67
Ending balance: individually evaluated for impairment	$	67
Ending balance: collectively evaluated for impairment	$	—
Financing receivables:
Ending balance	$	—
Ending balance: individually evaluated for impairment	$	—
Ending balance: collectively evaluated for impairment	$	—

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

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

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

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

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

15

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

As of September 30, 2019 and December 31, 2018, the Company’s financing receivables and its related investments by credit quality indicator and by class of financing receivables are as follows (excludes initial direct costs) (in thousands):

	Notes Receivable
	September 30,		December 31,
	2019		2018
Pass	$	—	$	—
Special mention		—		—
Substandard		—		—
Doubtful		—		67
Total	$	—	$	67

As of  September 30, 2019,  there were no impaired investment in financing receivables. As of December 31, 2018, the Company’s impaired investment in financing receivables were as follows (in thousands):

	December 31, 2018
			Unpaid				Average
	Recorded		Principal		Related		Recorded		Interest Income
	Investment		Balance		Allowance		Investment		Recognized
With no related allowance recorded
Notes receivable	$	—	$	—	$	—	$	—	$	—
With an allowance recorded
Notes receivable		67		67		67		—		—
Total	$	67	$	67	$	67	$	—	$	—

As of September 30, 2019, there were no aged investment in financing receivables. As of December 31, 2018, investment in financing receivables is aged as follows (in thousands):

													Recorded
											Total		Investment>90
	31‑60 Days		61‑90 Days		Greater Than		Total				Financing		Days and
December 31, 2018	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	67	$	67	$	—

5. Equipment under operating leases, net:

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

					Depreciation/
					Amortization
	Balance		Reclassifications		Expense or		Balance
	December 31,		& Additions /		Amortization		September 30,
	2018		Dispositions		of Leases		2019
Equipment under operating leases, net	$	20,277	$	(1,731)	$	(2,663)	$	15,883
Net investment in direct financing leases		5		(5)		—		—
Assets held for sale or lease, net		2,463		626		—		3,089
Initial direct costs, net of accumulated amortization of $178 at   September 30, 2019 and $182 at December 31, 2018		32		—		(23)		9
Total	$	22,777	$	(1,110)	$	(2,686)	$	18,981

16

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Impairment of equipment under operating leases, net:

Depreciation expense are the following (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Depreciation of operating lease assets	$	872	$	1,012	$	2,663	$	3,221

For the respective three and nine months ended September 30, 2019 and 2018, the Company did not record any impairment losses.

Recorded values of the Company’s leased asset portfolio are reviewed each quarter to confirm the reasonableness of established residual values and to determine whether there is indication that an asset impairment might have taken place.

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

The Company utilizes a straight-line depreciation method for equipment in all of the categories currently in its portfolio of lease transactions. IDC amortization expense related to the Company’s operating leases was $23 thousand for both three and nine months ended September 30, 2019, and was $12 thousand and $40 thousand for the three and nine months ended September  30, 2018 (see Note 3).

All of the Company’s leased property was acquired beginning in December 2011 through April 2015.

17

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Operating leases:

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

	Balance						Balance
	December 31,				Reclassifications		September 30,
	2018		Additions		or Dispositions		2019
Marine vessel	$	19,410	$	—	$	—	$	19,410
Manufacturing		7,836		—		—		7,836
Transportation, rail		7,686		—		(2,592)		5,094
Facility – other		5,084		—		—		5,084
Agriculture		2,112		—		—		2,112
Construction		2,009		—		(234)		1,775
Other		1,983		—		(582)		1,401
		46,120		—		(3,408)		42,712
Less accumulated depreciation		(25,843)		(2,663)		1,677		(26,829)
Total	$	20,277	$	(2,663)	$	(1,731)	$	15,883

The average estimated residual value for assets on operating leases was 19% and 34% on the assets’ original cost on September 30, 2019 and December 31, 2018, respectively. There were no operating leases on non-accrual status as of September 30, 2019 and December 31, 2018.

Direct financing leases:

Such amounts are included in other assets, with related revenues reflected on the income statement under other revenues. Direct financing lease amounts, and related disclosures, are immaterial as of and for both the quarter ended September 30, 2019 and the year ended December 31, 2018.

There were no investments in direct financing leases in non-accrual status at September 30, 2019 and December 31, 2018. 

As of September 30, 2019, the aggregate amounts of future minimum operating lease payments receivable are as follows ( in thousands):

	Operating
	Leases
Three months ending December 31, 2019	$	593
Year ending  December 31, 2020		2,342
2021		2,037
2022		1,903
2023		1,176
2024		254
Thereafter		16
	$	8,321

18

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of September 30, 2019, the respective useful lives of each category of lease assets in the Company’s portfolio are as follows (in years):

Equipment category	Useful Life
Transportation, rail	35 – 50
Marine vessel	20 – 30
Manufacturing	10 – 15
Agriculture	7 – 10
Construction	7 – 10
Facility - other	7 – 10
Other	7 – 10

6. Related party transactions:

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

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

Each of AFS and ATEL Leasing Corporation (“ALC”) is a wholly-owned subsidiary of ATEL Capital Group and performs services for the Company. Acquisition services, equipment management, lease administration and asset disposition services are performed by ALC; investor relations, communications and general administrative services are performed by AFS.

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

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Administrative costs reimbursed to Managing Member and/or affiliates	$	146	$	167	$	438	$	624
Asset management fees to Managing Member		56		42		161		190
	$	202	$	209	$	599	$	814

19

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

7. Non-recourse debt:

At September 30, 2019, non-recourse debt consists of notes payable to financial institutions. The note payments are due in monthly installments. Interest on the notes range from 3.40% to 3.66% per annum. The notes are secured by assignments of lease payments and pledges of assets. At September 30, 2019, gross operating lease rentals and future payments on direct financing leases totaled approximately $4.8 million over the remaining lease terms and the carrying value of the pledged assets is $10.4 million. The notes mature from 2019 through 2024.

The non-recourse debt does not contain any material financial covenants. The debt is secured by a lien granted by the Company to the non-recourse lenders on (and only on) the discounted lease transactions. The lenders have recourse only to the following collateral: the specific leased equipment; the related lease chattel paper; the lease receivables; and proceeds of the foregoing items. The non-recourse obligation is payable solely out of the respective specific security and the Company does not guarantee (nor is the Company otherwise contractually responsible for) the payment of the non-recourse debt as a general obligation or liability of the Company. Although the Company does not have any direct or general liability in connection with the non-recourse debt apart from the security granted, the Company is directly and generally liable and responsible for certain representations, warranties, and covenants made to the lenders, such as warranties as to genuineness of the transaction parties’ signatures, as to the genuineness of the respective lease chattel paper or the transaction as a whole, or as to the Company’s good title to or perfected interest in the secured collateral, as well as similar representations, warranties and covenants typically provided by non-recourse borrowers and customary in the equipment finance industry, and are viewed by such industry as being consistent with non-recourse discount financing obligations. Accordingly, as there are no financial covenants or ratios imposed on the Company in connection with the non-recourse debt, the Company has determined that there are no material covenants with respect to the non-recourse debt that warrant footnote disclosure.

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

	Principal		Interest		Total
Three months ending December 31, 2019	$	359	$	37	$	396
Year ending December 31, 2020		959		123		1,082
2021		946		91		1,037
2022		978		58		1,036
2023		1,012		25		1,037
2024		172		1		173
Total	$	4,426	$	335	$	4,761

8. Senior long-term debt:

As of December 31, 2018, $2.1 million of senior long-term debt consisted of a note payable to a lender. Such debt was utilized during the fourth quarter of 2013 to partially fund the marine vessel and related bareboat charter purchased by the Fund and its affiliate, ATEL 14, LLC. The note bore interest at a fixed-rate of 3.5% per annum, to accrue in arrears on a monthly basis. On May 20, 2019,  a  non-recourse promissory note approximating $9.2 million was executed. The non-recourse promissory note was split evenly between the Fund and its affiliate, ATEL 14, LLC for $4.6 million and were used to pay off the senior long-term debt. The note bore interest at a fixed rate of 3.4% per annum. The non-recourse promissory note is to be serviced by the cash flows generated under a renewed bareboat charter.

20

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

9. Borrowing facilities:

The Company is party to a $75 million revolving credit facility (the “Credit Facility”), with a syndicate of financial institutions as lenders.  Other parties to the Credit Facility include ATEL Capital Group and certain subsidiaries and affiliated funds.  Set to expire on June 30, 2019, the Credit Facility was temporarily extended to October 31, 2019 while an amendment was finalized reducing the availability to $55 million with a scheduled expiration of June 30, 2021. The joint Credit Facility is comprised of a working capital facility, an acquisition facility (the “Acquisition Facility”) and a warehouse facility (the “Warehouse Facility”), the Company and affiliates, and a venture facility.

The lending syndicate providing the Credit Facility has a blanket lien on all of the participant’s assets as collateral for any and all borrowings under the Acquisition Facility, and on a pro-rata basis under the Warehouse Facility. Such Credit Facility includes certain financial covenants.

As of September 30, 2019 and December 31, 2018, the total ATEL Capital Group and subsidiaries, and affiliated funds borrowings under the Credit Facility were as follows (in thousands):

	September 30,		December 31,
	2019		2018
Total available under the financing arrangement	$	75,000	$	75,000
Amount borrowed by affiliated partnerships and limited liability companies under the
working capital, acquisition and warehouse facilities		(865)		(2,110)
Total remaining available under the working capital, acquisition and warehouse facilities	$	74,135	$	72,890

The Company and its affiliates paid an annual commitment fee to have access to this line of credit. And, as of September 30, 2019, the Company was in compliance with all material financial covenants, and with all other material conditions of the Credit Facility during the tenure of participation.

The interest rate on the Credit Facility is based on either the LIBOR/Eurocurrency rate of 1‑, 2‑, 3‑ or 6‑month maturity plus a lender designated spread, or the bank’s Prime rate, which re-prices daily. Principal amounts of loans made under the Credit Facility that are prepaid may be re-borrowed on the terms and subject to the conditions set forth under the Credit Facility.

Warehouse facility

To hold the assets under the Warehousing Facility prior to allocation to specific investor programs, a Warehousing Trust has been entered into by the Company, AFS, ALC, and certain of the affiliated partnerships and limited liability companies.

The Warehousing Trust is used by the Warehouse Facility borrowers to acquire and hold, on a short-term basis, certain lease transactions that meet the investment objectives of each of such entities. Each of the leasing programs sponsored by AFS and ALC is a pro rata participant in the Warehousing Trust, as described below. When a program no longer has a need for short-term financing provided by the Warehousing Facility, it is removed from participation, and as new leasing investment entities are formed by AFS and ALC and commence their acquisition stages, these new entities are added.

21

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

As of September 30, 2019, the investment program participants were the Company, ATEL 16, LLC and ATEL 17, LLC. Pursuant to the Warehousing Trust, the benefit of the lease transaction assets, and the corresponding liabilities under the Warehouse Facility, inure to each of such entities based upon each entity’s pro-rata share in the Warehousing Trust estate. The “pro-rata share” is calculated as a ratio of the net worth of each entity over the aggregate net worth of all entities benefiting from the Warehousing Trust estate, excepting that the trustees, AFS and ALC, are both jointly and severally liable for the pro-rata portion of the obligations of each of the affiliated limited liability companies participating under the Warehouse Facility.

Transactions are financed through this Warehouse Facility only until the transactions are allocated to a specific program for purchase or are otherwise disposed by AFS and ALC. When a determination is made to allocate the transaction to a specific program for purchase by the program, the purchaser repays the debt associated with the asset, either with cash or by means of proceeds of a draw under the Acquisition Facility, and the asset is removed from the Warehouse Facility collateral, and ownership of the asset and any debt obligation associated with the asset are assumed solely by the purchasing entity.

10. Commitments:

At September 30, 2019, there were no commitments to purchase lease assets and to fund investments in notes receivable.

11. Members’ Capital:

A total of 6,542,557 Units were issued and outstanding at September 30, 2019, including the 50 Units issued to the initial member (Managing Member). The Fund was authorized to issue up to 15,000,000 Units in addition to the Units issued to the initial member.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Distributions declared	$	1,471	$	—	$	2,957	$	1,303
Weighted average number of Units outstanding		6,542,557		6,542,557		6,542,557		6,544,562
Weighted average distributions per Unit	$	0.22	$	—	$	0.45	$	0.20

12. Fair value measurements:

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

At September 30, 2019, the Company’s investment in securities and warrants were measured on a recurring basis. At December 31, 2018, only the Company’s warrants were measured on a recurring basis. In addition, certain notes receivable deemed impaired were measured at fair value on a non-recurring basis as of December 31, 2018. There were no notes receivable impaired as of September 30, 2019.

22

ATEL 15, 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 stock price(s), the exercise price(s), the volatility of comparable venture companies, time to maturity and a risk free interest rate for the term(s) of the warrant exercise(s). The calculated fair value of the Fund’s warrant portfolio approximated at $199 thousand and $376 thousand at September 30, 2019 and December 31, 2018, respectively. Such valuations are classified within Level 3 of the valuation hierarchy.

The fair value of warrants that were accounted for on a recurring basis classified as Level 3 are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Fair value of warrants at beginning of period	$	195	$	385	$	376	$	387
Unrealized loss on fair market valuation of warrants		4		7		(9)		5
Warrants converted to securities		—		—		(168)		—
Fair value of warrants at end of period	$	199	$	392	$	199	$	392

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. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital.

The fair value of investment securities that were accounted for on a recurring basis as of the three and nine months ended September 30, 2019 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 securities at the beginning of period	$	95	$	192	$	127	$	101
Unrealized loss on fair market valuation of securities		(33)		(36)		(65)		55
Fair value of investment securities at the end of period	$	62	$	156	$	62	$	156

Impaired off-lease equipment (non-recurring)

During the three and nine months ended September 30, 2019 and 2018, the Company had no recorded fair value adjustments to reduce the cost basis of certain-off lease construction equipment (assets) deemed impaired.

Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the fair value of the impaired lease assets were classified within Level 3 of the valuation hierarchy as the data source utilized for the valuation of such assets reflect significant inputs that are unobservable in the market. Such valuation utilizes a market approach technique and uses inputs that reflect the sales price of similar assets sold by affiliates and/or information from third party remarketing agents not readily available in the market.

23

ATEL 15, 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.

During the  nine months ended September 30, 2019, the Company recorded fair value adjustments totaling $13 thousand for the impaired notes. There were no adjustments for the current quarter. By comparison, $12 thousand of fair value adjustments were recorded during the nine months ended September 30, 2018, none of which was recorded during the third quarter of 2018.

The fair value adjustments recorded in both years 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 fair value calculation categorized as Level 3 in the fair value hierarchy at September 30, 2019 and December 31, 2018:

September 30, 2019
	Valuation	Valuation	Unobservable	Range of
Name	Frequency	Technique	Inputs	Input Values
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.12-  $12.92
			Exercise price	$0.10 - $1,000.00
			Time to maturity (in years)	.87 - 6.33
			Risk-free interest rate	1.55% - 2.44%
			Annualized volatility	37.93% - 117.54%

December 31, 2018
	Valuation	Valuation	Unobservable	Range of
Name	Frequency	Technique	Inputs	Input Values
Warrants	Recurring	Black-Scholes formulation	Stock price	$0.00 - $9.98
			Exercise price	$0.10 - $1,000.00
			Time to maturity (in years)	1.62 - 7.08
			Risk-free interest rate	2.46% - 2.59%
			Annualized volatility	35.36% - 91.94%

24

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

The following disclosure of the estimated fair value of financial instruments is made in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification. Fair value estimates, methods and assumptions, set forth below for the Company’s financial instruments, are made solely to comply with the requirements of the Financial Instruments Topic and should be read in conjunction with the Company’s financial statements and related notes.

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

Cash and cash equivalents

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

Notes receivable

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

Investment in securities

The Company’s purchased securities registered for public sale with readily determinable fair value are carried at fair value. These investment securities are valued based on their quoted market prices.

Non-recourse and senior long-term debt

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

Commitments and contingencies

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

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

25

ATEL 15, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

The following tables present estimated fair values of the Company’s financial instruments in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification at September 30, 2019 and December 31, 2018 (in thousands):

	Fair Value Measurements at September 30, 2019
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	4,453	$	4,453	$	—	$	—	$	4,453
Investment in securities		62		62		—		—		62
Warrants, fair value		199		—		—		199		199
Financial liabilities:
Non-recourse debt		4,426		—		—		4,482		4,482

	Fair Value Measurements at December 31, 2018
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	1,716	$	1,716	$	—	$	—	$	1,716
Investment in securities		127		127		—		—		127
Warrants, fair value		376		—		—		376		376
Financial liabilities:
Non-recourse debt		1,191		—		—		1,187		1,187
Senior long-term debt		2,068		—		—		2,456		2,456

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

Statements contained in this Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) and elsewhere in this Form 10-Q, which are not historical facts, may be forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. In particular, economic recession and changes in general economic conditions, including fluctuations in demand for equipment, lease rates, and interest rates, may result in delays in investment and reinvestment, delays in leasing, re-leasing, and disposition of equipment, and reduced returns on invested capital. The Company’s performance is subject to risks relating to lessee and borrower defaults and the creditworthiness of its lessees and borrowers. The Company’s performance is also subject to risks relating to the value of its equipment at the end of its leases, which may be affected by the condition of the equipment, technological obsolescence and the markets for new and used equipment at the end of lease terms. Investors are cautioned not to attribute undue certainty to these forward-looking statements, which speak only as of the date of this Form 10-Q. We undertake no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect the occurrence of unanticipated events, other than as required by law.

Overview

ATEL 15, LLC (the “Company” or the “Fund”) was formed under the laws of the state of California on March 4, 2011 for the purpose of raising capital and originating equipment financing transactions and acquiring equipment to engage in equipment leasing and sales activities. The offering of the Fund was granted effectiveness by the Securities and Exchange Commission as of October 28, 2011.

As of September 30, 2019, cumulative gross contributions, less rescissions and repurchases (net of distributions paid and allocated syndication costs, as applicable), totaling $66.0 million (inclusive of the $500 initial Member’s capital investment) had been received. As of the same date, 6,542,557 Units were issued and outstanding.

Results of Operations

The Fund had net losses of  $856 thousand and $480 thousand for the respective three and nine months ended September 30, 2019.

Total revenues for the quarter were $477 thousand and $3.6 million for the year to date. Such revenues were from operating lease rents and a termination settlement in favor of the fund recorded as other income during the second quarter. Operating lease rents for the quarter were $1 million and $3.5 million for the year to date period. Compared to prior periods, revenues have been declining consistent with a Fund in its operating stage where lease assets mostly continue in revenue generating deployment until scheduled or early lease termination offers an ability for renewal, re-marketing or disposition or disposition of the leased asset. The Company incurred an approximate loss of $541 thousand on the sale of certain lease assets.

Total operating expenses for the quarter were $1.3 million and a cumulative $4.1 million for the year to date. The main components of these operating expenses represent depreciation of operating lease assets, cost reimbursements to managing member and/or affiliates, asset management fees to the managing member, storage fees, interest expense and professional fees. Depreciation of operating lease assets for the quarter was $872 thousand and $2.7 million for the year to date period. This decline in depreciation, as compared to prior periods, is consistent with Fund in its operating stage where lease assets are mostly in service and in the midst of their respective normal useful and depreciable lives.

27

Cost reimbursements to Managing Member and/or affiliates were  $146 thousand and $438 thousand for the respective three and nine months periods ended September 30, 2019 and were reflective of consistent baseline allocations of common costs among the Fund and its affiliates. Asset management fees to the Managing Member are calculated based upon gross operating revenues and cash from sale or refinancing of lease assets and, while indicative of the consistency of such relationship, amounted to  $56 thousand and $161 thousand for the year to date. Storage fees charge reflect costs incurred to store off lease units of the Fund’s railcar fleet. Amounts expensed for the quarter and year to date were $44 thousand and $91 thousand, respectively, representing an expected cyclical expense trend.  Interest expense recorded in non-recourse, as well as the Fund’s participation in a joint credit facility with certain affiliated Funds was incurred to acquire lease assets. Expense amounts incurred as professional fees of $56 thousand and $186 thousand for the respective periods represent direct Fund 15 – specific core costs of preparation, printing, filing and distribution of annual Form 1065 tax and shareholder reports on Form K-1.  In addition, such costs also include costs attributable to the annual/quarterly tax preparation, valuation reports and mandated periodic regulatory filings with the SEC.

Distributions declared and/or paid during the current three and  nine month periods totaled $1.6 million and $3.2 million, respectively.

Cash balances increased by $633 thousand and $2.7 million during the current quarter and year to date period, respectively. This was mainly the result of the borrowing under non-recourse debt,  and the proceeds from sales of lease and early termination of notes of $323 thousand and $563 thousand during the respective quarter and year to date periods; and the likewise paydowns of assorted obligations of debt.

Compliance with debt covenants

The Credit Facility includes certain financial and non-financial covenants applicable to each borrower, including the Company. Such covenants include covenants typically found in credit facilities of the size and nature of the Credit Facility, such as accuracy of representations, good standing, absence of liens and material litigation, etc. The Company was in compliance with all applicable covenants under the Credit Facility as of September 30, 2019. The Company considers certain financial covenants to be material to its ongoing use of the Credit Facility and these covenants are described below.

Material financial covenants

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

As of September 30, 2019, the material financial covenants are summarized as follows:

Minimum Tangible Net Worth: $10.0 million

Leverage Ratio (leverage to Tangible Net Worth): Not to exceed 1.25 to 1

Collateral Value: Collateral value under the Warehouse Facility must be no less than the outstanding borrowings under that facility

EBITDA to Interest Ratio: Not to be less than 2 to 1 for the four fiscal quarters just ended

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“EBITDA” is defined under the Credit Facility as, for the relevant period of time (1) gross revenues (all payments from leases and notes receivable) for such period minus (2) expenses deducted in determining net income for such period plus (3) to the extent deducted in determining net income for such period (a) provision for income taxes and (b) interest expense, and (c) depreciation, amortization and other non-cash charges. Extraordinary items and gains or losses on (and proceeds from) sales or dispositions of assets outside of the ordinary course of business are excluded in the calculation of EBITDA. “Tangible Net Worth” is defined as, as of the date of determination, (i) the net worth of the Company, after deducting therefrom (without duplication of deductions) the net book amount of all assets of the Company, after deducting any reserves and other amounts for assets which would be treated as intangibles under accounting principles generally accepted in the United States of America (“GAAP”), and after certain other adjustments permitted under the agreements.

The financial covenants referred to above are applicable to the Company only to the extent that the Company has borrowings outstanding under the Credit Facility. The Company was in compliance with these financial covenants under the Credit Facility with a minimum Tangible Net Worth, leverage ratio and interest coverage ratio, as calculated per the Credit Facility agreement of $17.6 million, 0.25 to 1, and 26.25 to 1, respectively, as of September 30, 2019. As such, as of September 30, 2019, the Company was in compliance with all such material financial covenants.

Reconciliation to GAAP of EBITDA

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

The following is a reconciliation of EBITDA, as defined in the loan agreement, for the twelve months ended September 30, 2019 (in thousands):

Net loss - GAAP basis	$	(390)
Interest expense		138
Depreciation of operating lease assets		3,648
Amortization of IDC		33
Provision for credit losses		80
Provision for loss on investment in securities		81
Unrealized gain on fair valuation of warrants		26
Principal payments received on direct financing leases		5
Principal payments received on notes receivable		1
EBITDA (for Credit Facility financial covenant calculation only)	$	3,622

Distributions

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

Cash distributions were made by the Fund to Unitholders of record as of December 31, 2018 and paid through September 30, 2019. 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.

29

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 15, LLC Prospectus dated October 28, 2011 (“Prospectus”) under “Income, Losses and Distributions — Reinvestment.” Accordingly, the amount of cash flow from Fund investments distributed to Unitholders will not be available for reinvestment in additional portfolio assets. The cash distributions were based on current and anticipated gross revenues from the leases and loans acquired. During the Fund’s acquisition and operating stages, the Fund may incur short term borrowing to fund regular distributions of such gross revenues to be generated by newly acquired transactions during their respective initial fixed terms. As such, all Fund periodic cash distributions made during these stages have been, and are expected in the future to be, based on the Fund’s actual and anticipated gross revenues to be generated from the binding initial terms of the leases and loans acquired as they provide free cash balances. Further, distributions are declared and distributed at the discretion of the managing member.

As net cash flows from operations are anticipated to fluctuate during the remaining life of the Fund, distributions will only be paid on an annual basis beginning with March of 2018. A distribution equal to 9% of the total original capital contribution was paid in June 2019.  

The remaining amount to be distributed for 2019 will be determined in December 2019 and paid in January 2020. The amount of all future distributions is dependent upon the timing of lease payments, renewals and asset sales, which will vary during the year. The following table summarizes distribution activity for the Fund from inception through September 30, 2019 (in thousands, except as to Units and per Unit data):

														Total		Weighted
		Return of				Distribution				Total				Distribution		Average Units
Distribution Period (1)	Paid	Capital				of Income				Distribution				per Unit(2)		Outstanding(3)
Monthly and quarterly distributions
Oct 2011 – Dec 2011 (Distribution of escrow interest)	Feb 2012 – Jun 2012	$	—			$	—			$	—				n/a	n/a
Jan 2012 – Nov 2012	Feb 2012 – Dec 2012		1,173				—				1,173				0.79	1,476,249
Dec 2012 – Nov 2013	Jan 2013 – Dec 2013		4,191				—				4,191				0.88	4,758,784
Dec 2013 – Nov 2014	Jan 2014 – Dec 2014		5,952				—				5,952				0.90	6,620,428
Dec 2014 – Nov 2015	Jan 2015 – Dec 2015		5,951				—				5,951				0.90	6,612,560
Dec 2015 – Nov 2016	Jan 2016 – Dec 2016		5,934				—				5,934				0.90	6,606,921
Dec 2016 – Nov 2017	Jan 2017 – Dec 2017		5,892				—				5,892				0.90	6,567,800
Dec 2017 – Nov 2018	Jan 2018 – Dec 2018		1,918				—				1,918				0.29	6,554,450
Dec 2018 - Sept 2019	Jan 2019 - Sept 2019		2,957				—				2,957				0.45	6,542,557
		$	33,968			$	—			$	33,968			$	6.01
Source of distributions
Lease and loan payments and sales proceeds received		$	33,968	100.00	%	$	—	0.00	%	$	33,968	100.00	%
Interest Income			—	0.00	%		—	0.00	%		—	0.00	%
Debt against non-cancellable firm term payments on leases and loans			—	0.00	%		—	0.00	%		—	0.00	%
		$	33,968	100.00	%	$	—	0.00	%	$	33,968	100.00	%

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

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

(3) Balances shown represent weighted average units for the period from January 1, 2012 to November 30, 2012, December 1, 2012 to November 30, 2013, December 1, 2013 to November 30, 2014, December 1, 2014 to November 30, 2015, December 1, 2015 to November 30, 2016, December 1, 2016 to November 30, 2017, December 1, 2017 to November 30, 2018 and December 1, 2018 to September 30, 2019, respectively.

Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies

At September 30, 2019, there were no commitments to purchase lease assets and to fund investments in notes receivable.

30

Off-Balance Sheet Transactions

None.

Recent Accounting Pronouncements

For information on recent accounting pronouncements, see Note 2 Summary of Significant Accounting Policies.

Critical Accounting Policies and Estimates

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

The Company’s significant accounting policies are described in its Annual Report on Form 10-K for the year ended December 31, 2018. 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.

Item 4. Controls and procedures.

Evaluation of disclosure controls and procedures

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

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

Changes in internal control

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

31

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

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

32

SIGNATURES

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

Date: November 13, 2019

ATEL 15, LLC

(Registrant)

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

33