ATEL Growth Capital Fund 8 10-Q 2016 Q1 Quarterly report

Form 10-Q

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

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

For the quarterly period ended March 31, 2016

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

For the transition period from          to         

Commission File number 333-178629

ATEL GROWTH CAPITAL FUND 8, LLC

(Exact name of registrant as specified in its charter)

California	37-1656343
(State or other jurisdiction of Incorporation or organization)	(I. R. S. Employer Identification No.)

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

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

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

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

Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yesx Noo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yesx Noo

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).Yeso Nox

The number of Limited Liability Company Units outstanding as of April 30, 2016 was 1,618,296 Units.

DOCUMENTS INCORPORATED BY REFERENCE

None.

ATEL GROWTH CAPITAL FUND 8, LLC
 
Index

Part I. Financial Information		3
Item 1. Financial Statements (Unaudited)		3
Balance Sheets, March 31, 2016 and December 31, 2015		3
Statements of Operations for the three months ended March 31, 2016 and 2015		4
Statements of Changes in Members’ Capital for the year ended December 31, 2015 and for the three months ended March 31, 2016		5
Statements of Cash Flows for the three months ended March 31, 2016 and 2015		6
Notes to the Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
Item 4. Controls and Procedures		23
Part II. Other Information		25
Item 1. Legal Proceedings		25
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		25
Item 3. Defaults Upon Senior Securities		25
Item 4. Mine Safety Disclosures		25
Item 5. Other Information		25
Item 6. Exhibits		27

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

ATEL GROWTH CAPITAL FUND 8, LLC
 
BALANCE SHEETS
 
MARCH 31, 2016 AND DECEMBER 31, 2015

(in thousands)

	March 31, 2016		December 31, 2015
	(Unaudited)
ASSETS
Cash and cash equivalents	$	3,274	$	3,018
Accounts receivable		2		3
Notes receivable, net		4,870		5,722
Investment in securities		591		433
Fair value of warrants		736		722
Due from affiliates		43		134
Prepaid expenses and other assets		69		4
Total assets	$	9,585	$	10,036
LIABILITIES AND MEMBERS’ CAPITAL
Accounts payable and accrued liabilities:
Managing Member	$	27	$	28
Accrued distributions to Other Members		250		250
Other		5		2
Total liabilities		282		280
Commitments and contingencies
Members’ capital:
Managing Member		—		—
Other Members		9,303		9,756
Total Members’ capital		9,303		9,756
Total liabilities and Members’ capital	$	9,585	$	10,036

See accompanying notes.

3

ATEL GROWTH CAPITAL FUND 8, LLC
 
STATEMENTS OF OPERATIONS
 
FOR THE THREE MONTHS ENDED
MARCH 31, 2016 AND 2015

(in thousands except units and per unit data)
(Unaudited)

	Three Months Ended March 31,
	2016			2015
Revenues:
Notes receivable interest income, including accretion of net note origination costs and discounts	$	166		$	200
Unrealized gain on fair valuation of warrants		14			—
Other		8			11
Total revenues		188			211
Expenses:
Acquisition expense		—			96
Cost reimbursements to affiliates		56			51
Provision for credit losses		9			51
Asset management fees to Managing Member		21			17
Professional fees		38			34
Outside services		10			12
Taxes on income and franchise fees		3			2
Bank charges		5			3
Printing and photocopying		2			2
Other		3			13
Total expenses		147			281
Net income (loss)	$	41		$	(70	)
Net income (loss):
Managing Member	$	49		$	49
Other Members		(8	)		(119	)
	$	41		$	(70	)
Net loss per Limited Liability Company Unit (Other Members)	$	(0.00	)	$	(0.07	)
Weighted average number of Units outstanding		1,618,296			1,618,296

See accompanying notes.

4

ATEL GROWTH CAPITAL FUND 8, LLC
 
STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL
 
FOR THE YEAR ENDED DECEMBER 31, 2015
AND FOR THE THREE MONTHS ENDED
MARCH 31, 2016

(in thousands except units and per unit data)

			Amount
	Units		Other Members			Managing Member			Total
Balance December 31, 2014		1,618,296	$	11,330		$	—		$	11,330
Distributions to Other Members ($1.10 per Unit)		—		(1,779	)		—			(1,779	)
Distributions to Managing Member		—		—			(198	)		(198	)
Net income		—		205			198			403
Balance December 31, 2015		1,618,296		9,756			—			9,756
Distributions to Other Members ($0.27 per Unit)		—		(445	)		—			(445	)
Distributions to Managing Member		—		—			(49	)		(49	)
Net (loss) income		—		(8	)		49			41
Balance March 31, 2016 (Unaudited)		1,618,296	$	9,303		$	—		$	9,303

See accompanying notes.

5

ATEL GROWTH CAPITAL FUND 8, LLC
 
STATEMENTS OF CASH FLOWS
 
FOR THE THREE MONTHS ENDED
MARCH 31, 2016 AND 2015

(in thousands)
(Unaudited)

	Three Months Ended March 31,
	2016			2015
Operating activities:
Net income (loss)	$	41		$	(70	)
Adjustment to reconcile net income (loss) to cash provided by (used in) operating activities:
Accretion of note discount – warrants		(13	)		(21	)
Amortization of net note origination costs		5			6
Provision for credit losses		9			51
Unrealized gain on fair valuation of warrants		(14	)		—
Changes in operating assets and liabilities:
Accounts receivable		1			(8	)
Due from affiliates		91			—
Prepaid expenses and other assets		(65	)		(17	)
Accounts payable, Managing Member		(1	)		—
Accounts payable, other		3			2
Accrued liabilities, affiliates		—			6
Unearned fee income related to notes receivable		(8	)		(3	)
Net cash provided by (used in) by operating activities		49			(54	)
Investing activities:
Advance payments		(18	)		10
Purchase of securities		(158	)		—
Payments of note origination costs		(1	)		—
Note receivable and warrants advances		—			(529	)
Principal payments received on notes receivable		878			682
Net cash provided by investing activities		701			163
Financing activities:
Distributions to Other Members		(445	)		(445	)
Distributions to Managing Member		(49	)		(49	)
Net cash used in financing activities		(494	)		(494	)
Net increase (decrease) in cash and cash equivalents		256			(385	)
Cash and cash equivalents at beginning of period		3,018			4,924
Cash and cash equivalents at end of period	$	3,274		$	4,539
Schedule of non-cash investing and financing transactions:
Distributions payable to Other Members at period-end	$	250		$	250
Distributions payable to Managing Member at period-end	$	28		$	28

See accompanying notes.

6

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

1. Organization and Limited Liability Company matters:

ATEL Growth Capital Fund 8, LLC (the “Company” or the “Fund”) was formed under the laws of the state of California on December 8, 2011 for the purpose of providing financing for the acquisition of equipment and other goods and services used by emerging growth companies and established privately held companies without publicly traded securities, and for providing other forms of financing for, and to acquire equity interests and warrants and rights to purchase equity interests in such companies. The Fund may continue until it is terminated in accordance with the ATEL Growth Capital Fund 8, LLC limited liability company operating agreement dated December 13, 2011 (the “Operating Agreement”). The Managing Member of the Company is AGC Managing Member, LLC (the “Managing Member” or “Manager”), the renamed AGC 8 Managing Member, LLC which was formed in December 2011 as a Nevada limited liability company. Such name change is the result of an amendment to the articles of incorporation filed with the State of Nevada effective March 18, 2014. Contributions in the amount of $500 were received as of December 31, 2011, which represented the initial Member’s capital investment. As a limited liability company, the liability of any individual member for the obligations of the Fund is limited to the extent of capital contributions to the Fund by the individual member.

The Company conducted a public offering of 7,500,000 Limited Liability Company Units (“Units”), at a price of $10 per Unit. 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 are subject to a separate escrow and are 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 March 31, 2016, cumulative contributions, net of rescissions and related distributions paid, totaling $16.2 million (inclusive of the $500 initial Member’s capital investment) have been received. As of March 31, 2016, a total of 1,618,296 Units were issued and outstanding.

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

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.

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, 2015, filed with the Securities and Exchange Commission.

7

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

2. Summary of Significant Accounting Policies:

Basis of presentation:

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q as mandated by the Securities and Exchange Commission. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the Managing Member, necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the full year.

Certain prior period amounts may have been reclassified to conform to the current period presentation. These reclassifications had no significant effect on the reported financial position or results of operations.

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

In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after March 31, 2016, up until the issuance of the financial statements. No events were noted which would require additional disclosure in the footnotes to the financial statements.

Use of estimates:

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates. Such estimates primarily relate to the determination of 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 North America.

Investment in securities:

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

Purchased securities

Purchased securities (primarily preferred stocks) are generally not registered for public sale and are carried at cost. Such securities are adjusted to fair value if the fair value is less than the carrying value and such impairment is deemed by the Managing Member to be other than temporary. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. As of March 31, 2016 and December 31, 2015, investments in equity securities totaled $591 thousand and $433 thousand, respectively. There were no sales or dispositions of securities during the three months ended March 31, 2016 and 2015.

8

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

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

Warrants

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are reflected at an estimated fair value on the balance sheet as determined by the Managing Member. At March 31, 2016 and December 31, 2015, the Managing Member estimated the fair value of warrants to be $736 thousand and $722 thousand, respectively. During the three months ended March 31, 2016, the Company recorded unrealized gains of $14 thousand on fair valuation of its warrants. There were no unrealized gains or losses recorded during the prior year period. There were no exercises of warrants, net or otherwise, during the three months ended March 31, 2016 and 2015. See Note 9 for further discussion.

Per Unit data:

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

Recent accounting pronouncements:

In January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The new standard provides guidance related to accounting for equity investments and financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management is currently evaluating the standard and its operational and related disclosure requirements.

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

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

9

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 March 31, 2016, the terms of the notes receivable are from 24 to 42 months and bear interest at implicit or stated rates ranging from 11.25% to 18.00% per annum. The notes are secured by the equipment financed and have maturity dates ranging from 2016 through 2019.

As of March 31, 2016, the Company has six notes which were on non-accrual status, three of which were also on non-accrual status as of December 31, 2015.

The three notes which were on non-accrual status at both March 31, 2016 and December 31, 2015 were originally placed in such status as of December 1, 2014. As of December 31, 2014, these notes had net recorded investment of $40 thousand, $79 thousand and $53 thousand, respectively, with rates ranging from 11.54% to 11.73%. There were no fair value adjustments on these impaired notes until 2015 when the Company recorded combined fair value adjustments totaling $97 thousand. As of December 31, 2015, the fair values of such notes were $14 thousand, $26 thousand and $15 thousand, respectively, before accretion of net note origination costs and discounts. During the first quarter of 2016, additional combined fair value adjustments totaling $9 thousand were recorded. As of March 31, 2016, the fair values of the notes were $10 thousand, $20 thousand and $11 thousand, respectively.

Effective January 1, 2015, the notes were modified to defer the repayment of principal while maintaining interest-only payments at their original rates through June 30, 2015. During the second quarter of 2015, additional modifications were made which extended the interest-only payments through October 31, 2015. Such date was further extended during the fourth quarter of 2015 to June 30, 2016. The entire balance outstanding on these notes is expected to be paid on July 1, 2016. The payments will be adjusted such that the ultimate amounts paid will reflect interest earned at a composite rate of 18.00% per annum as related to the entire term of the indebtedness from the original funding date. Payments received on these non-accrual notes have been fully applied against principal pursuant to the Company’s policy on non-accrual notes. Interest not recorded relative to the original terms of the non-accrual notes approximated $16 thousand from December 2014 to March 2016.

On February 1, 2016, the Company placed three additional notes related to one borrower on non-accrual status. As of March 31, 2016, these notes had net recorded investment of $365 thousand, $250 thousand and $228 thousand, respectively. Each of the three notes have a stated annual interest rate of 14.14%. There were no fair value adjustments related to these notes. As of March 31, 2016, a formal forbearance agreement has yet to be entered into. Payments received on these non-accrual notes have been fully applied against principal pursuant to the Company’s policy on non-accrual notes. Interest not recorded relative to the original terms of the non-accrual notes approximated $20 thousand from February 2016 to March 2016.

As of March 31, 2016, the minimum future payments receivable are as follows (in thousands):

Nine months ending December 31, 2016	$	2,905
Year ending December 31, 2017		2,018
2018		828
2019		22
		5,773
Less: portion representing unearned interest income, net		(797	)
Less: allowance for credit losses		(106	)
Notes receivable, net	$	4,870

10

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

4. Allowance for credit losses:

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

	Allowance for Doubtful Accounts –  Notes Receivable		Valuation Adjustments –  Notes Receivable		Total Allowance for Credit Losses
Balance December 31, 2014	$	—	$	—	$	—
Provision for credit losses		—		97		97
Balance December 31, 2015		—		97		97
Provision for credit losses		—		9		9
Balance March 31, 2016	$	—	$	106	$	106

Allowance for Doubtful Accounts

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

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

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

Valuation Adjustments

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

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

11

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

4. Allowance for credit losses: - (continued)

The Company’s allowance for credit losses and its recorded investment in notes receivable as of March 31, 2016 and December 31, 2015 were as follows (in thousands):

March 31, 2016	Notes Receivable
Allowance for credit losses:
Ending balance	$	106
Ending balance: individually evaluated for impairment	$	106
Ending balance: collectively evaluated for impairment	$	—
Ending balance: loans acquired with deteriorated credit quality	$	—
Financing receivables:
Ending balance	$	4,976
Ending balance: individually evaluated for impairment	$	4,976
Ending balance: collectively evaluated for impairment	$	—
Ending balance: loans acquired with deteriorated credit quality	$	—

December 31, 2015	Notes Receivable
Allowance for credit losses:
Ending balance	$	97
Ending balance: individually evaluated for impairment	$	97
Ending balance: collectively evaluated for impairment	$	—
Ending balance: loans acquired with deteriorated credit quality	$	—
Financing receivables:
Ending balance	$	5,819
Ending balance: individually evaluated for impairment	$	5,819
Ending balance: collectively evaluated for impairment	$	—
Ending balance: loans acquired with deteriorated credit quality	$	—

The Company evaluates the credit quality of its notes receivables 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 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.

12

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

4. Allowance for credit losses: - (continued)

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.

At March 31, 2016 and December 31, 2015, the Company’s notes receivables by credit quality indicator and by class of financing receivables are as follows (excludes initial direct costs) (in thousands):

	Notes Receivable
	March 31, 2016		December 31, 2015
Pass	$	3,925	$	4,657
Special mention		904		1,011
Substandard		147		151
Doubtful		—		—
Total	$	4,976	$	5,819

As of March 31, 2016 and December 31, 2015, the Company’s impaired loans were as follows (in thousands):

	Impaired Loans
March 31, 2016	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded
Notes receivable	$	—	$	—	$	—	$	—	$	—
With an allowance recorded
Notes receivable		147		147		106		147		—
Total	$	147	$	147	$	106	$	147	$	—

	Impaired Loans
December 31, 2015	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded
Notes receivable	$	—	$	—	$	—	$	—	$	—
With an allowance recorded
Notes receivable		151		152		97		160		—
Total	$	151	$	152	$	97	$	160	$	—

13

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

4. Allowance for credit losses: - (continued)

At March 31, 2016 and December 31, 2015, investment in financing receivables is aged as follows (in thousands):

March 31, 2016	31 – 60 Days Past Due		61 – 90 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Financing Receivables		Recorded Investment > 90 Days and Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	4,976	$	4,976	$	—
Total	$	—	$	—	$	—	$	—	$	4,976	$	4,976	$	—

December 31, 2015	31 – 60 Days Past Due		61 – 90 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Financing Receivables		Recorded Investment > 90 Days and Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	5,819	$	5,819	$	—
Total	$	—	$	—	$	—	$	—	$	5,819	$	5,819	$	—

As of March 31, 2016, the Company has six notes which were on non-accrual status, three of which were also on non-accrual status as of December 31, 2015 (See Note 3 for details).

5. Related party transactions:

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

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

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 three months ended March 31, 2016 and 2015, 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 March 31,
	2016		2015
Administrative costs reimbursed to Managing Member and/or affiliates	$	56	$	51
Asset management fees to Managing Member		21		17
Acquisition costs and note origination fees paid to Managing Member		1		96
	$	78	$	164

14

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

6. Commitments:

At March 31, 2016, there were commitments to fund investments in notes receivable totaling $2.2 million. These amounts represent contract awards which may be canceled by the prospective borrower/investee or may not be accepted by the Company.

7. Guarantees:

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

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

8. Members’ Capital:

A total of 1,618,296 Units were issued and outstanding as of March 31, 2016 and December 31, 2015. The Fund is authorized to issue up to 7,500,000 Units in addition to the Units issued to the initial 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 months ended March 31, 2016 and 2015 are as follows (in thousands, except as to Units and per Unit data):

	Three Months Ended March 31,
	2016		2015
Distributions declared	$	445	$	445
Weighted average number of Units outstanding		1,618,296		1,618,296
Weighted average distributions per Unit	$	0.27	$	0.27

15

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

9. Fair value measurements:

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

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

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

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

At March 31, 2016 and December 31, 2015, only the Company’s warrants were measured on a recurring basis.

During 2015, the Company recorded non-recurring fair value adjustments to reduce the cost basis of certain impaired notes. During the first quarter of 2016, additional non-recurring adjustments were recorded to further writedown the fair values of these notes.

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.

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 for the term(s) of the warrant exercise(s), and the respective exercise prices and number of warrants.

As of March 31, 2016 and December 31, 2015, the calculated fair value of the Fund’s warrant portfolio totaled $736 thousand and $722 thousand, respectively. Such valuation is classified within Level 3 of the valuation hierarchy.

16

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

9. Fair value measurements: - (continued)

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

	Level 3 Assets
Balance at December 31, 2015	$	722
Unrealized gain on warrants, net recorded during the period		14
Balance at March 31, 2016	$	736

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 2015, the Company had recorded fair value adjustments totaling $97 thousand relative to three impaired notes, of which $51 thousand were recorded during the first quarter of 2015. The fair value adjustments 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.

During the first quarter of 2016, additional non-recurring adjustments totaling $9 thousand were recorded to further reduce the cost basis of these notes.

The following table presents the fair value measurement of impaired assets measured at fair value on a non-recurring basis and the level within the hierarchy in which the fair value measurements fall at March 31, 2016 and December 31, 2015 (in thousands):

	March 31, 2016		Level 1 Estimated Fair Value		Level 2 Estimated Fair Value		Level 3 Estimated Fair Value
Impaired notes receivable	$	40	$	—	$	—	$	40

	December 31, 2015		Level 1 Estimated Fair Value		Level 2 Estimated Fair Value		Level 3 Estimated Fair Value
Impaired notes receivable	$	55	$	—	$	—	$	55

17

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

9. Fair value measurements: - (continued)

The following tables summarize the valuation techniques and significant unobservable inputs used for the Company’s recurring and non-recurring fair value calculation categorized as Level 3 in the fair value hierarchy at March 31, 2016 and December 31, 2015:

March 31, 2016
Name	Valuation Frequency		Valuation Technique		Unobservable Inputs		Range of Input Values
Warrants		Recurring		Black-Scholes formulation		Stock price		$0.19 – $25.76
						Exercise price		$0.19 – $25.76
						Time to maturity (in years)		4.74 – 9.83
						Risk-free interest rate		1.17% – 1.77	%
						Annualized volatility		100.00	%
Notes Receivable		Non-recurring		Market Approach		Third Party Agents’ estimate   of the value of collateral		$0 – $25,522
						Condition of collateral   (equipment)		Poor to Average

December 31, 2015
Name	Valuation Frequency		Valuation Technique		Unobservable Inputs		Range of Input Values
Warrants		Recurring		Black-Scholes formulation		Stock price		$0.19 – $25.76
						Exercise price		$0.19 – $25.76
						Time to maturity (in years)		4.99 – 9.76
						Risk-free interest rate		1.76% – 2.26	%
						Annualized volatility		100.00	%
Notes Receivable		Non-recurring		Market Approach		Third Party Agents’ estimate   of the value of collateral		$0 – $25,522
						Condition of collateral   (equipment)		Poor to Average

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

The Company has determined the estimated fair value amounts by using market information and valuation methodologies that it considers appropriate and consistent with the fair value accounting guidance. Considerable judgment is required to interpret market data to develop the estimates of fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Cash and cash equivalents

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

18

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

9. Fair value measurements: - (continued)

Notes receivable

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

Investment in securities

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

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 March 31, 2016 and December 31, 2015 (in thousands):

	March 31, 2016
	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	3,274	$	3,274	$	—	$	—	$	3,274
Notes receivable, net		4,870		—		—		4,867		4,867
Investment in securities		591		—		—		591		591
Warrants		736		—		—		736		736

	December 31, 2015
	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	3,018	$	3,018	$	—	$	—	$	3,018
Notes receivable, net		5,722		—		—		5,699		5,699
Investment in securities		433		—		—		433		433
Warrants		722		—		—		722		722

19

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

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

Overview

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

The Company conducted a public offering of 7,500,000 Limited Liability Company Units (“Units”), at a price of $10 per Unit. 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 are subject to a separate escrow and are 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 March 31, 2016, cumulative contributions, net of rescissions and related distributions paid, totaling $16.2 million (inclusive of the $500 initial Member’s capital investment) have been received. As of March 31, 2016, a total of 1,618,296 Units were issued and outstanding.

Results of Operations

The three months ended March 31, 2016 versus the three months ended March 31, 2015

The Company reported net income of $41 thousand and a net loss of $70 thousand for the three months ended March 31, 2016 and 2015, respectively. Results for the first quarter of 2016 reflect decreases in both total revenues and total expenses when compared to the prior year period.

Revenues

Total revenues for the first quarter of 2016 decreased by $23 thousand, or 11%, as compared to the prior year period. The decrease in total revenues was largely due to a reduction in interest income on notes receivable offset, in part by a favorable change in unrealized gains or losses recorded on the Fund’s portfolio of warrants.

The decrease in interest income on notes receivables, including accretion of net note origination costs and discounts, totaled $34 thousand and was mainly due to the scheduled run-off of the portfolio.

The favorable change in unrealized gains or losses recorded on the Fund’s portfolio of warrants totaled $14 thousand and was attributable to the required periodic valuation of the warrants in the Company’s portfolio of investments.

Expenses

Total expenses for the first quarter of 2016 decreased by $134 thousand, or 48%, as compared to the prior year period. The decrease in total expenses was largely due to reductions in acquisition expense and the provision for credit losses.

20

The decrease in acquisition expense totaled $96 thousand and was primarily attributable to the absence of suitable venture funding activity during the current year period. The provision for credit losses declined by $42 thousand as the carrying value of three impaired notes receivable at March 31, 2016 more closely approximated fair value following accumulated impairment write downs during the prior year period and subsequent nine months.

Capital Resources and Liquidity

The Company’s cash and cash equivalents totaled $3.3 million and $3.0 million at March 31, 2016 and December 31, 2015, respectively. The liquidity of the Company varies, increasing to the extent cash flows from its portfolio investments exceed expenses and decreasing as portfolio investments are acquired, as distributions are made to the Members and to the extent expenses exceed cash flows from its portfolio investments.

The Fund will acquire its investments with cash. The Fund will not borrow to acquire its portfolio assets and does not intend or expect to incur any indebtedness. The Fund anticipates that it would incur indebtedness only in the event that it is required to borrow for temporary working capital purposes.

Cash Flows

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

	Three Months Ended March 31,
	2016			2015
Net cash provided by (used in):
Operating activities	$	49		$	(54	)
Investing activities		701			163
Financing activities		(494	)		(494	)
Net increase (decrease) in cash and cash equivalents	$	256		$	(385	)

The three months ended March 31, 2016 versus the three months ended March 31, 2015

During the three months ended March 31, 2016 and 2015, the Company’s primary source of liquidity was cash flow from its investments in notes receivable.

During the same respective periods, cash was primarily used to pay distributions to both the Other Members and the Managing Member, totaling a combined $494 thousand for each three-month period. Cash was also used to purchase $158 thousand of investment securities during the first quarter of 2016 and to fund $529 thousand of investment in notes receivable during the prior year period.

Distributions

The Unitholders of record are entitled to certain distributions as provided under the Operating Agreement. The Company commenced periodic distributions beginning with the month of November 2012. Additional distributions have been made through March 31, 2016.

Cash distributions were paid by the Fund to Unitholders of record as of February 29, 2016, and paid through March 31, 2016. 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

21

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.

The following table summarizes distribution activity for the Fund from inception through March 31, 2016 (in thousands):

Distribution Period(1)	Paid		Return of Capital					Distribution of Income					Total Distribution					Total Distribution per Unit(2)		Weighted Average Units Outstanding(3)
Monthly and quarterly distributions
Oct 2012 – Mar 2013 (Distribution of all escrow interest)		July 2013	$	—				$	—				$	—					n/a		n/a
Nov 14, 2012 – Nov 30, 2012		Dec 2012		3					—					3				$	0.43		6,306
Dec 2012 – Nov 2013		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
Dec 2014 – Nov 2015		Jan – Dec 2015		1,779					—					1,779					1.10		1,618,296
Dec 2015 – Feb 2016		Jan – Mar 2016		445					—					445					0.27		1,618,296
			$	4,545				$	—				$	4,545				$	4.45
Source of distributions
Lease and loan payments/payoffs			$	4,545		100.00	%	$	—		0.00	%	$	4,545		100.00	%
Interest income				—		0.00	%		—		0.00	%		—		0.00	%
			$	4,545		100.00	%	$	—		0.00	%	$	4,545		100.00	%

(1) Investors may elect to receive their distributions either monthly or quarterly (See “Timing and Method of Distributions” on Page 46 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 November 14 (date the escrow requirement was met) 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 and December 1, 2015 to February 29, 2016, respectively.

Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies

At March 31, 2016, there were commitments to fund investments in notes receivable totaling $2.2 million. These amounts represent contract awards which may be canceled by the prospective borrower/investee or may not be accepted by the Company.

Off-Balance Sheet Transactions

None.

Recent Accounting Pronouncements

In January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The new standard provides guidance related to accounting for equity investments and financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management is currently evaluating the standard and its operational and related disclosure requirements.

22

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

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

Critical Accounting Policies and Estimates

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

The Company’s critical accounting policies are described in its Annual Report on Form 10-K for the year ended December 31, 2015. There have been no material changes to the Company’s critical accounting policies since December 31, 2015.

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. 78aet seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include,

23

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 March 31, 2016 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.

24

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.

Fund Valuation

Background to Fund Valuation

The Financial Industry Regulatory Authority (“FINRA”), in conjunction with the Securities and Exchange Commission (“SEC”) updated rules for the presentation of account statement values relative to pricing of Direct Placement Program (“DPP”) shares. Under FINRA Notice 15-02 (the “Notice”) the SEC approved amendments to NASD Rule 2340, Customer Account Statements, and FINRA rule 2310, which address a FINRA member firm’s participation in a public offering of a DPP. In summary, the amendments require a FINRA member firm to include in the account statements for customers holding DPP securities a per share value for the DPP. This per share value must be prepared by, or with the material assistance or confirmation of, a third-party valuation expert or service. The results of this valuation must be disclosed in the issuer’s reports filed under the Securities Exchange Act of 1934. A valuation in compliance with the Notice must be undertaken and published on at least an annual basis.

The effective date of the Notice was April 11, 2016.

Methodologies

Broker dealers are required to provide a per share estimated value on the customer account statements for each non-listed DPP security held by their customers. Such estimated value must have been developed in a manner reasonably designed to provide a reliable value. Two valuation methodologies have been defined by FINRA, which by such designation are presumed to be reliable.

Net Investment Methodology

The amendments to NASD Rule 2340(c)(1)(A) require “net investment” to be based on the “amount available for investment” percentage disclosed in the “Estimated Use of Proceeds” section of the issuer’s offering prospectus. In essence, such value is equal to the offering price less selling commissions, other offering and organization expenses, and capital reserves. This method may be used for up to 150 days following the second anniversary of a Fund breaking escrow.

Appraised Value Methodology

As amended, Rule NASD 2340(c)(1)(B) requires that the per share estimated value disclosed in an issuer’s most recent periodic or current report be based upon an appraisal of the assets and liabilities of the program by, or with the material assistance or confirmation of, a third- party valuation expert or

25

service, in conformity with standard industry valuation practice as it relates to both the aforementioned assets and liabilities. No later than 150 days following the second anniversary of the issuer’s break of escrow for its minimum offering, this methodology must be used to establish the required estimated values.

Unit Valuation

The per Unit valuation estimate forATEL GROWTH CAPITAL FUND 8, LLC has been conducted, and the results disclosed herein, in compliance with the mandates of the Notice.

ForATEL GROWTH CAPITAL FUND 8, LLC, its estimated value per Unit reflects the Manager’s estimate of current portfolio valuation of all assets and liabilities of the Fund, calculated on a per Unit basis, and as such, does not represent a market value for the Units and may not accurately reflect the value of the Fund Units to the Unit holders if held over time to Fund maturity.

In connection with any estimate of per Unit value, Unit holders and all parties are reminded that no public market for the Units exists. Additionally, in order to preserve the Fund’s pass-through status for federal income tax purposes, the Fund will not permit a secondary market or the substantial equivalent of a secondary market for the Units. In the absence of a public market for the Units, there is no currently ascertainable fair market value for the Units.

The estimate of per Unit value does not take into account any extraordinary potential future business activity of the Fund; rather the valuation represents a snapshot view of the Fund’s portfolio as of the valuation date. In addition, the Fund does not include any analysis of the distributions that have already been paid by the Fund, nor the anticipated returns to Unit holder over the full course of the Fund life cycle, which will be dependent on many factors.

Disclosure

The estimated value per Unit reported in this Form 10-Q has been calculated using the “Appraised Value Methodology” described above under “Methodologies” above, as of December 31, 2015.

ATEL GROWTH CAPITAL FUND 8, LLC, will satisfy the disclosure requirements for providing estimated per Unit values pursuant to the Notice as follows:

1. For the customer statementsfirst provided after April 11, 2015, the disclosure is made in this quarterly report on Form 10-Q filed for the quarter ended March 31, 2016.

2. For the subsequent annual disclosures of estimated per Unit values as of December 31 of 2016 and each succeeding year through the termination of the Fund, these FINRA compliant estimated per Unit values will be accomplished and included in the Fund’s annual Form 10-K filing for each year.

Specifics Underlying Valuation Methodology:

Notes and Explanation of Valuation Components and Calculation

A. Fund Assets and Liabilities (other than as specifically identified below):  The estimated values for non-interest bearing items such as current assets and liabilities are assumed to equal their reported GAAP balances as an appropriate approximation of their fair values. Debt (interest bearing) is assumed to equal the fair values of the debt as disclosed in the footnotes of the 10-K.

B. Investments in Notes Receivable:  The estimated values for Investments in Notes Receivable are assumed to approximate the reported GAAP balances.

C. Investments in Marketable Securities:  The estimated values for Marketable Securities have been based on the estimated net book value as of the valuation date (with impairment adjustments), plus any unrealized gain on equity. The unrealized gain on equity is based on either: a) the most recent round of financing, b) the most recent 409A valuation provided by the underlying companies of the warrants, or c) the Manager’s estimate of the company valuations based on all available information, including company financials, company valuation reports, public press releases, and other sources.

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D. Warrants Outstanding:  The estimated values for Warrants Outstanding considers the reported GAAP balances to be an appropriate approximation of their fair values.

E. Syndication Costs:  Syndication costs for the Fund have been estimated based on 15% of gross equity raised, and are assumed to be amortized over the expected 12-year life of the Fund. The remaining unamortized portion has been added to the Fund’s balance sheet as an asset.

F. Accrued distributions:  Accrued distributions which are payable to the Unit holders have been removed from the Fund’s balance sheet liability section because they are not a liability to a third party.

ATEL GROWTH CAPITAL FUND 8, LLC Unit Valuation

The Manager’s estimated per Unit value of ATEL GROWTH CAPITAL FUND 8, LLC at December 31, 2015 as determined, and derived under the guidelines of the Appraised Value Methodology, and pursuant to the above specific enumerated component valuation methodologies and calculations, equals $7.46. An independent national public accounting firm with valuation expertise was retained to examine, attest and confirm ATEL GROWTH CAPITAL FUND 8, LLC’s per Unit valuation and its component methodologies and calculation as it relates to compliance with the regulatory mandate defined in the Notice. In this regard, they examined the components of the valuation methodologies and determined them to be reasonable and within industry standards. Other component attributes, including the bases and related key assumptions of the calculation were tested for their completeness, underlying documentation support and mathematical accuracy. Upon completion of their efforts, their attestation report confirmed that the per unit valuation of ATEL GROWTH CAPITAL FUND 8, LLC, and the related notes, in all material respects, was based upon industry practice as described in the Manager’s valuation approach.

Disclaimer

The foregoing Fund per Unit valuation has been performed solely for the purpose of providing an estimated value per Unit in accordance with a regulatory mandate, in order to provide the broker dealer and custodian community with a valuation on a reasonable and attested basis for use in assigning an estimation of a Unit holder’s account value. Any report or disclosure of such estimated per Unit valuation is to be accompanied by statements that the value does not represent an estimate of the amount a Unit holder would receive if the Unit holder were to seek to sell the Units, and that the Fund intends to liquidate its assets in the ordinary course of its business and over the Fund’s term. Further, each statement of the Fund’s estimated per Unit valuation is to be accompanied by a disclosure that there can be no assurance as to (1) when the Fund will be fully liquidated, (2) the amount the Fund may actually receive if and when the Fund seeks to liquidate its assets, (3) the amount of lease or loan payments the Fund will actually receive over the remaining term, (4) the amount of asset disposition proceeds the Fund will actually receive over the remaining term, and (5) the amounts that may actually be received in distributions by Unit holders over the course of the remaining term.

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           Rule 13a-14(a)/15d-14(a) Certification of Dean L. Cash

31.2           Rule 13a-14(a)/15d-14(a) 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

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101.CAL           XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB           XBRL Taxonomy Extension Label Linkbase Document

101.PRE           XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF           XBRL Taxonomy Extension Definition Linkbase Document

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SIGNATURES

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

Date: May 16, 2016

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
Vice President and Chief Accounting Officer of
AGC Managing Member, LLC (Managing Member)

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