Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
Statements contained in this Item 2, Managements 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 Companys 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.
Plan of Operations
The offering of ATEL Growth Capital Fund 8, LLC (the Company or the Fund) was granted effectiveness by the Securities and Exchange Commission as of August 20, 2012. The offering will continue until the earlier of a period of two years from that date or until sales of Units to the public reach $75,000,000.
As of November 14, 2012, subscriptions for the minimum number of Units (120,000, representing $1,200,000), 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 $3,750,000 in gross proceeds. Total contributions to the Fund exceeded
$3,750,000 on March 13, 2013, at which time a request was processed to release the Pennsylvania escrowed amounts.
As of September 30, 2013, cumulative contributions, net of rescissions and related distributions paid, totaling $7,907,310 (inclusive of the $500 initial Members capital investment) have been received. As of such date, a total of 790,731 Units were issued and outstanding. The Fund is actively raising capital and, as of October 31, 2013, has received cumulative contributions, net of rescissions and related distributions paid, in the amount of $8,625,510 (inclusive of the $500 initial Members capital investment).
The Company reported net income of $72,289 and a net loss of $27,594 for the respective three and nine months ended September 30, 2013.
The net income for the three months ended September 30, 2013 was a result of total revenues of $153,116 offset, in part, by total operating expenses of $80,827. Total revenues were primarily comprised of $52,727 of interest income (including amortization of net note origination costs and discounts) derived from the Funds investments in notes receivable, $49,911 of gain from the net exercise of warrants, and $46,452 of gain from the early termination of certain notes receivable. Combined, such revenues represent approximately 97% of total revenues. Total expenses mostly consisted of $38,019 of acquisition expenses related
to loan originations, $16,326 of costs reimbursed to affiliates, $10,241 of other expense related to administrative expenses, and $5,662 of outside services costs which were primarily associated with printing services.
The net loss for the nine months ended September 30, 2013 was comprised of total expenses amounting to $285,852 offset, in part, by total revenues of $258,258. Total expenses mostly consisted of $185,096 of acquisition expenses related to loan originations, $41,659 of costs reimbursed to affiliates, $17,405 of other expense primarily related to investor communications and administrative expenses, and $14,330 of outside services related to printing services. Combined, such expenses represent approximately 90% of total expenses. Total revenues mostly consisted of $149,331 of interest income (including amortization of net note
origination costs and discounts) derived from the Funds investments in notes receivable, $49,911 of gain from the net exercise of warrants, and $46,452 of gain from the early termination of certain notes receivable.