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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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Form 10-QSB



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

For the quarterly period ended June 30, 2007



| ̈ | 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 000-33103



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ATEL Capital Equipment Fund
VIII, LLC

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                       
|-------------------------------------------------------------- |  | --------------------------------------
|California                                                     |  | 94-3307404                            
|(State or other jurisdiction of Incorporation or organization) |  | (I. R. S. Employer Identification No.)

600 California Street, 6th Floor, San Francisco, California 94108

(Address of principal executive offices)

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



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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



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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  x    No ̈

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).    Yes ̈No  x

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

State the issuers revenues
for the most recent fiscal year: $14,581,271

The number of Limited Liability Company Units outstanding as of June 30, 2007: 13,560,188

DOCUMENTS INCORPORATED BY REFERENCE

None



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##### Table of Contents

Table of Contents

ATEL CAPITAL EQUIPMENT FUND VIII, LLC

Index



|         |  |                                                                                                                           |  |   
|-------- |  | ------------------------------------------------------------------------------------------------------------------------- |  | --
|Part I.  |  | Financial Information                                                                                                     |  |   
|         |  |                                                                                                                          
|Item 1.  |  | Financial Statements (Unaudited)                                                                                          |  |   
|         |  |                                                                                                                          
|         |  | Balance Sheet, June 30, 2007.                                                                                             |  | 3 
|         |  |                                                                                                                          
|         |  | Statements of Operations for the three and six months ended June 30, 2007 and 2006.                                       |  | 4 
|         |  |                                                                                                                          
|         |  | Statement of Changes in Members Capital for the year ended December 31, 2006 and for the six months ended June 30, 2007. |  | 5 
|         |  |                                                                                                                          
|         |  | Statements of Cash Flows for the three and six months ended June 30, 2007 and 2006.                                       |  | 6 
|         |  |                                                                                                                          
|         |  | Notes to the Financial Statements                                                                                         |  | 7 
|         |  |                                                                                                                          
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                     |  | 18
|         |  |                                                                                                                          
|Item 3.  |  | Controls and Procedures                                                                                                   |  | 23
|         |  |                                                                                                                          
|Part II. |  | Other Information                                                                                                         |  |   
|         |  |                                                                                                                          
|Item 1.  |  | Legal Proceedings                                                                                                         |  | 24
|         |  |                                                                                                                          
|Item 2.  |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                               |  | 24
|         |  |                                                                                                                          
|Item 3.  |  | Defaults Upon Senior Securities                                                                                           |  | 24
|         |  |                                                                                                                          
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                                                       |  | 24
|         |  |                                                                                                                          
|Item 5.  |  | Other Information                                                                                                         |  | 24
|         |  |                                                                                                                          
|Item 6.  |  | Exhibits                                                                                                                  |  | 24



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##### Table of Contents

Part I. FINANCIAL INFORMATION



|Item 1. | Financial Statements.
|------- | ---------------------

ATEL CAPITAL EQUIPMENT FUND VIII, LLC

BALANCE SHEET

JUNE 30, 2007

(in thousands)

(Unaudited)



|                                                                                                            |  |   |       
|----------------------------------------------------------------------------------------------------------- |  | - | ------
|ASSETS                                                                                                      |  |   |       
|                                                                                                            | 
|Cash and cash equivalents                                                                                   |  | $ | 2,198 
|Accounts receivable, net of allowance for doubtful accounts of $125                                         |  |   | 870   
|Prepaid and other assets                                                                                    |  |   | 35    
|Investments in equipment and leases, net of accumulated depreciation and impairment loss reserve of $42,445 |  |   | 19,818
|                                                                                                            |  |   |       
|Total assets                                                                                                |  | $ | 22,921
|                                                                                                            |  |   |       
|LIABILITIES AND MEMBERS CAPITAL                                                                            |  |   |       
|                                                                                                            | 
|Accounts payable and accrued liabilities:                                                                   |  |   |       
|Managing Member                                                                                             |  | $ | 860   
|Other                                                                                                       |  |   | 492   
|Accrued interest payable                                                                                    |  |   | 18    
|Non-recourse debt                                                                                           |  |   | 2,716 
|Interest rate swap contracts                                                                                |  |   | 89    
|Unearned operating lease income                                                                             |  |   | 226   
|                                                                                                            |  |   |       
|Total liabilities                                                                                           |  |   | 4,401 
|                                                                                                            | 
|Commitments and contingencies                                                                               |  |   |       
|                                                                                                            | 
|Members capital:                                                                                           |  |   |       
|Managing Member                                                                                             |  |   |      
|Other Members                                                                                               |  |   | 18,520
|                                                                                                            |  |   |       
|Total Members capital                                                                                      |  |   | 18,520
|                                                                                                            |  |   |       
|Total liabilities and Members capital                                                                      |  | $ | 22,921
|                                                                                                            |  |   |       

See accompanying notes.



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ATEL CAPITAL EQUIPMENT FUND VIII, LLC

STATEMENTS OF OPERATIONS

THREE AND SIX MONTHS ENDED

JUNE 30,
2007 AND 2006

(in thousands, except per unit data)

(Unaudited)



|                                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|-------------------------------------------------------------------- |  | --------------------------- | ---------- | - | ------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                                     |  | Three months ended June 30, |            |   | Six months ended June 30, |  
|                                                                     |  | 2007                        |            |   | 2006                      |   |            | 2007 |  |   | 2006       |  
|Revenues:                                                            |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Leasing activities:                                                  |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Operating leases                                                     |  | $                           | 1,987      |   |                           | $ | 2,532      |      |  | $ | 4,239      |   |  | $ | 4,922      |  
|Direct financing leases                                              |  |                             | 8          |   |                           |   | 27         |      |  |   | 17         |   |  |   | 58         |  
|Gain (loss) on sales of assets                                       |  |                             | 89         |   |                           |   | (268       | )    |  |   | 115        |   |  |   | (231       | )
|Interest                                                             |  |                             | 20         |   |                           |   | 12         |      |  |   | 33         |   |  |   | 25         |  
|Other revenue                                                        |  |                             | 3          |   |                           |   | 22         |      |  |   | 6          |   |  |   | 28         |  
|                                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Total revenues                                                       |  |                             | 2,107      |   |                           |   | 2,325      |      |  |   | 4,410      |   |  |   | 4,802      |  
|                                                                     |  |                             |            |  
|Expenses:                                                            |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Depreciation of operating lease assets                               |  |                             | 1,023      |   |                           |   | 1,389      |      |  |   | 2,040      |   |  |   | 2,782      |  
|Interest expense                                                     |  |                             | 74         |   |                           |   | 229        |      |  |   | 161        |   |  |   | 572        |  
|Asset management fees to Managing Member                             |  |                             | 101        |   |                           |   | 136        |      |  |   | 241        |   |  |   | 249        |  
|Vessel maintenance                                                   |  |                             | 124        |   |                           |   | 217        |      |  |   | 321        |   |  |   | 247        |  
|Railcar maintenance                                                  |  |                             | 147        |   |                           |   | 231        |      |  |   | 274        |   |  |   | 302        |  
|Cost reimbursements to Managing Member                               |  |                             |           |   |                           |   |           |      |  |   | 679        |   |  |   | 679        |  
|Amortization of initial direct costs                                 |  |                             | 4          |   |                           |   | 8          |      |  |   | 7          |   |  |   | 15         |  
|Professional fees                                                    |  |                             | 136        |   |                           |   | 50         |      |  |   | 389        |   |  |   | 172        |  
|Insurance                                                            |  |                             | 24         |   |                           |   | 25         |      |  |   | 47         |   |  |   | 49         |  
|Provision for (recovery of) doubtful accounts                        |  |                             | (2         | ) |                           |   | 25         |      |  |   | (6         | ) |  |   | 29         |  
|Taxes on income and franchise fees                                   |  |                             | 257        |   |                           |   | 84         |      |  |   | 257        |   |  |   | 109        |  
|Other                                                                |  |                             | 43         |   |                           |   | 47         |      |  |   | 103        |   |  |   | 75         |  
|                                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|                                                                     |  |                             | 1,931      |   |                           |   | 2,441      |      |  |   | 4,513      |   |  |   | 5,280      |  
|                                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Net income (loss) from operations                                    |  |                             | 176        |   |                           |   | (116       | )    |  |   | (103       | ) |  |   | (478       | )
|Other income, net                                                    |  |                             | 44         |   |                           |   | 108        |      |  |   | 73         |   |  |   | 261        |  
|                                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Net income (loss)                                                    |  | $                           | 220        |   |                           | $ | (8         | )    |  | $ | (30        | ) |  | $ | (217       | )
|                                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Net income (loss):                                                   |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Managing Member                                                      |  | $                           |           |   |                           | $ | 197        |      |  | $ |           |   |  | $ | 394        |  
|Other Members                                                        |  |                             | 220        |   |                           |   | (205       | )    |  |   | (30        | ) |  |   | (611       | )
|                                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|                                                                     |  | $                           | 220        |   |                           | $ | (8         | )    |  | $ | (30        | ) |  | $ | (217       | )
|                                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Net income (loss) per Limited Liability Company Unit (Other Members) |  | $                           | 0.02       |   |                           | $ | (0.02      | )    |  | $ |           |   |  | $ | (0.05      | )
|Weighted average number of Units outstanding                         |  |                             | 13,560,188 |   |                           |   | 13,570,188 |      |  |   | 13,560,188 |   |  |   | 13,570,188 |  

See accompanying notes.



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ATEL CAPITAL EQUIPMENT FUND VIII, LLC

STATEMENT OF CHANGES IN MEMBERS CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2006

AND FOR THE

SIX MONTHS ENDED

JUNE 30, 2007

(in thousands, except per unit data)

(Unaudited)



|                                                                   |  |               |   |  |                 |         |   |                                    |   |      |       |  |   |      |   |  |   |         |  
|------------------------------------------------------------------ |  | ------------- | - |  | --------------- | ------- | - | ---------------------------------- | - | ---- | ----- |  | - | ---- | - |  | - | ------- | -
|                                                                   |  | Other
Members |   |  | Managing Member |         |   | AccumulatedOtherComprehensive Loss |   |      | Total | 
|                                                                   |  | Units         |   |  | Amount          |         |   |                                    |  
|Balance December 31, 2005                                          |  | 13,570,188    |   |  | $               | 26,622  |   |                                    | $ |     |       |  | $ | (140 | ) |  | $ | 26,482  |  
|Distributions to Other Members ($0.91 per Unit)                    |  |              |   |  |                 | (12,343 | ) |                                    |   |     |       |  |   |     |   |  |   | (12,343 | )
|Distributions to Managing Member                                   |  |              |   |  |                 |        |   |                                    |   | (788 | )     |  |   |     |   |  |   | (788    | )
|Reclassification for portion of swap liability charged to net loss |  |              |   |  |                 |        |   |                                    |   |     |       |  |   | 140  |   |  |   | 140     |  
|Rescissions of capital contributions                               |  | (10,000       | ) |  |                 | (45     | ) |                                    |   |     |       |  |   |     |   |  |   | (45     | )
|Net income                                                         |  |              |   |  |                 | 4,316   |   |                                    |   | 788  |       |  |   |     |   |  |   | 5,104   |  
|                                                                   |  |               |   |  |                 |         |   |                                    |   |      |       |  |   |      |   |  |   |         |  
|Balance December 31, 2006                                          |  | 13,560,188    |   |  |                 | 18,550  |   |                                    |   |     |       |  |   |     |   |  |   | 18,550  |  
|Net loss                                                           |  |              |   |  |                 | (30     | ) |                                    |   |     |       |  |   |     |   |  |   | (30     | )
|                                                                   |  |               |   |  |                 |         |   |                                    |   |      |       |  |   |      |   |  |   |         |  
|Balance June 30, 2007                                              |  | 13,560,188    |   |  | $               | 18,520  |   |                                    | $ |     |       |  | $ |     |   |  | $ | 18,520  |  
|                                                                   |  |               |   |  |                 |         |   |                                    |   |      |       |  |   |      |   |  |   |         |  

See accompanying notes.



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ATEL CAPITAL EQUIPMENT FUND VIII, LLC

STATEMENTS OF CASH FLOWS

THREE AND SIX MONTHS ENDED

JUNE 30,
2007 AND 2006

(in thousands)

(Unaudited)



|                                                                                    |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|----------------------------------------------------------------------------------- |  | -------------------------- | ----- | - | ------------------------ | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                                    |  | Three months endedJune 30, |       |   | Six months endedJune 30, |  
|                                                                                    |  | 2007                       |       |   | 2006                     |   |        | 2007 |  |   | 2006   |  
|Operating activities:                                                               |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Net income (loss)                                                                   |  | $                          | 220   |   |                          | $ | (8     | )    |  | $ | (30    | ) |  | $ | (217   | )
|Adjustment to reconcile net income (loss) to cash provided by operating activities: |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|                                                                                    |  |                            |       |  
|Loss (gain) on sales of assets                                                      |  |                            | (89   | ) |                          |   | 268    |      |  |   | (115   | ) |  |   | 231    |  
|Depreciation of operating lease assets                                              |  |                            | 1,023 |   |                          |   | 1,389  |      |  |   | 2,040  |   |  |   | 2,782  |  
|Amortization of initial direct costs                                                |  |                            | 4     |   |                          |   | 8      |      |  |   | 7      |   |  |   | 15     |  
|Interest rate swap contracts                                                        |  |                            |      |   |                          |   |       |      |  |   |       |   |  |   | 140    |  
|Change in fair value of interest rate swap contracts                                |  |                            | (44   | ) |                          |   | (108   | )    |  |   | (73    | ) |  |   | (261   | )
|Provision for doubtful accounts                                                     |  |                            | (2    | ) |                          |   | 25     |      |  |   | (6     | ) |  |   | 29     |  
|Changes in operating assets and liabilities:                                        |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Accounts receivable                                                                 |  |                            | 110   |   |                          |   | (87    | )    |  |   | 229    |   |  |   | (190   | )
|Due From Affiliates                                                                 |  |                            | (72   | ) |                          |   |       |      |  |   | (72    | ) |  |   |       |  
|Prepaid expenses and other assets                                                   |  |                            | 9     |   |                          |   | 9      |      |  |   | 41     |   |  |   | 34     |  
|Accounts payable, Managing Member                                                   |  |                            | (56   | ) |                          |   | (113   | )    |  |   | (213   | ) |  |   | (179   | )
|Accounts payable, other                                                             |  |                            | (100  | ) |                          |   | 360    |      |  |   | (209   | ) |  |   | (87    | )
|Accrued interest payable                                                            |  |                            | 3     |   |                          |   | 30     |      |  |   | (11    | ) |  |   | 7      |  
|Unearned operating lease income                                                     |  |                            | (48   | ) |                          |   | (161   | )    |  |   | 134    |   |  |   | (88    | )
|                                                                                    |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Net cash provided by operating activities                                           |  |                            | 958   |   |                          |   | 1,612  |      |  |   | 1,722  |   |  |   | 2,216  |  
|                                                                                    |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Investing activities:                                                               |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Proceeds from sales of lease assets                                                 |  |                            | 154   |   |                          |   | 465    |      |  |   | 563    |   |  |   | 714    |  
|Reduction of net investment in direct financing leases                              |  |                            | 79    |   |                          |   | 247    |      |  |   | 157    |   |  |   | 490    |  
|Purchases of equipment on operating leases                                          |  |                            | (18   | ) |                          |   | (134   | )    |  |   | (18    | ) |  |   | (561   | )
|                                                                                    |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Net cash provided by investing activities                                           |  |                            | 215   |   |                          |   | 578    |      |  |   | 702    |   |  |   | 643    |  
|                                                                                    |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Financing activities:                                                               |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Borrowings under acquisition facility                                               |  |                            |      |   |                          |   | 1,500  |      |  |   |       |   |  |   | 8,100  |  
|Repayments under acquisition facility                                               |  |                            |      |   |                          |   | (100   | )    |  |   |       |   |  |   | (1,100 | )
|Repayments under receivables funding program                                        |  |                            |      |   |                          |   |       |      |  |   |       |   |  |   | (4,524 | )
|Repayments of non-recourse debt                                                     |  |                            | (216  | ) |                          |   |       |      |  |   | (780   | ) |  |   | (318   | )
|Distributions to Other Members                                                      |  |                            |      |   |                          |   | (3,087 | )    |  |   | (1,304 | ) |  |   | (6,174 | )
|Distributions to Managing Member                                                    |  |                            |      |   |                          |   | (197   | )    |  |   |       |   |  |   | (394   | )
|                                                                                    |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Net cash used in financing activities                                               |  |                            | (216  | ) |                          |   | (1,884 | )    |  |   | (2,084 | ) |  |   | (4,410 | )
|                                                                                    |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Net increase (decrease) in cash and cash equivalents                                |  |                            | 957   |   |                          |   | 306    |      |  |   | 340    |   |  |   | (1,551 | )
|Cash and cash equivalents at beginning of period                                    |  |                            | 1,241 |   |                          |   | 758    |      |  |   | 1,858  |   |  |   | 2,615  |  
|                                                                                    |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Cash and cash equivalents at end of period                                          |  | $                          | 2,198 |   |                          | $ | 1,064  |      |  | $ | 2,198  |   |  | $ | 1,064  |  
|                                                                                    |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Supplemental disclosures of cash flow information:                                  |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Cash paid during the period for taxes                                               |  | $                          | 257   |   |                          | $ | 84     |      |  | $ | 257    |   |  | $ | 110    |  
|                                                                                    |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Cash paid during the period for interest                                            |  | $                          | 70    |   |                          | $ | 200    |      |  | $ | 171    |   |  | $ | 565    |  
|                                                                                    |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Schedule of non-cash transactions:                                                  |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Distributions declared to Managing Member at period end                             |  | $                          |      |   |                          | $ | 106    |      |  | $ |       |   |  | $ | 106    |  
|                                                                                    |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Distributions declared to Other Members at period end                               |  | $                          |      |   |                          | $ | 1,306  |      |  | $ |       |   |  | $ | 1,306  |  
|                                                                                    |  |                            |       |   |                          |   |        |      |  |   |        |   |  |   |        |  

See accompanying notes.



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##### Table of Contents

ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

1. Organization and Limited Liability Company matters:

ATEL Capital
Equipment Fund VIII, LLC (the Company) was formed under the laws of the State of California on July 31, 1998. The Company was formed for the purpose of acquiring equipment to engage in equipment leasing, lending and sales
activities. The Managing Member of the Company is ATEL Financial Services, LLC (AFS), a California limited liability company. The Company may continue until December 31, 2019. Each Members personal liability for obligations of
the Company generally will be limited to the amount of their respective contributions and rights to undistributed profits and asset of the Company.

The
Company conducted a public offering of 15,000,000 Limited Liability Company Units (Units), at a price of $10 per Unit. On January 13, 1999, subscriptions for the minimum number of Units (120,000, representing $1.2 million) had been
received (excluding subscriptions from Pennsylvania investors) and AFS requested that the subscriptions be released to the Company. On that date the Company commenced operations in its primary business (leasing and lending activities). Total gross
contributions in the amount of $135.7 million (13,570,188 Units) were received as of November 30, 2000, $500 of which represented the Initial Members capital investment, $100 of which represented AFS capital investment and $135.7
million of which represented continuing interest of Other Members. The offering was terminated on November 30, 2000.

As of June 30, 2007,
13,560,188 Units were issued and outstanding.

The Companys principal objectives are to invest in a diversified portfolio of equipment that will
(i) preserve, protect and return the Companys invested capital; (ii) generate regular distributions to the Members of cash from operations and cash from sales or refinancing, with any balance remaining after certain minimum
distributions to be used to purchase additional equipment during the Reinvestment Period, which ended December 31, 2006 and (iii) provide additional distributions following the Reinvestment Period and until all equipment has been sold. The
Company is governed by its Limited Liability Company Operating Agreement (Operating Agreement), as amended.

The Company, or AFS on behalf of
the Company, has incurred costs in connection with the organization, registration and issuance of the Limited Liability Company Units (Note 4). The amount of such costs to be borne by the Company is limited by certain provisions of the
Companys Operating Agreement. The Company will pay AFS and affiliates of AFS substantial fees which may result in a conflict of interest. The Company will pay substantial fees to AFS and its affiliates before distributions are paid to
investors even if the Company does not produce profits. Therefore, the financial position of the Company could change significantly.

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 instructions to Form 10-QSB and
Item 310(b) of Regulation S-B. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the Managing Member, necessary to a fair statement of financial position and results of operations for the interim
periods presented. All such adjustments are of a normal recurring nature. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that effect reported amounts in the financial statements
and accompanying notes. Therefore, actual results could differ from those estimates. Operating results for the three and six months ended June 30, 2007 are not necessarily indicative of the results for the year ending December 31, 2007.

These unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto contained in the report on Form
10-KSB for the year ended December 31, 2006, filed with the Securities and Exchange Commission.

Certain prior period amounts have been reclassified
to conform to the current period presentation. Footnote and tabular amounts are presented in thousands, except as to Units and per Unit data.



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##### Table of Contents

ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of
significant accounting policies (continued):



Use of estimates:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 those estimates. Such estimates relate primarily
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.

Cash and cash equivalents:

Cash and cash equivalents include cash in
banks and cash equivalent investments with original maturities of ninety days or less.

Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, direct finance lease receivables and
accounts receivable. The Company places its cash deposits and temporary cash investments with creditworthy, high quality financial institutions and, therefore, believes that such 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 lessees in various industries, related to equipment on operating and direct financing leases.

Accounts receivable:

Accounts receivable represent the amounts
billed under operating and direct financing lease contracts which are currently due to the Company. Allowances for doubtful accounts are typically established based on historical charge offs and collection experience and are usually determined by
specifically identified lessees and invoiced amounts. Accounts receivable are charged off to the allowance on specific identification basis. Amounts recovered that were previously written-off are recorded as other income in the period received.

Direct financing leases and related revenue recognition:

Income from direct financing lease transactions is reported using the financing method of accounting, in which the Companys investment in the leased property is reported as a receivable from the lessee to be recovered through future
rentals. The interest income portion of each rental payment is calculated so as to generate a constant rate of return on the net receivable outstanding.

Allowances for losses on direct financing leases are typically established based on historical charge offs and collections experience and are usually determined by specifically identified lessees and billed and unbilled receivables. Direct
financing leases are charged off to the allowance as they are deemed uncollectible.

Direct financing 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 periodically reviews the credit worthiness of all direct finance lessees with payments outstanding less than 90 days. Based upon
managements judgment, direct finance lessees with balances less than 90 days delinquent may be placed in a 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.



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##### Table of Contents

ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of
significant accounting policies (continued):



Equipment on operating leases 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 at the end of the leases.

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 from 24 to 120 months. The difference between rent
received and rental revenue recognized is recorded as unearned operating lease income on the balance sheet.

Initial direct costs:

The Company capitalizes initial direct costs (IDC) associated with the origination and funding of lease assets as defined in Statement of Financial Accounting
Standards (SFAS) No. 91 (SFAS No. 91) Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases. IDC includes both internal costs
(e.g., labor and overhead) and external broker fees incurred with the origination. The costs are amortized on a lease by lease basis based on actual lease term using a straight-line method for operating leases and the effective interest rate method
for direct finance 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.

Acquisition expense:

In prior years, the Company capitalized initial direct costs (IDC) associated with the acquisition of lease assets (as defined in Statement of Financial Accounting Standards SFAS No. 91
Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases). Capitalized IDC included both internal costs (e.g., labor and overhead) and external broker fees incurred
with the acquisition. Remaining IDC is being amortized on a lease by lease basis based on actual lease term using a straight-line method for operating leases and the effective interest rate method for direct finance 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 were not consummated were not eligible for capitalization as initial direct costs. Such amounts were
expensed as acquisition expense.

Asset valuation:

Recorded values of the Companys asset portfolio are periodically reviewed for impairment in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. 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 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) of the asset and its carrying value on the measurement date.

Segment
reporting:

The Company reports segment information in accordance with SFAS No. 131 Disclosures about Segments of an Enterprise and Related
Information. SFAS No. 131 establishes annual and interim standards for operating segments of a company. It also requires entity-wide disclosures about the products and services an entity provides, the material countries



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##### Table of Contents

ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of
significant accounting policies (continued):



in which it holds assets and reports revenue, and its major customers. The Company is not organized by multiple operating segments for the purpose of making
operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment in the United States.

The
Companys chief operating decision makers are the Managing Members Chief Operating Officer and its Chief Executive Officer. The Company believes that its equipment leasing business operates as one reportable segment because: a) the
Company measures profit and loss at the equipment portfolio level as a whole; b) the chief operating decision makers do not review information based on any operating segment other than the equipment leasing transaction portfolio; c) the Company does
not maintain discrete financial information on any specific segment other than its equipment financing operations; d) the Company has not chosen to organize its business around different products and services other than equipment lease financing;
and e) the Company has not chosen to organize its business around geographic areas.

Certain of the Companys lessee customers have international
operations. In these instances, the Company is aware that certain equipment, primarily rail and transportation, may periodically exit the country. However, these lessee customers are US-based, and it is impractical for the Company to track, on an
asset-by-asset day-by-day basis, where these assets are deployed.

Derivative financial instruments:

In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, which established new accounting and reporting standards for derivative instruments. SFAS No. 133 has been amended by SFAS No. 137, issued in June 1999, by SFAS No. 138, issued in June 2000 and by SFAS No. 149,
issued in June 2003.

The Company records all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value.
It further provides criteria for derivative instruments to be designated as fair value, cash flow, or foreign currency hedges, and establishes accounting standards for reporting changes in the fair value of the derivative instruments. Upon adoption
on January 1, 2001, the Company recorded its interest rate swap hedging instruments at fair value in the balance sheet, designated the interest rate swaps as cash flow hedges, and recognized the offsetting gains or losses as adjustments to be
reported in net income or other comprehensive income, as appropriate. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in current earnings during the period of change. Such interest rate swaps are
linked to and adjust effectively the interest rate sensitivity of specific long-term debt.

The effective portion of the change in fair value of the
interest rate swaps is recorded in Accumulated Other Comprehensive Income (AOCI) and the ineffective portion (if any) directly in earnings. Amounts in AOCI are reclassified into earnings in a manner consistent with the earnings pattern
of the underlying hedged item (generally reflected in interest expense). If a hedged item is de-designated prior to maturity, previous adjustments to AOCI are recognized in earnings to match the earnings recognition pattern of the hedged item (e.g.,
level yield amortization if hedging an interest bearing instruments). Interest income or expense on most hedging derivatives used to manage interest rate exposure is recorded on an accrual basis as an adjustment to the yield of the link exposures
over the periods covered by the contracts. This matches the income recognition treatment of the exposure (i.e., the liabilities, which are carried at historical cost, with interest recorded on an accrual basis). See footnote 7, Receivables funding
program, for further information regarding interest rate swaps.

Credit exposure from derivative financial instruments, which are assets, arises from the
risk of a counterparty default on the derivative contract. The amount of the loss created by the default is the replacement cost or current positive fair value of the defaulted contract.



10



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##### Table of Contents

ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of
significant accounting policies (continued):



Unearned operating lease income:

The Company records prepayments on operating leases as a liability, unearned operating lease income. The liability is recorded when the prepayments are received and recognized as operating lease revenue ratably over
the period to which the prepayments relate.

Income taxes:

The Company is treated as a partnership for federal income tax purposes. Pursuant to the provisions of Section 701 of the Internal Revenue Code, a partnership is not subject to federal income taxes. Accordingly, the Company has
provided current income taxes for only those states which levy income taxes on partnerships.

Other income (loss), net:

Other income (loss) consists of gains and losses on interest rate swap contracts.

Per unit data:

Net income (loss) and distributions per unit are based upon the weighted average number of Other Members units
outstanding during the period.

Recent Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board (FASB) issued Statement No.159, The Fair Value Option for Financial Assets and Financial Liabilitiesincluding an amendment of FASB Statement
No. 115. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate
volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent
with the Boards long-term measurement objectives for accounting for financial instruments. SFAS 159 is effective as of the beginning of an entitys first fiscal year that begins after November 15, 2007, with early adoption permitted
as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of FASB Statement No. 157, Fair Value Measurements. The Partnership does not presently anticipate any
significant impact on its financial position, results of operations or cash flows.

During September 2006, the Securities and Exchange Commission
(SEC) issued Staff Accounting Bulletin (SAB) No. 108. This Bulletin provides the Staffs views on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the
purpose of a materiality assessment. The guidance in SAB No. 108 is effective for financial statements of fiscal years ending after November 15, 2006. Adoption of this guidance did not materially impact the Partnerships financial
statements.

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement on Financial Accounting Standards
No. 157, Fair Value Measurements (SFAS 157). This standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair
value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. As of June 30, 2007, the Fund does not believe the adoption of SFAS
157 will impact the amounts reported in the financial statements, however, additional disclosures will be required about the inputs used to develop the measurements of fair value and the effect of certain of the measurements reported in the
statement of operations for a fiscal period.



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##### Table of Contents

ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of
significant accounting policies (continued):



In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an
interpretation of FAS 109, Accounting for Income Taxes (FIN 48), to create a single model to address accounting for uncertainty in tax positions. FIN 48 clarifies the accounting for income taxes by prescribing a minimum recognition
threshold a tax position is required to meet before being recognized in the financial statements. FIN 48 also provides guidance on deregulation, measurement, classification, interest and penalties, accounting in interim periods, disclosure and
transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company adopted the provisions of FIN 48 on January 1, 2007. The adoption of FIN 48 did not have a significant effect on the Companys financial
position and results of operations for the three and six months ended June 30, 2007.

3. Investment in equipment and leases, net:

The Companys investment in leases consists of the following (in thousands):



|                                                                                                             |  |                         |        |                                            |   |      |                                                          |  |   |                     |   |  |   |       
|------------------------------------------------------------------------------------------------------------ |  | ----------------------- | ------ | ------------------------------------------ | - | ---- | -------------------------------------------------------- |  | - | ------------------- | - |  | - | ------
|                                                                                                             |  | BalanceDecember 31,2006 |        | Reclassifications& Additions /Dispositions |   |      | Depreciation/AmortizationExpense orAmortizationof Leases |  |   | BalanceJune 30,2007
|Net investment in operating leases                                                                           |  | $                       | 21,184 |                                            | $ | (328 | )                                                        |  | $ | (2,039              | ) |  | $ | 18,817
|Net investment in direct financing leases                                                                    |  |                         | 633    |                                            |   |     |                                                          |  |   | (157                | ) |  |   | 476   
|Assets held for sale or lease, net                                                                           |  |                         | 620    |                                            |   | (102 | )                                                        |  |   | (1                  | ) |  |   | 517   
|Initial direct costs, net of accumulated amortization of $236 at June 30, 2007 and $259 at December 31, 2006 |  |                         | 15     |                                            |   |     |                                                          |  |   | (7                  | ) |  |   | 8     
|                                                                                                             |  |                         |        |                                            |   |      |                                                          |  |   |                     |   |  |   |       
|Total                                                                                                        |  | $                       | 22,452 |                                            | $ | (430 | )                                                        |  | $ | (2,204              | ) |  | $ | 19,818
|                                                                                                             |  |                         |        |                                            |   |      |                                                          |  |   |                     |   |  |   |       

IDC amortization expense related to leases was $4 thousand and $8 thousand for the three months ended
June 30, 2007 and 2006, respectively. IDC amortization expense related to leases was $7 thousand and $15 thousand for the six months ended June 30, 2007 and 2006, respectively.

Impairment of investments in leases and assets held for sale or lease:

Impairment losses are recorded as an addition
to accumulated depreciation of the impaired assets. Depreciation expense on property subject to operating leases and property held for lease or sale was $1.0 million and $1.4 million for the three months ended June 30, 2007 and 2006,
respectively. Depreciation expense on property subject to operating leases and property held for lease or sale was $2.0 million and $2.8 million for the six months ended June 30, 2007 and 2006, respectively. There were no impairment losses for
the three and six months ended June 30, 2007 and 2006.

All of the leased property was acquired during the period from 1999 through 2002.



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##### Table of Contents

ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

3. Investment in
equipment and leases, net (continued):



Operating leases:

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



|                              |  |                         |         |   |           |   |        |                                  |  |   |                     |   |  |   |         |  
|----------------------------- |  | ----------------------- | ------- | - | --------- | - | ------ | -------------------------------- |  | - | ------------------- | - |  | - | ------- | -
|                              |  | BalanceDecember 31,2006 |         |   | Additions |   |        | Reclassificationsor Dispositions |  |   | BalanceJune 30,2007 |  
|Transportation, rail          |  | $                       | 23,854  |   |           | $ | 12     |                                  |  | $ |                    |   |  | $ | 23,866  |  
|Containers                    |  |                         | 20,995  |   |           |   |       |                                  |  |   | (85                 | ) |  |   | 20,910  |  
|Natural gas compressors       |  |                         | 2,522   |   |           |   |       |                                  |  |   | (163                | ) |  |   | 2,359   |  
|Manufacturing                 |  |                         | 1,141   |   |           |   |       |                                  |  |   | (600                | ) |  |   | 541     |  
|Transportation, other         |  |                         | 7,721   |   |           |   | 6      |                                  |  |   |                    |   |  |   | 7,727   |  
|Material handling             |  |                         | 1,041   |   |           |   |       |                                  |  |   |                    |   |  |   | 1,041   |  
|Other                         |  |                         | 3,050   |   |           |   |       |                                  |  |   | (750                | ) |  |   | 2,300   |  
|                              |  |                         |         |   |           |   |        |                                  |  |   |                     |   |  |   |         |  
|                              |  |                         | 60,324  |   |           |   | 18     |                                  |  |   | (1,598              | ) |  |   | 58,744  |  
|Less accumulated depreciation |  |                         | (39,140 | ) |           |   | (2,039 | )                                |  |   | 1,252               |   |  |   | (39,927 | )
|                              |  |                         |         |   |           |   |        |                                  |  |   |                     |   |  |   |         |  
|Total                         |  | $                       | 21,184  |   |           | $ | (2,021 | )                                |  | $ | (346                | ) |  | $ | 18,817  |  
|                              |  |                         |         |   |           |   |        |                                  |  |   |                     |   |  |   |         |  

Direct financing leases:

As of June 30, 2007, investment in direct financing leases consists of rail cars, anhydrous ammonia storage tanks, office automation equipment, point of sale equipment, refrigerated trailers and laundry
equipment. The following lists the components of the Companys investment in direct financing leases as of June 30, 2007 (in thousands):



|                                                             |  |              |     |  
|------------------------------------------------------------ |  | ------------ | --- | -
|                                                             |  | June 30,2007 |    
|Total minimum lease payments receivable                      |  | $            | 154 |  
|Estimated residual values of leased equipment (unguaranteed) |  |              | 334 |  
|                                                             |  |              |     |  
|Investment in direct financing leases                        |  |              | 488 |  
|Less unearned income                                         |  |              | (12 | )
|                                                             |  |              |     |  
|Net investment in direct financing leases                    |  | $            | 476 |  
|                                                             |  |              |     |  

At June 30, 2007, the aggregate amount of future lease payments is as follows (in thousands):



|                                    |  |  |  |                 |        |                       |   |       |  |   |       
|----------------------------------- |  |  |  | --------------- | ------ | --------------------- | - | ----- |  | - | ------
|                                    |  |  |  | OperatingLeases |        | DirectFinancingLeases |   | Total
|Six months ending December 31, 2007 |  |  |  | $               | 3,365  |                       | $ | 105   |  | $ | 3,470 
|Year ending December 31, 2008       |  |  |  |                 | 5,130  |                       |   | 49    |  |   | 5,179 
|2009                                |  |  |  |                 | 2,633  |                       |   |      |  |   | 2,633 
|2010                                |  |  |  |                 | 1,274  |                       |   |      |  |   | 1,274 
|2011                                |  |  |  |                 | 757    |                       |   |      |  |   | 757   
|2012                                |  |  |  |                 | 356    |                       |   |      |  |   | 356   
|Thereafter                          |  |  |  |                 | 192    |                       |   |      |  |   | 192   
|                                    |  |  |  |                 |        |                       |   |       |  |   |       
|                                    |  |  |  | $               | 13,707 |                       | $ | 154   |  | $ | 13,861
|                                    |  |  |  |                 |        |                       |   |       |  |   |       



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##### Table of Contents

ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

3. Investment in
equipment and leases, net (continued):



The Company utilizes a straight line depreciation method for equipment in all of the categories currently in its
portfolio of lease transactions. The useful lives for investment in leases by category are as follows (in years):



|                        |  |            
|----------------------- |  | -----------
|Equipment category      |  | Useful Life
|Transportation, rail    |  | 30 - 35    
|Manufacturing           |  | 10 - 20    
|Construction            |  | 7 - 10     
|Material handling       |  | 7 - 10     
|Natural gas compressors |  | 7 - 10     
|Transportation, other   |  | 7 - 10     

4. Related party transactions:

The terms of the Operating Agreement provide that AFS 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 AFS for providing administrative services to the Company. Administrative services provided
include Company accounting, investor relations, legal counsel and lease and equipment documentation. AFS is not reimbursed for services whereby it is entitled to receive a separate fee as compensation for such services, such as management of
equipment. Reimbursable costs incurred by AFS are allocated to the Company based upon estimated time incurred by employees working on Company business and an allocation of rent and other costs based on utilization studies.

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

Cost reimbursements to the Managing
Member are based on costs incurred by AFS in performing administrative services for the Company that are allocated to each fund that AFS manages based on certain criteria such as existing or new leases, number of investors or equity depending on the
type of cost incurred. AFS 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 and six months ended June 30, 2007 and 2006, AFS and/or affiliates earned fees,
commissions and reimbursements, pursuant to the Operating Agreement as follows (in thousands):



|                                         |  |                            |     |                          |   |      |  |      |     |  |   |    
|---------------------------------------- |  | -------------------------- | --- | ------------------------ | - | ---- |  | ---- | --- |  | - | ---
|                                         |  | Three Months EndedJune 30, |     | Six Months EndedJune 30,
|                                         |  | 2007                       |     | 2006                     |   | 2007 |  | 2006
|Asset management fees to Managing Member |  | $                          | 101 |                          | $ | 136  |  | $    | 241 |  | $ | 249
|Cost reimbursements to Managing Member   |  |                            |    |                          |   |     |  |      | 679 |  |   | 679
|                                         |  |                            |     |                          |   |      |  |      |     |  |   |    
|                                         |  | $                          | 101 |                          | $ | 136  |  | $    | 920 |  | $ | 928
|                                         |  |                            |     |                          |   |      |  |      |     |  |   |    



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##### Table of Contents

ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS



5. Non-recourse debt:

At June 30, 2007, non-recourse debt consists of notes payable to a financial institution. The notes are due in monthly or semi-annual installments. Interest on the notes is fixed at rates ranging from 4.96% to 6.90%. The notes are
secured by assignments of lease payments and pledges of assets. At June 30, 2007, the carrying value of the pledged assets is $3.0 million. The notes mature from 2008 through 2010. On July 2, 2007, the Company repaid the balance of one of
the notes totaling $343 thousand.

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



|                                    |  |  |  |           |       |          |   |       |  |   |      
|----------------------------------- |  |  |  | --------- | ----- | -------- | - | ----- |  | - | -----
|                                    |  |  |  | Principal |       | Interest |   | Total
|Six months ending December 31, 2007 |  |  |  | $         | 783   |          |   | 84    |  | $ | 867  
|Year ending December 31, 2008       |  |  |  |           | 779   |          |   | 107   |  |   | 886  
|2009                                |  |  |  |           | 756   |          |   | 56    |  |   | 812  
|2010                                |  |  |  |           | 398   |          |   | 8     |  |   | 406  
|                                    |  |  |  |           |       |          |   |       |  |   |      
|                                    |  |  |  | $         | 2,716 |          | $ | 255   |  | $ | 2,971
|                                    |  |  |  |           |       |          |   |       |  |   |      

6. Borrowing facilities:

The Company participated with AFS and certain of its affiliates in a financing arrangement (comprised of a term loan to AFS and a line of credit) with a group of financial institutions that includes certain financial
covenants. The financial arrangement, which was originally for $75 million, was to expire in June 2007. However, AFS and its affiliates renewed the arrangement through June 2009. The Company was removed as a party to the agreement on
January 31, 2007.

7. Receivables funding program:

In 1999, the Company established a $40 million receivables funding program (which was subsequently increased to a maximum of $125 million in July 2000) with a receivables financing company that issues commercial paper rated A1 from Standard
and Poors and P1 from Moodys Investor Services. In this receivables funding program, the lenders received a general lien against all of the otherwise unencumbered assets of the Company. The program provided for borrowing at a variable
interest rate and required the Company to enter into interest rate swap agreements with certain counterparties (also rated A1/P1) to mitigate the interest rate risk associated with a variable rate note. AFS believes that this program allowed the
Company to avail itself of lower cost debt than that available for individual non-recourse debt transactions. The program expired as to new borrowings in January 2002. The receivables funding program terminated in January 2007.

As of June 30, 2007, the Company receives or pays interest on a notional principal of $5.9 million, based on the difference between nominal rates ranging from 4.35%
to 7.50% and the variable rate under the Program of 5.76% at June 30, 2007. No actual borrowing or lending is involved. The termination of swaps was to coincide with the maturity of the debt. The differential to be paid or received is accrued
as interest rates change and is recognized currently as an adjustment to interest expense related to the debt. Through the swap agreements, the interest rates on the borrowings have been effectively fixed. The differential to be paid or received is
accrued as interest rates change and is recognized currently as an adjustment to interest expense related to the debt. The interest rate swaps are carried at fair value on the balance sheet with unrealized gain/loss included in the statement of
operations in other income or loss.

The interest rate swaps were originally designated as cash flow hedges of the interest payment on the long term debt.
As a result of repayments, the swaps were deemed to be ineffective and the Company de-designated the original hedge relationships effective September 30, 2004. Prior to this de-designation, changes in the fair value of the swaps were



15



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##### Table of Contents

ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

7. Receivables
funding program (continued):



recognized in accumulated other comprehensive loss (AOCL). Subsequent to this de-designation, changes in fair value of the swaps were reflected
in the statement of operations in other income/loss, net. In addition, amounts remaining in AOCL subsequent to the de-designation of the swaps were reclassified into earning in a manner consistent with the earnings pattern of the underlying hedged
item. As of June 30, 2007, the Company has no remaining balance in AOCL.

Prior to the programs termination in January 2007, the Company was
required to make payments of standby fees in order to maintain the availability of the program. These fees were included in interest expense in the Companys statement of operations. The Company made standby fee payments of $7 thousand during
the first six months of 2006. There were no standby fee payments in 2007.

Borrowings under the program are as follows (in thousands):



|              |  |                        |         |                     |   |                             |  |                       |       |  |                                     |     |   |  |      |  
|------------- |  | ---------------------- | ------- | ------------------- | - | --------------------------- |  | --------------------- | ----- |  | ----------------------------------- | --- | - |  | ---- | -
|Date Borrowed |  | OriginalAmountBorrowed |         | BalanceJune 30,2007 |   | NotionalBalanceJune 30,2007 |  | SwapValueJune 30,2007 |       |  | PaymentRate OnInterestSwapAgreement |    
|11/11/1999    |  | $                      | 20,000  |                     | $ |                            |  | $                     |      |  | $                                   |    |   |  |      |  
|12/21/1999    |  |                        | 20,000  |                     |   |                            |  |                       | 4,773 |  |                                     | (85 | ) |  | 7.41 | %
|12/24/1999    |  |                        | 25,000  |                     |   |                            |  |                       | 18    |  |                                     |    |   |  | 7.44 | %
|4/17/2000     |  |                        | 6,500   |                     |   |                            |  |                       | 18    |  |                                     |    |   |  | 7.45 | %
|4/28/2000     |  |                        | 1,900   |                     |   |                            |  |                       |      |  |                                     |    |   |  | *    |  
|8/3/2000      |  |                        | 19,000  |                     |   |                            |  |                       | 715   |  |                                     | (6  | ) |  | 7.50 | %
|10/31/2000    |  |                        | 7,500   |                     |   |                            |  |                       | 148   |  |                                     | *   |   |  | 7.13 | %
|1/29/2001     |  |                        | 8,000   |                     |   |                            |  |                       |      |  |                                     |    |   |  |      |  
|6/1/2001      |  |                        | 2,000   |                     |   |                            |  |                       |      |  |                                     |    |   |  |      |  
|9/1/2001      |  |                        | 9,000   |                     |   |                            |  |                       | 258   |  |                                     | 2   |   |  | 4.35 | %
|1/31/2002     |  |                        | 3,900   |                     |   |                            |  |                       |      |  |                                     |    |   |  |      |  
|              |  |                        |         |                     |   |                             |  |                       |       |  |                                     |     |   |  |      |  
|              |  | $                      | 122,800 |                     | $ |                            |  | $                     | 5,930 |  | $                                   | (89 | ) |  |      |  
|              |  |                        |         |                     |   |                             |  |                       |       |  |                                     |     |   |  |      |  

8. Commitments:

As of June 30, 2007, the Company had no commitments to purchase lease assets.

9. Guarantees:

The Company enters into contracts that contain a variety of indemnifications. The Companys maximum exposure under these arrangements is unknown. However, the
Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

In the normal course of business, the
Company enters into contracts of various types, including lease contracts, contracts for the sale or purchase of lease assets, management contracts, loan agreements, credit lines and other debt facilities. It is prevalent industry practice for most
contracts of any significant value to include provisions that each of the contracting partiesin addition to assuming liability for breaches of the representations, warranties, and covenants that are part of the underlying contractual
obligationsalso assume an obligation to indemnify and hold the other contracting party harmless for such breaches, for harm caused by such partys gross negligence and willful misconduct, including, in certain instances, certain costs and
expenses arising from the contract. The Managing Member has substantial experience in managing similar leasing programs subject to similar contractual commitments in similar transactions, and the losses and claims arising from these commitments have
been insignificant, if any. Generally, to the extent these contracts are performed in the ordinary course of business under the reasonable business judgment of the Managing Member, no



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##### Table of Contents

ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

9. Guarantees
(continued):



liability will arise as a result of these provisions. The Managing Member has no reason to believe that the facts and circumstances relating to the
Companys contractual commitments differ from those it has entered into on behalf of the prior programs it has managed. 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.

10. Members capital:

As of June 30, 2007,
13,560,188 Units were issued and outstanding. The Company was authorized to issue up to 15,000,000 Units in addition to the Units issued to the initial members (50 Units).

As defined in the Operating Agreement, the Companys Net Income, Net Losses, and Distributions are to be allocated 92.5% to the Other Members and 7.5% to AFS.

Distributions to the Other Members were as follows (in thousands, except per unit data):



|                                             |  |                             |            |                           |   |            |  |      |            |  |   |           
|-------------------------------------------- |  | --------------------------- | ---------- | ------------------------- | - | ---------- |  | ---- | ---------- |  | - | ----------
|                                             |  | Three Months Ended June 30, |            | Six Months Ended June 30,
|                                             |  | 2007                        |            | 2006                      |   | 2007       |  | 2006
|Distributions declared                       |  | $                           |           |                           | $ | 3,087      |  | $    |           |  | $ | 6,174     
|Weighted average number of Units outstanding |  |                             | 13,560,188 |                           |   | 13,570,188 |  |      | 13,560,188 |  |   | 13,570,188
|                                             |  |                             |            |                           |   |            |  |      |            |  |   |           
|Weighted average distributions per Unit      |  | $                           |           |                           | $ | 0.23       |  | $    |           |  | $ | 0.45      
|                                             |  |                             |            |                           |   |            |  |      |            |  |   |           



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##### Table of Contents

|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, and elsewhere in this Form 10-QSB, 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 form 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 defaults and the creditworthiness of its lessees. The Fund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-QSB. 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-QSB or to reflect the occurrence of unanticipated events,
other than as required by law.

Capital Resources and Liquidity

The Company commenced its offering of Units on December 7, 1998. On January 13, 1999, the Company commenced operations in its primary business (leasing activities). As of November 30, 2000, the offering
was concluded. Total proceeds of the offering were $135.7 million. The Companys public offering provided for a total maximum capitalization of $150 million.

The liquidity of the Company will vary in the future, increasing to the extent cash flows from leases and proceeds of asset sales exceed expenses, and decreasing as lease assets are acquired, as distributions are made to the Other Members
and to the extent expenses exceed cash flows from leases and proceeds from asset sales.

As another source of liquidity, the Company has and is expected to
continue having contractual obligations with a diversified group of lessees for fixed lease terms at fixed rental amounts. As initial lease terms expire, the Company re-leases or sells the equipment. The future liquidity beyond the contractual
minimum rentals will depend on the Companys success in re-leasing or selling the equipment as it comes off lease.

Throughout the Reinvestment
Period, the Company anticipates reinvesting a portion of lease payments from assets owned in new leasing transactions. Such reinvestment will occur only after the payment of all current obligations, including debt service (both principal and
interest), the payment of management fees to AFS and providing for cash distributions to the Other Members.

The Company participates with AFS and certain
of its affiliates in a financing arrangement (the Master Terms Agreement). The Master Terms Agreement is comprised of: (1) a working capital term loan facility to AFS, (2) an acquisition facility, (3) a warehouse facility
to AFS, and (4) a venture facility available to an affiliate. The Master Terms Agreement is with a group of financial institutions and includes certain financial and non-financial covenants. The Master Terms Agreement totals $75 million and
expired in June 2007. The availability of borrowings to the Company under the Master Terms Agreement was to be reduced by the amount outstanding on any of the above mentioned facilities. The Company was removed as a party to the agreement on
January 31, 2007.

Borrowings under the facility as of June 30, 2007 were as follows (in thousands):



|                                                                                                                           |  |   |         |  
|-------------------------------------------------------------------------------------------------------------------------- |  | - | ------- | -
|Total available under the financing facility                                                                               |  | $ | 75,000  |  
|Amount borrowed by the Company under the acquisition facility                                                              |  |   |        |  
|Amounts borrowed by affiliated partnerships and limited liability companies under the acquisition and warehouse facilities |  |   | (13,500 | )
|                                                                                                                           |  |   |         |  
|Total remaining available under the acquisition and warehouse facilities                                                   |  | $ | 61,500  |  
|                                                                                                                           |  |   |         |  

The Company currently has available adequate reserves to meet its immediate cash requirements and those of the
next twelve months, but in the event those reserves were found to be inadequate, the Company would likely be in a position to borrow against its current portfolio to meet such requirements. AFS envisions no such requirements for operating purposes.



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If inflation in the general economy becomes significant, it may affect the Company in as much as the residual (resale)
values and rates on re-leases of the Companys leased assets may increase as the costs of similar assets increase. However, the Companys revenues from existing leases would not increase; as such rates are generally fixed for the terms of
the leases without adjustment for inflation.

If interest rates increase significantly, the lease rates that the Company can obtain on future leases will
be expected to increase as the cost of capital is a significant factor in the pricing of lease financing. Leases already in place, for the most part, would not be affected by changes in interest rates. For detailed information on the Companys
debt obligations, see footnotes 5, 6 and 7 to the financial statements.

In 1999, the Company established a $40 million receivables funding program (which
was subsequently increased to a maximum of $125 million) with a receivables financing company that issues commercial paper rated A1 from Standard and Poors and P1 from Moodys Investor Services. In this receivables funding program, the
lenders receive liens against the Companys assets. The lender is in a first position against certain specified assets and will be in either a subordinated or shared position against the remaining assets. The program provides for borrowing at a
variable interest rate and requires AFS, on behalf of the Company, to enter into interest rate swap agreements with certain hedge counterparties (also rated A1/P1) to mitigate the interest rate risk associated with a variable interest rate note. The
receivables funding program allowed the Company to have a more cost effective means of obtaining debt financing than available for individual, non-recourse debt transactions. The receivables funding program expired as to new borrowings in January
2002 and fully terminated in January 2007.

Prior to the termination of the receivables funding program, the Company was required to make standby payments.
These fees totaled $0 and $7 thousand for the six months ended June 30, 2007 and 2006, respectively. The standby payments are included in interest expense in the Companys statement of operations.

Finally, the Company has access to certain sources of non-recourse debt financing, which the Company uses on a transaction basis as a means of mitigating credit risk.
The non-recourse debt financing consists of notes payable to a financial institution. The notes are due in monthly or semi-annual payments. Interest on the notes is fixed at rates ranging from 4.96% to 6.90%. The note is secured by assignments of
lease payments and pledges of assets.

The Operating Agreement limits such borrowings to 50% of the total cost of equipment, in aggregate.

The Company commenced regular distributions, based on cash flows from operations, beginning with the month of January 1999.

At June 30, 2007, the Company had no commitments to purchase leased assets.

Cash Flows

The three months ended June 30, 2007 versus the three months ended June 30, 2006

Operating Activities

During the three months ended June 30, 2007 and
2006, the Companys primary source of cash from operations was rents from operating leases. In addition, the Companys cash flows are impacted by changes in certain assets and liabilities. Cash provided by operating activities totaled $958
thousand and $1.6 million for the second quarter of 2007 and 2006, respectively. The decrease in cash flow was primarily due to (1) the year over year difference in operating results, adjusted for non-cash revenue and expense such as sales on
gains of assets and depreciation expense and (2) increased payments made against accounts payable and accrued liabilities partially offset by increased payments received on accounts receivable.

The difference in year over year results, adjusted for non-cash items, reduced cash flow by $462 thousand. The decrease in operating results was primarily due to a
decline in operating lease revenue offset by a decrease in interest expense. The increase in payments made against accounts payable and accrued liabilities reduced cash flow by $403 thousand and was caused by the timing of inestimable third party
vendor invoices. The aforementioned decreases in cash flow were partially offset by a $125 thousand cash inflow resulting from increased payments received on accounts receivable.



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Investing Activities

During the three months ended June 30, 2007 and 2006, the main sources of cash flow from investing activities were proceeds from sales of lease assets and payments received on the Companys investment in direct financing leases.
Cash provided by investing activities totaled $215 thousand and $578 thousand for the three months ended June 30, 2007 and 2006, respectively. The decrease was primarily due to the following: (1) $311 thousand year over year decline in
proceeds from sales of lease assets, and (2) a $168 thousand decrease in principal payments received on the Companys investment in direct financing leases, partially offset by a $116 thousand decline in capitalized costs of refurbishing
rail cars and vessels under operating leases.

Financing Activities

During the three months ended June 30, 2007, the Companys sole financing activity was the repayment of its non-recourse debt. During the three months ended June 30, 2006, the main source of cash from
financing activities has been borrowings on the Companys various credit facilities. The main uses of cash in financing activities during the same timeframe have been the repayment of debt and distributions to both Managing Member and Other
Members.

Cash used in financing activities totaled $216 thousand and $1.9 million for the three months ended June 30, 2007 and 2006, respectively.
The significantly higher amount of cash used during the first quarter of 2006 was primarily due to $3.1 million of distributions paid to the Other Members and $197 thousand of distributions paid to the Managing Member.

The six months ended June 30, 2007 versus the six months ended June 30, 2006

Operating Activities

During the six months ended June 30, 2007 and 2006, the Companys primary source of cash
from operations was rents from operating leases. In addition, the Companys cash flows are impacted by changes in certain assets and liabilities. Cash provided by operating activities totaled $1.7 million and $2.2 million for the six months
ended June 30, 2007 and 2006, respectively. The decrease in cash flow was primarily due to (1) the year over year difference in operating results, adjusted for non-cash revenue and expense such as gains on sales of assets and depreciation expense,
and (2) increased payments made against accounts payable and accrued liabilities partially offset by (1) increased payments received on accounts receivable and (2) decrease in unearned lease income account balance.

The difference in year over year results, adjusted for non-cash items, reduced cash flow by $896 thousand. The decrease in operating results was primarily due to a
decline in operating lease revenue offset by a decrease in interest expense. The increase in payments made against accounts payable and accrued liabilities reduced cash flow by $156 thousand and was caused by the timing of inestimable third party
vendor invoices. The decreases in cash flow were partially offset by a $347 thousand cash inflow resulting from increased payments received on accounts receivable and a $222 thousand inflow resulting from the year over year decline in unearned
rents.

Investing Activities

During the six months
ended June 30, 2007 and 2006, the main sources of cash flow from investing activities were proceeds from sales of lease assets and payments received on the Companys investment in direct financing leases. Cash provided by investing
activities totaled $702 thousand and $643 thousand for the six months ended June 30, 2007 and 2006, respectively. The increase was primarily due to a $543 thousand year over year decline in capitalized costs of refurbishing rail cars and
vessels under operating leases offset by a $333 thousand decrease in principal payments received on the Companys investment in direct financing leases and a $151 thousand year over year decline in proceeds from sales of lease assets.

Financing Activities

During the six months ended
June 30, 2007, the Companys sole financing activity was the repayment of its non-recourse debt. During the six months ended June 30, 2006, the main source of cash from financing activities has been borrowings on the Companys
various credit facilities. The main uses of cash in financing activities during the same timeframe have been the repayment of debt and distributions to both Managing Member and Other Members.



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Cash used in financing activities totaled $2.1 million and $4.4 million for the six months ended June 30, 2007 and
2006, respectively. The significantly higher amount of cash used during the first six months of 2006 was primarily due to $6.6 million of distributions paid to the Managing Member and Other Members offset, in part, by net borrowings during the first
six months of 2006 totaling $2.2 million.

Results of Operations

Cost reimbursements to the Managing Member are based on costs incurred by AFS in performing administrative services for the Company that are allocated to each managed entity based on certain criteria such as existing
or new leases, number of investors or equity depending on the type of cost incurred.

The three months ended June 30, 2007 versus the three months
ended June 30, 2006

The Company had net income of $220 thousand for the three months ended June 30, 2007 compared to a net loss of $8
thousand for the three months ended June 30, 2006. Results for the three months ended June 30, 2007 reflects decreases in both total revenues and operating expenses when compared to the three months ended June 30, 2006.

Revenues

Total revenues were $2.1 million and $2.3 million for the
three months ended June 30, 2007 and 2006, respectively. The net decline in total revenues was primarily a result of a decrease in operating lease revenue partially offset by an increase in gains on sales of lease assets.

Revenues from operating leases for the three months ended June 30, 2007 declined by $545 thousand when compared to the same period in 2006, due to continued run-off
of the Companys lease portfolio. The Company recorded net gains on sales of assets totaling $89 thousand during the second quarter of 2007 compared to net losses of $268 thousand during the second quarter of 2006. A majority of the gain in
2007 involved the sale of equipment under operating leases that terminated in June 2007.

Expenses

Total expenses were $1.9 million and $2.4 million for the three months ended March 31, 2007 and 2006, respectively. The quarter over quarter decrease in total
expenses was primarily due to (1) $366 thousand decline in depreciation expense, (2) $155 thousand decrease in interest expense, and (3) $93 thousand decline in vessel maintenance expense offset in part by a $173 thousand increase in
taxes on income and franchise fees.

The decrease in depreciation expense was primarily due to the run-off of the Companys lease portfolio, and is
consistent with lower operating lease revenue. Interest expense decreased as a result of a $7.3 million decline in outstanding debt balances since June 30, 2006. The decline in vessel maintenance expense was due to the timing of required
maintenance on a leased asset placed in service in March 2006.

The aforementioned decreases in expenses were partially offset by an increase in taxes on
income and franchise fees due primarily to increased assessments in Pennsylvania, Illinois and New York.

Other

Other income for the first quarter of 2007 and 2006 was solely comprised of gains on interest rate swap contracts and totaled $44 thousand and $108 thousand,
respectively.

The six months ended June 30, 2007 versus the six months ended June 30, 2006

The Company incurred net losses of $30 thousand and $217 thousand for the six months ended June 30, 2007 and 2006, respectively. Results for the six months ended
June 30, 2007 reflects decreases in both total revenues and operating expenses when compared to the same period in 2006.

Revenues

Total revenues were $4.4 million and $4.8 million for the six months ended June 30, 2007 and 2006, respectively. The net decline in total revenues was primarily a
result of decreases in both operating and direct financing lease revenues offset by an increase in gains on sales of lease assets.



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Revenues from operating and direct financing leases declined by $683 thousand and $41 thousand, respectively, during the
six months ended June 30, 2007 when compared to the same period in 2006. The decrease was due to run-off and disposition of the Companys lease portfolios. The Company recorded net gains on sales of lease assets totaling $115 thousand
during the first six months of 2007 compared to net losses of $231 thousand during the first six months of 2006. A majority of the gain in 2007 involved the sale of equipment under operating leases that terminated during the second quarter of 2007.

Expenses

Total expenses were $4.5 million and $5.3
million for the six months ended June 30, 2007 and 2006, respectively. The year over year decrease in total expenses was primarily due to decreases in depreciation and interest expense offset by increases in professional fees and taxes on
income and franchise fees.

Depreciation expense for the six months ended June 30, 2007 declined by $742 thousand when compared to the same period in
2006. The decrease was primarily due to the run-off of the Companys lease portfolio. Interest expense decreased by $411 thousand as a result of a $7.3 million decline in outstanding debt balances since June 30, 2006.

The above decreases in expenses were partially offset by an increase in taxes on income and franchise fees due primarily to higher year over year assessments in
Pennsylvania, Illinois and New York.

Other

Other
income for the six months ended June 30, 2007 and 2006 was solely comprised of gains on interest rate swap contracts and totaled $73 thousand and $261 thousand, respectively.



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|Item 3. | 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, evaluated the effectiveness of the Companys disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) during and 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 ineffective.

The Company does not control the financial reporting process, and is dependent on the Managing Member, who is
responsible for providing the Company with financial statements in accordance with generally accepted accounting principles. The Managing Members disclosure controls and procedures over the timeliness of the financial statement close process
were determined to be ineffective and constitute a material weakness in internal control over financial reporting.

Changes in internal control

The Managing Member has reviewed the above noted material weakness and believes that the following corrective actions taken as a whole will address
the material weakness in its disclosure controls and procedures described above.



| |  |  | We have aggressively recruited experienced professionals to augment and upgrade our financial staff to address issues of timeliness in financial reporting even
during periods when we are preparing filings for the Securities and Exchange Commission. Although we believe that this corrective step will enable management to conclude that the internal controls over our financial reporting are effective when the
staff is trained and the current surge of regulatory reports have been completed, we cannot assure with certainty that these steps will be sufficient.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Managing Member believes that the following corrective actions taken as a whole have addressed, and mitigated, one of the material weaknesses noted in its disclosure controls and procedures listed in its
previously filed Form 10-QSB as of its fiscal quarter ended March 31, 2007:



| |  |  | With regard to identifying and estimating liabilities in the correct periods, the Managing Member has performed a detailed review to identify and record the
liabilities, in the correct period. A standardized quarterly review process has been implemented to ensure the identification and estimation of the liabilities.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Except for the preceding items, no change in our internal control over financial reporting (as defined in Rule 13a-15(f) or Rule 15d-15(f) under the Securities Exchange Act of 1934) occurred during our most recent
fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



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##### Table of Contents

PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings.
|------- | ------------------

Inapplicable.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

Inapplicable.



|Item 3. | Defaults Upon Senior Securities.
|------- | --------------------------------

Inapplicable.



|Item 4. | Submission Of Matters To A Vote Of Security Holders.
|------- | ----------------------------------------------------

Inapplicable.



|Item 5. | Other Information.
|------- | ------------------

Inapplicable.



|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



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##### Table of Contents

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: August 14, 2007



|                                      |  |             
|------------------------------------- |  | ------------
|ATEL CAPITAL EQUIPMENT FUND VIII, 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 Managing Member
|    | 
|By: |  | /s/ Paritosh K. Choksi                                  
|    |  | Paritosh K. Choksi                                      
|    |  | Principal Financial Officer of Registrant               



25