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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-QSB
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the quarterly period ended September 30, 2005
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the transition period from            to
 Commission File number 333-120276
 ATEL Capital Equipment Fund XI, LLC
  California
(State or other jurisdiction of
Incorporation or organization)
    
    20-1357935
(I. R. S. Employer
Identification No.)
 600 California Street, 6th Floor, San Francisco, California 94108
 (415) 989-8800
 None
 None
 þ o
 o þ
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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ATEL CAPITAL EQUIPMENT FUND XI, LLC
 Index
 Part I.
    
    Financial InformationItem 1.
    
    Financial Statements (Unaudited)Balance Sheet, September 30, 2005.Statements of Operations for the nine and three month periods ended September 30, 2005.Statements of
Changes in Members Capital from inception (June 25, 2004) to December 31,
2004 and for the nine month period ended September 30, 2005.Statements of Cash Flows from inception (June 25, 2004) to December 31, 2004 and for
the nine month period ended September 30, 2005.Notes to the Financial StatementsItem 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3.
    
    Controls and ProceduresPart II.
    
    Other InformationItem 1.
    
    Legal ProceedingsItem 2.
    
    Unregistered Sales of Equity Securities and Use of ProceedsItem 3.
    
    Defaults Upon Senior SecuritiesItem 4.
    
    Submission of Matters to a Vote of Security HoldersItem 5.
    
    Other InformationItem 6.
    
    ExhibitsEXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
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Part I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements (unaudited).
 ATEL CAPITAL EQUIPMENT FUND XI, LLC
 
 BALANCE SHEET
 SEPTEMBER 30, 2005
(unaudited)
 ASSETSCash and cash equivalents
    
    $
    19,770,290Accounts receivables and other assets
    
    
    3,350Prepaid syndication costs
    
    
    124,309Notes receivable
    
    
    987,308Investments in operating leases, net
    
    
    644,495Total assets
    
    $
    21,529,752LIABILITIES AND MEMBERS CAPITALAccounts payable and accruals:Managing Member
    
    $
    224,821Other
    
    
    165,641Other liabilities
    
    
    29,970Total liabilities
    
    
    420,432Members capital:Managing Member
    
    
    (15,105
    )Other Members
    
    
    21,124,425Total Members capital
    
    $
    21,109,320Total liabilities and Members capital
    
    $
    21,529,752
  3




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##### Table of Contents



ATEL CAPITAL EQUIPMENT FUND XI, LLC
 
 STATEMENTS OF OPERATIONS
 NINE AND THREE MONTH PERIODS ENDED
SEPTEMBER 30, 2005
(Unaudited)
 Nine months
    
    
    Three monthsended September 30,
    
    
    ended September 30,2005
    
    
    2005Revenues:Interest income
    
    $
    102,850
    
    
    $
    94,994Operating lease income
    
    
    14,270
    
    
    
    14,270Notes receivable interest income
    
    
    12,062
    
    
    
    12,062Other
    
    
    3,750
    
    
    
    3,750132,932
    
    
    
    125,076Expenses:Cost reimbursements to Managing Member
    
    
    95,678
    
    
    
    78,165Professional fees
    
    
    11,105
    
    
    
    11,105Depreciation of operating lease assets
    
    
    10,946
    
    
    
    10,946Equipment and incentive management fees to Managing Member
    
    
    2,561
    
    
    
    2,561Amortization of initial direct costs
    
    
    1,566
    
    
    
    1,566Other
    
    
    9,721
    
    
    
    8,694131,577
    
    
    
    113,037Net income
    
    $
    1,355
    
    
    $
    12,039Net income (loss):Managing Member
    
    
    15,205
    
    
    
    15,205Other Members
    
    
    (13,850
    )
    
    
    (3,166
    )$
    1,355
    
    
    $
    12,039Net income (loss) per Limited Liability Company Unit (Other Members)
    
    $
    (0.01
    )
    
    $
    0.00Weighted average number of Limited Liability Company Units outstanding
    
    
    1,067,659
    
    
    
    1,609,823
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ATEL CAPITAL EQUIPMENT FUND XI, LLC
 
 STATEMENT OF CHANGES IN MEMBERS CAPITAL
 FOR THE PERIOD FROM JUNE 25, 2004 (INCEPTION)
THROUGH DECEMBER 31, 2004
AND FOR THE
NINE MONTH PERIOD ENDED
SEPTEMBER 30, 2005
(Unaudited)
 Units
    
    
    AmountMembers Capital as of June 25, 2004 (inception)
    
    
    
    
    
    $
    Capital contributions
    
    
    150
    
    
    
    600Balance December 31, 2004
    
    
    150
    
    
    
    600Capital contributions
    
    
    2,480,573
    
    
    
    24,805,730Less selling commissions and other syndication costs to affiliates
    
    
    
    
    
    
    (3,495,486
    )Less distributions to Other Members
    
    
    
    
    
    
    (187,674
    )Less distributions to Managing Member
    
    
    
    
    
    
    (15,205
    )Net income
    
    
    
    
    
    
    1,355Balance September 30, 2005
    
    
    2,480,623
    
    
    $
    21,109,320
  5




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ATEL CAPITAL EQUIPMENT FUND XI, LLC
 
 STATEMENT OF CASH FLOWS
 NINE AND THREE MONTH PERIODS ENDED
SEPTEMBER 30, 2005
(Unaudited)
 Nine months
    
    
    Three monthsended September 30,
    
    
    ended September 30,2005
    
    
    2005Operating activities:Net income
    
    $
    1,355
    
    
    $
    12,039Adjustment to reconcile net income to net cash provided by operating activities:Depreciation of operating lease assets
    
    
    10,946
    
    
    
    10,946Amortization of initial direct costs
    
    
    1,566
    
    
    
    1,566Changes in operating assets and liabilities:Accounts receivable, net
    
    
    (3,234
    )
    
    
    (3,234
    )Other assets
    
    
    (116
    )
    
    
    (116
    )Accounts payable, Managing Member
    
    
    224,821
    
    
    
    205,563Accounts payable, other
    
    
    165,641
    
    
    
    (21,674
    )Prepaid syndication costs
    
    
    (124,309
    )
    
    
    143,061Other liabilities
    
    
    29,970
    
    
    
    29,970Net cash provided by operating activities
    
    
    306,640
    
    
    
    378,121Investing activities:Investment in operating leases
    
    
    (615,112
    )
    
    
    (615,112
    )Investment in notes receivable
    
    
    (987,308
    )
    
    
    (987,308
    )Payments of initial direct costs to Managing Member
    
    
    (41,895
    )
    
    
    (41,895
    )Net cash used in investing activities
    
    
    (1,644,315
    )
    
    
    (1,644,315
    )Financing activities:Capital contributions received
    
    
    24,805,730
    
    
    
    17,863,890Payment of commissions and syndication cost to Managing Member
    
    
    (3,495,486
    )
    
    
    (2,664,020
    )Distributions to Other Members
    
    
    (187,674
    )
    
    
    (187,674
    )Distributions to Managing Member
    
    
    (15,205
    )
    
    
    (15,205
    )Net cash provided by financing activities
    
    
    21,107,365
    
    
    
    14,996,991Net increase in cash and cash equivalents
    
    
    19,769,690
    
    
    
    13,730,797Cash and cash equivalents at beginning of period
    
    
    600
    
    
    
    6,039,493Cash and cash equivalents at end of period
    
    $
    19,770,290
    
    
    $
    19,770,290
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ATEL CAPITAL EQUIPMENT FUND XI, LLC
 
 NOTES TO FINANCIAL STATEMENTS
 SEPTEMBER 30, 2005
(Unaudited)
 1. Organization and Limited Liability Company matters:
       2. Summary of significant accounting policies:
   7




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Cash and cash equivalents:
  Use of estimates:
  Equipment on operating leases:
  Asset Valuation:
  Revenue recognition:
 Operating leases
 Direct finance leases
 Notes receivable
 Initial direct costs:
  8




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Segment Reporting:
  3. Investment in equipment leases:
  Depreciation/AmortizationExpense orAmortizationBalance
    
    
    
    
    
    
    of Direct
    
    
    BalanceDecember 31,
    
    
    
    
    
    
    Financing
    
    
    September 30,2004
    
    
    Additions
    
    
    Leases
    
    
    2005Net investment in operating leases
    
    $
    
    
    
    $
    615,112
    
    
    $
    (10,946
    )
    
    $
    604,166Initial direct costs, net of
accumulated amortization of
$1,566 in 2005
    
    
    
    
    
    
    41,895
    
    
    
    (1,566
    )
    
    
    40,329$
    
    
    
    $
    657,007
    
    
    $
    (12,512
    )
    
    $
    644,495
  Operating leases:
  Balance
    
    
    
    
    
    
    BalanceDecember 31,
    
    
    
    
    
    
    September 30,2004
    
    
    Additions
    
    
    2005Manufacturing
    
    $
    
    
    
    $
    615,112
    
    
    $
    615,122Less accumulated depreciation
    
    
    
    
    
    
    (10,946
    )
    
    
    (10,946
    )$
    
    
    
    $
    604,166
    
    
    $
    604,166
  TotalThree months ending December 31, 2005
    
    $
    18,383Year ending December 31, 2006
    
    
    73,5302007
    
    
    73,5302008
    
    
    73,5302009
    
    
    42,893$
    281,866
  Equipment category
    
    Useful LifeManufacturing
    
    
    10 - 20
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4. Notes receivable:
  Three months ending December 31, 2005
    
    $
    104,755Year ending December 31, 2006
    
    
    383,7302007
    
    
    383,7302008
    
    
    291,134$
    1,163,349Less portion representing interest
    
    
    (176,041
    )$
    987,308
 5. Related party transactions:
      Nine Months
    
    
    Three MonthsEnded September 30,
    
    
    Ended September 30,2005
    
    
    2005Selling commissions, equal to
9% of the selling price of
the Limited Liability Company
units, deducted from Other
Members capital
    
    $
    2,232,516
    
    
    $
    1,607,750Reimbursement of other
syndication costs to
Managing Member, deducted
from Other Members capital
    
    
    1,262,970
    
    
    
    1,056,270Other operating expenses
    
    
    95,678
    
    
    
    78,165$
    3,591,164
    
    
    $
    2,742,185
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6. Members capital:
   Nine Months
    
    
    Three MonthsEnded September 30,
    
    
    Ended September 30,2005
    
    
    2005Distributions to other members
    
    $
    187,674
    
    
    $
    187,674Weighted average number of Units outstanding
    
    
    1,067,659
    
    
    
    1,609,823Weighted average distributions per Unit
    
    $
    .18
    
    
    $
    .12
 7. Commitments:
  8. Financing Arrangement:
  Total amount available under the financing arrangement
    
    $
    75,000,000Term loan to AFS as of September 30, 2005
    
    
    Total available under the acquisition and warehouse facilities
    
    
    75,000,000Amount borrowed by the Company under the acquisition facility
    
    
    Amounts borrowed by affiliated partnerships and limited liability
companies under the acquisition facility
    
    
    (12,500,000
    )Total remaining available under the acquisition and warehouse facilities
    
    $
    62,500,000
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9. Guarantees:
   
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Capital Resources and Liquidity
    12




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Cash Flows
    Results of operations
     13




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Item 3. Controls and procedures.
 Evaluation of disclosure controls and procedures
 ITEM 3. CONTROLS AND PROCEDURES
       Changes in internal controls
  14




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PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings.
 Inapplicable.
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  (1)
    
    Effective date of the offering: April 11, 2005; File Number: 333-120276(2)
    
    Offering commenced: April 11, 2005(3)
    
    The offering did not terminate before any securities were sold.(4)
    
    The offering has not been terminated prior to the sale of all of the securities.(5)
    
    The managing underwriter is ATEL Securities Corporation.(6)
    
    The title of the registered class of securities is Units of Limited Liability
Company Interest.(7)
    
    Aggregate amount and offering price of securities registered and sold as of
September 30, 2005:
 Aggregateprice ofoffering
    
    
    
    
    
    
    AggregateAmount
    
    
    amount
    
    
    
    
    
    
    price of offeringTitle of Security
    
    Registered
    
    
    registered
    
    
    Units sold
    
    
    amount soldUnits of Limited Company Interest
    
    
    15,000,000
    
    
    $
    150,000,000
    
    
    
    2,480,573
    
    
    $
    24,805,730
 (8)
    
    Costs incurred for the issuers account in connection with the issuance and
distribution of the securities registered for each category listed below:
 Direct or indirectpayments to directors,officers, Managing Membersof the issuer or their associates;to persons owning ten percent
    
    
    Direct oror more of any class of equity
    
    
    indirectsecurities of the issuer; and
    
    
    paymentsto affiliates of the issuer
    
    
    to others
    
    
    TotalUnderwriting discounts and commissions
    
    $
    372,086
    
    
    $
    1,860,430
    
    
    $
    2,232,516Other expenses
    
    
    
    
    
    
    1,262,970
    
    
    
    1,262,970Total expenses
    
    $
    372,086
    
    
    $
    3,123,400
    
    
    $
    3,495,486(9) Net offering proceeds to the issuer after the total expenses in item 8:
    
    
    
    
    
    
    
    
    
    $
    21,310,244
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(10)
    
    The amount of net offering proceeds to the issuer used for each of the purposes
listed below:
 Direct or indirectpayments to directors,officers, Managing Membersof the issuer or their associates;to persons owning ten percent
    
    
    Direct oror more of any class of equity
    
    
    indirectsecurities of the issuer; and
    
    
    paymentsto affiliates of the issuer
    
    
    to others
    
    
    TotalPurchase and installation of machinery and equipment
    
    $
    41,895
    
    
    $
    1,602,420
    
    
    $
    1,644,315Working capital
    
    
    
    
    
    
    19,665,929
    
    
    
    19,665,929$
    41,895
    
    
    $
    21,268,349
    
    
    $
    21,310,244
 (11)
    
    The use of the proceeds in Item 10 does not represent a material change in the uses
of proceeds described in the prospectus.
 
 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 SchedulesAll 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 Exhibits31.1 Certification of Paritosh K. Choksi
31.2 Certification of Dean L. Cash
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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SIGNATURES
  
 ATEL CAPITAL EQUIPMENT FUND XI, LLC
(Registrant)
 By:
    ATEL Financial Services LLCManaging Member of Registrant By:
    /s/ Dean L. CashDean L. CashPresident and Chief Executive Officer of
Managing MemberBy:
    /s/ Paritosh K. ChoksiParitosh K. ChoksiPrincipal Financial Officer of Registrant 17