** **

**UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C.  20549**

 

**Form10-QSB**

 
| **ý**                                                                                                                                                                                    | **Quarterly Report Pursuant to Section 13 or 15(d)  of the Securities Exchange Act of 1934.**  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                          |                                                                                                               |
| **For the  quarterly period ended June 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**

 

**ATELCapital Equipment Fund XI, LLC******(Exact name of registrant as specified in itscharter)

** **
| **California**                                                  | **20-1357935**                          |
|-----------------------------------------------------------------|-----------------------------------------|
| (State or other jurisdiction of  Incorporation or organization) | (I. R. S. Employer  Identification No.) |

** **

 

**600 California Street, 6th Floor, San Francisco, California94108**(Address ofprincipal executive offices)

 

Registrant’s telephonenumber, including area code **(415) 989-8800**

 

Securities registeredpursuant to section 12(b) of the Act:  **None**

 

Securities registeredpursuant to section 12(g) of the Act:  **None**

 

Indicate by a check mark whether the registrant (1)has filed all reports required to be filed by section 13 or 15(d) of theSecurities  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 suchfiling requirements for the past 90 days. Yes ý  No o

 

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

 

 

State the issuer’srevenues for the most recent fiscal year: Inapplicable

 

The number of LimitedLiability Company Units outstanding as of June 30, 2005:  694,334

 

 

**DOCUMENTSINCORPORATED BY REFERENCE**

 

None

 

----

** **

**ATEL CAPITAL EQUIPMENT FUND XI, LLC**

 

**Index**

 
| **Part I.**  | **Financial Information**                                                                                                                             | ** ** |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
|         |                                                                                                                                                  |       |
| Item 1.      | Financial Statements  (Unaudited)                                                                                                                     |       |
|         |                                                                                                                                                  |       |
|         | Balance Sheet, June 30,  2005.                                                                                                                        |       |
|         |                                                                                                                                                  |       |
|         | Statements of  Operations for the six and three month periods ended June 30, 2005.                                                                    |       |
|         |                                                                                                                                                  |       |
|         | Statements of Changes in  Members’ Capital from inception (June 25,2004) to December 31, 2004 and for  the six month period ended June 30, 2005. |       |
|         |                                                                                                                                                  |       |
|         | Statements of Cash Flows from inception  (June 25, 2004) to December 31, 2004 and for the six month period ended June  30, 2005.                      |       |
|         |                                                                                                                                                  |       |
|         | Notes to the Financial Statements                                                                                                                     |       |
|         |                                                                                                                                                  |       |
| Item 2.      | Management’s Discussion and  Analysis of Financial Condition and Results of Operations                                                           |       |
|         |                                                                                                                                                  |       |
| Item 3.      | Controls and Procedures                                                                                                                               |       |
|         |                                                                                                                                                  |       |
|         |                                                                                                                                                  |       |
| **Part II.** | **Other Information**                                                                                                                                 |       |
|         |                                                                                                                                                  |       |
| Item 1.      | Legal Proceedings                                                                                                                                     |       |
|         |                                                                                                                                                  |       |
| Item 2.      | Unregistered Sales of Equity  Securities and Use of Proceeds                                                                                          |       |
|         |                                                                                                                                                  |       |
| Item 3.      | Defaults Upon Senior  Securities                                                                                                                      |       |
|         |                                                                                                                                                  |       |
| Item 4.      | Submission of Matters to a  Vote of Security Holders                                                                                                  |       |
|         |                                                                                                                                                  |       |
| Item 5.      | Other Information                                                                                                                                     |       |
|         |                                                                                                                                                  |       |
| Item 6.      | Exhibits                                                                                                                                              |       |
|         |                                                                                                                                                  |       |

 

2

----

 

**Part I.  FINANCIALINFORMATION**

 

**Item 1.  Financial Statements (unaudited).**

** **

**ATEL CAPITAL EQUIPMENT FUND XI, LLC**(a development stage enterprise)

** **

**BALANCE SHEET**

** **

**JUNE 30, 2005 (unaudited)**

** **
| **ASSETS**                                  |   |      |      |
|---------------------------------------------|--------|-----------|-----------|
|                                        |   |      |      |
| Cash and cash equivalents                   |   | $         | 6,039,493 |   |
| Prepaid syndication cost                    |   | 267,370   |      |
|                                        |   | $         | 6,306,863 |   |
|                                        |   |      |      |
| **LIABILITIES AND MEMBERS’ CAPITAL**   |   |      |      |
|                                        |   |      |      |
| Accounts payable and  accruals:             |   | $         | 190,255   |   |
|                                        |   |      |      |
| Members’ capital:                      |   |      |      |
| Managing Member                             |   | 100       |      |
| Other Members                               |   | 6,116,508 |      |
| Total Members’ capital                 |   | $         | 6,116,608 |   |
|                                        |   |      |      |   |
| Total liabilities and Members’ capital |   | $         | 6,306,863 |   |
|                                             |        |           |           |  |  |

** **

See accompanying notes.

 

3

----

 

**ATEL CAPITAL EQUIPMENT FUND XI, LLC**(a development stage enterprise)

** **

**STATEMENTS OF OPERATIONS**

** **

**SIX AND THREE MONTH PERIODS ENDEDJUNE 30, 2005(Unaudited)**

 
| ** **                             | ** ** | **Six months  ended June 30,** | ** ** | **Three months  ended June 30,** | ** ** |
|----------------------------------------|------------|--------------------------------|------------|----------------------------------|------------|
| ** **                             | ** ** | **2005**                       | ** ** | **2005**                         | ** ** |
| Revenues:                              |       |                           |       |                             |       |
| Interest income                        |       | $                              | 7,856      |                             | $          | 7,856 |   |
|                                   |       |                           |       |                             |       |
| Expenses:                              |       |                           |       |                             |       |
| Cost reimbursements to Managing Member |       | 1,195                          |       | 1,195                            |       |
| Other                                  |       | 1,027                          |       | 1,027                            |       |
|                                   |       | 2,222                          |       | 2,222                            |       |
| Net income                             |       | $                              | 5,634      |                             | $          | 5,634 |   |

** **

See accompanying notes.

 

4

----

 

**ATEL CAPITAL EQUIPMENT FUND XI, LLC**(a development stage enterprise)

** **

**STATEMENT OF CHANGES IN MEMBERS’ CAPITAL**

** **

**FOR THE PERIOD FROM JUNE 25, 2004 (INCEPTION)THROUGH DECEMBER 31, 2004AND FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2005**

 
| ** **                                                          | ** ** | **Units** | ** ** | **Amount** | ** ** |
|---------------------------------------------------------------------|------------|-----------|------------|------------|------------|
| Members’ Capital as of  June 25, 2004 (inception)              |       | —    |       | $          | —     |   |
| Capital contributions                                               |       | 150       |       | 600        |       |
| Balance December 31, 2004                                           |       | 150       |       | 600        |       |
|                                                                |       |      |       |       |       |
| Capital contributions                                               |       | 694,184   |       | 6,941,840  |       |
| Less selling commissions  and other syndication costs to affiliates |       | —    |       | (831,466   | )          |
| Net income                                                          |       | —    |       | 5,634      |       |
| Balance June 30, 2005                                               |       | 694,334   |       | $          | 6,116,608  |   |

 

Seeaccompanying notes.

 

5

----

 

**ATEL CAPITAL EQUIPMENT FUND XI, LLC**(a development stage enterprise)

 

**STATEMENT OF CASH FLOWS**

** **

**SIX AND THREE MONTH PERIODS ENDEDJUNE 30, 2005**

 
| ** **                                                                        | ** ** | **Six months  ended June 30,  2005** | ** ** | **Three months  ended June 30,  2005** | ** ** |      |
|-----------------------------------------------------------------------------------|------------|--------------------------------------|------------|----------------------------------------|------------|-----------|
| **Operating activities**                                                          |       |                                 |       |                                   |       |      |
| Net income                                                                        |       | $                                    | 5,634      |                                   | $          | 5,634     |   |   |
| Adjustment to reconcile net income to net cash provided by operating  activities: |       |                                 |       |                                   |       |      |
| Changes in operating assets and liabilities:                                      |       |                                 |       |                                   |       |      |
| Accounts payable, Managing Member                                                 |       | 190,255                              |       | 190,255                                |       |      |
| Other assets                                                                      |       | (267,370                             | )          | (267,370                               | )          |      |
| **Net cash used in operating activities**                                         |       | (71,481                              | )          | (71,481                                | )          |      |
|                                                                              |       |                                 |       |                                   |       |      |
| **Financing activities:**                                                         |       |                                 |       |                                   |       |      |
| Capital contributions received                                                    |       | 6,941,840                            |       | 6,941,840                              |       |      |
| Payment of commissions and syndication cost to Managing Member                    |       | (831,466                             | )          | (831,466                               | )          |      |
| **Net cash provided by financing activities**                                     |       | 6,110,374                            |       | 6,110,374                              |       |      |
|                                                                              |       |                                 |       |                                   |       |      |
| **Net increase in cash and cash equivalents**                                     |       | 6,038,893                            |       | 6,038,893                              |       |      |
| **Cash and cash equivalents at beginning of period**                              |       | 600                                  |       | 600                                    |       |      |
| **Cash and cash equivalents at end of period**                                    |       | $                                    | 6,039,493  |                                   | $          | 6,039,493 |   |
|                                                                                   |            |                                      |            |                                        |            |           |  |  |  |  |

 

Seeaccompanying notes.

 

6

----

 

**ATEL CAPITAL EQUIPMENT FUND XI, LLC**(a development stage enterprise)

** **

**NOTES TO FINANCIAL STATEMENTS**

** **

**JUNE 30, 2005(Unaudited)**

 

**1.  Organization and Limited Liability Companymatters:**

 

ATEL Capital Equipment  Fund XI, LLC (adevelopment  stage enterprise) (the  “Fund”) was formed  under  the laws of  the  state of California  on June 25, 2004  for the purpose  of acquiring equipment to engage in equipmentleasing, lending and sales activities. The Fund may continue until December 31,2025.  Contributions in the amount of$6,941,840 were received as of June 30, 2005, $100 of which represented theManaging Member’s continuing interest.

 

The Company is conducting a public offeringof 15,000,000 Limited Liability Company Units (Units) at a price of $10 perUnit.  Upon the sale of the minimumamount of Units of 120,000 Units ($1,200,000) and the receipt of the proceedsthereof on May 31, 2005, the Company commenced operations.

 

As a limited liability company, the liabilityof any individual member for the obligations of the Fund is limited to theextent of capital contributions to the Fund by the individual member.

 

ATEL Financial Services, LLC (“AFS”), anaffiliated entity, acts as the Managing Member of the Company.

 

The Company, or AFS on behalf of the Company,will incur costs in connection with the organization, registration and issuanceof the Limited Liability Company Units (Units). The amount of such costs to be borne by the Company is limited bycertain provisions of the Company’s Operating Agreement.

 

The Company’s principal objectives are toinvest in a diversified portfolio of equipment that will (i) preserve, protectand 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 minimumdistributions to be used to purchase additional equipment during the ReinvestmentPeriod, as defined, and (iii) provide additional distributions following theReinvestment Period and until all equipment  has  been sold.   The  Company is  governed  by its  Limited  Liability Company  Operating  Agreement (Operating Agreement).

 

**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 UnitedStates (GAAP) for interim financial information and with instructions to Form10-QSB and Article 10 of Regulation S-X. The unaudited interim financial statements reflect all adjustments whichare, 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 withGAAP requires management to make estimates  and assumptions  that effect reported amounts  in the financialstatements  and accompanying notes.   Therefore, actual results could differ fromthose estimates.   Operating results  for the  six  months ended  June 20, 2005  are not  necessarily  indicative of  the  results for  the  year ending December 31, 2005.

 

 

7

----

** **

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, 2004,  filed  with the  Securities  and Exchange Commission.

 

*Cash andcash equivalents:*

 

Cash and cash equivalents include cash inbanks and cash equivalent investments with original maturities of ninety daysor less.

 

*Use ofestimates:*

 

The preparation of the financial statementsin conformity with accounting principles generally accepted in the UnitedStates requires management to make estimates and assumptions that affect thereported amounts of assets and liabilities and disclosure of contingent assetsand liabilities at the date of the consolidated balance sheet.  Actual results could differ from thoseestimates.

 

**3.  Members’ capital:**

** **

As of June 30, 2005, 694,334 Units wereissued and outstanding.  The Fund isauthorized to issue up to 15,000,000 Units.

 

Net Income, Net Losses, and Distributions areto be allocated 92.5% to the Members and 7.5% to the Managing Member.  Under the operating agreement, the ManagingMember may make special allocations at its sole discretion.  There were no special allocations in 2005.

 

**4.  Related party transactions:**

 

The terms of the Limited Liability CompanyOperating Agreement provide that AFS and/or affiliates are entitled to receive certainfees for equipment management and resale and for management of the Company.

 

The Limited  Liability  Company Operating  Agreement  allows for  the  reimbursement of  costs  incurred by  AFS  in providing administrative services  to  the Company.   Administrative servicesprovided include Company accounting, investor relations, legal counsel andlease and equipment documentation.  AFSis not reimbursed for services whereby it is entitled to receive a separate feeas compensation for such services, such as management of equipment.   Reimbursable costs incurred by AFS areallocated to the Company based upon estimated time incurred by employeesworking on Company business and an allocation of rent and other costs based onutilization studies.

 

Each of ATEL Leasing Corporation (“ALC”),ATEL Equipment Corporation (“AEC”), ATEL Investor Services (“AIS”) and ATELFinancial Services LLC is a wholly-owned subsidiary of ATEL Capital Group andperforms 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 areperformed by AIS and general administrative services for the Company areperformed by AFS.

 

 

8

----

** **

Cost reimbursements to the Managing Memberare based on costs incurred by AFS in performing administrative services forthe Company that are allocated to each fund that AFS manages based on certaincriteria such as existing or new leases, number of investors or equitydepending on the type of cost incurred. AFS believes that the costs reimbursedare the lower of (i) actual costs incurred on behalf of the Company or (ii) theamount the Company would be required to pay independent parties for comparableadministrative services in the same geographic location.

 

During the six and three month periods endedJune 30, 2005, AFS and/or affiliates earned fees, commissions and reimbursements,pursuant to the Limited Liability Company Operating Agreement as follows:

 

| Selling commissions, equal to 9% of the selling price of the Limited  Liability Company units, deducted from Other Members’ capital |   | $       | 624,766 |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|---------|--------|
| Reimbursement of other syndication costs to Managing Member, deducted  from Other                                                        |   |    |    |
| Members’ capital                                                                                                                    |   | 206,700 |    |
|                                                                                                                                     |   | $       | 831,466 |   |

 

The Managing Member, on behalf of theCompany, will incur syndication costs in connection with the organization,registration and issuance of the Limited Liability Company Units (Units). As ofJune 30, 2005, total syndication costs incurred and reimbursed by the Companyof the Managing Member exceeded the syndication cost limitations as defined inthe Operating Agreement. The amounts in excess of the limit are recorded asprepaid syndication costs. As the limit increases, based on increased sales ofthe Units, the prepaid syndication costs are recorded as a reduction toMembers’ capital.

 

9

----

 

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

** **

Statements  contained in  this  Item 2,  “Management’s  Discussion and  Analysis  of Financial  Condition  and Results  of Operations,” andelsewhere in this Form 10-QSB,  which arenot historical facts, may be forward-looking statements. Such statements aresubject to risks and uncertainties that could cause actual results to differmaterially form those projected.   Inparticular, 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 investedcapital.  The Company’s performance issubject to risks relating to lessee defaults and the creditworthiness of itslessees.  The Fund’s performance is alsosubject to risks relating to the value of its equipment at the end of itsleases, which may be affected by the condition of the equipment, technologicalobsolescence and  the  markets for  new  and used  equipment  at the  end  of lease  terms.   Investors are cautioned not to attributeundue certainty to these forward-looking statements, which speak only as of thedate of this Form 10-QSB. We undertake no obligation to publicly release anyrevisions to these forward-looking statements to reflect events orcircumstances after the date of this Form 10-QSB or to reflect the occurrenceof unanticipated events, other than as required by law.

 

**CapitalResources and Liquidity**

 

The Company commenced  its  offering of  Units  on April 11, 2005.   On  May 31, 2005, the  Company  commenced operations  in its  primary  business (leasing and lending activities).  Until  the  Company’s initial  portfolio  of equipment  has  been purchased,  funds that  have  been received,  but  that have  not  yet been invested  in  leased equipment,  are  invested in interest-bearing accounts or high-quality/short-term commercialpaper.  The Company’s public offeringprovides for a total maximum capitalization of $150,000,000.

 

During the funding period, the Company’sprimary source of liquidity will be subscription proceeds from the publicoffering of Units.  As of June 30, 2005,$6,941,840 has been contributed.  Theliquidity of the Company will vary in the future, increasing to the extentproceeds from the offering, cash flows from  leases  and proceeds  of  asset sales  exceed  expenses, and  decreasing  as lease  assets  are acquired,  as distributions aremade to the Members and to the extent expenses exceed cash flows from  leases and proceeds from asset sales.

 

As another source of liquidity, the Companymay enter into contractual obligations with a diversified group of lessees forfixed lease terms at fixed rental amounts.  As the initial lease terms expire, the Company will re-lease or sell theequipment.  The future liquidity beyondthe contractual minimum rentals will depend on AFS’s success in re-leasing orselling the equipment as it comes off lease. As of June 30, 2005, the Company has not entered into any leases.

 

Throughout the Reinvestment Period (asdefined in the Limited Liability Company Operating Agreement), the Companyanticipates reinvesting a portion of lease payments from assets owned in newleasing transactions. Such reinvestment will occur only after the payment ofall obligations, including debt service (both principal and interest), thepayment of management fees to AFS and providing for cash distributions to theMembers.

 

As of June 30, 2005, the Company has notentered into any commitments for the purchase of lease assets.

 

**Cash Flows**

 

During the first half of 2005, the Company’sprimary source of liquidity was the proceeds of its offering of Units.  As of June 30, 2005, 694,334 units have beensold.

 

During this same period, the primary use ofcash consisted of payments of commissions and syndication costs associated withthe offering.  As of June 30, 2005,$831,466 of these costs have been paid to the Managing Member.

 

**Results of operations**

** **

In the first half of 2005,  operations consisted of interest incomeearned on cash and cash equivalents less cost reimbursements to the ManagingMember and other expenses.  Results of operationsin future periods are expected to

 

10

----

 

vary considerably from those of the firsthalf of 2005 as the Company continues to receive offering proceeds and beginacquisitions of lease assets and lending activities.

 

**Item 3.  Controls andprocedures.**

 

**Evaluationof disclosure controls and procedures**

 

Underthe supervision and with the participation of our management (ATEL FinancialServices, LLC as Managing Member of the registrant, including the chief executiveofficer and chief financial officer), an evaluation of the effectiveness of thedesign and operation of the Company’s disclosure controls and procedures [asdefined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of1934] was performed as of June 30, 2005. Based upon this evaluation, the chief executive officer and the chieffinancial officer concluded that, as of the evaluation date, our disclosurecontrols and procedures were effective for the purposes of recording,processing, summarizing, and timely reporting information required to bedisclosed by us in the reports that we file under the Securities Exchange Actof 1934; and that such information is accumulated and communicated to ourmanagement in order to allow timely decisions regarding required disclosure.

 

**Changes ininternal controls**

 

There have been no significant changes in ourinternal controls or in other factors that could significantly affect ourdisclosure controls and procedures subsequent to the evaluation date, nor werethere any significant deficiencies or material weaknesses in our internalcontrols.

 

11

----

 

**PART II. OTHER INFORMATION**

** **

** **

**Item 1.  LegalProceedings.**

** **

Inapplicable.

** **

**Item2.  Unregistered Sales of Equity Securitiesand Use of Proceeds**

 

Information providedpursuant to § 228.701 (Item 701(f))(formerly included in Form SR):

 

(1)               Effective dateof the offering:  April 11, 2005; FileNumber: 333-120276

(2)               Offeringcommenced: April 11, 2005

(3)               The offering didnot terminate before any securities were sold.

(4)               The offeringhas not been terminated prior to the sale of all of the securities.

(5)               The managingunderwriter is ATEL Securities Corporation.

(6)               The title ofthe registered class of securities is “Units of Limited Liability CompanyInterest.”

(7)               Aggregateamount and offering price of securities registered and sold as of  June 30, 2005:

 

 
| **Title of Security**              | ** ** | **Amount  Registered** | ** ** | **Aggregate  price of  offering  amount  registered** | ** ** | **Units sold** | ** ** | **Aggregate  price of offering  amount sold** | ** ** |
|------------------------------------|------------|------------------------|------------|-------------------------------------------------------|------------|----------------|------------|-----------------------------------------------|------------|
| Units of Limited Company  Interest |       | 15,000,000             |       | $150,000,000                                          |       | 694,184        |       | $6,941,840                                    |       |

 

(8)              Costs incurredfor the issuers account in connection with the issuance and distribution of thesecurities registered for each category listed below:

 
| ** **                                                                                                 | ** ** | **Direct or indirect  payments to directors,  officers, Managing Members  of the issuer or their associates;  to persons owning ten percent  or more of any class of equity  securities of the issuer; and  to affiliates of the issuer** | ** ** | **Direct or  indirect  payments  to others** | ** ** | **Total** | ** ** |
|------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------|------------|-----------|------------|
| Underwriting discounts and  commissions                                                                    |       | $                                                                                                                                                                                                                                         | 104,128    |                                         | $          | 520,638   |       | $ | 624,766 |   |
| Other expenses                                                                                             |       | —                                                                                                                                                                                                                                    |       | 206,700                                      |       | 206,700   |       |
| Total expenses                                                                                             |       | $                                                                                                                                                                                                                                         | 104,128    |                                         | $          | 727,338   |       | $ | 831,466 |   |
|                                                                                                       |       |                                                                                                                                                                                                                                      |       |                                         |       |      |       |   |   |   |
| (9)     Net offering proceeds to  the issuer after the total expenses in item 8:  |       | $                                                                                                                                                                                                                                         | 6,110,374  |                                         |

 

12

----

 

(10)         The amount ofnet offering proceeds to the issuer used for each of the purposes listed below:

 
| ** **                                            | ** ** | **Direct or indirect  payments to directors,  officers, Managing Members  of the issuer or their associates;  to persons owning ten percent  or more of any class of equity  securities of the issuer; and  to affiliates of the issuer** | ** ** | **Direct or  indirect  payments  to others** | ** ** | **Total** | ** ** |
|-------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------|------------|-----------|------------|
| Purchase and installation  of machinery and equipment |       | $                                                                                                                                                                                                                                         | —     |                                         | $          | —    |       | $ | — |   |
| Working capital                                       |       | —                                                                                                                                                                                                                                    |       | 6,110,374                                    |       | 6,110,374 |       |
|                                                  |       | $                                                                                                                                                                                                                                         | —     |                                         | $          | 6,110,374 |       | $ | 6,110,374 |   |
|                                                       |            |                                                                                                                                                                                                                                           |            |                                              |            |           |            |  |  |  |  |

 

(11)   The use of the proceeds inItem 10 does not represent a material change in the uses of proceeds describedin 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 thisreport

 

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 ofParitosh K. Choksi31.2 Certification of Dean L. Cash32.1 Certification Pursuant to 18 U.S.C. section 1350 of Dean L. Cash32.2 Certification Pursuant to 18 U.S.C. section 1350 of Paritosh K. Choksi

 

13

----

 

**SIGNATURES**

 

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

 

Date:August 15, 2005

 

 

**ATEL CAPITAL EQUIPMENT FUND XI, 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                |   |

 

14

----