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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q



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

For the quarterly period ended September 30, 2010



| ̈ | 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 000-53618

ATEL 12, LLC

(Exact name of registrant as specified in its charter)



|                                                               |  |                                       
|-------------------------------------------------------------- |  | --------------------------------------
|California                                                     |  | 20-8712853                            
|(State or other jurisdiction of
Incorporation or organization) |  | (I. R. S. Employer Identification No.)

600 California Street, 6th Floor,
San Francisco, California 94108-2733

(Address of principal executive offices)

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

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

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

Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈

Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   ̈    No   ̈

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



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

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

The number of Limited Liability Company Units outstanding as of October 31, 2010 was 2,999,482.

DOCUMENTS INCORPORATED BY REFERENCE

None.









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ATEL 12, LLC

Index



|         |  |                                                                                                                                 |  |   
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------- |  | --
|Part I.  |  | Financial Information                                                                                                           |  | 3 
|         |  |                                                                                                                                
|Item 1.  |  | Financial Statements (Unaudited)                                                                                                |  | 3 
|         |  |                                                                                                                                
|         |  | Balance Sheets, September 30, 2010 and December 31, 2009                                                                        |  | 3 
|         |  |                                                                                                                                
|         |  | Statements of Operations for the three and nine months ended September 30, 2010 and 2009                                        |  | 4 
|         |  |                                                                                                                                
|         |  | Statements of Changes in Members Capital for the year ended December 31, 2009 and for the nine months ended September 30, 2010 |  | 5 
|         |  |                                                                                                                                
|         |  | Statements of Cash Flows for the three and nine months ended September 30, 2010 and 2009                                        |  | 6 
|         |  |                                                                                                                                
|         |  | Notes to the Financial Statements                                                                                               |  | 7 
|         |  |                                                                                                                                
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                           |  | 18
|         |  |                                                                                                                                
|Item 4.  |  | Controls and Procedures                                                                                                         |  | 25
|         |  |                                                                                                                                
|Part II. |  | Other Information                                                                                                               |  | 26
|         |  |                                                                                                                                
|Item 1.  |  | Legal Proceedings                                                                                                               |  | 26
|         |  |                                                                                                                                
|Item 2.  |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                     |  | 26
|         |  |                                                                                                                                
|Item 3.  |  | Defaults Upon Senior Securities                                                                                                 |  | 26
|         |  |                                                                                                                                
|Item 4.  |  | [Reserved]                                                                                                                      |  | 26
|         |  |                                                                                                                                
|Item 5.  |  | Other Information                                                                                                               |  | 26
|         |  |                                                                                                                                
|Item 6.  |  | Exhibits                                                                                                                        |  | 26



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PART I. FINANCIAL INFORMATION



|Item 1. | Financial Statements (Unaudited).
|------- | ---------------------------------

ATEL 12, LLC

BALANCE SHEETS

SEPTEMBER 30, 2010 AND DECEMBER 31, 2009

(In Thousands)

(Unaudited)



|                                                                                                                                                                                                                                 |  |                   |        |  |                  |   |        | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------ |  | ---------------- | - | ------ | 
|                                                                                                                                                                                                                                 |  | September 30,2010 |        |  | December 31,2009 |  
|ASSETS                                                                                                                                                                                                                           |  |                   |        |  |                  |   |        | 
|Cash                                                                                                                                                                                                                             |  | $                 | 6,895  |  |                  | $ | 3,976  | 
|Due from affiliate                                                                                                                                                                                                               |  |                   |       |  |                  |   | 1,758  | 
|Accounts receivable, net of allowance for doubtful accounts of $3 at September 30, 2010 and $19 at December 31,
2009                                                                                                             |  |                   | 141    |  |                  |   | 164    | 
|Notes receivable, net of unearned interest income of $261 and allowance for credit losses of $500 at September 30, 2010 and
net of unearned interest income of $149 and allowance for credit losses of $375 at December 31, 2009 |  |                   | 1,176  |  |                  |   | 851    | 
|Investment in securities                                                                                                                                                                                                         |  |                   | 523    |  |                  |   | 467    | 
|Investments in equipment and leases, net of accumulated depreciation of $5,911 at September 30, 2010 and $3,456 at
December 31, 2009                                                                                             |  |                   | 11,542 |  |                  |   | 14,234 | 
|Other assets                                                                                                                                                                                                                     |  |                   | 20     |  |                  |   | 18     | 
|                                                                                                                                                                                                                                 |  |                   |        |  |                  |   |        | 
|Total assets                                                                                                                                                                                                                     |  | $                 | 20,297 |  |                  | $ | 21,468 | 
|                                                                                                                                                                                                                                 |  |                   |        |  |                  |   |        | 
|LIABILITIES AND MEMBERS CAPITAL                                                                                                                                                                                                 |  |                   |        |  |                  |   |        | 
|Accounts payable and accrued liabilities:                                                                                                                                                                                        |  |                   |        |  |                  |   |        | 
|Managing Member                                                                                                                                                                                                                  |  | $                 | 22     |  |                  | $ | 19     | 
|Due to affiliate                                                                                                                                                                                                                 |  |                   | 142    |  |                  |   |       | 
|Accrued distributions to Other Members                                                                                                                                                                                           |  |                   | 230    |  |                  |   | 230    | 
|Other                                                                                                                                                                                                                            |  |                   | 90     |  |                  |   | 116    | 
|Non-recourse debt                                                                                                                                                                                                                |  |                   | 1,473  |  |                  |   |       | 
|Unearned operating lease income                                                                                                                                                                                                  |  |                   | 128    |  |                  |   | 154    | 
|                                                                                                                                                                                                                                 |  |                   |        |  |                  |   |        | 
|Total liabilities                                                                                                                                                                                                                |  |                   | 2,085  |  |                  |   | 519    | 
|                                                                                                                                                                                                                                 |  |                   |        |  |                  |   |        | 
|Commitments and contingencies                                                                                                                                                                                                    |  |                   |        |  |                  |   |        | 
|Members capital:                                                                                                                                                                                                                |  |                   |        |  |                  |   |        | 
|Managing Member                                                                                                                                                                                                                  |  |                   |       |  |                  |   |       | 
|Other Members                                                                                                                                                                                                                    |  |                   | 18,212 |  |                  |   | 20,949 | 
|                                                                                                                                                                                                                                 |  |                   |        |  |                  |   |        | 
|Total Members capital                                                                                                                                                                                                           |  |                   | 18,212 |  |                  |   | 20,949 | 
|                                                                                                                                                                                                                                 |  |                   |        |  |                  |   |        | 
|Total liabilities and Members capital                                                                                                                                                                                           |  | $                 | 20,297 |  |                  | $ | 21,468 | 
|                                                                                                                                                                                                                                 |  |                   |        |  |                  |   |        | 

See accompanying notes.



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ATEL 12, LLC

STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2010 AND 2009

(In Thousands Except for Units and Per Unit Data)

(Unaudited)



|                                                            |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|----------------------------------------------------------- |  | ------------------------------- | --------- | - | ------------------------------ | - | --------- | ---- |  | - | --------- | - |  | - | --------- | -
|                                                            |  | Three months endedSeptember 30, |           |   | Nine months endedSeptember 30, |  
|                                                            |  | 2010                            |           |   | 2009                           |   |           | 2010 |  |   | 2009      |  
|Revenues:                                                   |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Operating lease income                                      |  | $                               | 979       |   |                                | $ | 886       |      |  | $ | 2,968     |   |  | $ | 2,315     |  
|Direct financing leases                                     |  |                                 | 1         |   |                                |   | 1         |      |  |   | 4         |   |  |   | 3         |  
|Notes receivable interest income                            |  |                                 | 24        |   |                                |   | 32        |      |  |   | 64        |   |  |   | 109       |  
|Other                                                       |  |                                 | 2         |   |                                |   | 4         |      |  |   | 12        |   |  |   | 4         |  
|                                                            |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Total revenues                                              |  |                                 | 1,006     |   |                                |   | 923       |      |  |   | 3,048     |   |  |   | 2,431     |  
|                                                            |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|                                                            |  |                                 |           |  
|Expenses:                                                   |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Depreciation of operating lease assets                      |  |                                 | 844       |   |                                |   | 773       |      |  |   | 2,547     |   |  |   | 2,043     |  
|Asset management fees to Managing Member                    |  |                                 | 50        |   |                                |   | 42        |      |  |   | 138       |   |  |   | 110       |  
|Acquisition expense                                         |  |                                 | 113       |   |                                |   | 169       |      |  |   | 113       |   |  |   | 634       |  
|Cost reimbursements to Managing Member and affiliates       |  |                                 | 104       |   |                                |   | 82        |      |  |   | 328       |   |  |   | 183       |  
|Provision for credit losses                                 |  |                                 |          |   |                                |   |          |      |  |   | 109       |   |  |   |          |  
|Amortization of initial direct costs                        |  |                                 | 18        |   |                                |   | 18        |      |  |   | 59        |   |  |   | 50        |  
|Interest expense                                            |  |                                 | 21        |   |                                |   | 12        |      |  |   | 58        |   |  |   | 49        |  
|Professional fees                                           |  |                                 | 14        |   |                                |   | 16        |      |  |   | 108       |   |  |   | 55        |  
|Outside services                                            |  |                                 | 34        |   |                                |   | 6         |      |  |   | 69        |   |  |   | 16        |  
|Other                                                       |  |                                 | 22        |   |                                |   | 12        |      |  |   | 67        |   |  |   | 25        |  
|                                                            |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Total operating expenses                                    |  |                                 | 1,220     |   |                                |   | 1,130     |      |  |   | 3,596     |   |  |   | 3,165     |  
|                                                            |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Net loss                                                    |  | $                               | (214      | ) |                                | $ | (207      | )    |  | $ | (548      | ) |  | $ | (734      | )
|                                                            |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Net income (loss):                                          |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Managing Member                                             |  | $                               | 54        |   |                                | $ | 48        |      |  | $ | 164       |   |  | $ | 115       |  
|Other Members                                               |  |                                 | (268      | ) |                                |   | (255      | )    |  |   | (712      | ) |  |   | (849      | )
|                                                            |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|                                                            |  | $                               | (214      | ) |                                | $ | (207      | )    |  | $ | (548      | ) |  | $ | (734      | )
|                                                            |  |                                 |           |   |                                |   |           |      |  |   |           |   |  |   |           |  
|Net loss per Limited Liability Company Unit (Other Members) |  | $                               | (0.09     | ) |                                | $ | (0.10     | )    |  | $ | (0.24     | ) |  | $ | (0.40     | )
|Weighted average number of Units outstanding                |  |                                 | 2,999,482 |   |                                |   | 2,593,488 |      |  |   | 2,999,482 |   |  |   | 2,096,621 |  

See accompanying
notes.



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ATEL 12, LLC

STATEMENTS OF CHANGES IN MEMBERS CAPITAL

FOR THE YEAR ENDED
DECEMBER 31, 2009

AND FOR THE

NINE MONTHS ENDED

SEPTEMBER 30, 2010

(In Thousands Except for Units and Per Unit Data)

(Unaudited)



|                                                |  |               |           |   |                |   |        |   |       |   |      |   |  |   |        |  
|----------------------------------------------- |  | ------------- | --------- | - | -------------- | - | ------ | - | ----- | - | ---- | - |  | - | ------ | -
|                                                |  | Other Members |           |   | ManagingMember |   |        |   |      
|                                                |  | Units         |           |   | Amount         |   |        |   | Total |  
|Balance December 31, 2008                       |  |               | 1,524,402 |   |                | $ | 11,376 |   |       | $ |     |   |  | $ | 11,376 |  
|Capital contributions                           |  |               | 1,477,780 |   |                |   | 14,778 |   |       |   |     |   |  |   | 14,778 |  
|Redemptions of capital contributions            |  |               | (2,700    | ) |                |   | (27    | ) |       |   |     |   |  |   | (27    | )
|Distributions to Other Members ($0.90 per Unit) |  |               |          |   |                |   | (2,088 | ) |       |   |     |   |  |   | (2,088 | )
|Less selling commissions to affiliates          |  |               |          |   |                |   | (1,330 | ) |       |   |     |   |  |   | (1,330 | )
|Syndication costs                               |  |               |          |   |                |   | (314   | ) |       |   |     |   |  |   | (314   | )
|Distributions to Managing Member                |  |               |          |   |                |   |       |   |       |   | (169 | ) |  |   | (169   | )
|Net (loss) income                               |  |               |          |   |                |   | (1,446 | ) |       |   | 169  |   |  |   | (1,277 | )
|                                                |  |               |           |   |                |   |        |   |       |   |      |   |  |   |        |  
|Balance December 31, 2009                       |  |               | 2,999,482 |   |                |   | 20,949 |   |       |   |     |   |  |   | 20,949 |  
|Distributions to Other Members ($0.68 per Unit) |  |               |          |   |                |   | (2,025 | ) |       |   |     |   |  |   | (2,025 | )
|Distributions to Managing Member                |  |               |          |   |                |   |       |   |       |   | (164 | ) |  |   | (164   | )
|Net (loss) income                               |  |               |          |   |                |   | (712   | ) |       |   | 164  |   |  |   | (548   | )
|                                                |  |               |           |   |                |   |        |   |       |   |      |   |  |   |        |  
|Balance September 30, 2010                      |  |               | 2,999,482 |   |                | $ | 18,212 |   |       | $ |     |   |  | $ | 18,212 |  
|                                                |  |               |           |   |                |   |        |   |       |   |      |   |  |   |        |  

See accompanying notes.



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ATEL 12, LLC

STATEMENTS OF CASH FLOWS

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2010 AND 2009

(In Thousands)

(Unaudited)



|                                                                           |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|-------------------------------------------------------------------------- |  | ------------------------------- | ----- | - | ------------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                           |  | Three months endedSeptember 30, |       |   | Nine months ended September 30, |  
|                                                                           |  | 2010                            |       |   | 2009                            |   |        | 2010 |  |   | 2009   |  
|Operating activities:                                                      |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Net loss                                                                   |  | $                               | (214  | ) |                                 | $ | (207   | )    |  | $ | (548   | ) |  | $ | (734   | )
|Adjustment to reconcile net loss to cash provided by operating activities: |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Depreciation of operating lease assets                                     |  |                                 | 844   |   |                                 |   | 773    |      |  |   | 2,547  |   |  |   | 2,043  |  
|Amortization of initial direct costs                                       |  |                                 | 18    |   |                                 |   | 18     |      |  |   | 59     |   |  |   | 50     |  
|Amortization of unearned income on direct financing leases                 |  |                                 | (1    | ) |                                 |   | (1     | )    |  |   | (4     | ) |  |   | (3     | )
|Amortization of unearned income on notes receivable                        |  |                                 | (24   | ) |                                 |   | (32    | )    |  |   | (64    | ) |  |   | (109   | )
|Provision for credit losses                                                |  |                                 |      |   |                                 |   |       |      |  |   | 109    |   |  |   |       |  
|Changes in operating assets and liabilities:                               |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Accounts receivable                                                        |  |                                 | (47   | ) |                                 |   | (140   | )    |  |   | 39     |   |  |   | (203   | )
|Prepaid and other assets                                                   |  |                                 | (9    | ) |                                 |   | (13    | )    |  |   | (2     | ) |  |   | (17    | )
|Accounts payable, Managing Member                                          |  |                                 | 3     |   |                                 |   | 8      |      |  |   | 3      |   |  |   | 7      |  
|Accounts payable, other                                                    |  |                                 | 25    |   |                                 |   | (11    | )    |  |   | (26    | ) |  |   | 2      |  
|Accrued liabilities, affiliates                                            |  |                                 | 72    |   |                                 |   | (27    | )    |  |   | 230    |   |  |   | 405    |  
|Unearned operating lease income                                            |  |                                 | 41    |   |                                 |   | (111   | )    |  |   | (26    | ) |  |   | 87     |  
|                                                                           |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Net cash provided by operating activities                                  |  |                                 | 708   |   |                                 |   | 257    |      |  |   | 2,317  |   |  |   | 1,528  |  
|                                                                           |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Investing activities:                                                      |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Purchases of equipment on operating leases                                 |  |                                 |      |   |                                 |   | (3,342 | )    |  |   |       |   |  |   | (8,949 | )
|Purchases of equipment on direct financing leases                          |  |                                 |      |   |                                 |   | (19    | )    |  |   |       |   |  |   | (59    | )
|Purchase of securities                                                     |  |                                 | (41   | ) |                                 |   |       |      |  |   | (56    | ) |  |   |       |  
|Proceeds from sales of lease assets                                        |  |                                 | 75    |   |                                 |   |       |      |  |   | 75     |   |  |   |       |  
|Payments of initial direct costs                                           |  |                                 | (7    | ) |                                 |   | (60    | )    |  |   | (8     | ) |  |   | (158   | )
|Payments received on direct financing leases                               |  |                                 | 6     |   |                                 |   | 4      |      |  |   | 19     |   |  |   | 12     |  
|Note receivable advances                                                   |  |                                 | (668  | ) |                                 |   | (29    | )    |  |   | (668   | ) |  |   | (29    | )
|Payments received on notes receivable                                      |  |                                 | 82    |   |                                 |   | 164    |      |  |   | 286    |   |  |   | 473    |  
|                                                                           |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Net cash used in investing activities                                      |  |                                 | (553  | ) |                                 |   | (3,282 | )    |  |   | (352   | ) |  |   | (8,710 | )
|                                                                           |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Financing activities:                                                      |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Borrowings under non-recourse debt                                         |  |                                 | 1,473 |   |                                 |   |       |      |  |   | 1,473  |   |  |   |       |  
|Borrowings under acquisition facility                                      |  |                                 |      |   |                                 |   |       |      |  |   |       |   |  |   | 1,500  |  
|Repayments under acquisition facility                                      |  |                                 |      |   |                                 |   |       |      |  |   |       |   |  |   | (1,500 | )
|Repayment of amount due from affiliate                                     |  |                                 |      |   |                                 |   |       |      |  |   | 1,670  |   |  |   |       |  
|Selling commissions to affiliates                                          |  |                                 |      |   |                                 |   | (673   | )    |  |   |       |   |  |   | (1,330 | )
|Syndication costs                                                          |  |                                 |      |   |                                 |   | (11    | )    |  |   |       |   |  |   | (314   | )
|Distributions to Other Members                                             |  |                                 | (675  | ) |                                 |   | (531   | )    |  |   | (2,025 | ) |  |   | (1,304 | )
|Distributions to Managing Member                                           |  |                                 | (54   | ) |                                 |   | (52    | )    |  |   | (164   | ) |  |   | (115   | )
|Capital contributions                                                      |  |                                 |      |   |                                 |   | 7,487  |      |  |   |       |   |  |   | 14,778 |  
|Rescissions and redemptions of capital contributions                       |  |                                 |      |   |                                 |   |       |      |  |   |       |   |  |   | (27    | )
|                                                                           |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Net cash provided by financing activities                                  |  |                                 | 744   |   |                                 |   | 6,220  |      |  |   | 954    |   |  |   | 11,688 |  
|                                                                           |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Net increase in cash and cash equivalents                                  |  |                                 | 899   |   |                                 |   | 3,195  |      |  |   | 2,919  |   |  |   | 4,506  |  
|Cash and cash equivalents at beginning of period                           |  |                                 | 5,996 |   |                                 |   | 3,361  |      |  |   | 3,976  |   |  |   | 2,050  |  
|                                                                           |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Cash and cash equivalents at end of period                                 |  | $                               | 6,895 |   |                                 | $ | 6,556  |      |  | $ | 6,895  |   |  | $ | 6,556  |  
|                                                                           |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Supplemental disclosures of cash flow information:                         |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Cash paid during the period for interest                                   |  | $                               | 20    |   |                                 | $ | 12     |      |  | $ | 57     |   |  | $ | 49     |  
|                                                                           |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Cash paid during the period for taxes                                      |  | $                               | 5     |   |                                 | $ |       |      |  | $ | 14     |   |  | $ | 6      |  
|                                                                           |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Schedule of non-cash transactions:                                         |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Distributions payable to Other Members at period-end                       |  | $                               | 230   |   |                                 | $ | 221    |      |  | $ | 230    |   |  | $ | 221    |  
|                                                                           |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Distributions payable to Managing Member at period-end                     |  | $                               | 19    |   |                                 | $ | 18     |      |  | $ | 19     |   |  | $ | 18     |  
|                                                                           |  |                                 |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  

See accompanying notes.



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##### Table of Contents



ATEL 12, LLC

NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Limited Liability Company matters:

ATEL 12, LLC (the Company or the Fund) was formed under the laws of the state of California on January 25, 2007 for the purpose of equipment financing and acquiring equipment
to engage in equipment leasing and sales activities, as well as in real estate, growth capital investment activities and green technologies (the principal operations). The Managing Member of the Company is ATEL Associates 12, LLC (the
Managing Member), a Nevada limited liability corporation. The Fund may continue until December 31, 2030. As a limited liability company, the liability of any individual member for the obligations of the Fund is limited to the extent
of capital contributions to the Fund by the individual member.

The Company conducted a public offering of 20,000,000 Limited Liability
Company Units (Units), at a price of $10 per Unit. On January 24, 2008, subscriptions for the minimum number of Units (120,000, representing $1.2 million), excluding subscriptions from Pennsylvania investors, had been received and
the Fund requested subscription proceeds to be released from escrow. On that date, the Company commenced initial operations and continued in its development stage activities until transitioning to an operating enterprise during the second quarter.
Pennsylvania subscriptions were subject to a separate escrow to be released to the Fund only when the Fund had received aggregate subscriptions for all investors equal to at least $7.5 million. Total contributions to the Fund exceeded $7.5 million
on July 15, 2008. The offering was terminated on September 25, 2009.

As of September 30, 2010, cumulative contributions, net
of rescissions and/or redemptions, totaling $30.0 million (inclusive of the $500 initial members capital investment) have been received and 2,999,482 Units were issued and outstanding.

The Fund, or Managing Member and/or affiliates on behalf of the Fund, has incurred costs in connection with the organization, registration and issuance of the limited liability company units (Units). The
amount of such costs to be borne by the Fund is limited by certain provisions of the ATEL 12, LLC Limited Liability Company Operating Agreement dated April 3, 2007 (the Operating Agreement).

The Companys principal objectives are to invest in a diversified portfolio of investments that (i) preserves, protects and returns the
Companys invested capital; (ii) generates regular cash distributions to Unit holders, any balance remaining after required minimum distributions to be used to purchase additional investments during the Reinvestment Period (ending six
calendar years after the completion of the Companys public offering of Units) which ends on December 31, 2015 and (iii) provides additional cash distributions following the Reinvestment Period and until all investment portfolio
assets have been sold or otherwise disposed. The Company is governed by its Operating Agreement, as amended.

These unaudited interim
financial statements should be read in conjunction with the financial statements and notes thereto contained in the report on Form 10-K for the year ended December 31, 2009, filed with the Securities and Exchange Commission.

2. Summary of Significant Accounting Policies:

Basis of presentation:

The accompanying unaudited financial statements have been prepared
in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions to Form 10-Q as mandated by the Securities and Exchange Commission. The unaudited interim
financial statements reflect all adjustments which are, in the opinion of the Managing Member, necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal
recurring nature. Operating results for the three and nine months ended September 30, 2010 are not necessarily indicative of the results to be expected for the full year.

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on equity or net income (loss).



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ATEL 12, LLC

NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

2. Summary of Significant Accounting Policies (continued):



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

In preparing the accompanying unaudited financial statements, the Managing Member has reviewed events that have occurred after
September 30, 2010 up until the issuance of the financial statements. No events were noted which would require disclosure in the footnotes to the financial statements.

Use of Estimates:

The preparation of the financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from the estimates. Such estimates primarily relate to the determination of residual values at the end of the lease term and expected future cash flows used for impairment analysis
purposes and for determination of the allowance for doubtful accounts and reserve for credit losses on notes receivable.

Segment
reporting:

The Company is organized into one operating segment for the purpose of making operating decisions or assessing performance.
Accordingly, the Company operates in one reportable operating segment in the United States.

The primary geographic regions in which the
Company sought leasing opportunities were North America and Europe. During 2010 and 2009, 100% of the Companys operating revenues and long-lived assets are from customers domiciled in North America.

Investment in securities:

Purchased securities

Purchased securities are generally not registered for public sale and are carried at cost. Such securities are adjusted to fair value if the fair value is less than the carrying value and such impairment
is deemed by the Managing Member to be other than temporary. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuers ability to meet its current
obligations and indications of the issuers subsequent ability to raise capital. Management has concluded that there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the
instruments and that it is not practicable to estimate the fair value of the investment because of its illiquidity. Accordingly, such investment is stated at cost at September 30, 2010 and December 31, 2009.

Warrants

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are carried at an estimated fair
value on the balance sheet at the end of the period, as determined by the Managing Member. At September 30, 2010 and December 31, 2009, the Managing Member estimated the fair value of the warrants to be nominal in amount.

Per Unit data:

Net loss and
distributions per Unit are based upon the weighted average number of Other Members Units outstanding during the period.

Recent accounting
pronouncements:

In July 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update
(ASU) No. 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.



8



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##### Table of Contents

ATEL 12, LLC

NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

2. Summary of Significant Accounting Policies (continued):



ASU 2010-20 requires entities to provide disclosures designed to facilitate financial statement
users evaluation of (i) the nature of credit risk inherent in the entitys portfolio of financing receivables, (ii) how that risk is analyzed and assessed in arriving at the allowance for credit losses and (iii) the changes
and reasons for those changes in the allowance for credit losses. Disclosures must be disaggregated by portfolio segment, the level at which an entity develops and documents a systematic method for determining its allowance for credit losses, and
class of financing receivable, which is generally a disaggregation of portfolio segment. The required disclosures include, among other things, a rollforward of the allowance for credit losses as well as information about modified, impaired,
non-accrual and past due loans and credit quality indicators. ASU 2010-20 will be effective for the Companys financial statements as of December 31, 2010, as it relates to disclosures required as of the end of a reporting period.
Disclosures that relate to activity during a reporting period will be required for the Companys financial statements that include periods beginning on or after January 1, 2011. The Company anticipates that adoption of these additional
disclosures will not have a material effect on its financial position or results of operations.

In January 2010, the FASB issued ASU
No. 2010-06, Improving Disclosure about Fair Value Measurement (ASU 2010-06). ASU 2010-06 requires additional disclosures related to recurring or nonrecurring fair-value measurements including significant transfers into
and out of Level 1 and Level 2 fair-value measurements, and information on purchases, sales, issuances, and settlements in a rollforward reconciliation of Level 3 fair-value measurements. Except for the Level 3 reconciliation disclosures, which will
be effective for fiscal years beginning after December 15, 2010, the guidance became effective for the Company beginning January 1, 2010 and was adopted during the first quarter of 2010 with no impact on the Companys financial
position, results of operations or cash flows.

3. Notes receivable, net:

The Company has various notes receivable from borrowers who have financed the purchase of equipment through the Company. At September 30, 2010, the original terms of the notes receivable are 36
months and bear interest at rates ranging from 11% to 18%. The notes are generally secured by the equipment financed. The notes mature from 2011 through 2013. At December 31, 2009, the Company had a $375 thousand reserve related to an impaired
note receivable. During the nine months ended September 30, 2010, an additional impairment provision totaling $125 thousand was recorded related to the same note receivable which reduced the net book value of such investment to zero. In
addition to the fully reserved note, there were two other notes in non-accrual status during the quarter ended September 30, 2010. However, impairment on these two additional notes was determined to be nominal at September 30, 2010. There
were no notes placed in non-accrual status as of December 31, 2009.

As of September 30, 2010, the minimum future payments
receivable are as follows (in thousands):



|                                                          |  |  |  |   |       |  
|--------------------------------------------------------- |  |  |  | - | ----- | -
|Three months ending December 31, 2010                     |  |  |  | $ | 582   |  
|Year ending December 31, 2011                             |  |  |  |   | 789   |  
|2012                                                      |  |  |  |   | 361   |  
|2013                                                      |  |  |  |   | 197   |  
|                                                          |  |  |  |   |       |  
|                                                          |  |  |  |   | 1,929 |  
|Less: portion representing unearned interest & fee income |  |  |  |   | (261  | )
|                                                          |  |  |  |   |       |  
|                                                          |  |  |  |   | 1,668 |  
|Unamortized indirect costs                                |  |  |  |   | 8     |  
|Less: Reserve for impairment                              |  |  |  |   | (500  | )
|                                                          |  |  |  |   |       |  
|Notes receivable, net                                     |  |  |  | $ | 1,176 |  
|                                                          |  |  |  |   |       |  



|                                                                |  |                   |     |  |                  |   |   | 
|--------------------------------------------------------------- |  | ----------------- | --- |  | ---------------- | - | - | 
|                                                                |  | September 30,2010 |     |  | December 31,2009 |  
|Net investment in notes receivable placed in non-accrual status |  | $                 | 248 |  |                  | $ |  | 
|                                                                |  |                   |     |  |                  |   |   | 



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ATEL 12, LLC

NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

3. Notes receivable, net (continued):



IDC amortization expense related to notes receivable and the Companys operating and direct finance
leases for the three and nine months ended September 30, 2010 and 2009 are as follows (in thousands):



|                                    |  |                                 |    |  |                                |   |    |      |  |   |      |  |  |   |    | 
|----------------------------------- |  | ------------------------------- | -- |  | ------------------------------ | - | -- | ---- |  | - | ---- |  |  | - | -- | 
|                                    |  | Three months endedSeptember 30, |    |  | Nine months endedSeptember 30, |  
|                                    |  | 2010                            |    |  | 2009                           |   |    | 2010 |  |   | 2009 | 
|IDC amortization - notes receivable |  | $                               | 1  |  |                                | $ | 1  |      |  | $ | 4    |  |  | $ | 4  | 
|IDC amortization - lease assets     |  |                                 | 17 |  |                                |   | 17 |      |  |   | 55   |  |  |   | 46 | 
|                                    |  |                                 |    |  |                                |   |    |      |  |   |      |  |  |   |    | 
|Total                               |  | $                               | 18 |  |                                | $ | 18 |      |  | $ | 59   |  |  | $ | 50 | 
|                                    |  |                                 |    |  |                                |   |    |      |  |   |      |  |  |   |    | 

4. Investments in equipment and leases, net:

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



|                                          |  |                         |        |  |                                           |   |     |                                                          |  |   |                          |   |  |   |        | 
|----------------------------------------- |  | ----------------------- | ------ |  | ----------------------------------------- | - | --- | -------------------------------------------------------- |  | - | ------------------------ | - |  | - | ------ | 
|                                          |  | BalanceDecember 31,2009 |        |  | Reclassifications&Additions /Dispositions |   |     | Depreciation/AmortizationExpense orAmortization ofLeases |  |   | BalanceSeptember 30,2010 |  
|Net investment in operating leases        |  | $                       | 13,953 |  |                                           | $ | (75 | )                                                        |  | $ | (2,547                   | ) |  | $ | 11,331 | 
|Net investment in direct financing leases |  |                         | 79     |  |                                           |   |    |                                                          |  |   | (15                      | ) |  |   | 64     | 
|Initial direct costs, net                 |  |                         | 202    |  |                                           |   |    |                                                          |  |   | (55                      | ) |  |   | 147    | 
|                                          |  |                         |        |  |                                           |   |     |                                                          |  |   |                          |   |  |   |        | 
|Total                                     |  | $                       | 14,234 |  |                                           | $ | (75 | )                                                        |  | $ | (2,617                   | ) |  | $ | 11,542 | 
|                                          |  |                         |        |  |                                           |   |     |                                                          |  |   |                          |   |  |   |        | 

Impairment of investments in leases:

Management periodically reviews the carrying values of its assets on leases. Impairment losses are recorded as an adjustment to the net investment in operating leases. No impairment losses were recorded
during the three and nine months ended September 30, 2010 and 2009. Depreciation expense on property subject to operating leases totaled $844 thousand and $773 thousand for the respective three months ended September 30, 2010 and 2009, and
$2.5 million and $2.0 million for the respective nine months ended September 30, 2010 and 2009.

All of the Companys leased
property was acquired in the years 2008 through 2009.

Operating leases:

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



|                              |  |                         |        |   |           |   |        |                                  |  |   |                          |   |  |   |        |  
|----------------------------- |  | ----------------------- | ------ | - | --------- | - | ------ | -------------------------------- |  | - | ------------------------ | - |  | - | ------ | -
|                              |  | BalanceDecember 31,2009 |        |   | Additions |   |        | Reclassificationsor Dispositions |  |   | BalanceSeptember 30,2010 |  
|Materials handling            |  | $                       | 7,842  |   |           | $ |       |                                  |  | $ |                         |   |  | $ | 7,842  |  
|Research                      |  |                         | 3,963  |   |           |   |       |                                  |  |   | (167                     | ) |  |   | 3,796  |  
|Aviation                      |  |                         | 2,167  |   |           |   |       |                                  |  |   |                         |   |  |   | 2,167  |  
|Construction                  |  |                         | 2,156  |   |           |   |       |                                  |  |   |                         |   |  |   | 2,156  |  
|Transportation                |  |                         | 1,032  |   |           |   |       |                                  |  |   |                         |   |  |   | 1,032  |  
|Manufacturing                 |  |                         | 249    |   |           |   |       |                                  |  |   |                         |   |  |   | 249    |  
|                              |  |                         |        |   |           |   |        |                                  |  |   |                          |   |  |   |        |  
|                              |  |                         | 17,409 |   |           |   |       |                                  |  |   | (167                     | ) |  |   | 17,242 |  
|Less accumulated depreciation |  |                         | (3,456 | ) |           |   | (2,547 | )                                |  |   | 92                       |   |  |   | (5,911 | )
|                              |  |                         |        |   |           |   |        |                                  |  |   |                          |   |  |   |        |  
|Total                         |  | $                       | 13,953 |   |           | $ | (2,547 | )                                |  | $ | (75                      | ) |  | $ | 11,331 |  
|                              |  |                         |        |   |           |   |        |                                  |  |   |                          |   |  |   |        |  



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ATEL 12, LLC

NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

4. Investments in equipment and leases, net (continued):



The average estimated residual value for assets on operating leases was 25% and 26% of the assets
original cost at September 30, 2010 and December 31, 2009, respectively.

Direct financing leases:

As of September 30, 2010 and December 31, 2009, investment in direct financing leases consists of cleaning services and materials handling
equipment such as sweepers, forklifts and lift trucks. The following lists the components of the Companys investment in direct financing leases as of September 30, 2010 and December 31, 2009 (in thousands):



|                                                             |  |                   |    |   |                  |   |     |  
|------------------------------------------------------------ |  | ----------------- | -- | - | ---------------- | - | --- | -
|                                                             |  | September 30,2010 |    |   | December 31,2009 |  
|Total minimum lease payments receivable                      |  | $                 | 62 |   |                  | $ | 82  |  
|Estimated residual values of leased equipment (unguaranteed) |  |                   | 8  |   |                  |   | 8   |  
|                                                             |  |                   |    |   |                  |   |     |  
|Investment in direct financing leases                        |  |                   | 70 |   |                  |   | 90  |  
|Less unearned income                                         |  |                   | (6 | ) |                  |   | (11 | )
|                                                             |  |                   |    |   |                  |   |     |  
|Net investment in direct financing leases                    |  | $                 | 64 |   |                  | $ | 79  |  
|                                                             |  |                   |    |   |                  |   |     |  

There were no investments in direct financing leases in non-accrual status at September 30, 2010 and December 31,
2009.

At September 30, 2010, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):



|                                      |  |  |  |                 |       |  |                       |   |    |       |  |   |       | 
|------------------------------------- |  |  |  | --------------- | ----- |  | --------------------- | - | -- | ----- |  | - | ----- | 
|                                      |  |  |  | OperatingLeases |       |  | DirectFinancingLeases |   |    | Total | 
|Three months ending December 31, 2010 |  |  |  | $               | 923   |  |                       | $ | 7  |       |  | $ | 930   | 
|Year ending December 31, 2011         |  |  |  |                 | 3,355 |  |                       |   | 27 |       |  |   | 3,382 | 
|2012                                  |  |  |  |                 | 2,083 |  |                       |   | 22 |       |  |   | 2,105 | 
|2013                                  |  |  |  |                 | 1,159 |  |                       |   | 6  |       |  |   | 1,165 | 
|2014                                  |  |  |  |                 | 817   |  |                       |   |   |       |  |   | 817   | 
|2015                                  |  |  |  |                 | 189   |  |                       |   |   |       |  |   | 189   | 
|                                      |  |  |  |                 |       |  |                       |   |    |       |  |   |       | 
|                                      |  |  |  | $               | 8,526 |  |                       | $ | 62 |       |  | $ | 8,588 | 
|                                      |  |  |  |                 |       |  |                       |   |    |       |  |   |       | 

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 all investments in equipment and leases by category are as follows (in years):



|                   |  |             |         | 
|------------------ |  | ----------- | ------- | 
|Equipment category |  | Useful Life |        
|Aviation           |  |             | 15 - 20 | 
|Manufacturing      |  |             | 10 - 20 | 
|Materials handling |  |             | 7 - 10  | 
|Transportation     |  |             | 7 - 10  | 
|Construction       |  |             | 7 - 10  | 
|Research           |  |             | 7 - 10  | 



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##### Table of Contents

ATEL 12, LLC

NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)





5. Related party transactions:

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

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

Each of ATEL Financial Services, LLC (AFS) and ATEL Leasing Corporation
(ALC) is a wholly-owned subsidiary of ATEL Capital Group, Inc. and performs services for the Company on behalf of the Managing Member. Acquisition services, equipment management, lease administration and asset disposition services are
performed by ALC; investor relations, communications and general administrative services are performed by AFS.

Cost reimbursements to the
Managing Member or its affiliates are based on its costs incurred in performing administrative services for the Company. These costs are allocated to each managed entity based on certain criteria such as total assets, number of investors or
contributed capital based upon the type of cost incurred. The Managing Member believes that the costs reimbursed are the lower of (i) actual costs incurred on behalf of the Company or (ii) the amount the Company would be required to pay
independent parties for comparable administrative services in the same geographic location.

During the three and nine months ended
September 30, 2010 and 2009, the Managing Member and/or affiliates earned commissions and reimbursements, pursuant to the Operating Agreement as follows (in thousands):



|                                                                                                                                  |  |                                 |     |  |                                |   |       |      |  |   |      |  |  |   |       | 
|--------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | --- |  | ------------------------------ | - | ----- | ---- |  | - | ---- |  |  | - | ----- | 
|                                                                                                                                  |  | Three Months EndedSeptember 30, |     |  | Nine Months EndedSeptember 30, |  
|                                                                                                                                  |  | 2010                            |     |  | 2009                           |   |       | 2010 |  |   | 2009 | 
|Selling commissions, equal to 9% of the selling price of the Limited Liability Company Units, deducted from Other Members
capital |  | $                               |    |  |                                | $ | 673   |      |  | $ |     |  |  | $ | 1,330 | 
|Reimbursement of other syndication costs to AFS and affiliates, deducted from Other Members capital                               |  |                                 |    |  |                                |   | 11    |      |  |   |     |  |  |   | 314   | 
|Administrative costs reimbursed to Managing Member and/or affiliates                                                              |  |                                 | 104 |  |                                |   | 82    |      |  |   | 328  |  |  |   | 183   | 
|Asset management fees to Managing Member and/or affiliates                                                                        |  |                                 | 50  |  |                                |   | 42    |      |  |   | 138  |  |  |   | 110   | 
|Acquisition and initial direct costs paid to Managing Member and/or affiliates                                                    |  |                                 | 121 |  |                                |   | 230   |      |  |   | 121  |  |  |   | 776   | 
|                                                                                                                                  |  |                                 |     |  |                                |   |       |      |  |   |      |  |  |   |       | 
|                                                                                                                                  |  | $                               | 275 |  |                                | $ | 1,038 |      |  | $ | 587  |  |  | $ | 2,713 | 
|                                                                                                                                  |  |                                 |     |  |                                |   |       |      |  |   |      |  |  |   |       | 

6. Syndication costs:

With the termination of the offering on September 25, 2009, the Company ceased to incur syndication costs. At December 31, 2009, syndication costs incurred during 2009 are reflected as a
reduction to Members capital as such costs are netted against the capital raised. Total syndication costs were $684 thousand and $1.6 million for the respective three and nine months ended September 30, 2009. The amount was primarily
comprised of selling commissions and fees pertaining to document preparation, regulatory filing fees, legal, and other direct costs associated with the Companys registration.

The Operating Agreement places a limit for cost reimbursements to the Managing Member and/or affiliates. When added to selling commissions, such cost reimbursements may not exceed a total equal to 15% of
all offering proceeds up to $25 million and 14% of any additional offering proceeds. As of September 30, 2010 and December 31, 2009, there were no syndication costs in excess of the limitation.



12



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##### Table of Contents

ATEL 12, LLC

NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)





7. Non-recourse Debt:

At September 30, 2010, non-recourse debt consists of a note payable to a financial institution. The note is due in monthly
installments. Interest on the note is at a fixed rate of 4.11% per annum. The note is secured by assignments of lease payments and pledges of assets. At September 30, 2010, gross lease rentals totaled approximately $1.6 million over the
remaining lease terms; and the carrying value of the pledged assets is approximately $1.8 million. The note matures in 2014.

The non-recourse
note payable does not contain any material financial covenant. The note is secured by a lien granted by the Company to the non-recourse lender on (and only on) the discounted lease transaction. The lender has recourse only to the following
collateral: the specific leased equipment; the related lease chattel paper; the lease receivables; and proceeds of the foregoing items. The non-recourse obligation is payable solely out of this specific security and the Company does not guarantee
(nor is the Company otherwise contractually responsible for) the payment of non-recourse note as a general obligation or liability of the Company. Although the Company does not have any direct general liability in connection with the non-recourse
note apart from the security granted, the Company is directly and generally liable and responsible for certain representations, warranties, and covenants made to the lender, such as warranties as to genuineness of the transaction parties
signatures, as to the genuineness of the lease chattel paper or the transaction as a whole, or as to the Companys good title to or perfected interest in the secured collateral, as well as similar representations, warranties and covenants
typically provided by non-recourse borrowers and customary in the equipment finance industry, and are viewed by such industry as being consistent with a non-recourse discount financing obligation. Accordingly, as there are no financial covenants or
ratios imposed on the Company in connection with this non-recourse obligation, the Company has determined that there are no material covenants with respect to the non-recourse note that warrant footnote disclosure.

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



|                                      |  |  |  |           |       |  |          |   |     |       |  |   |       | 
|------------------------------------- |  |  |  | --------- | ----- |  | -------- | - | --- | ----- |  | - | ----- | 
|                                      |  |  |  | Principal |       |  | Interest |   |     | Total | 
|Three months ending December 31, 2010 |  |  |  | $         | 59    |  |          | $ | 10  |       |  | $ | 69    | 
|Year ending December 31, 2011         |  |  |  |           | 365   |  |          |   | 51  |       |  |   | 416   | 
|2012                                  |  |  |  |           | 380   |  |          |   | 36  |       |  |   | 416   | 
|2013                                  |  |  |  |           | 396   |  |          |   | 20  |       |  |   | 416   | 
|2014                                  |  |  |  |           | 273   |  |          |   | 5   |       |  |   | 278   | 
|                                      |  |  |  |           |       |  |          |   |     |       |  |   |       | 
|                                      |  |  |  | $         | 1,473 |  |          | $ | 122 |       |  | $ | 1,595 | 
|                                      |  |  |  |           |       |  |          |   |     |       |  |   |       | 

8. Borrowing facilities:

The Company participates with AFS and certain of its affiliates in a revolving credit facility (the Credit Facility) comprised of a working capital facility to AFS, an acquisition facility
(the Acquisition Facility) and a warehouse facility (the Warehouse Facility) to AFS, the Company and affiliates, and a venture facility available to an affiliate with a syndicate of financial institutions which Credit
Facility includes certain financial covenants. The Credit Facility is for an amount up to $75 million and expires in June 2012.

As of
September 30, 2010 and December 31, 2009, borrowings under the facility were as follows (in thousands):



|                                                                                                                                            |  |                   |        |  |                  |   |        |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------ |  | ---------------- | - | ------ | -
|                                                                                                                                            |  | September 30,2010 |        |  | December 31,2009 |  
|Total available under the financing arrangement                                                                                             |  | $                 | 75,000 |  |                  | $ | 75,000 |  
|Amount borrowed by the Company under the acquisition facility                                                                               |  |                   |       |  |                  |   |       |  
|Amounts borrowed by affiliated partnerships and Limited Liability Companies under the working capital, acquisition and warehouse
facilities |  |                   |       |  |                  |   | (1,750 | )
|                                                                                                                                            |  |                   |        |  |                  |   |        |  
|Total remaining available under the working capital, acquisition and warehouse facilities                                                   |  | $                 | 75,000 |  |                  | $ | 73,250 |  
|                                                                                                                                            |  |                   |        |  |                  |   |        |  



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ATEL 12, LLC

NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)





8. Borrowing facilities
(continued):

The Company and its affiliates pay an annual commitment fee to have access to this line of credit. As of September 30,
2010, the aggregate amount remaining unutilized under the Credit Facility is potentially available to the Company, subject to certain sub-facility and borrowing-base limitations. However, as amounts are drawn on the Credit Facility by each of the
Company and the affiliates who are borrowers under the Credit Facility, the amount remaining available to all borrowers to draw under the Credit Facility is reduced. As the Warehousing Facility is a short term bridge facility, any amounts borrowed
under the Warehousing Facility, and then repaid by the affiliated borrowers (including the Company) upon allocation of an acquisition to a specific purchaser, become available under the Warehouse Facility for further short term borrowing.

As of September 30, 2010, the Companys Tangible Net Worth requirement under the Credit Facility was $7.5 million, the permitted
maximum leverage ratio was not to exceed 1.25 to 1, and the required minimum interest coverage ratio was not to be less than 2 to 1. The Company was in compliance with these financial covenants under the Credit Facility with a minimum Tangible Net
Worth, leverage ratio and interest coverage ratio, as calculated per the Credit Facility agreement of $18.2 million, 0.08 to 1, and 42.45 to 1, respectively, as of September 30, 2010. As such, as of September 30, 2010, the Company was in
compliance with all material financial covenants, and with all other material conditions of the Credit Facility. The Company does not anticipate any covenant violations nor does it anticipate that any of these covenants will restrict its operations
or its ability to procure additional financing.

Fee and interest terms

The interest rate on the Credit Facility is based on either the LIBOR/Eurocurrency rate of 1-, 2-, 3- or 6-month maturity plus a lender designated spread, or the banks Prime rate, which re-prices
daily. Principal amounts of loans made under the Credit Facility that are prepaid may be re-borrowed on the terms and subject to the conditions set forth under the Credit Facility. At September 30, 2010 and December 31, 2009, the Company
has no outstanding borrowings under the acquisition facility. The Company has repaid all outstanding borrowings under the Credit Facility during the first nine months of 2009. The weighted average interest rate on borrowings for the first nine
months of 2009 was 3.56%.

Warehouse facility

To hold the assets under the Warehousing Facility prior to allocation to specific investor programs, a Warehousing Trust has been entered into by the Company, AFS, ALC, and certain of the affiliated
partnerships and limited liability companies. The Warehousing Trust is used by the Warehouse Facility borrowers to acquire and hold, on a short-term basis, certain lease transactions that meet the investment objectives of each of such entities. Each
of the leasing programs sponsored by AFS and ALC currently in its acquisition stage is a pro rata participant in the Warehousing Trust, as described below. When a program no longer has a need for short term financing provided by the Warehousing
Facility, it is removed from participation, and as new leasing investment entities are formed by AFS and ALC and commence their acquisition stages, these new entities are added.

As of September 30, 2010, the investment program participants were ATEL Capital Equipment Fund X, LLC, ATEL Capital Equipment Fund XI, LLC, and the Company. Pursuant to the Warehousing Trust, the
benefit of the lease transaction assets, and the corresponding liabilities under the Warehouse Facility, inure to each of such entities based upon each entitys pro-rata share in the Warehousing Trust estate. The pro-rata share is
calculated as a ratio of the net worth of each entity over the aggregate net worth of all entities benefiting from the Warehousing Trust estate, excepting that the trustees, AFS and ALC, are both jointly and severally liable for the pro rata portion
of the obligations of each of the affiliated partnerships and limited liability companies participating under the Warehouse Facility. Transactions are financed through this Warehouse Facility only until the transactions are allocated to a specific
program for purchase or are otherwise disposed by AFS and ALC. When a determination is made to allocate the transaction to a specific program for purchase by the program, the purchaser repays the debt associated with the asset, either with cash or
by means of proceeds of a draw under the Acquisition Facility, and the asset is removed from the Warehouse Facility collateral, and ownership of the asset and any debt obligation associated with the asset are assumed solely by the purchasing entity.

As of September 30, 2010 and December 31, 2009, there were no borrowings under the Warehouse Facility.



14



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ATEL 12, LLC

NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)





9. Commitments:

At September 30, 2010, there were commitments to purchase lease assets and fund investments in notes receivable totaling approximately $4.3 million
and $1.2 million, respectively. These amounts represent contract awards which may be canceled by the prospective borrower/investee or may not be accepted by the Company.

10. 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.

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.

11. Members capital:

A total of
2,999,482 Units were issued and outstanding as of September 30, 2010 and December 31, 2009, respectively. The Fund was authorized to issue up to 20,000,000 total Units.

The Company has the right, exercisable in the Managers discretion, but not the obligation, to repurchase Units of a Unit holder who ceases to be a U.S. Citizen, for a price equal to 100% of the
holders capital account. The Company is otherwise permitted, but not required, to repurchase Units upon a holders request. The repurchase of Fund units is made in accordance with Section 13 of the Amended and Restated Limited
Liability Company Operating Agreement. The repurchase would be at the discretion of the Manager on terms it determines to be appropriate under given circumstances, in the event that the Manager deems such repurchase to be in the best interest of the
Company; provided, the Company is never required to repurchase any Units. Upon the repurchase of any Units by the Fund, the tendered Units are cancelled. Units repurchased in prior periods were repurchased at amounts representing the original
investment less cumulative distributions made to the unit-holder with respect to the Units. All Units repurchased during a quarter are deemed to be repurchased effective the last day of the preceding quarter, and are not deemed to be outstanding
during, or entitled to allocations of net income, net loss or distributions for the quarter in which such repurchase occurs.

The Funds
net income or net losses are to be allocated 100% to the Members. From the commencement of the Fund until the initial closing date, as defined in the Companys Operating Agreement, net income and net loss shall be allocated 99% to the Managing
Member and 1% to the initial Other Members. Commencing with the initial closing date, net income and net loss shall be allocated 92.5% to the Other Members and 7.5% to the Managing Member.

Fund distributions are to be allocated 7.5% to the Managing Member and 92.5% to the Other Members. Distributions to the Other Members were as follows (in thousands, except as to Units and per Unit data):



|                                             |  |                                 |           |  |                                |   |           |      |  |   |           |  |  |   |           | 
|-------------------------------------------- |  | ------------------------------- | --------- |  | ------------------------------ | - | --------- | ---- |  | - | --------- |  |  | - | --------- | 
|                                             |  | Three Months EndedSeptember 30, |           |  | Nine Months
EndedSeptember 30, |  
|                                             |  | 2010                            |           |  | 2009                           |   |           | 2010 |  |   | 2009      | 
|Distributions                                |  | $                               | 675       |  |                                | $ | 584       |      |  | $ | 2,025     |  |  | $ | 1,413     | 
|Weighted average number of Units outstanding |  |                                 | 2,999,482 |  |                                |   | 2,593,488 |      |  |   | 2,999,482 |  |  |   | 2,096,621 | 
|                                             |  |                                 |           |  |                                |   |           |      |  |   |           |  |  |   |           | 
|Weighted average distributions per Unit      |  | $                               | 0.23      |  |                                | $ | 0.23      |      |  | $ | 0.68      |  |  | $ | 0.67      | 
|                                             |  |                                 |           |  |                                |   |           |      |  |   |           |  |  |   |           | 



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##### Table of Contents

ATEL 12, LLC

NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)





12. Fair value measurements:

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

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

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

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

At September 30, 2010
and December 31, 2009, the Company had no assets or liabilities that require measurement at fair value on a recurring or non-recurring basis.

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

The Company has determined the estimated fair value amounts by using market
information and valuation methodologies that it considers appropriate and consistent with the fair value accounting guidance. Considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the
estimates presented herein are not necessarily indicative of the amounts the Company could realize or has realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on
the estimated fair value amounts.

Cash and cash equivalents

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

Due from (due to) affiliates

The
recorded amounts of due from (due to) affiliates approximate fair value because of the short-term period of settlement.

Notes receivable

The fair value of the Companys notes receivable is estimated using discounted cash flow analyses, based upon current market rates
for similar types of lending arrangements.

Investment in securities

The Companys investment securities are not registered for public sale and are carried at cost. The investment securities are adjusted for impairment, if any, based upon factors which include, but
are not limited to, available financial information, the issuers ability to meet its current obligations and indications of the issuers subsequent ability to raise capital. Management has concluded that there are no identified events or
changes in circumstances that may have a significant adverse effect on the fair value of the instruments and that it is not practicable to estimate the fair value of the investment because of its illiquidity. Accordingly, such investment is stated
at cost.

Limitations

The
fair value estimates presented herein were based on pertinent information available to the Company as of September 30, 2010 and December 31, 2009. Although the Company is not aware of any factors that would significantly affect the
estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since those dates and, therefore, current estimates of fair value may differ significantly from the amounts presented
herein.



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ATEL 12, LLC

NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

12. Fair value measurements (continued):



The following table presents estimated fair values of the Companys financial instruments in
accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification at September 30, 2010 and December 31, 2009 (in thousands):



|                          |  |                    |       |  |                     |   |       |                |  |   |                     |  |  |   |       | 
|------------------------- |  | ------------------ | ----- |  | ------------------- | - | ----- | -------------- |  | - | ------------------- |  |  | - | ----- | 
|                          |  | September 30, 2010 |       |  | December 31, 2009   |  
|                          |  | CarryingAmount     |       |  | EstimatedFair Value |   |       | CarryingAmount |  |   | EstimatedFair Value | 
|Financial assets:         |  |                    |       |  |                     |   |       |                |  |   |                     |  |  |   |       | 
|Cash and cash equivalents |  | $                  | 6,895 |  |                     | $ | 6,895 |                |  | $ | 3,976               |  |  | $ | 3,976 | 
|Due from affiliates       |  |                    |      |  |                     |   |      |                |  |   | 1,758               |  |  |   | 1,758 | 
|Notes receivable          |  |                    | 1,176 |  |                     |   | 1,176 |                |  |   | 851                 |  |  |   | 851   | 
|                          |  |                    |       | 
|Financial liabilities:    |  |                    |       |  |                     |   |       |                |  |   |                     |  |  |   |       | 
|Non-recourse debt         |  |                    | 1,473 |  |                     |   | 1,474 |                |  |   |                    |  |  |   |      | 
|Due to affiliates         |  |                    | 142   |  |                     |   | 142   |                |  |   |                    |  |  |   |      | 



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|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-Q, which are not historical facts, may be forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. In particular, the
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 Company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 market 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-Q. We undertake no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of
this Form 10-Q or to reflect the occurrence of unanticipated events, other than as required by law.

Overview

ATEL 12, LLC (the Company or the Fund) is a California limited liability company that was formed in January 2007 for the purpose
of equipment financing and acquiring equipment to engage in equipment leasing and sales activities, as well as in real estate, growth capital investment activities and green technologies (the principal operations), primarily in the
United States.

The Company conducted a public offering of 20,000,000 Limited Liability Company Units (Units), at a price of $10
per Unit. On January 24, 2008, subscriptions for the minimum number of Units (120,000, representing $1.2 million), excluding subscriptions from Pennsylvania investors, had been received and the Fund requested subscription proceeds to be
released from escrow. On that date, the Company commenced initial operations and continued in its development stage activities until transitioning to an operating enterprise during the second quarter. Pennsylvania subscriptions were subject to a
separate escrow to be released to the Fund only when the Fund had received aggregate subscriptions for all investors equal to at least $7.5 million. Total contributions to the Fund exceeded $7.5 million on July 15, 2008. As of
September 25, 2009, the offering was terminated.

During 2009, the Company completed its initial acquisition stage with the investment of
the net proceeds from the public offering of Units. Subsequently, during the reinvestment period (Reinvestment Period) (defined as six full years following the year the offering was terminated), the Company has utilized its credit
facilities and reinvested cash flow in excess of certain amounts required to be distributed to the Other Members to acquire additional equipment and/or to fund financing transactions. Throughout the Reinvestment Period, which ends December 31,
2015, the Company anticipates continued reinvestment of cash flow in excess of minimum distributions and other obligations. The Company is governed by its Limited Liability Company Operating Agreement (Operating Agreement), as amended.

The Company may continue until December 31, 2030. Periodic distributions are paid at the discretion of the Managing Member.

Results of Operations

The
three months ended September 30, 2010 versus the three months ended September 30, 2009

The Company had net losses of $214
thousand and $207 thousand for the third quarter of 2010 and 2009, respectively. Results for the third quarter of 2010 reflect an increase in total operating expenses offset, in part, by an increase in total revenues.

Revenues

Total third quarter 2010
revenues increased by $83 thousand as compared to the prior year period primarily on higher operating lease revenues partially offset by a decline in interest income on the Companys notes receivable.

The increase in operating lease income, totaling $93 thousand, was primarily due to revenues derived from lease assets acquired since September 30,
2009.



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Interest income on notes receivable
decreased by $8 thousand because revenues derived from investments funded in the past year was more than offset by the impact of notes receivable in non-accrual status.

During the third quarters of 2010 and 2009, revenues derived from the Companys investments in lease assets and notes receivable approximated 99.8% and 99.6% of total revenues, respectively. During
the same respective periods, approximately $2 thousand and $4 thousand of the Companys total revenues were derived from processing and servicing fees on certain lease transactions.

Expenses

Total expenses during the third quarter of 2010 were higher by $90 thousand as
compared to the prior year period. A majority of the period over period increase was attributable to increases in depreciation expense, outside services, costs reimbursed to AFS, and other expense offset, in part, by a decline in acquisition
expense.

The increase in depreciation expense totaled $71 thousand and was mainly due to the period over period increase in the
Companys lease asset portfolio. Outside services expense increased by $28 thousand largely due to expenses incurred relative to a venture bankruptcy. Such investment had been fully reserved in prior quarters.

Moreover, costs reimbursed to AFS increased by $22 thousand largely as a result of higher administrative costs related to expanded operations; and, other
expense increased by $10 thousand as a result of higher postage and printing costs related to investor communications, as well as increased bank charges and insurance costs.

As a partial offset, acquisition costs decreased by $56 thousand due to the decline in acquisition phase activity subsequent to the completion of the Companys initial acquisition stage during 2009.
Such decline was primarily the result of an absence of suitable investments and the continuing effects of the economic downturn.

The
nine months ended September 30, 2010 versus the nine months ended September 30, 2009

The Company had net losses of $548
thousand and $734 thousand for the first nine months of 2010 and 2009, respectively. Results for the first nine months of 2010 reflect an increase in total revenues offset, in part, by an increase in total operating expenses.

Revenues

Total revenues for the first
nine months of 2010 increased by $617 thousand compared to the prior year period. The increase was primarily due to higher operating lease revenues partially offset by a decline in interest income on the Companys notes receivable.

Operating lease revenues increased by $653 thousand primarily due to revenues derived from lease assets acquired since September 30, 2009.

Interest income on notes receivable decreased by $45 thousand as revenues derived from investments funded since September 30, 2009 was
more than offset by the impact of notes receivable in non-accrual status.

During the first nine months of 2010 and 2009, revenues derived
from the Companys investments in lease assets and notes receivable approximated 99.6% and 99.8% of total revenues, respectively. During the respective first nine months of 2010 and 2009, approximately $12 thousand and $4 thousand of the
Companys total revenues were derived from processing and servicing fees on certain lease transactions.

Expenses

Total expenses during the first nine months of 2010 were higher by $431 thousand as compared to the prior year period. The net increase in expenses was
comprised of higher depreciation expense, costs reimbursed to AFS, provision for credit losses, professional fees and outside services and other expense offset, in part, by lower acquisition expense.

The increase in depreciation expense totaled $504 thousand and was mainly due to the period over period increase in the Companys lease asset
portfolio. Costs reimbursed to AFS increased by $145 thousand as a result of higher administrative



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##### Table of Contents

costs related to expanded operations; and the provision for credit losses increased by $109 thousand as a result of a $125 thousand reserve related to an impaired note partially offset by a $16
thousand recovery of a prior period provision related to delinquent receivables.

Moreover, professional fees and outside services expense
increased by $106 thousand primarily due to higher audit related fees and business development expense, and expenses incurred relative to a lessee bankruptcy which had been fully reserved in prior quarters. Finally, other expense increased by $42
thousand as a result of higher postage and printing costs related to investor communications as well as higher bank charges, and insurance costs.

As a partial offset, acquisition costs decreased by $521 thousand due to the decline in acquisition phase activity subsequent to the completion of the Companys initial acquisition stage during 2009.
Such decline was primarily the result of an absence of suitable investments and the continuing effects of the economic downturn.

Capital Resources and Liquidity

The liquidity of the Company varies, 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 Members and to the extent expenses exceed cash flows from leases and proceeds from asset sales.

During the funding period, which ended on September 25, 2009, the Companys primary source of liquidity was subscription proceeds from the public offering of Units. Through September 30,
2009, cumulative contributions, net of rescissions, totaling $30.0 million had been received. Subsequent to that date, the primary source of liquidity for the Company has been its cash flow from fixed-term leasing and financing activities.

The changes in the Companys cash flow for the three and nine months ended September 30, 2010 as compared to the three and nine
months ended September 30, 2009 are as follows:

The three months ended September 30, 2010 versus the three months ended
September 30, 2009



| |  |  | Operating Activities
| | - |  | --------------------

Cash provided by operating activities during the third quarter of 2010 increased by $451 thousand as compared to the prior year period. The net increase in cash flow was mainly attributable to a period
over period increase in unearned operating lease income, a favorable year over year three-month change in accounts payable and accrued liabilities, a similar favorable change in accounts receivable, and an increase in net operating results as
adjusted for non-cash expense items, such as depreciation and amortization expense.

The increase in unearned operating lease
income improved cash flow by $152 thousand. The increase was primarily attributable to the application of approximately $111 thousand second quarter 2009 prepaid rents to third quarter 2009 billings, and a $41 thousand increase in prepaid rents
received during the third quarter of 2010.

The favorable change in accounts payable and accrued liabilities improved cash flow
by $130 thousand and was mainly attributable to a period over period increase in quarter-end accruals related costs reimbursable to affiliates. Likewise, the favorable change in accounts receivable activity increased cash flow by $93 thousand. The
increase was largely due to a period over period increase in accrued billings.

Finally, the growth in net operating results as
adjusted for non-cash items increased cash flow by $72 thousand. The Companys improved results were primarily due to the growth in revenues consistent with the period over period growth in revenue-earning assets.



| |  |  | Investing Activities
| | - |  | --------------------

Cash used in investing activities during the third quarter of 2010 decreased by $2.7 million as compared to the prior year period. The net increase in cash flow was primarily a result of a period over
period reduction in cash used to purchase lease assets offset, in part, by an increase in cash used to fund investments in notes receivable.

Cash used to purchase lease assets declined by $3.3 million as the Company completed its initial acquisition stage during the second half of 2009 with the investment of the net proceeds from the public
offering of Units. This increase in cash flow was partially offset by a $639 thousand period over period increase in cash used to fund investments in notes receivable.



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| |  |  | Financing Activities
| | - |  | --------------------

Net cash provided by financing activities during the third quarter of 2010 decreased by $5.5 million as compared to the prior year period. The net decrease in cash flow was primarily a result of the
absence of subscription proceeds during the third quarter of 2010 and an increase in distributions paid to Other Members offset, in part, by a period over period increase in net borrowings and a reduction in syndication costs.

Subscription proceeds declined by $7.5 million as the Fund terminated the offering of its Units in September 2009; and, distributions paid
to Other Members increased by $144 thousand as a result of the period over period increase in Units issued and outstanding.

Net borrowings increased by $1.5 million as the Company anticipated the funding of new loans; and, syndication costs declined by $684
thousand pursuant to the termination of the offering.

The nine months ended September 30, 2010 versus the nine months ended
September 30, 2009



| |  |  | Operating Activities
| | - |  | --------------------

Cash provided by operating activities during the first nine months of 2010 increased by $789 thousand as compared to the prior year period. The net increase in cash flow was mainly attributable to an
increase in net operating results as adjusted for non-cash expense items, such as depreciation and amortization expense, and a favorable year over year nine-month change in accounts receivable offset, in part, by an unfavorable year over year
nine-month change in accounts payable and accrued liabilities and a decline in unearned operating lease income.

The increase
in net operating results as adjusted for non-cash items improved cash flow by $852 thousand and was largely a result of increased revenues consistent with the growth in the Companys revenue-earning assets. In addition, the change in accounts
receivable further improved cash flow by $242 thousand. The increase was mainly due to higher lease, loan and property tax billings accrued at year-end 2009 versus 2008 resulting primarily from the increase in Fund investments. Accordingly, higher
amounts of receivables were collected during the first nine months of 2010 as compared to the prior year period.

Partially
offsetting the aforementioned increases in cash flow was the unfavorable year over year nine-month change in accounts payable and accrued liabilities and the decline in unearned operating lease income which reduced cash flow by $207 thousand and
$113 thousand, respectively. The change in accounts payable and accrued liabilities was largely due to lower 2010 period-end accruals related to costs reimbursable to affiliates; and, the decrease in unearned operating lease income was mainly due to
a period over period decrease in unearned rents received and increased amortization of prepaid rents received in previous periods.



| |  |  | Investing Activities
| | - |  | --------------------

Cash used in investing activities during the first nine months of 2010 decreased by $8.4 million as compared to the prior year period. The net increase in cash flow was primarily a result of a period over
period reduction in cash used to purchase lease assets and a decrease in payments of initial direct costs offset, in part, by an increase in cash used to fund investments in notes receivable and a decrease in payments received on the notes.

Cash used to purchase lease assets declined by $8.9 million as the Company completed its initial acquisition stage during the
second half of 2009 with the investment of the net proceeds from the public offering of Units. Similarly, payments of initial direct costs were reduced by $150 thousand due to the period over period decline in asset acquisitions.

Partially offsetting the aforementioned increases in cash flow was a $639 thousand period over period increase in cash used to fund
investments in notes receivable; and, a $187 thousand decline in payments received on the notes receivable. The decrease primarily reflects the impact of certain notes receivable being placed in non-accrual status.



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| |  |  | Financing Activities
| | - |  | --------------------

Net cash provided by financing activities during the first nine months of 2010 decreased by $10.7 million as compared to the prior year period. The net decrease in cash flow was primarily a result of the
absence of subscription proceeds during 2010 coupled with an increase in distributions paid to Other Members offset, in part, by the settlement of an amount due from an affiliate during the first quarter of 2010, a period over period reduction in
syndication costs and increase in net borrowings.

Subscription proceeds declined by $14.8 million as the Fund terminated the
offering of its Units in September 2009; and, distributions paid to Other Members increased by $721 thousand as a result of the period over period increase in Units issued and outstanding.

The payment received from an affiliate, which increased cash flow by $1.7 million, relates to a December 31, 2009 reassignment of a
newly purchased lease asset. The decline in syndication costs also improved cash flow by $1.6 million and was pursuant to the termination of the offering; and, net borrowings increased by $1.5 million as the Company anticipated the funding of new
loans.

Throughout the Reinvestment Period (as defined in the Operating Agreement), the Company anticipates reinvesting a portion of lease
payments from assets owned, and/or payments received on notes receivable, in new leasing or financing transactions. Such reinvestment will occur only after the payment of all obligations, including debt service (both principal and interest), the
payment of management fees to AFS and providing for cash distributions to the Members.

In a normal economy, 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 and notes would not increase as such rates are generally fixed for the terms of the leases and notes without adjustment for inflation. In addition, if interest rates increase significantly under such circumstances, the rates
that the Company can obtain on future lease or financing transactions will be expected to increase as the cost of capital is a significant factor in the pricing of leases and investments in notes receivable. Conversely, should interest rates remain
low or decrease, the rates that the Company can obtain on renewals, or future lease or financing transactions will be expected to remain constant or decline. Leases and notes already in place, for the most part, would not be affected by changes in
interest rates.

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. The Managing Member envisions no such requirements for operating
purposes.

Revolving credit facility

The Company participates with AFS and certain of its affiliates in a revolving credit facility (the Credit Facility) comprised of a working capital facility to AFS, an acquisition facility
(the Acquisition Facility) and a warehouse facility (the Warehouse Facility) to AFS, the Company and affiliates, and a venture facility available to an affiliate, with a syndicate of financial institutions.

Compliance with covenants

The Credit Facility includes certain financial and non-financial covenants applicable to each borrower, including the Company. Such covenants include covenants typically found in credit facilities of the
size and nature of the Credit Facility, such as accuracy of representations, good standing, absence of liens and material litigation, etc. The Company was in compliance with all covenants under the Credit Facility as of September 30, 2010. The
Company considers certain financial covenants to be material to its ongoing use of the Credit Facility and these covenants are described below.



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Material financial
covenants

Under the Credit Facility, the Company is required to maintain a specific tangible net worth, to comply with a
leverage ratio and an interest coverage ratio, and to comply with other terms expressed in the Credit Facility, including limitation on the incurrence of additional debt and guaranties, defaults, and delinquencies.

The material financial covenants are summarized as follows:

Minimum Tangible Net Worth: $7.5 million

Leverage Ratio (leverage to Tangible
Net Worth): Not to exceed 1.25 to 1

Collateral Value: Collateral value under the Warehouse Facility must exceed outstanding
borrowings under that facility.

EBITDA to Interest Ratio: Not to be less than 2 to 1 for the four fiscal quarters just ended.

EBITDA is defined under the Credit Facility as, for the relevant period of time (1) gross revenues (all
payments from leases and notes receivable) for such period minus (2) expenses deducted in determining net income for such period plus (3) to the extent deducted in determining net income for such period (a) provision for income taxes
and (b) interest expense, and (c) depreciation, amortization and other non-cash charges. Extraordinary items and gains or losses on (and proceeds from) sales or dispositions of assets outside of the ordinary course of business are excluded
in the calculation of EBITDA. Tangible Net Worth is defined as, as of the date of determination, (i) the net worth of the Company, after deducting therefrom (without duplication of deductions) the net book amount of all assets of
the Company, after deducting any reserves and other amounts for assets which would be treated as intangibles under accounting principles generally accepted in the United States of America (GAAP), and after certain other adjustments
permitted under the agreements.

The financial covenants referred to above are applicable to the Company only to the extent
that the Company has borrowings outstanding under the Credit Facility. As of September 30, 2010, the Companys Tangible Net Worth requirement under the Credit Facility was $7.5 million, the permitted maximum leverage ratio was 1.25 to 1,
and the required minimum interest coverage ratio (EBITDA/interest expense) was 2 to 1. The Company was in compliance with each of these financial covenants with a minimum Tangible Net Worth, leverage ratio and (EBITDA) interest coverage ratio, as
calculated per the Credit Facility agreement of $18.2 million, 0.08 to 1, and 42.45 to 1, respectively, as of September 30, 2010. As such, as of September 30, 2010, the Company was in compliance with all such material financial
covenants.

Reconciliation to GAAP of EBITDA

For purposes of compliance with the Credit Facility covenants, the Company uses a financial calculation of EBITDA, as defined therein, which is a non-GAAP financial performance measure. The EBITDA is
utilized by the Company to calculate its debt covenant ratios.

The following is a reconciliation of EBITDA to the net loss for
the nine months ended September 30, 2010 (in thousands):



|                                                                 |  |   |       |  
|---------------------------------------------------------------- |  | - | ----- | -
|Net loss - GAAP basis                                            |  | $ | (548  | )
|Interest expense                                                 |  |   | 58    |  
|Depreciation and amortization                                    |  |   | 2,547 |  
|Amortization of initial direct costs                             |  |   | 59    |  
|Provision for credit losses                                      |  |   | 109   |  
|Payments received on direct finance leases                       |  |   | 19    |  
|Payments received on notes receivable                            |  |   | 286   |  
|Amortization of unearned income on direct finance leases         |  |   | (4    | )
|Amortization of unearned income on notes receivable              |  |   | (64   | )
|                                                                 |  |   |       |  
|EBITDA (for Credit Facility financial covenant calculation only) |  | $ | 2,462 |  
|                                                                 |  |   |       |  



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Events of default,
cross-defaults, recourse and security

The terms of the Credit Facility include standard events of default by the Company
which, if not cured within applicable grace periods, could give lenders remedies against the Company, including the acceleration of all outstanding borrowings and a demand for repayment in advance of their stated maturity. If a breach of any
material term of the Credit Facility should occur, the lenders may, at their option, increase borrowing rates, accelerate the obligations in advance of their stated maturities, terminate the facility, and exercise rights of collection available to
them under the express terms of the facility, or by operation of law. The lenders also retain the discretion to waive a violation of any covenant at the Companys request.

The Company is currently in compliance with its obligations under the Credit Facility. In the event of a technical default (e.g., the failure to timely file a required report, or a one-time breach of a
financial covenant), the Company believes it has ample time to request and be granted a waiver by the lenders, or, alternatively, cure the default under the existing provisions of its debt agreements, including, if necessary, arranging for
additional capital from alternate sources to satisfy outstanding obligations.

The lending syndicate providing the Credit
Facility has a blanket lien on all of the Companys assets as collateral for any and all borrowings under the Acquisition Facility, and on a pro-rata basis under the Warehouse Facility.

The Acquisition Facility is generally recourse solely to the Company, and is not cross-defaulted to any other obligations of affiliated
companies under the Credit Facility, except as described in this paragraph. The Credit Facility is cross-defaulted to a default in the payment of any debt (other than non-recourse debt) or any other agreement or condition beyond the period of grace
(not exceeding 30 days), the effect of which would entitle the lender under such agreement to accelerate the obligations prior to their stated maturity in an individual or aggregate principal amount in excess of 15% of the Companys
consolidated Tangible Net Worth. Also, a bankruptcy of AFS will trigger a default for the Company under the Credit Facility.

For detailed
information on the Companys debt obligations, see Notes 7 and 8 as set forth in Item 1. Financial Statements.

The Company
commenced periodic distributions, based on cash flows from operations, beginning with the month of February 2008. Continuing distributions have been made on schedule through September 30, 2010.

At September 30, 2010, there were commitments to purchase lease assets and fund investments in notes receivable (see Note 9 Commitments, as set
forth in Item 1. Financial Statements).

Critical Accounting Policies and Estimates

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

The Companys critical accounting policies are described in its Annual Report on Form 10-K for the year ended December 31, 2009. There have been no material changes to the Companys
critical accounting policies since December 31, 2009.



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|Item 4. | Controls and Procedures.
|------- | ------------------------

Evaluation of disclosure controls and procedures

The Companys Managing Members President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer and Chief Operating Officer (Management), evaluated
the effectiveness of the Companys disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based on the evaluation of the Companys disclosure controls and
procedures, Management concluded that as of the end of the period covered by this report, the design and operation of these disclosure controls and procedures were effective.

The Company does not control the financial reporting process, and is solely dependent on the Management of the Managing Member, which is responsible for providing the Company with financial statements in
accordance with generally accepted accounting principles in the United States. The Managing Members disclosure controls and procedures, as applicable to the Company, were effective to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Changes in internal control

There were no changes in the Managing Members
internal control over financial reporting, as it is applicable to the Company, during the quarter ended September 30, 2010 that have materially affected, or are reasonably likely to materially affect, the Managing Members internal control
over financial reporting, as it is applicable to the Company.



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PART II. OTHER INFORMATION



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

In the
ordinary course of conducting business, there may be certain claims, suits, and complaints filed against the Managing Member. In the opinion of management, the outcome of such matters, if any, will not have a material impact on the Managing
Members financial position or results of operations.



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

None.



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

None.



|Item 4. | [Reserved].
|------- | -----------



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

None.



|Item 6. | Exhibits.
|------- | ---------

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 not applicable, and therefore have been omitted.



| | 2. | Other Exhibits
| | -- | --------------

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

31.2    Rule 13a-14(a)/ 15d-14(a) Certification of Paritosh K. Choksi

32.1    Certification Pursuant to 18 U.S.C. section 1350 of Dean L. Cash

32.2    Certification Pursuant to 18 U.S.C. section 1350 of Paritosh K. Choksi



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SIGNATURES

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

Date: November 12, 2010



|    |  |                               |  |              |  |                                                                                                                                        
|--- |  | ----------------------------- |  | ------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------
|    |  |                               |  | ATEL 12, LLC
|    |  |                               |  | (Registrant)
|    |  |                               | 
|By: |  | ATEL Associates 12, LLC       |  |              |  |                                                                                                                                        
|    |  | Managing Member of Registrant |  |              |  |                                                                                                                                        
|    |  |                               |  | By:          |  | /s/ Dean L. Cash                                                                                                                       
|    |  |                               |  |              |  | Dean L. Cash                                                                                                                           
|    |  |                               |  |              |  | Chairman of the Board, President and Chief Executive Officer of ATEL Associates 12, LLC (Managing Member)                              
|    |  |                               | 
|    |  |                               |  | By:          |  | /s/ Paritosh K. Choksi                                                                                                                 
|    |  |                               |  |              |  | Paritosh K. Choksi                                                                                                                     
|    |  |                               |  |              |  | Director, Executive Vice President and Chief Financial Officer and Chief Operating Officer of ATEL Associates 12, LLC (Managing Member)
|    |  |                               | 
|    |  |                               |  | By:          |  | /s/ Samuel Schussler                                                                                                                   
|    |  |                               |  |              |  | Samuel Schussler                                                                                                                       
|    |  |                               |  |              |  | Vice President and Chief Accounting Officer of ATEL Associates 12, LLC (Managing Member)                                               



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