**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, 2007**





[  ]         Transition
      Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
      for the





transition
                period from
            
            to





Commission_File_Number_
            **000-51916**





**ICON
                Leasing Fund Eleven, LLC**(Exact
                name of registrant as specified in its
                charter)





**Delaware**
            **20-1979428**(State
                or other jurisdiction of incorporation or organization)
            (IRS
                Employer Identification Number)





**100
                Fifth Avenue, 4th
                Floor, New
                York, New York**
            **10011-1505**(Address
                of principal executive offices)
            (Zip
                code)





**(212)
                418-4700**Registrant's
                telephone number, including area
                code





Indicate
      by 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. [x] Yes     [  ]
      No





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer or a non-accelerated filer. See definition of ‘‘accelerated
      filer and large accelerated filer’’ in Rule 12b-2 of the Exchange
      Act. Large accelerated filer
      [  ]    Accelerated
      filer [  ]   Non-accelerated filer
      [x]





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





Number
      of
      outstanding limited liability company shares of the registrant on October 31,
      2007 is 363,859.













ICON
                Leasing Fund Eleven, LLC
              Table
                of ContentsPART
                I - FINANCIAL INFORMATION
            PageItem
                1.  Condensed Consolidated Financial
                StatementsCondensed
                Consolidated Balance Sheets at September 30, 2007
                (unaudited)and
                December 31, 2006
            1Condensed
                Consolidated Statements of Operations for the
                Three and NineMonths
                Ended September 30, 2007 and 2006
                (unaudited)
            2Condensed
                Consolidated Statement of Changes in Members’
                Equity for thePeriods Ended
                December 31, 2006 through September 30,
                2007 (unaudited)
            3Condensed
                Consolidated Statements of Cash Flows for the Nine
                MonthsEnded
                September 30, 2007 and 2006
                (unaudited)
            4Notes
                to Condensed Consolidated Financial Statements
                (unaudited)
            6Item
                2. Manager’s Discussion and Analysis of Financial
                Condition and Results
                of Operations
            18Item
                3. Quantitative and Qualitative Disclosures About
                Market Risk
            30Item
                4T. Controls and Procedures
            30PART
                II – OTHER INFORMATIONItem
                1. Legal Proceedings
            
            31Item
                1A.   Risk
                Factors
            
            31Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            31Item
                3. Defaults Upon Senior
                Securities
            31Item
                4. Submission of Matters to a Vote of Security
                Holders
            31Item
                5. Other Information
            
            31Item
                6. Exhibits
            
            31Signatures
            
            32







*Table
          of Contents*






**PART
      I – FINANCIAL INFORMATION**





**Item
      1.  Condensed Consolidated Financial
      Statements**





ICON
                Leasing Fund Eleven, LLC(A
                Delaware Limited Liability Company)Condensed
                Consolidated Balance SheetsAssetsSeptember
                30,2007
            
            
            December
                31,(unaudited)
            
            
            2006Current
                assetsCash
                and cash equivalents
            
            $
            41,593,359
            
            
            $
            61,258,267Current
                portion of net investment in finance leases
            
            
            6,384,217
            
            
            
            4,482,077Current
                portion of mortgage notes receivables
            
            
            557,162
            
            
            
            210,918Short-term
                notes receivables
            
            
            6,500,000
            
            
            
            -Accounts
                receivable (net of allowancefor
                doubtful accounts of $72,882 and $70,015, respectively)
            
            
            2,941,242
            
            
            
            3,098,973Restricted
                cash
            
            
            1,885,383
            
            
            
            1,241,326Deferred
                income taxes
            
            
            2,734,610
            
            
            
            -Other
                current assets, net
            
            
            3,034,168
            
            
            
            1,553,401Total
                current assets
            
            
            65,630,141
            
            
            
            71,844,962Non-current
                assetsNet
                investments in finance leases, less current portion
            
            
            88,093,010
            
            
            
            89,908,379Leased
                equipment at cost (less: accumulated depreciationof
                $95,526,190 and $47,105,223, respectively)
            
            
            431,345,132
            
            
            
            337,066,371Note
                receivable on financing facility, net
            
            
            3,154,875
            
            
            
            -Long-term
                portion of mortgage notes receivable, net of current
                portion
            
            
            14,318,938
            
            
            
            12,722,006Investments
                in joint ventures
            
            
            1,509,888
            
            
            
            11,805,734Equipment
                held for sale or lease, net
            
            
            1,745,510
            
            
            
            2,678,117Deferred
                income taxes
            
            
            1,027,675
            
            
            
            2,554,454Other
                non-current assets, net
            
            
            1,655,666
            
            
            
            2,319,120Total
                non-current assets
            
            
            542,850,694
            
            
            
            459,054,181Total
                Assets
            
            $
            608,480,835
            
            
            $
            530,899,143Liabilities
                and Members' EquityCurrent
                liabilitiesCurrent
                portion of non-recourse long-term debt
            
            $
            50,420,190
            
            
            $
            40,949,651Deferred
                rental income
            
            
            6,873,779
            
            
            
            8,404,745Current
                portion of leasing payables and other lease liabilities
            
            
            3,648,473
            
            
            
            2,680,690Due
                to Manager and affiliates, net
            
            
            394,888
            
            
            
            515,119Income
                taxes payable
            
            
            -
            
            
            
            2,634,727Accrued
                expenses and other liabilities
            
            
            4,316,037
            
            
            
            4,327,253Total
                current liabilities
            
            
            65,653,367
            
            
            
            59,512,185Non-current
                liabilitiesNon-recourse
                long-term debt, net of current portion
            
            
            248,900,429
            
            
            
            219,977,291Leasing
                payables and other lease liabilities, net of current
                portion
            
            
            10,694,058
            
            
            
            10,200,679Total
                non-current liabilities
            
            
            259,594,487
            
            
            
            230,177,970Total
                Liabilities
            
            
            325,247,854
            
            
            
            289,690,155Minority
                Interest
            
            
            6,968,088
            
            
            
            8,312,503Commitments
                and contingenciesMembers'
                EquityManager
            
            
            (548,361
            )
            
            
            (243,580
            )Additional
                Members
            
            
            266,258,294
            
            
            
            232,868,044Accumulated
                other comprehensive income
            
            
            10,554,960
            
            
            
            272,021Total Members' Equity
            
            
            276,264,893
            
            
            
            232,896,485Total
                Liabilities and Members' Equity
            
            $
            608,480,835
            
            
            $
            530,899,143









1
 *Table
          of Contents*







ICON
                Leasing Fund Eleven, LLC(A
                Delaware Limited Liability Company)Condensed
                Consolidated Statements of Operations(unaudited)Three
                Months Ended
            
            
            Nine
                Months EndedSeptember
                30,
            
            
            September
                30,2007
            
            
            2006
            
            
            2007
            
            
            2006Revenue:Rental
                income
            
            $
            26,503,336
            
            
            $
            23,013,318
            
            
            $
            75,714,659
            
            
            $
            41,317,586Finance
                income
            
            
            1,736,842
            
            
            
            1,150,699
            
            
            
            5,715,097
            
            
            
            2,538,701Income
                from investments in joint ventures
            
            
            36,790
            
            
            
            120,643
            
            
            
            57,722
            
            
            
            501,868Net
                gain on sales of new equipment
            
            
            164,871
            
            
            
            162,349
            
            
            
            716,579
            
            
            
            442,966Net
                (loss) gain on sales of leased equipment
            
            
            (590,605
            )
            
            
            (132,908
            )
            
            
            (637,659
            )
            
            
            288,614Interest
                income
            
            
            1,554,296
            
            
            
            390,164
            
            
            
            4,222,279
            
            
            
            1,383,260Total
                revenue
            
            
            29,405,530
            
            
            
            24,704,265
            
            
            
            85,788,677
            
            
            
            46,472,995Expenses:General
                and administrative
            
            
            458,712
            
            
            
            267,738
            
            
            
            1,610,656
            
            
            
            425,429Depreciation
                and amortization
            
            
            20,577,648
            
            
            
            18,972,950
            
            
            
            61,070,945
            
            
            
            34,090,525Impairment
                loss
            
            
            122,774
            
            
            
            446,301
            
            
            
            122,774
            
            
            
            446,301Management
                fees - Manager
            
            
            1,739,929
            
            
            
            1,520,291
            
            
            
            4,895,421
            
            
            
            2,605,705Administrative
                expense reimbursements -Manager
                and affiliate
            
            
            1,192,107
            
            
            
            1,811,745
            
            
            
            4,181,934
            
            
            
            4,335,610Interest
            
            
            6,593,695
            
            
            
            5,356,149
            
            
            
            14,510,229
            
            
            
            7,137,831Minority
                interest
            
            
            263,621
            
            
            
            264,423
            
            
            
            779,271
            
            
            
            529,451Total
                expenses
            
            
            30,948,486
            
            
            
            28,639,597
            
            
            
            87,171,230
            
            
            
            49,570,852Loss
                before income taxes
            
            
            (1,542,956
            )
            
            
            (3,935,332
            )
            
            
            (1,382,553
            )
            
            
            (3,097,857
            )Provision
                (benefit) for income taxes
            
            
            428,484
            
            
            
            -
            
            
            
            (74,768
            )
            
            
            -Net
                loss
            
            $
            (1,971,440
            )
            
            $
            (3,935,332
            )
            
            $
            (1,307,785
            )
            
            $
            (3,097,857
            )Net
                loss allocable to:Additional
                Members
            
            $
            (1,951,726
            )
            
            $
            (3,895,979
            )
            
            $
            (1,294,707
            )
            
            $
            (3,066,878
            )Manager
            
            
            (19,714
            )
            
            
            (39,353
            )
            
            
            (13,078
            )
            
            
            (30,979
            )$
            (1,971,440
            )
            
            $
            (3,935,332
            )
            
            $
            (1,307,785
            )
            
            $
            (3,097,857
            )Weighted
                average number of additionalmember
                shares outstanding
            
            
            363,946
            
            
            
            218,980
            
            
            
            348,262
            
            
            
            174,685Net
                loss per weighted averageadditional
                member share
            
            $
            (5.36
            )
            
            $
            (17.79
            )
            
            $
            (3.72
            )
            
            $
            (17.56
            )









2
 *Table
          of Contents*







ICON
                Leasing Fund Eleven, LLC(A
                Delaware Limited Liability Company)Condensed
                Consolidated Statement of Changes in Members' Equity(unaudited)AccumulatedAdditional
            
            
            
            
            
            
            
            
            Other
            
            
            TotalMember
            
            
            Additional
            
            
            
            
            
            Comprehensive
            
            
            Members'Shares
            
            
            Members
            
            
            Manager
            
            
            (Loss)
                Income
            
            
            EquityOpening
                balance, January 1, 2006
            
            
            107,099
            
            
            $
            90,318,028
            
            
            $
            (28,876
            )
            
            $
            (33,886
            )
            
            $
            90,255,266Proceeds
                from issuance of additional members shares
            
            
            185,118
            
            
            
            185,118,088
            
            
            
            -
            
            
            
            -
            
            
            
            185,118,088Sales
                and offering expenses
            
            
            -
            
            
            
            (21,276,702
            )
            
            
            -
            
            
            
            -
            
            
            
            (21,276,702
            )Additional
                member shares redeemed
            
            
            (53
            )
            
            
            (41,454
            )
            
            
            -
            
            
            
            -
            
            
            
            (41,454
            )Cash
                distributions paid or accrued to members
            
            
            -
            
            
            
            (16,600,276
            )
            
            
            (167,738
            )
            
            
            -
            
            
            
            (16,768,014
            )Change
                in valuation of interest rate swap contracts
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (928,750
            )
            
            
            (928,750
            )Change
                in valuation of warrants held by joint venture
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            538,072
            
            
            
            538,072Foreign
                currency translation adjustments
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            696,585
            
            
            
            696,585Net
                loss
            
            
            -
            
            
            
            (4,649,640
            )
            
            
            (46,966
            )
            
            
            -
            
            
            
            (4,696,606
            )Period
                ended, December 31, 2006
            
            
            292,164
            
            
            $
            232,868,044
            
            
            $
            (243,580
            )
            
            $
            272,021
            
            
            $
            232,896,485Proceeds
                from issuance of additional members shares
            
            
            57,136
            
            
            
            57,135,796
            
            
            
            -
            
            
            
            -
            
            
            
            57,135,796Sales
                and offering expenses
            
            
            -
            
            
            
            (6,569,904
            )
            
            
            -
            
            
            
            -
            
            
            
            (6,569,904
            )Additional
                member shares redeemed
            
            
            (170
            )
            
            
            (136,048
            )
            
            
            -
            
            
            
            -
            
            
            
            (136,048
            )Cash
                distributions paid or accrued to members
            
            
            -
            
            
            
            (12,546,393
            )
            
            
            (126,733
            )
            
            
            -
            
            
            
            (12,673,126
            )Change
                in valuation of interest rate swap contracts
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (77,450
            )
            
            
            (77,450
            )Change
                in valuation of warrants held by joint venture
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (473,681
            )
            
            
            (473,681
            )Foreign
                currency translation adjustments
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            554,709
            
            
            
            554,709Net
                loss
            
            
            -
            
            
            
            (1,467,678
            )
            
            
            (14,825
            )
            
            
            -
            
            
            
            (1,482,503
            )Period
                ended, March 31, 2007
            
            
            349,130
            
            
            $
            269,283,817
            
            
            $
            (385,138
            )
            
            $
            275,599
            
            
            $
            269,174,278Proceeds
                from issuance of additional members shares
            
            
            15,846
            
            
            
            15,846,033
            
            
            
            -
            
            
            
            -
            
            
            
            15,846,033Sales
                and offering expenses
            
            
            -
            
            
            
            (1,822,618
            )
            
            
            -
            
            
            
            -
            
            
            
            (1,822,618
            )Additional
                member shares redeemed
            
            
            (1,020
            )
            
            
            (885,767
            )
            
            
            -
            
            
            
            -
            
            
            
            (885,767
            )Cash
                distributions paid or accrued to members
            
            
            -
            
            
            
            (8,046,294
            )
            
            
            (81,335
            )
            
            
            -
            
            
            
            (8,127,629
            )Change
                in valuation of interest rate swap contracts
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            670,100
            
            
            
            670,100Change
                in valuation of warrants held by joint venture
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (16,242
            )
            
            
            (16,242
            )Foreign
                currency translation adjustments
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            4,925,915
            
            
            
            4,925,915Net
                income
            
            
            -
            
            
            
            2,124,697
            
            
            
            21,461
            
            
            
            -
            
            
            
            2,146,158Period
                ended, June 30, 2007
            
            
            363,956
            
            
            $
            276,499,868
            
            
            $
            (445,012
            )
            
            $
            5,855,372
            
            
            $
            281,910,228Additional
                member shares redeemed
            
            
            (12
            )
            
            
            (10,031
            )
            
            
            -
            
            
            
            -
            
            
            
            (10,031
            )Cash
                distributions paid or accrued to members
            
            
            -
            
            
            
            (8,279,817
            )
            
            
            (83,635
            )
            
            
            -
            
            
            
            (8,363,452
            )Change
                in valuation of interest rate swap contracts
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (832,550
            )
            
            
            (832,550
            )Change
                in valuation of warrants held by joint venture
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (45,928
            )
            
            
            (45,928
            )Foreign
                currency translation adjustments
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            5,578,066
            
            
            
            5,578,066Net
                loss
            
            
            -
            
            
            
            (1,951,726
            )
            
            
            (19,714
            )
            
            
            -
            
            
            
            (1,971,440
            )Period
                ended, September 30, 2007
            
            
            363,944
            
            
            $
            266,258,294
            
            
            $
            (548,361
            )
            
            $
            10,554,960
            
            
            $
            276,264,893











3
 *Table
          of Contents*







ICON
                Leasing Fund Eleven, LLC(A
                Delaware Limited Liability Company)Condensed
                Consolidated Statements of Cash FlowsNine
                Months Ended September 30,(unaudited)2007
            
            
            2006Cash
                flows from operating activities:Net
                loss
            
            $
            (1,307,785
            )
            
            $
            (3,097,857
            )Adjustments
                to reconcile net loss to net cash provided byoperating
                activities:Rental
                income paid directly to lenders by lessees
            
            
            (7,928,631
            )
            
            
            (2,317,981
            )Finance
                income
            
            
            (5,715,097
            )
            
            
            (2,538,701
            )Income
                from investments in joint ventures
            
            
            (57,722
            )
            
            
            (501,868
            )Net
                gains on sales of new and leased equipment
            
            
            (78,920
            )
            
            
            (731,580
            )Depreciation
                and amortization
            
            
            61,070,945
            
            
            
            34,090,525Impairment
                loss
            
            
            122,774
            
            
            
            446,301Bad
                debt expense
            
            
            -
            
            
            
            70,015Interest
                expense paid directly to lenders by lessees
            
            
            1,812,754
            
            
            
            384,248Change
                in fair value of interest rate swap contract
            
            
            1,530,916
            
            
            
            1,246,899Minority
                interest
            
            
            779,271
            
            
            
            529,451Deferred
                tax provision
            
            
            (737,667
            )
            
            
            -Changes
                in operating assets and liabilities:Collection
                of principal - financed receivables
            
            
            25,668,997
            
            
            
            12,913,259Rents
                receivable
            
            
            (45,555
            )
            
            
            1,758,241Other
                assets, net
            
            
            (1,197,346
            )
            
            
            (954,172
            )Payables,
                deferred rental income and other liabilities
            
            
            (6,836,443
            )
            
            
            13,787,523Due
                to Manager and affiliates, net
            
            
            (128,881
            )
            
            
            (280,306
            )Net
                cash provided by operating activities
            
            
            66,951,610
            
            
            
            54,803,997Cash
                flows from investing activities:Investments
                in leased assets, net of cash received
            
            
            (114,676,027
            )
            
            
            (169,468,315
            )Proceeds
                from sales of new and leased equipment
            
            
            20,918,533
            
            
            
            11,286,921Investment
                in financing facility
            
            
            (3,475,507
            )
            
            
            -Investment
                in mortgage notes receivable
            
            
            (1,981,155
            )
            
            
            -Investment
                in short-term note receivable
            
            
            (6,500,000
            )
            
            
            -Proceeds
                from mortgage notes receivable
            
            
            1,771,587
            
            
            
            -Restricted
                cash deposits paid
            
            
            (456,112
            )
            
            
            (1,076,827
            )Investments
                in joint ventures, net of cash acquired
            
            
            -
            
            
            
            (4,598,382
            )Distributions
                received from joint ventures
            
            
            10,026,158
            
            
            
            135,080Other
                assets, net
            
            
            834,322
            
            
            
            -Net
                cash used in investing activities
            
            
            (93,538,201
            )
            
            
            (163,721,523
            )Cash
                flows from financing activities:Proceeds
                from notes payable - non-recourse
            
            
            30,103,769
            
            
            
            33,956,911Repayments
                of notes payable - non-recourse
            
            
            (59,191,174
            )
            
            
            (32,418,991
            )Issuance
                of additional member shares, net of sales and offering expenses
                paid
            
            
            64,494,671
            
            
            
            117,544,095Redemption
                of additional member shares
            
            
            (1,031,846
            )
            
            
            -Cash
                distributions to members
            
            
            (29,164,208
            )
            
            
            (10,829,198
            )Distributions
                to minority interest holders
            
            
            (2,123,686
            )
            
            
            (1,509,546
            )Net
                cash provided by financing activities
            
            
            3,087,526
            
            
            
            106,743,271Effects
                of exchange rates on cash and cash equivalents
            
            
            3,834,157
            
            
            
            1,049,733Net
                decrease in cash and cash equivalents
            
            
            (19,664,908
            )
            
            
            (1,124,522
            )Cash
                and cash equivalents, beginning of the period
            
            
            61,258,267
            
            
            
            71,449,920Cash
                and cash equivalents, end of the period
            
            $
            41,593,359
            
            
            $
            70,325,398









4
 *Table
            of Contents*







ICON
                Leasing Fund Eleven, LLC(A
                Delaware Limited Liability Company)Condensed
                Consolidated Statements of Cash FlowsNine
                Months Ended Septmeber 30,(unaudited)2007
            
            
            2006Supplemental
                disclosure of cash flow information:Cash
                paid during the period for interest
            
            $
            11,547,103
            
            
            $
            5,419,994Supplemental
                disclosure of non-cash investing and financing activities:Non-cash
                portion of equipment purchased with non-recourse long-term
                debt
            
            $
            66,656,754
            
            
            $
            271,698,228Principal
                and interest on non-recourse long-term debtpaid
                directly to lenders by lessees
            
            $
            8,462,121
            
            
            $
            2,697,477Transfer
                from other assets to investments in leased equipment at
                cost
            
            $
            -
            
            
            $
            2,828,287Transfer
                from investments in joint ventures to leased equipment at
                cost
            
            $
            -
            
            
            $
            7,695,494







5
 *Table
            of Contents*


ICON
        Leasing Fund Eleven, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        to
        Condensed Consolidated Financial Statements
 September
        30, 2007
 (unaudited)


(1)
            Basis
                of Presentation and Consolidation





The
      accompanying condensed consolidated financial statements of ICON Leasing Fund
      Eleven, LLC (the “LLC”) have been prepared in accordance with accounting
      principles generally accepted in the United States of America (“GAAP”) for
      interim financial information and pursuant to the rules and regulations of
      the
      Securities and Exchange Commission for Quarterly Reports on Form
      10-Q.  Accordingly, they do not include all of the information and
      footnotes required by GAAP for complete financial statements.  In the
      opinion of ICON Capital Corp. (the “Manager”), all adjustments (consisting only
      of normal recurring accruals) considered necessary for a fair presentation
      have
      been included.  These condensed consolidated financial statements
      should be read together with the consolidated financial statements and notes
      included in the LLC’s Annual Report on Form 10-K for the year ended December 31,
      2006.  The results for the interim period are not necessarily
      indicative of the results for the full year.





The
      condensed consolidated financial statements include the accounts of the LLC
      and
      its majority owned subsidiaries. All intercompany accounts and transactions
      have
      been eliminated in consolidation.





The
      LLC
      accounts for its noncontrolling interests in joint ventures where the LLC has
      influence over financial and operational matters, generally greater than 5%
      but
      less than 50% ownership interest, under the equity method of accounting. In
      such
      cases, the LLC’s original investments are recorded at cost and adjusted for its
      share of earnings, losses and distributions.  The LLC accounts for
      investments in joint ventures where the LLC has virtually no influence over
      financial and operational matters using the cost method of
      accounting.  In such cases, the LLC’s original investments are
      recorded at cost and any distributions received are recorded as
      revenue.  All of the LLC’s investments in joint ventures are subject
      to its impairment review policies.





In
      joint
      ventures where the LLC’s interest is majority owned, the financial condition and
      results of operations of the joint venture are consolidated.  Minority
      interest represents the minority owner’s proportionate share of its equity in
      the joint venture. The minority interest is adjusted for the minority owner’s
      share of the earnings, losses and distributions of the joint
      venture.





(2)
            Organization





The
      LLC
      was formed on December 2, 2004 as a Delaware limited liability company and
      commenced operations on May 6,2005 when
      the
      LLC admitted its first Additional Members.  Additional Members
      represent all members other than the Manager.  The LLC is engaged in
      one business segment, the business of purchasing equipment and leasing it to
      third-party end users, equipment financing, acquiring equipment subject to
      lease
      and, to a lesser extent, acquiring ownership rights to items of leased equipment
      at lease expiration.  From time to time, the LLC also purchases
      equipment and sells it to its leasing customers.  The LLC will
      continue until December 31, 2024, unless terminated sooner.





The
      Manager of the LLC was a Connecticut corporation.  Effective June 1,
      2007, the Manager was reincorporated as a Delaware corporation.  The
      Manager manages and controls the business affairs of the LLC, including, but
      not
      limited to, the equipment leases and financing transactions, pursuant to the
      terms of the Amended and Restated Limited Liability Company Agreement (the
“LLC
      Agreement”) with the LLC.  The Manager has a 1% interest in the
      profits, losses, cash distributions and liquidation proceeds of the
      LLC.








6
 *Table
          of Contents*
  ICON
          Leasing Fund Eleven, LLC
 (A
          Delaware Limited Liability Company)
 Notes
          to
          Condensed Consolidated Financial Statements
 September
          30, 2007
 (unaudited)





(2)
            Organization
                - continued





The
      LLC
      had its initial closing on May 6, 2005 (the “Commencement of Operations”) with
      the initial sale of member shares.  Through April 20, 2007, the final
      closing, the LLC sold 365,199 member shares, representing $365,198,690 of
      capital contributions.  Through September 30, 2007, the LLC redeemed
      1,255 additional member shares, leaving 363,944 additional member shares
      outstanding at September 30, 2007.  Beginning with the Commencement of
      Operations, the LLC has paid sales commissions incurred to third parties and
      various fees to the Manager and ICON Securities Corp. (“ICON Securities”), an
      entity owned by the Manager.  These sales commissions and fees paid to
      the Manager and its affiliate are recorded as a reduction to the LLC’s
      equity.  Beginning with the Commencement of Operation through
      September 30, 2007, the LLC has paid $29,210,870 of sales commissions to
      third parties, $6,978,355 of organizational and offering expenses to the
      Manager, and $7,304,473 of underwriting fees to ICON Securities.  For
      the nine months ended September 30, 2007, the LLC has paid $5,837,282 of sales
      commissions to third parties, $1,095,103 of organizational and offering expenses
      to the Manager, and $1,460,137 of underwriting fees to ICON
      Securities.




The
      LLC’s
      offering period ended on April 20, 2007 and its operating period
      commenced.  The LLC will invest most of the net proceeds from its
      offering in items of equipment that are subject to a lease. After the net
      offering proceeds are invested, additional investments will be made with the
      cash generated from the LLC’s initial investments, to the extent that cash is
      not needed for expenses, reserves or distributions to members. The investment
      in
      additional equipment in this manner is called “reinvestment.” The LLC currently
      anticipates purchasing equipment from time to time until approximately April
      2012, unless that date is extended for up to an additional three years, at
      the
      Manager’s sole discretion. After the reinvestment period, the LLC will then sell
      its assets in the ordinary course of business, a time frame called the
“liquidation period.”





Members’
      capital accounts are increased for their initial capital contribution plus
      their
      proportionate share of earnings and decreased by their proportionate share
      of
      losses and distributions. Profits, losses, cash distributions and liquidation
      proceeds are allocated 99% to the additional members and 1% to the Manager
      until
      each additional member has received cash distributions and liquidation proceeds
      sufficient to reduce their adjusted capital contribution account to zero and
      have received, in addition, other distributions and allocations that provide
      an
      8% per year cumulative return on their outstanding adjusted capital contribution
      account.  After such time, distributions will be allocated 90% to the
      additional members and 10% to the Manager.




(3)
            Summary
                  of Significant Accounting
                  Policies




Revenue
      Recognition





For
      notes
      receivable, the LLC uses the interest method to recognize interest income,
      which
      produces a constant periodic rate of return on the investment, when
      earned.  If the borrower does not make a payment for 120 days, the LLC
      places the related note receivable on non-accrual status.





Notes
      Receivable





Notes
      receivable are reported at their outstanding principal balances net of any
      unamortized deferred fees and premiums or discounts on purchased loans.
      Costs on originated loans are reported as other non-current assets. Unearned
      income, discounts and premiums are amortized to income using the interest
      method.  Interest receivable resulting from the unpaid principal is
      recorded separately from the outstanding balance and is reduced upon receipt
      of
      the cash payment.







7
 *Table
          of Contents*
  ICON
          Leasing Fund Eleven, LLC
 (A
          Delaware Limited Liability Company)
 Notes
          to
          Condensed Consolidated Financial Statements
 September
          30, 2007
 (unaudited)




(3)
            Summary
                  of Significant Accounting Policies -
                  continued




Concentration
      of Credit Risk





Concentrations
      of credit risk with respect to lessees are dispersed across different industry
      segments within the United States of America and throughout the world;
      accordingly, the LLC is exposed to business and economic risk. Although the
      LLC
      does not currently foresee a concentrated credit risk associated with these
      customers, lease payments are dependent upon the financial stability of the
      segments in which they operate.





Debt
      Financing Costs





Expenses
      associated with the issuance of long-term debt are capitalized and amortized
      over the term of the debt instrument using the effective interest rate
      method.  These costs are included in other non-current
      assets.





Warrants





Warrants
      held by the LLC are revalued on a quarterly basis.  The revaluation of
      the warrants is computed using the Black-Scholes option pricing
      model.  The assumptions utilized in the Black-Scholes model include
      share price, strike price, expiration date, risk free interest rate and the
      volatility percentage.  Any unrealized gains or losses during the
      period from these warrants calculated using the Black-Scholes model are
      reflected in other comprehensive income, which is a component of members’
equity. Realized gains and losses during the year are reflected in the statement
      of operations, which will only be recorded once the warrants have been
      exercised.





Use
      of
      Estimates





The
      preparation of condensed consolidated financial statements in conformity with
      GAAP requires the Manager to make estimates and assumptions that affect the
      reported amounts of assets and liabilities and the disclosure of contingent
      assets and liabilities as of the date of the condensed consolidated financial
      statements and the reported amounts of revenues and expenses during the
      reporting period. Significant estimates primarily include the determination
      of
      allowance for doubtful accounts, the value of unguaranteed residual values,
      depreciation and amortization and impairment losses.  Actual results
      could differ from those estimates.





Reclassifications





Certain
      reclassifications have been made to the accompanying condensed consolidated
      financial statements in prior periods to conform to the current
      presentation.





(4)
            Leasing
                Portfolio





On
      March
      7, 2006, the LLC acquired substantially the entire equipment leasing portfolio
      (the “Leasing Portfolio”) of Clearlink Capital Corporation (“Clearlink”), based
      in Mississauga, Ontario, Canada.  At the time of the acquisition, the
      Leasing Portfolio consisted of approximately 1,100 equipment schedules
      originated by Clearlink with predominantly large, investment grade quality
      lessees and was comprised mainly of information technology and
      technology-related equipment, including personal computers and client/server
      equipment that perform business-related functions such as database
      inquiries.  This equipment is leased primarily in the United States
      and Canada.  The Leasing Portfolio had a weighted average remaining
      lease term of approximately 18 months at the time of acquisition.








8
 *Table
          of Contents*
  ICON
          Leasing Fund Eleven, LLC
 (A
          Delaware Limited Liability Company)
 Notes
          to
          Condensed Consolidated Financial Statements
 September
          30, 2007
 (unaudited)




(5)
            Investments
                    in Leased Equipment at
                    Cost




*MW
      Universal*





On
      September 28, 2007, the LLC completed the acquisitions of the manufacturing
      assets of W Forge Holdings, Inc. (“W Forge”), MW Scott, Inc., and MW Gilco, LLC,
      wholly-owned subsidiaries of MW Universal, Inc. (“MWU”), for purchase prices of
      $21,000,000, $600,000 and $600,000, respectively.  The LLC paid
      acquisition fees for W Forge, MW Scott, Inc., and MW Gilco, LLC of approximately
      $630,000, $18,000 and $18,000, respectively.  Each of the leases
      terms commence on October 1, 2007 and continue for a period of 60
      months.





In
      connection with the W Forge transaction, the LLC also provided $6,500,000 in
      short-term real property financing that was recorded as short term notes
      receivables.  W Forge is to make interest only payments at a rate of
      14% per annum payable on the 30th and 60th days following the
      close.  Also due on the 60th day is a balloon payment of all principal
      outstanding.  Subsequent to September 30, 2007, W Forge repaid $6,500,000
      of borrowings to the LLC.





Simultaneously
      with the closing of the transactions with W Forge, MW Scott, Inc. and MW Gilco,
      LLC, ICON Leasing Fund Twelve, LLC (“Fund Twelve”) and ICON Income Fund Ten, LLC
      (“Fund Ten”), two entities also managed by the Manager (together, the
“Participating Funds”), completed similar acquisitions with two other
      subsidiaries of MWU pursuant to which the respective funds purchased
      substantially all of the machining and metal working equipment of each
      subsidiary.  Each of the subsidiary’s obligations under its respective
      leases (including those of W Forge, MW Scott, Inc., and MW Gilco, LLC) are
      cross-collateralized, cross-defaulted, and all subsidiaries’ obligations are
      guaranteed by MWU.  Each of the Participating Funds have also entered
      into a credit support agreement with the LLC, pursuant to which if losses are
      incurred by a Participating Fund with respect to any MWU subsidiary, those
      losses are shared among the Participating Funds proportionately based on the
      amount of capital invested.





*Product
      Tankers*





On
      April
      11, 2007, the LLC, through its wholly-owned subsidiaries, ICON Senang, LLC
      and
      ICON Sebarok, LLC (the “Teekay Purchasers”), acquired two Aframax 95,649 DWT
      product tankers, the Senang Spirit and the Sebarok Spirit (collectively, the
      “Teekay Vessels”). The purchase price for the Teekay Vessels was approximately
      $88,000,000, comprised of (i) a cash payment of approximately $21,300,000 funded
      in the form of a capital contribution and (ii) borrowings of approximately
      $66,700,000 of non-recourse debt under a secured loan agreement with Fortis
      Capital Corp. (see Note 8).  The LLC paid an acquisition fee to the
      Manager of approximately $2,640,000 relating to this
      transaction.  Simultaneously with the closing of the purchase of the
      Teekay Vessels, a bareboat charter was entered into by an affiliate of Teekay
      Corporation for a term of five years.  The charter commenced on April 11,
      2007.






9
 *Table
          of Contents*
  ICON
          Leasing Fund Eleven, LLC
 (A
          Delaware Limited Liability Company)
 Notes
          to
          Condensed Consolidated Financial Statements
 September
          30, 2007
 (unaudited)




(5)
            Investments
                    in Leased Equipment at Cost -
                    continued




*Auto
      Parts Manufacturing Equipment*





On
      March
      30, 2007, the LLC, through its wholly-owned subsidiary, ICON French Equipment
      I,
      LLC (“ICON Heuliez”), entered into a purchase and sale agreement (the
“Agreement”) with Heuliez SA (“HSA”) and Heuliez Investissements SNC (“Heuliez”)
      to purchase certain auto parts manufacturing equipment from Heuliez.  In
      connection with the Agreement, ICON Heuliez agreed to lease back the equipment
      to HSA and Heuliez, respectively, for an initial term of 60
      months.  The purchase price for the equipment was approximately
      $11,994,000 (€9,000,000) at March 30, 2007.  The LLC incurred
      professional fees of approximately $51,000 and paid an acquisition fee to
      the Manager of approximately $360,000 relating to this
      transaction.  These fees were capitalized as part of the acquisition
      cost of the equipment.  The leases commenced on April 1, 2007.





On
      October 26, 2007, HSA, a lessee of ICON Heuliez, and Groupe Henri Heuliez,
      the
      guarantor of the leases with ICON Heuliez, filed for “procedure de sauvegarde”,
      a procedure only available to a solvent company seeking to reorganize its
      business affairs under French law.  ICON Heuliez’s other lessee, Heuliez
      Invesissements SNC, did not file for “procedure de sauvegarde”.  HSA has
      paid all amounts due under the lease and has notified ICON Heuliez that it
      will
      continue to make timely payments in full. The lease remains in full force and
      effect.





*Information
      Technology Equipment*





On
      December 29, 2006, the LLC, through its wholly-owned subsidiary, ICON Global
      Crossing III, LLC (“ICON Global Crossing III”), purchased state-of-the-art
      telecommunications equipment for approximately $9,779,000 in cash. This
      equipment is subject to a lease with Global Crossing Telecommunications, Inc.
      and Global Crossing North American Networks, Inc. (collectively, the “Global
      Crossing Group”).  The term of the lease is 48 months, and commenced
      on January 1, 2007.  The LLC paid an acquisition fee to the Manager of
      approximately $293,000 relating to this transaction.





During
      February 2007, ICON Global Crossing III purchased approximately $6,893,000
      of
      additional equipment that is subject to a lease with the Global Crossing
      Group.  The term of the lease is 48 months, and commenced on March 1,
      2007.  The LLC paid an acquisition fee to the Manager of approximately
      $207,000 relating to this transaction.





*Other*





The
      LLC
      entered into various operating leases for its manufacturing, transportation,
      bank machines and office equipment.  The leases range in terms from
      less than one to eight years and expire through August 2015.




Aggregate
      minimum future rentals receivable from each of the LLC’s non-cancelable leases
      over the next five years consist of the following at September 30,
      2007:




Year
                EndingDecember
                31,
            
            
            Total2007
            
            
            $
            26,536,1632008
            
            
            $
            93,315,2692009
            
            
            $
            81,980,1472010
            
            
            $
            64,963,0252011
            
            
            $
            24,721,890






10
 *Table
          of Contents*




ICON
        Leasing Fund Eleven, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        to
        Condensed Consolidated Financial Statements
 September
        30, 2007
 (unaudited)





(6)
            Notes
                    Receivable on Financing
                    Facility




On
      August
      13, 2007, the LLC entered into an equipment financing facility with a consortium
      of other lenders and Solyndra, Inc. (“Solyndra”), a privately held manufacturer
      of solar panels for the building of a new production facility.  The
      financing facility matures on June 30, 2013 and is secured by the equipment
      as
      well as all other assets of Solyndra.  The equipment is comprised of
      two fully automated manufacturing lines that combine glass tubes and thin film
      semiconductors to produce solar panels.  Principal payments will be
      received by the LLC starting in October 2008.  In the interim period,
      interest will be paid on a quarterly basis using a range of rates from 8.86%
      to
      9.01%.  In connection with the transaction, the LLC received warrants
      to purchase up to 40,290 shares of Solyndra common stock.  Any
      unrealized gains and losses during the period from these warrants are reflected
      in other comprehensive income, which is a component of members’ equity. Realized
      gains and losses during the year are reflected in the statement of operations.
      At September 30, 2007, the Manager has determined, based on the Black-Scholes
      option pricing model, that the aggregate fair value of the warrants is
      $170,608.  The assumptions used for the Black-Scholes option pricing
      model were as follows: Strike price $4.96, share price $4.28, expiration date
      of
      April 6, 2014, a volatility of 250%, and the risk free interest rate of
      4.72%.  The volatility percentage was determined by taking a sampling
      of six similar businesses from their initial public offering date to present
      and
      placing a percentage based on the performance of the share price of this
      sampling.





The
      financing facility is for a maximum amount of $93,500,000, of which the LLC
      has
      committed to invest up to $5,000,000.  At September 30, 2007, the LLC
      invested approximately $3,326,000 and committed to loan additional amounts
      of up
      to $1,674,000.  In October 2007, the LLC invested approximately
      $671,000, increasing the total amount invested to approximately $3,997,000
      and
      is committed to loan additional amounts of up to $1,003,000.





(7)
            Investments
                in Joint Ventures





The
      joint ventures described below are
      not consolidated with the LLC.





ICON
      AeroTV, LLC





The
      LLC
      owns a 50% interest in ICON AeroTV, LLC (“ICON AeroTV”), whose sole purpose was
      to own equipment leased to AeroTV Ltd (“AeroTV”). On February 13, 2007, AeroTV’s
      customer, the largest scheduled bus line in Europe, terminated its service
      agreement with AeroTV. Shortly thereafter, AeroTV notified the Manager of its
      inability to pay certain rent owed to ICON AeroTV and subsequently filed for
      insolvency protection in the United Kingdom. In February 2007, ICON AeroTV
      sent
      a notice to AeroTV terminating the Master Lease Agreement.  Certain
      facts came to light that gave the Manager serious concerns regarding the
      propriety of AeroTV's actions during and after the execution of the lease with
      AeroTV. On April 18, 2007, ICON AeroTV filed a lawsuit in the United Kingdom’s
      High Court of Justice, Queen’s Bench Division against AeroTV and one of its
      directors for fraud. Subsequently, ICON AeroTV registered a default judgment
      against the AeroTV director. ICON AeroTV is currently in the process of
      attempting to execute the judgment. At this time, it is not possible to
      determine the ability to collect the judgment.






11
 *Table
          of Contents*
  ICON
          Leasing Fund Eleven, LLC
 (A
          Delaware Limited Liability Company)
 Notes
          to
          Condensed Consolidated Financial Statements
 September
          30, 2007
 (unaudited)





(7)
            Investments
                in Joint Ventures - continued




On
      February 20, 2007, ICON AeroTV wrote off its leased assets with a remaining
      cost
      basis of approximately $441,000, which was off-set by the recognition of the
      relinquished security deposit and deferred income of approximately $288,000,
      resulting in a loss of approximately $153,000. During March 2007, ICON AeroTV
      collected approximately$218,000 of the remaining
      rent balance.  In April 2007, all the unexpended amounts previously
      contributed to ICON AeroTV for the purchase of onboard
      digital audio/visual systems were
      returned to the LLC and Fund Ten, whichtotaled,together with accrued
      interest,approximately
      $5,215,000.





ICON
      EAM,
      LLC





On
      November 9, 2005, the LLC, along with Fund Ten, formed ICON EAM, LLC (“ICON
      EAM") and each contributed approximately $5,618,000 in cash for a 50% interest
      in ICON EAM with the intention of purchasing industrial gas meters and
      accompanying data gathering equipment that would be subject to a Master Lease
      with EAM Assets Ltd. (“EAM”). EAM is a meter asset manager whose business is
      maintaining industrial gas meters in the United Kingdom.  EAM was
      unable to meet its conditions precedent to the LLC’s obligations to perform
      under the Master Lease.  The Manager attempted to negotiate a resolution
      with EAM regarding its failure to meet those conditions precedent. Based on
      the
      Manager’s further due diligence, the Manager determined it was not in the LLC’s
      best interest to enter into a work-out situation with EAM at that time. All
      amounts funded to ICON EAM in anticipation of purchasing the industrial gas
      meters and accompanying data gathering equipment was deposited into an
      interest bearing escrow account controlled by ICON EAM's legal
      counsel.  In April 2007, ICON EAM's initial investment and all accrued
      interest were returned to the LLC and Fund Ten, amounting to approximately
      $13,833,000.





(8)
            Non-Recourse
                Long-Term Debt





*Product
      Tankers*





In
      connection with the acquisition of the Teekay Vessels (See Note 5), the Teekay
      Purchasers entered into a non-recourse senior secured loan agreement (the
“Teekay Loan Agreement”) with Fortis Capital Corp. (“Fortis Capital”) for
      $66,656,754.  Pursuant to the terms of the Teekay Loan Agreement,
      there were two advances of $33,328,377, each for the acquisition of the Senang
      Spirit and the Sebarok Spirit, respectively.  The advances are both
      cross-collateralized, have a maturity date of April 11, 2012 and accrue interest
      at the London Interbank Offered Rate (“LIBOR”) plus 1.00% per year.





The
      advances require monthly principal payments through April 11, 2012, totaling
      approximately $5,796,000 in 2007, $8,924,000 in 2008, $9,515,000 in 2009,
      $10,051,000 in 2010, $10,659,000 in 2011, and $2,939,000 in 2012.  On
      April 11, 2012, a balloon payment of approximately $18,800,000 is due and
      payable.  The LLC may, at its discretion, make periodic prepayments of
      the outstanding principal balance without penalty. At September 30, 2007,
      the outstanding balance of the non-recourse debt obligations for the Teekay
      Vessels was $63,069,219.





As
      part
      of the acquisition of the Teekay Vessels, the LLC assumed two interest rate
      swap
      contracts.  These interest rate swap contracts were established in
      order to fix the variable interest rate on the senior non-recourse debt
      obligation with an affiliate of Fortis Capital to minimize the LLC’s risk for
      interest rate fluctuations.  These interest rate swap contracts were
      deemed effective on September 30, 2007, have an aggregate notional amount of
      $31,534,609 per contract and will fix the interest rate at 5.125% per year,
      thereby fixing the overall interest rate at 6.125%.  The LLC accounts
      for these swap contracts as fair value hedges in accordance with Statement
      of
      Financial Accounting Standards (“SFAS”) No. 133 (“SFAS No. 133”), as amended,
      and recognizes the periodic change in the fair value of the interest rate swap
      contracts through the statement of operations.  For the nine months
      ended September 30, 2007, the LLC recorded approximately $1,121,000 through
      the
      statement of operations as interest expense relating to the change in fair
      value
      if the interest rate swap contracts.




*Leasing
        Portfolio*
 
 In
        connection with the acquisition of the Leasing Portfolio from Clearlink (See
        Note 4), the LLC incurred non-recourse debt obligations.  In the
        ordinary course of operations, the LLC continually enters into non-recourse
        debt
        obligations in order to finance acquisitions relating to the Clearlink
        operations.  For the nine months ended September 30, 2007, the LLC
        incurred additional borrowings of approximately $30,104,000.  At
        September 30, 2007, the Leasing Portfolio’s non-recourse debt obligations accrue
        interest at rates ranging from 4.59% to 7.36% per year and mature at various
        dates through September 2015.  At September 30, 2007, the outstanding
        balance of the non-recourse debt obligations was $82,607,349.




12
 *Table
          of Contents*




ICON
        Leasing Fund Eleven, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        to
        Condensed Consolidated Financial Statements
 September
        30, 2007
 (unaudited)




(8)
            Non-RecourseLong-Term
                Debt - continued





The
      aggregate maturities of non-recourse debt consist of the following at September
      30, 2007:





Year
                EndingDecember
                31,
            
            
            Total2007
            
            
            $
            21,891,7562008
            
            
            $
            76,422,3122009
            
            
            $
            61,225,0052010
            
            
            $
            66,162,7672011
            
            
            $
            47,141,546




(9)
            Revolving
                Line of Credit - Recourse





On
      August
      31, 2005, the LLC, together with certain of its affiliates (entities sponsored
      and organized by the Manager), ICON Income Fund Eight B L.P. ("Fund Eight B"),
      ICON Income Fund Nine, LLC and Fund Ten (collectively, the “Borrowers”) entered
      into a Commercial Loan Agreement (the "Loan Agreement"), with California Bank
      & Trust (the “Lender”). The Loan Agreement provides for a revolving line of
      credit of up to $17,000,000 pursuant to a senior secured revolving loan facility
      (the “Facility”) which is secured by all assets of the Borrowers not subject to
      a first priority lien, as defined
      in the Loan Agreement. Each of the Borrowers is jointly and severally
      liable for all amounts borrowed under the Facility. Amounts available under
      the
      Facility are subject to a borrowing base that is determined, subject to certain
      limitations, on the present value of the future receivables under certain lease
      agreements in which the Borrowers have a beneficial interest.





As
      part
      of the Loan Agreement, the Borrowers are required to comply with certain
      financial covenants, including a minimum debt coverage ratio, a tangible net
      worth covenant, a leverage ratio and a minimum liquidity covenant. The Borrowers
      are in compliance with these covenants at September 30, 2007. The Loan Agreement
      prohibits the Borrowers from declaring or paying any distribution to investors
      if such a payment would cause the Borrowers to become non-compliant with the
      financial covenants in the Loan Agreement.





In
      addition, on August 31, 2005, the Borrowers entered into a Contribution
      Agreement (the "Contribution Agreement") pursuant to which the Borrowers agreed
      to certain restrictions on the amounts and terms of their respective borrowings
      under the Facility in order to minimize the risk that a Borrower would be
      unable to repay its portion of the outstanding obligations under the Facility
      at any time. These restrictions include, but are not limited to, borrowing
      in excess of the lesser of (a) an amount each Borrower could reasonably expect
      to repay in one year from its projected free cash flow, or (b) the greater
      of
      (i) the borrowing base, as defined in the Loan Agreement, as applied to such
      Borrower and (ii) 50% of the net worth of such Borrower. The Contribution
      Agreement also provides that, in the event a Borrower pays an amount under
      the
      Contribution Agreement in excess of its share of the total obligations under
      the
      Facility, whether by reason of an event of default or otherwise, the other
      Borrowers will immediately make a contribution payment to such Borrower and
      in
      such amount that the aggregate amount paid by each Borrower reflects its
      allocable share of the aggregate obligations under the Facility. The Borrowers'
      obligations to each other under the Contribution Agreement
      are collateralized by a subordinate lien on the assets of each Borrower.
      The Borrowers are in compliance with the Contribution Agreement at September
      30,
      2007 and no amounts are due to or payable by the LLC under the Contribution
      Agreement.





On
      December 26, 2006, the Borrowers entered into a Loan Modification Agreement
      (the
“Loan Modification”) to the Loan Agreement. The Loan Modification extended the
      Facility from August 31, 2007 to September 30, 2008 and lowered (i) the
      interest rate for advances under the Facility from the Lender’s prime rate plus
      0.25% to the Lender’s prime rate and (ii) the interest rate on the five
      separate advances that are permitted to be made under the Facility at the rate
      at which United States dollar deposits can be acquired by the Lender in the
      London Interbank Eurocurrency Market (the “LIBOR Rate”) plus 2.75% per year to
      the LIBOR Rate plus 2.5% per year. In addition, pursuant to the terms of the
      Loan Modification, the Borrowers no longer have to maintain a cash reserve.
      The
      interest rate at September 30, 2007 was 7.75%.





On
      June
      20, 2007, the Loan Agreement, the Contribution Agreement and the Loan
      Modification were modified to admit Fund Twelve as a permitted borrower. Fund
      Twelve, as a result of its entry into the Loan Modification, is jointly and
      severally liable for the outstanding balance.





Aggregate
      borrowings by all Borrowers under the Facility amounted to $6,255,000 at
      September 30, 2007.  The LLC currently has no borrowings outstanding
      under the Facility. Subsequent to September 30, 2007, Fund Twelve repaid
      $5,000,000 of borrowings under the Facility. The remaining balance of $1,255,000
      relates to borrowings by Fund Eight B.







13
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          of Contents*


ICON
        Leasing Fund Eleven, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        to
        Condensed Consolidated Financial Statements
 September
        30, 2007
 (unaudited)




(10)
            Transactions
                  with Related Parties




The
      LLC
      has entered into certain agreements with its Manager and ICON Securities,
      whereby the LLC pays certain fees and reimbursements to these
      parties.  The Manager was entitled to receive 3.5% on capital raised
      up to $50,000,000, 2.5% of capital raised between $50,000,001 and $100,000,000
      and 1.5% of capital raised over $100,000,000.  ICON Securities was
      entitled to receive a 2% underwriting fee from the gross proceeds from sales
      of
      shares to the additional members.





In
      accordance with the terms of the LLC Agreement, the LLC pays the Manager (i)
      management fees ranging from 1% to 7% based on a percentage of the rentals
      recognized either directly by the LLC or through its joint ventures, and (ii)
      acquisition fees, through the end of the operating period, of 3% of the gross
      value of the LLC’s acquisition transactions.  In addition, the Manager
      is reimbursed for administrative expenses incurred in connection with the LLC’s
      operations.  The Manager has assigned its rights and obligations to
      provide the LLC with administrative services and collect reimbursement for
      those
      services relating to the Leasing Portfolio to the Manager’s Canadian affiliate,
      ICON Funding ULC, pursuant to a management agreement between the Manager and
      ICON Funding ULC.





The
      Manager performs certain services relating to the management of the LLC’s
      equipment leasing activities.  Such services include the collection of
      lease payments from the lessees of the equipment, re-leasing services in
      connection with equipment which is off-lease, inspections of the equipment,
      liaison with and general supervision of lessees to assure that the equipment
      is
      being properly operated and maintained, monitoring performance by the lessees
      of
      their obligations under the leases and the payment of operating
      expenses.





Administrative
      expense reimbursements are costs incurred by the Manager or its affiliates
      that
      are necessary to the LLC’s operations.  These costs include the Manager’s
      and its affiliates legal, accounting, investor relations and operations
      personnel, as well as professional fees and other costs that are charged to
      the
      LLC based upon the percentage of time such personnel dedicate to the LLC. 
Excluded are salaries and related costs, travel expenses and other
      administrative costs incurred by individuals with a controlling interest in
      the
      Manager.





The
      Manager also has a 1% interest in the LLC’s profits, losses, cash distributions
      and liquidation proceeds. The LLC paid distributions to the Manager of $291,703
      for the nine months ended September 30, 2007.  The Manager’s interest
      in the LLC’s net loss for the three months ended September 30, 2007 and 2006 was
      $19,714 and $39,353, respectively.  The Manager’s interest in the
      LLC’s net loss for the nine months ended September 30, 2007 and 2006 was $13,078
      and $30,979, respectively.






14
 *Table
          of Contents*
  ICON
          Leasing Fund Eleven, LLC
 (A
          Delaware Limited Liability Company)
 Notes
          to
          Condensed Consolidated Financial Statements
 September
          30, 2007
 (unaudited)




(10)
            Transactions
                  with Related Parties -
                  continued


Fees
      and
      other expenses paid or accrued by the LLC to the Manager or its affiliates
      for
      the three and nine months ended September 30, 2007 and 2006, are as
      follows:





Three
                Months EndedSeptember
                30,Entity
            Capacity
            Description
            
            2007
            
            
            2006ICON
                Capital Corp.
            Manager
            Organizational
                andoffering
                expenses (1)
            
            $
            -
            
            
            $
            608,706ICON
                Securities Corp.
            Managing
                broker-dealer
            Underwriting
                fees (1)
            
            $
            -
            
            
            $
            811,608ICON
                Capital Corp.
            Manager
            Acquisition
                fees (2)
            
            $
            1,172,500
            
            
            $
            512,285ICON
                Capital Corp.
            Manager
            Management
                fees (3)
            
            $
            1,739,929
            
            
            $
            1,520,291ICON
                Capital Corp. and affiliate
            Manager
            Administrative
                fees (3)
            
            $
            1,192,107
            
            
            $
            1,811,745Nine
                Months EndedSeptember
                30,Entity
            Capacity
            Description
            
            2007
            
            
            2006ICON
                Capital Corp.
            Manager
            Organizational
                andoffering
                expenses (1)
            
            $
            1,095,103
            
            
            $
            1,992,411ICON
                Securities Corp.
            Managing
                broker-dealer
            Underwriting
                fees (1)
            
            $
            1,460,137
            
            
            $
            2,656,548ICON
                Capital Corp.
            Manager
            Acquisition
                fees (2)
            
            $
            5,553,112
            
            
            $
            13,132,809ICON
                Capital Corp.
            Manager
            Management
                fees (3)
            
            $
            4,895,421
            
            
            $
            2,605,705ICON
                Capital Corp. and affiliate
            Manager
            Administrative
                fees (3)
            
            $
            4,181,934
            
            
            $
            4,335,610(1)
                Amount charged directly to members' equity.(2)
                Amount capitalized and amortized to operations.(3)
                Amount charged directly to operations.








At
      September 30, 2007, the LLC had a net payable due to its Manager and affiliates
      that consisted primarily of accruals due to the Manager for acquisition fees,
      administrative expense reimbursements and management fees of
      $394,888.







15
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          of Contents*




ICON
        Leasing Fund Eleven, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        to
        Condensed Consolidated Financial Statements
 September
        30, 2007
 (unaudited)


(11)
            Comprehensive
                    income (loss)


Comprehensive
      income (loss) consists of the following:








Three
                Months Ended
            
            
            Nine
                Months EndedSeptember
                30,
            
            
            September
                30,2007
            
            
            2006
            
            
            2007
            
            
            2006Net
                loss
            
            $
            (1,971,440
            )
            
            $
            (3,935,332
            )
            
            $
            (1,307,785
            )
            
            $
            (3,097,857
            )Other
                comprehensive income (loss):Change
                in valuation of interest rate swap contracts
            
            
            (832,550
            )
            
            
            (1,070,856
            )
            
            
            (239,900
            )
            
            
            (1,098,720
            )Change
                in valuation of warrants held by joint venture
            
            
            (45,928
            )
            
            
            (96,234
            )
            
            
            (535,851
            )
            
            
            543,803Foreign
                currency translation adjustments
            
            
            5,578,066
            
            
            
            408,004
            
            
            
            11,058,690
            
            
            
            1,716,008Comprehensive
                income (loss)
            
            $
            2,728,148
            
            
            $
            (4,694,418
            )
            
            $
            8,975,154
            
            
            $
            (1,936,766
            )




(12)
            Lease
                    Program


The
      LLC
      has a program (the “Program”), in which lessees may participate, that
      streamlines the process of ordering, accepting and leasing equipment under
      the
      lessee’s master lease agreement (the “Master Lease Agreement”) for information
      technology equipment.  The Program allows lessees to periodically and
      systematically order equipment either directly from the manufacturer or from
      the
      LLC, which acts as a reseller and procures equipment for the lessee, to meet
      their current equipment requirements without having to negotiate a new
      lease agreement with the LLC.  In order to participate in the Program,
      lessees must meet certain credit requirements, as defined in the form agreement
      governing the terms of the Program (the “Program Agreement”), and may not be in
      default under the Program Agreement or the Master Lease Agreement.





In
      advance of each calendar quarter, the LLC notifies the Program participants
      of the estimated cost of new equipment purchases available for that
      participant during the coming quarter as well as the monthly rental payment
      that
      will be applied to each piece of equipment purchased.  At September
      30, 2007, the LLC had approved approximately $35,824,000 for equipment
      purchases during the next quarter with lease terms commencing on or before
      January 1, 2008, of which approximately $13,900,000 was for U.S. lessees,
      approximately $11,820,000 was for Canadian lessees and approximately $10,104,000
      was for United Kingdom lessees.




(13)
            Recent
                    Accounting
                    Pronouncements


In
      September 2006, the Financial Accounting Standards Board (“FASB”) issued
      SFAS No. 157, “Accounting for Fair Value Measurements” (“SFAS 157”). SFAS 157
      establishes a separate framework for determining fair values of assets and
      liabilities that are required by other authoritative GAAP pronouncements to
      be
      measured at fair value. In addition, SFAS 157 incorporates and clarifies
      the guidance in FASB Concepts Statement No. 7 regarding the use of present
      value
      techniques in measuring fair value. SFAS 157 is effective for
      financial statements with fiscal years beginning after November 15, 2007.
      The Manager is currently evaluating the impact of this
      pronouncement.







16
 *Table
          of Contents*





ICON
        Leasing Fund Eleven, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        to
        Condensed Consolidated Financial Statements
 September
        30, 2007
 (unaudited)


(14)
            Commitment
                    and Contingencies and Off Balance Sheet
                    Risk


On
      September 28, 2007, the LLC completed the acquisition of substantially all
      of
      the machining and metal working equipment of W Forge, MW Scott, Inc., and MW
      Gilco, LLC, wholly-owned subsidiaries of MWU.  Simultaneously with the
      closing of the transactions with W Forge, MW Scott, Inc. and MW Gilco, LLC,
      the
      Participating Funds completed similar acquisitions with two other subsidiaries
      of MWU pursuant to which the respective funds purchased substantially all of
      the
      machining and metal working equipment of each subsidiary.  Each of the
      subsidiary’s obligations under its respective leases (including those of W
      Forge, MW Scott, Inc., and MW Gilco, LLC) are cross-collateralized,
      cross-defaulted, and all subsidiaries’ obligations are guaranteed by
      MWU.  Each of the Participating Funds have also entered into a credit
      support agreement, pursuant to which if losses are incurred by a Participating
      Fund with respect to any MWU subsidiary, those losses are shared among the
      Participating Funds proportionately with the LLC based on the amount of
      capital invested.  The term of the credit support agreement matches
      that of the lease agreements.  No amounts were accrued at September
      30, 2007 and management cannot reasonably estimate at this time the maximum
      potential amounts that may become payable under the credit support
      agreement.





FASB
      Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for
      Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”),
      requires certain guarantees to be recorded at fair value and requires a
      guarantor to make disclosures, even when the likelihood of making any payments
      under the guarantee is remote. For those guarantees and indemnifications that
      do
      not fall within the initial recognition and measurement requirements of FIN
      45,
      the Manager must continue to monitor the conditions that are subject to the
      guarantees and indemnifications, a required under existing GAAP, to identify
      if
      a loss has been incurred.  If the Manager determines that it is
      probable that a loss has been incurred, any such estimable loss would be
      recognized.






17
 *Table
          of Contents*


**Item
      2. Manager’s Discussion and Analysis of Financial
      Condition and Results of Operations**





The
      following is a discussion of our results of operations and current financial
      position. This discussion should be read together with our unaudited condensed
      consolidated financial statements and related notes included elsewhere in this
      report, Part II, Item 1A. Risk Factors and the audited financial statements
      and related notes included in our Annual Report on Form 10-K for the year ended
      December 31, 2006.





As
      used
      in this Quarterly Report on Form 10-Q, references to “we,” “us,” “our” or
      similar terms include ICON Leasing Fund Eleven, LLC and its consolidated
      subsidiaries.





**Forward-Looking
      Statements**





Certain
      statements within this Quarterly Report on Form 10-Q may constitute
      forward-looking statements within the meaning of the Private Securities
      Litigation Reform Act of 1995 (“PSLRA”).  These statements are being
      made pursuant to the PSLRA, with the intention of obtaining the benefits of
      the
“safe harbor” provisions of the PSLRA, and, other than as required by law, we
      assume no obligation to update or supplement such
      statements.  Forward-looking statements are those that do not relate
      solely to historical fact.  They include, but are not limited to, any
      statement that may predict, forecast, indicate or imply future results,
      performance, achievements or events.  You can identify these
      statements by the use of words such as “may,” “will,” “could,” “anticipate,”
“believe,” “estimate,” “expects,” “intend,” “predict” or “project” and
      variations of these words or comparable words or phrases of similar
      meaning.  These forward-looking statements reflect our current beliefs
      and expectations with respect to future events and are based on assumptions
      and
      are subject to risks and uncertainties and other factors outside our control
      that may cause actual results to differ materially from those
      projected.





**Overview**





We
      operate as an equipment leasing program formed on December 2,
      2004.  We began active operations on May 6, 2005.  We
      primarily engage in the business of purchasing equipment and leasing it to
      third-party end users, equipment financing, acquiring equipment subject to
      lease
      and, to a lesser extent, acquiring ownership rights to items of leased equipment
      at lease expiration. Some of our equipment leases will be acquired for cash
      and
      are expected to provide current cash flow, which we refer to as "income"
      leases.  The majority of the purchase price of our other equipment
      leases will be financed, so these leases will generate little or no current
      cash
      flow because substantially all of the rental payments received from the lessees
      will be paid to lenders. For these “growth” leases, we anticipate that the
      future value of the leased equipment will exceed the cash portion of the
      purchase price paid for the equipment.





We
      expect
      to invest most of the net proceeds from our offering in items of equipment
      that
      will be subject to a lease. After the net offering proceeds have been invested,
      it is anticipated that additional investments will be made with the cash
      generated from our initial investments to the extent that cash is not needed
      for
      expenses, reserves and distributions to members. The investment in additional
      equipment in this manner is called “reinvestment.” We anticipate purchasing
      equipment from time to time for the next five years. This time frame is called
      the “operating period,” which may be extended, at the discretion of our Manager,
      up to an additional three years.  After the operating period, we will
      then sell our assets in the ordinary course of business during a time frame
      called the “liquidation period.”







18
 *Table
          of Contents*





**Investment
      Portfolio and Significant Transactions**





The
      following is an overview of our significant investments at September 30, 2007
      which we hold either directly or through joint venture investments with
      affiliates, and certain recent transaction:





*Auto
      Parts Manufacturing Equipment*





·
            On
                March 30, 2007, through our wholly-owned subsidiary, ICON French
                Equipment
                I, LLC (“ICON Heuliez”), we entered into a purchase and sale agreement
                (the “Agreement”) with Heuliez SA (“HSA”) and Heuliez Investissements SNC
                (“Heuliez”) to purchase certain auto parts manufacturing equipment from
                Heuliez.  In connection with the Agreement, ICON Heuliez agreed to
                lease back the equipment to HSA and Heuliez, respectively, for an
                initial
                term of 60 months.  The purchase price for the equipment was
                approximately $11,994,000 (€9,000,000) at March 30, 2007.  We
                incurred professional fees of approximately $51,000 and paid an
                acquisition fee to the Manager of approximately $360,000 relating
                to this
                transaction.  These fees were capitalized as part of the
                acquisition cost of the equipment.    The leases commenced
                on April 1, 2007.





*Lumber
      Processing Equipment*





·
            We
                have a 100% interest in equipment, plant and machinery, which is
                subject
                to lease with The Teal Jones Group and Teal Jones Lumber Services,
                Inc.
                (collectively, “Teal Jones”).  The lease expires in November
                2013.





*Marine
      Vessels*





·
            On
                April 11, 2007, we acquired, through our wholly-owned subsidiaries,
                ICON
                Senang, LLC and ICON Sebarok, LLC, two Aframax 95,649 DWT product
                tankers
                - the Senang Spirit and the Sebarok Spirit (collectively, the “Teekay
                Vessels”). The purchase price for the Teekay Vessels was approximately
                $88,000,000, comprised of (i) a cash payment of approximately $21,300,000
                funded in the form of a capital contribution and (ii) borrowings
                of
                approximately $66,700,000 of non-recourse debt under a secured loan
                agreement with Fortis Capital Corp.  We paid an acquisition fee
                to the Manager of approximately $2,640,000 relating to this
                transaction.  Simultaneously with the closing of the purchase of
                the Teekay Vessels, the Teekay Vessels were bareboat chartered back
                to an
                affiliate of Teekay Corporation for a term of five years.  The
                charter commenced on April 11,
                2007.





·
            We
                have a 100% interest in four product carrying vessels, the M/T Doubtless,
                the M/T Faithful, the M/T Spotless, and the M/T Vanguard (the “Tankers”),
                which are subject to bareboat charters with subsidiaries of Top Tankers,
                Inc. that expire in February 2011.





·
            We
                have a 100% interest in four container vessels on bareboat charter
                to ZIM
                Integrated Shipping Services Ltd. (“ZIM”), the M/V Andaman Sea (f/k/a ZIM
                America), the M/V Japan Sea (f/k/a ZIM Japan), the M/V ZIM Hong Kong,
                and
                the M/V ZIM Israel (collectively the “ZIM Vessels”).  The M/V
                Andaman Sea (f/k/a ZIM America) and the M/V Japan Sea (f/k/a ZIM
                Japan)
                have bareboat charters that expire in November 2010, and the M/V
                ZIM Hong
                Kong and the M/V ZIM Israel have bareboat charters that expire in
                January
                2011.





*Information
      Technology and Technology-Related Equipment*





·
            On
                March 7, 2006, we acquired substantially the entire equipment leasing
                portfolio (the “Leasing Portfolio”) of Clearlink Capital Corporation
                (“Clearlink”), based in Mississauga, Ontario, Canada.  At the
                time of the acquisition, the Leasing Portfolio consisted of approximately
                1,100 equipment schedules originated by Clearlink with predominantly
                large, investment grade quality lessees and was comprised mainly
                of
                information technology and technology-related equipment, including
                personal computers and client/server equipment that
                perform business-related functions such as database inquiries. This
                equipment is leased primarily in the United States and
                Canada.  The Leasing Portfolio had a weighted average remaining
                lease term of approximately 18 months at the time of
                acquisition.







19
 *Table
          of Contents*




The
      Leasing Portfolio, which was acquired effective as of March 1, 2006, was
      acquired by us from our Manager and ICON Canada, Inc., an affiliate of our
      Manager, for approximately $144,591,000, which included a cash payment of
      approximately $49,361,000 and the assumption of non-recourse debt and other
      assets and liabilities related to the Leasing Portfolio of approximately
      $95,230,000.





For
      the
      nine months ended September 30, 2007, we purchased approximately $27,543,000
      of
      new equipment. At September 30, 2007, there were 1,023 leases in the Leasing
      Portfolio with an aggregate original equipment cost of approximately
      $201,835,000.  We paid an acquisition fee to our Manager of
      approximately $826,000 and $3,425,000, for the nine months ended September
      30,
      2007 and 2006, respectively.  We paid or accrued an acquisition fee to
      our Manager of approximately $259,000 and $512,000, for the three months ended
      September 30, 2007 and 2006, respectively.  The weighted average
      remaining term of the leases was 17 months as of September 30,
      2007.  At September 30, 2007, 10 lessees comprised 62% of the total
      equipment cost of the Leasing Portfolio and 57% of the total outstanding booked
      residual value of the Leasing Portfolio.  At September 30, 2007, the
      residual value of the equipment subject to lease was approximately $22,009,000,
      compared to approximately $23,600,000 when we acquired the Leasing
      Portfolio.  For the nine months ended September 30, 2007, 182 lease
      schedules terminated, resulting in a realization rate of approximately
      107%.  We anticipate that as additional leases expire this year, the
      Leasing Portfolio will continue to perform at approximately the same or at
      a
      slightly lower rate of residual realization.





The
      Leasing Portfolio’s continued performance is contingent upon us realizing on the
      expected future value of the technology equipment in the Leasing Portfolio
      (which is a rapidly depreciating asset class) after the base term of the lease
      expires and the non-recourse debt has been paid off.  We utilize third
      party resources and our own historical experience to determine the rate of
      amortization and the fair market value of the equipment at lease expiration,
      taking into account the type of equipment, its useful life, anticipated customer
      activity at lease expiration and anticipated changes in technology. At this
      time, we have no reason to believe that we will not continue to meet or exceed
      our expectations on the residual value of the Leasing Portfolio.





Of
      the 73
      current lessees in the Leasing Portfolio, 29 lessees continued to enter into
      new
      leases in 2007, and we added 148 new lease schedules. It may become increasingly
      difficult to add new lease schedules to the Leasing Portfolio, because some
      of
      our lessees have begun to purchase more of their technology equipment instead
      of
      leasing it from us and we continue to encounter pricing pressures from many
      of
      the captive leasing companies.  As a result, we expect the total
      number of lessees and lease schedules in the Leasing Portfolio to decline
      slightly in the next quarter.





*Telecommunications
      Equipment*





·
            We
                have a 61.4% interest in ICON Global Crossing, LLC (“ICON Global
                Crossing”), which purchased state-of-the-art telecommunications equipment
                from various vendors, which was then leased to Global Crossing
                Telecommunications, Inc. (“Global Crossing”). The lease will expire on
                March 31, 2010.





·
            We
                have a 13.3% interest in ICON Global Crossing II, LLC (“ICON Global
                Crossing II”), which purchased state-of-the-art telecommunications
                equipment from various vendors, which was then leased to Global Crossing
                and Global Crossing North American Networks, Inc. (collectively,
                the
                “Global Crossing Group”). The lease will expire on October 31,
                2010.





·
            On
                December 29, 2006, we purchased, through our wholly-owned subsidiary,
                ICON
                Global Crossing III, LLC (“ICON Global Crossing
                III”), state-of-the-art telecommunications equipment for
                approximately $9,779,000. This equipment is subject to a lease with
                the
                Global Crossing Group.  The term of the lease is 48 months, and
                commenced on January 1, 2007.  We paid an acquisition fee to our
                Manager of approximately $293,000 relating to this
                transaction.  During February 2007, ICON Global Crossing III
                purchased approximately $6,893,000 of additional equipment that is
                subject
                to a lease with the Global Crossing Group.  The term of the
                lease is 48 months, and commenced on March 1, 2007.  We paid an
                acquisition fee to our Manager of approximately $207,000 relating
                to this
                transaction.







20
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*Manufacturing
      equipment*





·
            On
                September 28, 2007, we completed the acquisitions of the manufacturing
                assets of W Forge Holdings Inc. (“W Forge”), MW Scott, Inc., and MW Gilco,
                LLC, wholly-owned subsidiaries of MW Universal, Inc. (“MWU”), for purchase
                prices of $21,000,000, $600,000 and $600,000, respectively.  We
                paid acquisition fees for W Forge, MW Scott, Inc., and MW Gilco,
                LLC of
                approximately $630,000, $18,000 and $18,000, respectively.  Each
                of the leases terms commence on October 1, 2007 and continue for a
                period of 60 months.





In
      connection with the W Forge transaction, we also provided $6,500,000 in
      short-term real property financing that was recorded as current portion of
      mortgage notes receivables.  W Forge is to make interest only payments
      at a rate of 14% per annum payable on the 30th and 60th days following the
      close.  Also due on the 60th day is a balloon payment of all principal
      outstanding.  Subsequent to September 30, 2007, W Forge repaid $6,500,000
      of borrowings to us.





*Financing
      facility:*





·
            On August
                13, 2007, we entered into an equipment financing facility with a
                consortium of other lenders and Solyndra, Inc. (“Solyndra”), a privately
                held manufacturer of solar panels for the building of a new production
                facility.  The financing facility matures on June 30, 2013 and
                is secured by the equipment as well as all other assets of
                Solyndra.  The equipment is comprised of two fully automated
                manufacturing lines that combine glass tubes and thin film semiconductors
                to produce solar panels.  Included as part of the consideration
                in the acquisition are warrants to purchase 40,290 shares of Solyndra
                common stock at an exercise price of $4.96.  The warrants expire
                on April 6, 2014.





*Digital
      Audio/Visual Entertainment Systems*





·
            We
                own a 50% interest in ICON AeroTV, LLC (“ICON AeroTV”), whose sole purpose
                was to own equipment leased to AeroTV Ltd (“AeroTV”). On February 13,
                2007, AeroTV’s customer, the largest scheduled bus line in Europe,
                terminated its service agreement with AeroTV. Shortly thereafter,
                AeroTV
                notified our Manager of its inability to pay certain rent owed to
                ICON AeroTV and subsequently filed for insolvency protection in the
                United Kingdom. In February 2007, ICON AeroTV sent a notice to AeroTV
                terminating the Master Lease Agreement.  Certain facts came to
                light that gave our Manager serious concerns regarding the propriety
                of
                AeroTV's actions during and after the execution of the lease with
                AeroTV.
                On April 18, 2007, ICON AeroTV filed a lawsuit in the United Kingdom’s
                High Court of Justice, Queen’s Bench Division against AeroTV and one of
                its directors for fraud. Subsequently, ICON AeroTV executed a default
                judgment against the AeroTV director. ICON AeroTV is currently in
                the
                process of attempting to execute the judgment. At this time, it is
                not
                possible to determine the ability to collect the
                judgment.





On
      February 20, 2007, ICON AeroTV wrote off its leased assets with a remaining
      cost
      basis of approximately $441,000, which was off-set by the recognition of the
      relinquished security deposit and deferred income of approximately $288,000,
      resulting in a loss of approximately $153,000. During March 2007, ICON AeroTV
      collected approximately $218,000 of the remaining rent balance.  In
      April 2007, all the unexpended amounts previously contributed to ICON AeroTV
      for
      the purchase of on board digital audio/visual systems were returned to us and
      ICON Income Fund Ten, LLC (“Fund Ten”), which amount together with accrued
      interest was approximately $5,215,000.







21
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**New Accounting
      Pronouncements**





In
      September 2006, the Financial Accounting Standards Board (“FASB”) issued
      SFAS No. 157, “Accounting for Fair Value Measurements” (“SFAS 157”). SFAS 157
      establishes a separate framework for determining fair values of assets and
      liabilities that are required by other authoritative accounting principles
      generally accepted in the United States of America (“GAAP”) pronouncements to be
      measured at fair value. In addition, SFAS 157 incorporates and clarifies
      the guidance in FASB Concepts Statement No. 7 regarding the use of present
      value
      techniques in measuring fair value. SFAS 157 is effective for
      financial statements with fiscal years beginning after November 15, 2007.
      Our Manager is currently evaluating the impact of this
      pronouncement.





We
      commenced operations on May 6, 2005, completed our offering period in April
      2007
      and are currently in our operating period.  We raised total equity of
      $365,198,690 from our Commencement of Operations through April 20,
      2007.  With the net proceeds from our offering, we have acquired and
      anticipate acquiring both income leases and growth leases.  As our
      leases expire, we may sell the equipment and reinvest the proceeds in additional
      equipment subject to leases or re-lease the equipment.  We anticipate
      incurring both gains and losses on the sales of equipment during our operating
      period. Additionally, we expect to see our rental income and finance income
      increase, as well as related expenses such as depreciation and amortization
      expense and interest expense.  We anticipate that the fees we pay our
      Manager to operate and manage our business portfolio will increase during this
      period as our Manager will be spending a greater portion of its time managing
      our portfolio.





**Results
      of Operations for the Three Months Ended September 30, 2007 (the “2007 Quarter”)
      and 2006 (the “2006 Quarter”)**





Revenue
      for the 2007 Quarter and the 2006 Quarter are summarized as
      follows:





Three
                Months Ended September 30,2007
            
            
            2006
            
            
            ChangeTotal
                revenue
            
            $
            29,405,530
            
            
            $
            24,704,265
            
            
            $
            4,701,265Rental
                income
            
            
            26,503,336
            
            
            
            23,013,318
            
            
            
            3,490,018Finance
                income
            
            
            1,736,842
            
            
            
            1,150,699
            
            
            
            586,143Income
                from investment in joint ventures
            
            
            36,790
            
            
            
            120,643
            
            
            
            (83,853
            )Net
                gain on sales of new equipment
            
            
            164,871
            
            
            
            162,349
            
            
            
            2,522Net
                loss on sales of leased equipment
            
            
            (590,605
            )
            
            
            (132,908
            )
            
            
            (457,697
            )Interest
                income
            
            
            1,554,296
            
            
            
            390,164
            
            
            
            1,164,132





Total
      revenue for the 2007 Quarter increased $4,701,265, or 19.0%, as compared to
      the
      2006 Quarter.  The increase in total revenue was due to higher rental
      income, interest income and finance income that were partly offset by increased
      loss on sales of leased equipment.  The increase in rental income was
      primarily attributable to the acquisitions of the Teekay Vessels in the
      second quarter of 2007, Global Crossing III in the fourth quarter of
      2006, and the auto parts manufacturing equipment in the first quarter of
      2007.  These acquisitions accounted for approximately $3,107,000,
      $1,178,000 and $738,000, respectively of the increase in rental
      income.  The increase in rental income was partly offset by an
      increased number of leases in the Leasing Portfolio coming to term during the
      2007 Quarter which accounted for approximately a $1,650,000 decrease in rental
      income for the 2007 Quarter.  The increase in interest income during
      the 2007 Quarter was primarily due to interest received on our money market
      account.  The increase in finance income was attributable to the
      acquisition of the lumber processing equipment in the fourth Quarter of 2006
      which accounted for approximately $327,000, and the remaining finance income
      was
      from our Leasing Portfolio.  The revenue in the 2007 Quarter was
      offset by the loss on sales of leased equipment which was attributed to our
      Leasing Portfolio.  We anticipate that as we continue to acquire
      assets subject to lease that our revenue, particularly rental income, will
      continue to increase.






22
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          of Contents*





Expenses
      for the 2007 Quarter and the 2006 Quarter are summarized as
      follows:





Three
                Months Ended September 30,2007
            
            
            2006
            
            
            ChangeTotal
                expenses
            
            $
            30,948,486
            
            
            $
            28,639,597
            
            
            $
            2,308,889General
                and administrative
            
            
            458,712
            
            
            
            267,738
            
            
            
            190,974Depreciation
                and amortization
            
            
            20,577,648
            
            
            
            18,972,950
            
            
            
            1,604,698Impairment
                loss
            
            
            122,774
            
            
            
            446,301
            
            
            
            (323,527
            )Management
                fees - Manager
            
            
            1,739,929
            
            
            
            1,520,291
            
            
            
            219,638Administrative
                expense reimbursements -Manager
                and affiliate
            
            
            1,192,107
            
            
            
            1,811,745
            
            
            
            (619,638
            )Interest
            
            
            6,593,695
            
            
            
            5,356,149
            
            
            
            1,237,546Minority
                interest
            
            
            263,621
            
            
            
            264,423
            
            
            
            (802
            )





Total
      expenses for the 2007 Quarter increased $2,308,889, or 8.1%, as compared to
      the
      2006 Quarter.  The increase was primarily due to higher depreciation
      and amortization and Management fees – Manager that were partly offset by a
      decrease in Administrative expense reimbursements – Manager and affiliates and
      impairment loss.  The increase in depreciation and amortization was
      primarily attributable to the acquisitions of the Teekay Vessels, Global
      Crossing III, and the auto parts manufacturing equipment noted above, which
      accounted for approximately $1,524,000, $874,000 and $405,000, respectively
      in
      the 2007 Quarter.  The increase was partly offset by the expiration of
      our leases in the Leasing Portfolio, which accounted for a decrease in
      depreciation and amortization of approximately $1,183,000 during the 2007
      Quarter.  The
      increase in interest expense was primarily attributable to the acquisition
      of
      the Teekay Vessels in the 2007 Quarter of approximately $998,000 and a full
      quarter impact of the ZIM Vessels of approximately $577,000, partly offset
      by a
      reduction in interest expense of $276,000 resulting from the amortization of
      the
      loans on the Tankers.  The overall increase in Management fees
– Manager was a result of the increased investment in leased assets in
      the 2007
      Quarter.  The increase in total expenses for the 2007 Quarter was
      partly offset by a decrease in administrative expense reimbursements-Manager
      which is the result of a decrease in investment activities.  The
      decrease in impairment loss was from lower write-offs in the 2007 Quarter as
      compared to the 2006 Quarter in our Leasing Portfolio.   We
      anticipate that as we continue to acquire assets subject to lease and that
      our
      expenses, particularly depreciation and amortization, will continue to
      increase.





*Provision
      for Income Taxes*





Certain
      of our direct and indirect wholly-owned subsidiaries are unlimited
      liability companies and are taxed as corporations under the laws of
      Canada.  Other indirect wholly-owned subsidiaries are taxed as
      corporations in Barbados.  For the 2007 Quarter, the provision for
      income taxes was comprised of $409,831 in current taxes and $18,653 in deferred
      taxes.





*Net
      Loss*





As
      a
      result of the foregoing factors, net loss for the 2007 and 2006 Quarter was
      $1,971,440 and $3,935,332, respectively.  The net loss per weighted
      average number of additional member share for the 2007 and 2006 Quarter was
      $5.36 and $17.79, respectively.







23
 *Table
          of Contents*





**Results
      of Operations for the Nine Months Ended September 30, 2007 (the “2007 Period”)
      and 2006 (the “2006 Period”)**





Revenue
      for the 2007 Period and the 2006 Period are summarized as follows:





Nine
                Months Ended September 30,2007
            
            
            2006
            
            
            ChangeTotal
                revenue
            
            $
            85,788,677
            
            
            $
            46,472,995
            
            
            $
            39,315,682Rental
                income
            
            
            75,714,659
            
            
            
            41,317,586
            
            
            
            34,397,073Finance
                income
            
            
            5,715,097
            
            
            
            2,538,701
            
            
            
            3,176,396Income
                from investment in joint ventures
            
            
            57,722
            
            
            
            501,868
            
            
            
            (444,146
            )Net
                gain on sales of new equipment
            
            
            716,579
            
            
            
            442,966
            
            
            
            273,613Net
                (loss) gain on sales of leased equipment
            
            
            (637,659
            )
            
            
            288,614
            
            
            
            (926,273
            )Interest
                income
            
            
            4,222,279
            
            
            
            1,383,260
            
            
            
            2,839,019





Total
      revenue for the 2007 Period increased $39,315,682, or 84.6%, as compared to
      the
      2006 Period.  The increase in total revenue was due to higher rental
      income, finance income and interest income that were partly offset by increased
      loss on sales of leased equipment. The increase in our rental income was
      primarily attributable to a full period of rental income from the ZIM Vessels
      and the Tankers acquired in June 2006, the acquisition of the Teekay Vessels
      in
      the second quarter of 2007, and the Leasing Portfolio acquired in March 2006,
      which accounted for $9,798,000, $8,707,000, $5,858,000 and $3,315,000,
      respectively, of the increase in rental income for the 2007
      Period.  The increase in finance income was attributable to the
      acquisition of the lumber processing equipment in the fourth quarter of
      2006, which accounted for $958,000, and the remaining finance income was from
      our Leasing Portfolio.  The increase in interest income during the
      2007 Period was primarily derived from the addition of the lumber processing
      equipment which accounted for approximately $2,056,000 of mortgage note
      interest.  The remaining interest and other income were primarily due
      to interest received on our money market account.  The revenue in the
      2007 Period was offset by the loss on sales of leased equipment which was
      attributed to our Leasing Portfolio.  We anticipate that as we
      continue to acquire assets subject to lease that our revenue, particularly
      rental income, will continue to increase.





Expenses
      for the 2007 Period and the 2006 Period are summarized as follows:





Nine
                Months Ended September 30,2007
            
            
            2006
            
            
            ChangeTotal
                expenses
            
            $
            87,171,230
            
            
            $
            49,570,852
            
            
            $
            37,600,378General
                and administrative
            
            
            1,610,656
            
            
            
            425,429
            
            
            
            1,185,227Depreciation
                and amortization
            
            
            61,070,945
            
            
            
            34,090,525
            
            
            
            26,980,420Impairment
                loss
            
            
            122,774
            
            
            
            446,301
            
            
            
            (323,527
            )Management
                fees - Manager
            
            
            4,895,421
            
            
            
            2,605,705
            
            
            
            2,289,716Administrative
                expense reimbursements -Manager
                and affiliate
            
            
            4,181,934
            
            
            
            4,335,610
            
            
            
            (153,676
            )Interest
            
            
            14,510,229
            
            
            
            7,137,831
            
            
            
            7,372,398Minority
                interest
            
            
            779,271
            
            
            
            529,451
            
            
            
            249,820





Total
      expenses for the 2007 Period increased $37,600,378, or 75.9%, as compared to
      the
      2006 Period.  The increase was due to higher depreciation and
      amortization, interest and Management fees – Manager.  The increase in
      depreciation and amortization was primarily attributed to the full period impact
      of our equipment acquisitions in 2006 and the 2007 acquisition as noted above,
      which accounted for approximately $8,591,000, $6,152,000, $4,626,000 and
      $2,878,000, respectively, in the 2007 Period.  The increase in
      interest expense was attributable to the full period impact of our equipment
      acquisitions in 2006 also as noted above, which accounted for approximately
      $2,806,000, $2,044,000, $1,554,000 and $1,091,000, respectively, in the
      2007 Period.  The increase in Management fees – Manager was a result
      of the increased investment in leased assets in the 2007 Period.  We
      anticipate that as we continue to acquire assets subject to lease that our
      expenses, particularly depreciation and amortization and interest, will continue
      to increase.






24
 *Table
          of Contents*





*Provision
      for Income Taxes*





Certain
      of our direct and indirect wholly-owned subsidiaries are unlimited
      liability companies and are taxed as corporations under the laws of
      Canada.  Other indirect wholly-owned subsidiaries are taxed as
      corporations in Barbados.  For the 2007 Period, the provision for
      income taxes was comprised of $668,667 in current taxes and ($743,435) in
      deferred taxes.





*Net
      Loss*





As
      a
      result of the foregoing factors, net loss for the 2007 and 2006 Period was
      $1,307,785 and $3,097,857, respectively.  The net loss per weighted average
      number of additional member share for the 2007 and 2006 Period was $3.72 and
      $17.56, respectively.





**Liquidity
      and Capital Resources**





*Sources
      and Uses of Cash*





At
      September 30, 2007 and 2006, we had cash and cash equivalents of $41,593,359
      and
      $70,325,398, respectively. During our offering period, our main source of cash
      was from financing activities and during our operating period, we anticipate
      our
      main source of cash will be from investing activities, which we expect will
      continue during our liquidation period. During our offering period, our main
      use
      of cash was from investing activities and during our operating period, our
      main
      use of cash will be from financing activities, which we anticipate will continue
      during the liquidation period.  Our offering period ended on April 20,
      2007 and our operating period commenced.





*Operating
      Activities*




*Sources
      of cash*




Our
      main
      source of cash from operating activities in the 2007 Period was from the
      collection of rental income from our operating leases and the collection of
      non-financed receivables from our finance leases.





Our
      main
      sources of cash from operating activities in the 2006 Period were from the
      collection of rental income from our operating leases and the collection of
      non-financed receivables from our finance leases.





*Investing
      Activities*




*Sources
      of cash*




Our
      main
      source of cash from investing activities in the 2007 Period was from proceeds
      from sales of equipment of $20,918,533 of new and leased equipment in our
      Leasing Portfolio.  We also received $10,026,158 in distributions from
      our joint venture investments.





Our
      main
      source of cash from investing activities in the 2006 Period was from proceeds
      from sales of equipment in our Leasing Portfolio of $11,286,921.





*Uses
      of cash*




Our
      main
      use of cash for investing activities in the 2007 Period was for the purchase
      of
      leased equipment of $114,676,027, relating to the acquisition of the information
      technology equipment in our Leasing Portfolio, telecommunications equipment,
      auto parts manufacturing equipment and product tankers. We paid $1,981,155
      for
      mortgage notes receivable investments to two of our lessees.  We
      provided for a short-term note receivable of $6,500,000 to W Forge.  We
      also paid $3,475,507, net for notes receivable on financing facility. 
Subsequent to September 30, 2007, W Forge repaid $6,500,000 of borrowings to
      us.





Our
      main
      use of cash for investing activities in the 2006 Period was for the purchase
      of
      leased equipment of $169,468,315, relating to the acquisition of the Leasing
      Portfolio, the Tankers and the ZIM Vessels.  We also made investments
      in joint ventures of $4,598,382.







25
 *Table
          of Contents*




*Financing
      Activities*




*Sources
      of cash*




Our
      main
      source of cash from financing activities in the 2007 Period was from the
      issuance of additional member shares, net of sales and offering
      expenses.  We sold 72,982 additional member shares, representing
      approximately $72,982,000 of capital contributions.  We paid various
      selling expenses of approximately $8,393,000, which provided us with net
      proceeds from the sale of our member shares of approximately
      $64,495,000.





Our
      main
      source of cash from financing activities in the 2006 Period was from the
      issuance of additional member shares, net of sales and offering
      expenses.  We sold 132,827 additional member shares, representing
      approximately $132,827,000 of capital contributions.  We paid and
      accrued various selling expenses of approximately $15,264,000, which provided
      us
      with net proceeds from the sale of our additional member shares of approximately
      $117,563,000.





Beginning
      with the commencement of operations, we paid sales commissions to third parties
      and various fees to our Manager and ICON Securities.  These sales
      commissions and fees paid to our Manager and ICON Securities are recorded as
      a
      reduction of our equity.





During
      the 2007 Period, we paid sales commissions of $5,837,282 to unrelated third
      parties,  $1,460,137 to ICON Securities, who receives or is entitled
      to receive, a 2% underwriting fee from the gross proceeds from sales of all
      additional member shares to the additional members, and $1,095,103 to our
      Manager, who is entitled to receive a fee for organizational and offering
      expenses.





We
      also
      received proceeds from non-recourse long-term debt on the Leasing Portfolio
      of $30,103,769 and $33,956,911 during the 2007 Period and 2006 Period,
      respectively.





*Uses
      of cash*




Our
      main
      use of cash for financing activities in the 2007 Period was for the repayment
      of
      $59,191,174 of non-recourse long-term debt on the Leasing Portfolio, the Tankers
      and the ZIM Vessels.  We also paid or accrued distributions to our
      members of $29,164,208.




Our
      main
      use of cash for financing activities in the 2006 Period was for the repayment
      of
      $32,418,991 of non-recourse long-term debt on the Leasing
      Portfolio.  We also paid distributions to our members of
      $10,829,198.




*Financings
      and Borrowings*





*Non-recourse
      Long-Term Debt*





We
      have
      non-recourse long-term debt at September 30, 2007 of
      $299,320,619.  All of our non-recourse long-term debt consists of debt
      in which the lender has a security interest in the equipment. In some cases,
      in
      addition to the security interest, the lender has an assignment of the rental
      payments under the lease.  In that case, the lender is being paid
      directly by the lessee.  In other cases, we receive the rental
      payments and remit to the lender.






26
 *Table
          of Contents*





*Revolving
      Line of Credit - Recourse*





On
      August
      31, 2005, we, together with certain of our affiliates (entities sponsored and
      organized by our Manager), ICON Income Fund Eight B L.P. (“Fund Eight B”), ICON
      Income Fund Nine, LLC and Fund Ten (collectively, the “Borrowers”) entered into
      a Commercial Loan Agreement (the “Loan Agreement”), with California Bank &
Trust (the “Lender”). The Loan Agreement provides for a revolving line of credit
      of up to $17,000,000 pursuant to a senior secured revolving loan facility (the
      “Facility”) which is secured by all assets of the Borrowers not subject to a
      first priority lien, as defined in the Loan Agreement. Each of the Borrowers
      is
      jointly and severally liable for all amounts borrowed under the Facility.
      Amounts available under the Facility are subject to a borrowing base that is
      determined, subject to certain limitations, on the present value of the future
      receivables under certain lease agreements in which the Borrowers have a
      beneficial interest.





As
      part
      of the Loan Agreement, the Borrowers are required to comply with certain
      financial covenants, including, a minimum debt coverage ratio, a tangible net
      worth covenant, a leverage ratio and a minimum liquidity covenant. The Borrowers
      are in compliance with these covenants at September 30, 2007. The Loan Agreement
      prohibits the Borrowers from declaring or paying any distribution to investors
      if such a payment would cause the Borrowers to become non-compliant with the
      financial covenants in the Loan Agreement.





In
      addition, on August 31, 2005, the Borrowers entered into a Contribution
      Agreement (the “Contribution Agreement”) pursuant to which the Borrowers agreed
      to certain restrictions on the amounts and terms of their respective borrowings
      under the Facility in order to minimize the risk that a Borrower would be unable
      to repay its portion of the outstanding obligations under the Facility at any
      time. These restrictions include, but are not limited to, borrowing in excess
      of
      the lesser of (a) an amount each Borrower could reasonably expect to repay
      in
      one year from its projected free cash flow, or (b) the greater of (i) the
      borrowing base, as defined in the Loan Agreement, as applied to such Borrower
      and (ii) 50% of the net worth of such Borrower. The Contribution Agreement
      also
      provides that, in the event a Borrower pays an amount under the Contribution
      Agreement in excess of its share of the total obligations under the Facility,
      whether by reason of an event of default or otherwise, the other Borrowers
      will
      immediately make a contribution payment to such Borrower and in such amount
      that
      the aggregate amount paid by each Borrower reflects its allocable share of
      the
      aggregate obligations under the Facility. The Borrowers' obligations to each
      other under the Contribution Agreement are collateralized by a subordinate
      lien
      on the assets of each Borrower. The Borrowers are in compliance with the
      Contribution Agreement at September 30, 2007 and no amounts are due to or
      payable by us under the Contribution Agreement.





On
      December 26, 2006, the Borrowers entered into a Loan Modification Agreement
      (the
“Loan Modification”) to the Loan Agreement. The Loan Modification extended the
      Facility from August 31, 2007 to September 30, 2008 and lowered (i) the interest
      rate for advances under the Facility from the Lender’s prime rate plus 0.25% to
      the Lender’s prime rate and (ii) the interest rate on the five separate advances
      that are permitted to be made under the Facility at the rate at which United
      States dollar deposits can be acquired by the Lender in the London Interbank
      Eurocurrency Market (the “LIBOR Rate”) plus 2.75% per year to the LIBOR Rate
      plus 2.5% per year. In addition, pursuant to the terms of the Loan Modification,
      the Borrowers no longer have to maintain a cash reserve. The interest rate
      at
      September 30, 2007 was 7.75%.





On
      June
      20, 2007, the Loan Agreement, the Contribution Agreement and the Loan
      Modification were modified to admit ICON Leasing Fund Twelve, LLC (“Fund
      Twelve”) as a permitted borrower. Fund Twelve, as a result of its entry into the
      Loan Modification, is jointly and severally liable for the outstanding
      balance.





Aggregate
      borrowings by all Borrowers under the Facility amounted to $6,255,000 at
      September 30, 2007.  We currently have no borrowings outstanding under
      the Facility. Subsequent to September 30, 2007, Fund Twelve repaid $5,000,000
      of
      borrowings under the Facility.  The remaining balance of $1,255,000
      relates to borrowings by Fund Eight B.






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Our
        Manager believes that with the cash we have currently available, cash being
        generated from our equipment leases and cash proceeds from sales of equipment,
        we have sufficient cash to continue our operations into the foreseeable future.
        We have the ability to borrow funds under the Facility, if necessary. However,
        our ability to generate cash in the future is subject to general economic,
        financial, competitive, regulatory and other factors that affect our lessees’
business that are beyond our control.  See “Part II, Item
        1A.  Risk Factors.” At September 30, 2007, we have approximately
        $65,630,000 in current assets and approximately $65,653,000 in current
        liabilities, which results in approximately a $23,000 working capital deficit.
        Of this amount, approximately $7,929,000 consists of direct payments to lenders
        made by our lessees. These direct payments are for debts that have no
        corresponding current assets. Therefore, when considering the overall working
        capital, direct payments should be excluded. The exclusion of these payments
        yields a surplus of approximately $7,906,000 at September 30,
        2007.





*Distributions*





We
      pay
      monthly distributions to our members starting with the first month after the
      additional members’ admission and continue to pay such distributions until the
      termination of the operating period.  We paid distributions to our
      additional members of approximately $28,873,000 and $10,912,000 for the 2007
      Period and 2006 Period, respectively.  We also paid distributions to
      our Manager of approximately $292,000 and $110,000 for the 2007 Period and
      2006
      Period, respectively.





**Contractual
      Obligations and Commitments**





*Contractual
      Obligations*





At
      September 30, 2007, we have non-recourse long-term debt obligations. The lenders
      have security interests in the equipment relating to each non-recourse long-term
      debt instrument and, in some cases, an assignment of the rental payments under
      the leases associated with the equipment. In that case, the lender is being
      paid directly by the lessee.  In other cases, we receive the rental
      payments and pay the lender.  If the lessee were to default on the
      non-recourse long-term debt, the equipment would be returned to the lender
      in
      extinguishment of the non-recourse long-term debt. At September 30, 2007, our
      outstanding non-recourse long-term debt obligations were
      $299,320,619.  We are a party to the Facility as discussed in the
      financing and borrowings section above. We have no borrowings under the Facility
      at September 30, 2007.





*Commitments*





We
      have a
      program (the “Program”), in which lessees may participate, that streamlines the
      process of ordering, accepting and leasing equipment under the lessee’s master
      lease agreement (the “Master Lease Agreement”) for information technology
      equipment.  The Program allows lessees to periodically and systematically
      order equipment either directly from the manufacturer or from us, acting as
      a
      reseller and procuring equipment for the lessee, to meet their current equipment
      requirements without having to negotiate a new lease agreement with
      us.  In order to participate in the Program, lessees must meet certain
      credit requirements, as defined in the form agreement governing the terms of
      the
      Program (the “Program Agreement”), and may not be in default under the Program
      Agreement or the Master Lease Agreement.  In advance of each calendar
      quarter, we notify the Program participants of the estimated cost of new
      equipment purchases available for that participant during the coming quarter
      as
      well as the monthly rental payment that will be applied to each piece of
      equipment purchased.  While the amount of equipment actually purchased
      rarely meets the pre-approved amount, it is an indicator of the amount of
      business that we anticipate entering into with these lessees in the upcoming
      quarter.  At September 30, 2007, the LLC had approved approximately
      $35,824,000 for equipment purchases during the next quarter with lease terms
      commencing on or before January 1, 2008, of which approximately $13,900,000
      was
      for U.S. lessees, approximately $11,820,000 was for Canadian lessees and
      approximately $10,104,000 was for United Kingdom lessees.






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On
      September 28, 2007, we completed the acquisition of substantially all of the
      machining and metal working equipment of W Forge, MW Scott, Inc., and MW Gilco,
      LLC, wholly-owned subsidiaries of MWU.  Simultaneously with the
      closing of the transaction with W Forge, MW Scott, Inc., and MW Gilco, LLC,
      Fund
      Twelve and Fund Ten, two entities also managed by the Manager (together, the
      “Participating Funds”), completed similar acquisitions with two other
      subsidiaries of MWU pursuant to which the respective funds purchased
      substantially all of the machining and metal working equipment of each
      subsidiary.  Each of the subsidiary’s obligations under its respective
      leases (including those of W Forge, MW Scott, Inc., and MW Gilco, LLC) are
      cross-collateralized, cross-defaulted, and all subsidiaries’ obligations are
      guaranteed by MWU.  Each of the Participating Funds have also entered
      into a credit support agreement with us, pursuant to which if losses are
      incurred by a Participating Fund with respect to any MWU subsidiary, those
      losses are shared among the Participating Funds proportionately based on the
      amount of capital invested.  The term of the credit support agreement
      matches that of the lease agreements.  No amounts were accrued at
      September 30, 2007 and management cannot reasonably estimate at this time the
      maximum potential amounts that may become payable under the credit support
      agreement.





FASB
      Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for
      Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”),
      requires certain guarantees to be recorded at fair value and requires a
      guarantor to make disclosures, even when the likelihood of making any payments
      under the guarantee is remote.  For those guarantees and
      indemnifications that do not fall within the initial recognition and measurement
      requirements of FIN 45, our Manager must continue to monitor the conditions
      that
      are subject to the guarantees and indemnifications, a required under existing
      GAAP, to identify if a loss has been incurred.  If our Manager
      determines that it is probable that a loss has been incurred, any such estimable
      loss would be recognized.







29
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**Item
      3.  Quantitative and Qualitative Disclosures About
      Market Risk**





We,
      like
      most other companies, are exposed to certain market risks, which include changes
      in interest rates and the demand for equipment (and the related residuals)
      owned
      by us.  We believe that our exposure to other market risks, including
      foreign currency exchange rate risk, commodity risk and equity price risk,
      are
      insignificant, at this time, to both our financial position and our results
      of
      operations.  There are no other material changes to the disclosure
      related to these items since the filing of our Annual Report on Form 10-K for
      the year ended December 31, 2006.








**Item
      4T. Controls and Procedures**





*Evaluation
      of disclosure controls and procedures*





In
      connection with the preparation of this Quarterly Report on Form 10-Q for the
      period ended September 30, 2007, as well as the condensed consolidated financial
      statements and Quarterly Reports on Form 10-Q for the period ended September
      30,
      2007 for our affiliates, our Manager carried out an evaluation, under the
      supervision and with the participation of the management of our Manager,
      including its Chief Executive Officer and the Principal Financial and Accounting
      Officer, of the effectiveness of the design and operation of our Manager’s
      disclosure controls and procedures as of the end of the period covered by this
      report pursuant to the Securities Exchange Act of 1934. Based on the foregoing
      evaluation, except as noted below, the Chief Executive Officer and the Principal
      Financial and Accounting Officer concluded that our Manager’s disclosure
      controls and procedures were effective.





While
      evaluating our Manager’s disclosure controls and procedures during 2006, our
      Manager recognized that greater internal controls were needed to aid in a more
      efficient closing of our financial statements, thereby requiring our Manager
      to
      hire additional skilled accounting staff. In response, our Manager hired several
      additional accounting staff members who are certified public accountants and/or
      are experienced with public reporting entities, including three additional
      senior accountants with more than 16, 10 and 9 years, respectively, of
      experience with public reporting entities, the most senior of those accountants
      having assumed the responsibilities of the senior vice president of
      accounting. Our Manager will continue to evaluate its disclosure controls
      and procedures to determine their effectiveness and adequacy and will take
      the
      steps necessary, in our Manager’s opinion, to ensure the adequacy of our
      Manager’s disclosure controls and procedures.





In
      designing and evaluating our Manager’s disclosure controls and procedures, our
      Manager recognized that disclosure controls and procedures, no matter how well
      conceived and operated, can provide only reasonable, not absolute, assurance
      that the objectives of the disclosure controls and procedures are met.  Our
      Manager’s disclosure controls and procedures have been designed to meet
      reasonable assurance standards. Disclosure controls and procedures cannot detect
      or prevent all error and fraud. Some inherent limitations in disclosure controls
      and procedures include costs of implementation, faulty decision-making, simple
      error and mistake. Additionally, controls can be circumvented by the individual
      acts of some persons, by collusion of two or more people, or by management
      override of the controls. The design of any system of controls is based, in
      part, upon certain assumptions about the likelihood of future events, and there
      can be no assurance that any design will succeed in achieving its stated goals
      under all anticipated and unanticipated future conditions. Over time, controls
      may become inadequate because of changes in conditions, or the degree of
      compliance with established policies or procedures.





Our
      Manager’s Chief Executive Officer and Principal Financial and Accounting Officer
      have determined that no weakness in disclosure controls and procedures had
      any
      material effect on the accuracy and completeness of our financial reporting
      and
      disclosure included in this report.







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**PART
      II - OTHER INFORMATION**





**Item
      1.  Legal Proceedings**





In
      the
      ordinary course of conducting our business, there may be certain claims, suits
      and complaints filed against us.  In the opinion of management, the
      outcome of such matters, if any, will not have a material impact on our
      consolidated financial position or results of operations.  No material
      legal proceedings are currently pending or threatened, to our knowledge, against
      us or against any of our assets.





**Item
      1A.  Risk Factors**





There
      have been no material changes from the risk factors disclosed in “Item 1A. Risk
      Factors” of our Annual Report on Form 10-K for the year ended December 31,
      2006.





**Item
      2.  Unregistered Sales of Equity Securities and Use
      of Proceeds**





Our
      Manager consented to us redeeming 1,202 additional member shares during the
      2007
      Period. The redemption amounts are calculated according to a specified
      redemption formula in accordance with the LLC agreement.  Redeemed
      shares have no voting rights and do not share in distributions.  The
      LLC agreement limits the number of additional member shares which can be
      redeemed in any one year and redeemed additional member shares may not be
      reissued. The following table details our additional member share
      redemptions:





Total
                Number ofAdditional
                Member
            
            
            Price
                  Paid PerAdditionalShares
                Redeemed
            
            
            Member
              SharesJanuary
                1, 2007 through January 31, 2007
            
            
            74
            
            
            $
            821.16February
                1, 2007 through February 28, 2007
            
            
            27
            
            
            $
            823.35March
                1, 2007 through March 31, 2007
            
            
            69
            
            
            $
            768.08April
                1, 2007 through April 30, 2007
            
            
            82
            
            
            $
            741.33May
                1, 2007 through May 31, 2007
            
            
            1
            
            
            $
            885.71June
                1, 2007 through June 30, 2007
            
            
            937
            
            
            $
            879.80July
                1, 2007 through July 31, 2007
            
            
            12
            
            
            $
            802.48





**Item
      3.  Defaults Upon Senior
      Securities**





Not
      applicable.





**Item
      4.  Submission of Matters to a Vote of Security
      Holders**





No
      matters were submitted to a vote of security holders during the 2007
      Period.





**Item
      5.  Other Information**





Not
      applicable.




**Item
      6. Exhibits**





31.1
            Rule
                13a-14(a)/15d-14(a) certifications.31.2
            Rule
                13a-14(a)/15d-14(a) certifications.32.1
            Certification
                pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002.32.2
            Certification
                pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002.







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**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the LLC has duly caused this report to be signed on its behalf by the
      undersigned, thereunto duly authorized.





ICON
      Leasing Fund Eleven, LLC File No. 000-51916 (Registrant) by its Manager, ICON
      Capital Corp.





*Date:
      November 16, 2007*





*/s/
      Thomas W. Martin*


Thomas
      W.
      Martin


Chairman,
      Chief Executive Officer and President of the Manager


(Principal
      Executive Officer)


ICON
      Capital Corp.


Manager
      of ICON Leasing Fund Eleven, LLC





*Date:
      November 16, 2007*





*/s/Michael A. Reisner*


Michael
      A. Reisner


Director,
      Executive Vice President and Chief Financial Officer of the Manager


(Principal
      Financial and Accounting Officer)


ICON
      Capital Corp.


Manager
      of ICON Leasing Fund Eleven, LLC






32