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
            June 30, 2010




or


[  ]           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)
            (I.R.S.
      Employer Identification No.)





100 Fifth Avenue, 4thFloor, New York, New York
            10011(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 has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).
 [ ]
Yes     [  ] No





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




Large
accelerated filer [  ]  Accelerated
filer [  ]  Non-accelerated filer
[X]  Smaller reporting
company [   ]





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 shares of limited liability company interests of the
registrant on August 6, 2010 is 362,654.












ICON Leasing Fund Eleven, LLC
              Table
      of ContentsPART I - FINANCIAL INFORMATION
            PageItem 1. Consolidated
      Financial StatementsConsolidated Balance Sheets
            1Consolidated Statements of
    Operations
            2Consolidated Statements of Changes in
      Equity
            3Consolidated Statements of Cash Flows
            4Notes to Consolidated Financial
    Statements
            6Item 2. Manager’s Discussion and Analysis of Financial
      Condition and Results of Operations
            20Item 3. Quantitative and Qualitative Disclosures About
      Market Risk
            29Item 4. Controls and Procedures
            29PART II – OTHER INFORMATIONItem 1. Legal Proceedings
            
            30Item 1A. Risk Factors
            
            30Item 2. Unregistered Sales of Equity Securities and Use of
      Proceeds
            30Item 3. Defaults Upon Senior
Securities
            30Item 4. (Removed
      and Reserved)
            30Item 5. Other Information
            
            30Item 6. Exhibits
            
            31Signatures
            
            32







Table of Contents





PART I – FINANCIAL INFORMATION





Item 1.  Consolidated Financial
Statements





ICON Leasing Fund Eleven, LLC(A
      Delaware Limited Liability Company)Consolidated
      Balance SheetsAssetsJune
      30,2010
            
            
            December
      31,(unaudited)
            
            
            2009Current
      assets:Cash
      and cash equivalents
            
            $
            9,375,546
            
            
            $
            18,615,323Current
      portion of net investment in finance leases
            
            
            8,353,458
            
            
            
            9,448,439Accounts
      receivable, net
            
            
            572,933
            
            
            
            594,082Current
      portion of note receivable
            
            
            2,038,246
            
            
            
            725,049Assets
      held for sale, net
            
            
            2,958,447
            
            
            
            3,813,647Other
      current assets
            
            
            1,557,041
            
            
            
            1,514,555Total
      current assets
            
            
            24,855,671
            
            
            
            34,711,095Non-current
      assets:Net
      investment in finance leases, less current portion
            
            
            12,772,578
            
            
            
            15,232,713Leased
      equipment at cost (less accumulated depreciation of$178,428,061
      and $158,488,912, respectively)
            
            
            161,698,001
            
            
            
            183,614,179Mortgage
      note receivable
            
            
            12,722,006
            
            
            
            12,722,006Note
      receivable, less current portion
            
            
            396,855
            
            
            
            9,289,951Investments
      in joint ventures
            
            
            8,702,004
            
            
            
            11,578,687Deferred
      income taxes, net
            
            
            852,615
            
            
            
            943,053Other
      non-current assets, net
            
            
            12,184,306
            
            
            
            4,029,168Total
      non-current assets
            
            
            209,328,365
            
            
            
            237,409,757Total
      Assets
            
            $
            234,184,036
            
            
            $
            272,120,852Liabilities
      and EquityCurrent
      liabilities:Current
      portion of non-recourse long-term debt
            
            $
            20,585,728
            
            
            $
            43,603,558Revolving
      line of credit, recourse
            
            
            -
            
            
            
            2,260,000Derivative
      instruments
            
            
            3,603,903
            
            
            
            5,049,327Deferred
      revenue
            
            
            780
            
            
            
            148,098Due
      to Manager and affiliates
            
            
            1,595,158
            
            
            
            300,223Accrued
      expenses and other liabilities
            
            
            3,909,083
            
            
            
            5,841,639Total
      current liabilities
            
            
            29,694,652
            
            
            
            57,202,845Non-current
      liabilities:Non-recourse
      long-term debt, less current portion
            
            
            88,492,296
            
            
            
            71,335,500Total
      Liabilities
            
            
            118,186,948
            
            
            
            128,538,345Commitments
      and contingencies (Note 14)Equity:Members'
      Equity:Additional
      members
            
            
            114,741,068
            
            
            
            139,684,262Manager
            
            
            (2,068,963
            )
            
            
            (1,820,378
            )Accumulated
      other comprehensive loss
            
            
            (2,508,340
            )
            
            
            (1,485,640
            )Total
      Members' Equity
            
            
            110,163,765
            
            
            
            136,378,244Noncontrolling
      Interests
            
            
            5,833,323
            
            
            
            7,204,263Total
      Equity
            
            
            115,997,088
            
            
            
            143,582,507Total
      Liabilities and Equity
            
            $
            234,184,036
            
            
            $
            272,120,852








1
 Table of Contents







ICON Leasing Fund Eleven, LLC(A
      Delaware Limited Liability Company)Consolidated
      Statements of Operations(unaudited)Three Months Ended June 30,
            
            
            Six Months Ended June 30,2010
            
            
            2009
            
            
            2010
            
            
            2009Revenue:Rental
      income
            
            $
            9,169,223
            
            
            $
            19,221,569
            
            
            $
            18,612,659
            
            
            $
            38,978,829Time
      charter revenue
            
            
            2,801,002
            
            
            
            300,961
            
            
            
            5,711,479
            
            
            
            300,961Finance
      income
            
            
            458,917
            
            
            
            663,448
            
            
            
            973,539
            
            
            
            1,378,597(Loss)
      income from investments in joint ventures
            
            
            (462,937
            )
            
            
            608,264
            
            
            
            (144,352
            )
            
            
            1,286,296Net
      gain on sales of  new equipment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            75,185Loss
      on assets held for sale
            
            
            (120,168
            )
            
            
            -
            
            
            
            (120,168
            )
            
            
            -Net
      (loss) gain on lease termination
            
            
            (218,890
            )
            
            
            26,138,416
            
            
            
            (218,890
            )
            
            
            26,138,416Interest
      and other income
            
            
            944,937
            
            
            
            845,382
            
            
            
            2,195,570
            
            
            
            1,645,027Total
      revenue
            
            
            12,572,084
            
            
            
            47,778,040
            
            
            
            27,009,837
            
            
            
            69,803,311Expenses:Management
      fees - Manager
            
            
            186,728
            
            
            
            1,037,758
            
            
            
            541,090
            
            
            
            2,015,688Administrative
      expense reimbursements - Manager
            
            
            507,171
            
            
            
            736,270
            
            
            
            844,995
            
            
            
            1,285,474General
      and administrative
            
            
            975,159
            
            
            
            620,622
            
            
            
            1,612,002
            
            
            
            1,197,861Vessel
      operating expense
            
            
            3,580,958
            
            
            
            313,865
            
            
            
            6,618,058
            
            
            
            313,865Interest
            
            
            1,964,220
            
            
            
            2,698,045
            
            
            
            4,076,807
            
            
            
            5,326,473Depreciation
      and amortization
            
            
            10,250,311
            
            
            
            15,209,329
            
            
            
            20,722,756
            
            
            
            29,012,767Impairment
      loss
            
            
            517,432
            
            
            
            -
            
            
            
            517,432
            
            
            
            -Gain
      on financial instruments
            
            
            (1,018,495
            )
            
            
            (27,765
            )
            
            
            (1,592,566
            )
            
            
            (21,983
            )Loss
      on guaranty
            
            
            1,355,738
            
            
            
            -
            
            
            
            1,355,738
            
            
            
            -Total
      expenses
            
            
            18,319,222
            
            
            
            20,588,124
            
            
            
            34,696,312
            
            
            
            39,130,145(Loss)
      income before income taxes
            
            
            (5,747,138
            )
            
            
            27,189,916
            
            
            
            (7,686,475
            )
            
            
            30,673,166(Provision)
      benefit for income taxes
            
            
            (103,900
            )
            
            
            513,734
            
            
            
            (105,239
            )
            
            
            125,618Net
      (loss) income
            
            
            (5,851,038
            )
            
            
            27,703,650
            
            
            
            (7,791,714
            )
            
            
            30,798,784Less:
      Net income attributable to noncontrolling interests
            
            
            167,773
            
            
            
            495,436
            
            
            
            395,118
            
            
            
            1,056,895Net
      (loss) income attributable to Fund Eleven
            
            $
            (6,018,811
            )
            
            $
            27,208,214
            
            
            $
            (8,186,832
            )
            
            $
            29,741,889Net
      (loss) income attributable to Fund Eleven allocable to:Additional
      Members
            
            $
            (5,958,623
            )
            
            $
            26,936,132
            
            
            $
            (8,104,964
            )
            
            $
            29,444,470Manager
            
            
            (60,188
            )
            
            
            272,082
            
            
            
            (81,868
            )
            
            
            297,419$
            (6,018,811
            )
            
            $
            27,208,214
            
            
            $
            (8,186,832
            )
            
            $
            29,741,889Weighted
      average number of additional shares oflimited
      liability company interests outstanding
            
            
            362,654
            
            
            
            363,152
            
            
            
            362,695
            
            
            
            363,170Net
      (loss) income attributable to Fund Eleven per weightedaverage
      additional share of limited liability company interests
      outstanding
            
            $
            (16.43
            )
            
            $
            74.17
            
            
            $
            (22.35
            )
            
            $
            81.08





See
accompanying notes to consolidated financial statements.
 2
 Table of Contents







ICON Leasing Fund Eleven, LLC(A
      Delaware Limited Liability Company)Consolidated
      Statements of Changes in EquityMembers'
      EquityAdditionalShares
      of
              Limited
      Liability
            
            
            
            
            
            
            
            
            Accumulated
      Other
            
            
            TotalCompany Interests
            
            
            AdditionalMembers
            
            
            Manager
            
            
            Comprehensive Income (Loss)
            
            
            Members' Equity
            
            
            NoncontrollingInterests
            
            
            TotalEquityBalance,
      December 31, 2009
            
            
            363,093
            
            
            $
            139,684,262
            
            
            $
            (1,820,378
            )
            
            $
            (1,485,640
            )
            
            $
            136,378,244
            
            
            $
            7,204,263
            
            
            $
            143,582,507Comprehensive
      (loss) income:Net
      (loss) income
            
            
            -
            
            
            
            (2,146,341
            )
            
            
            (21,680
            )
            
            
            -
            
            
            
            (2,168,021
            )
            
            
            227,345
            
            
            
            (1,940,676
            )Change
      in valuation of derivative instruments
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            286,189
            
            
            
            286,189
            
            
            
            -
            
            
            
            286,189Currency
      translation adjustments
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (573,772
            )
            
            
            (573,772
            )
            
            
            -
            
            
            
            (573,772
            )Total
      comprehensive (loss) income
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (287,583
            )
            
            
            (2,455,604
            )
            
            
            227,345
            
            
            
            (2,228,259
            )Shares
      of limited liability company interests repurchased
            
            
            (439
            )
            
            
            (333,216
            )
            
            
            -
            
            
            
            -
            
            
            
            (333,216
            )
            
            
            -
            
            
            
            (333,216
            )Cash
      distributions
            
            
            -
            
            
            
            (8,254,346
            )
            
            
            (83,377
            )
            
            
            -
            
            
            
            (8,337,723
            )
            
            
            (883,910
            )
            
            
            (9,221,633
            )Balance,
      March 31, 2010 (unaudited)
            
            
            362,654
            
            
            
            128,950,359
            
            
            
            (1,925,435
            )
            
            
            (1,773,223
            )
            
            
            125,251,701
            
            
            
            6,547,698
            
            
            
            131,799,399Comprehensive
      (loss) income:Net
      (loss) income
            
            
            -
            
            
            
            (5,958,623
            )
            
            
            (60,188
            )
            
            
            -
            
            
            
            (6,018,811
            )
            
            
            167,773
            
            
            
            (5,851,038
            )Change
      in valuation of derivative instruments
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            74,993
            
            
            
            74,993
            
            
            
            -
            
            
            
            74,993Currency
      translation adjustments
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (810,110
            )
            
            
            (810,110
            )
            
            
            -
            
            
            
            (810,110
            )Total
      comprehensive (loss) income
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (735,117
            )
            
            
            (6,753,928
            )
            
            
            167,773
            
            
            
            (6,586,155
            )Cash
      distributions
            
            
            -
            
            
            
            (8,250,668
            )
            
            
            (83,340
            )
            
            
            -
            
            
            
            (8,334,008
            )
            
            
            (882,148
            )
            
            
            (9,216,156
            )Balance,
      June 30, 2010 (unaudited)
            
            
            362,654
            
            
            $
            114,741,068
            
            
            $
            (2,068,963
            )
            
            $
            (2,508,340
            )
            
            $
            110,163,765
            
            
            $
            5,833,323
            
            
            $
            115,997,088









3
 Table of Contents







ICON Leasing Fund Eleven, LLC(A
      Delaware Limited Liability Company)Consolidated
      Statements of Cash Flows(unaudited)Six Months Ended June 30,2010
            
            
            2009Cash
      flows from operating activities:Net
      (loss) income
            
            $
            (7,791,714
            )
            
            $
            30,798,784Adjustments
      to reconcile net (loss) income to net cashprovided
      by operating activities:Rental
      income paid directly to lenders by lessees
            
            
            (6,052,000
            )
            
            
            (6,120,000
            )Finance
      income
            
            
            (973,539
            )
            
            
            (1,378,597
            )Income
      from investments in joint ventures
            
            
            144,352
            
            
            
            (1,286,296
            )Net
      gain on sales of leased equipment
            
            
            -
            
            
            
            (75,185
            )Loss
      on assets held for sale
            
            
            120,168
            
            
            
            -Net
      loss (gain) on lease termination
            
            
            218,890
            
            
            
            (14,624,054
            )Depreciation
      and amortization
            
            
            20,722,756
            
            
            
            29,012,767Impairment
      loss
            
            
            517,432
            
            
            
            -Amortization
      of deferred time charter expense
            
            
            466,331
            
            
            
            126,041Interest
      expense on non-recourse financing paid directly to lenders by
      lessees
            
            
            1,766,499
            
            
            
            2,112,352Interest
      expense from amortization of debt financing costs
            
            
            146,034
            
            
            
            149,384Gain
      on financial instruments
            
            
            (1,592,566
            )
            
            
            (430,983
            )Loss
      on guaranty
            
            
            1,355,738
            
            
            
            -Deferred
      tax expense (benefit)
            
            
            93,129
            
            
            
            (385,797
            )Changes
      in operating assets and liabilities:Collection
      of finance leases
            
            
            4,457,065
            
            
            
            3,602,669Accounts
      receivable
            
            
            8,020
            
            
            
            (2,023,275
            )Other
      assets, net
            
            
            (9,074,704
            )
            
            
            (245,507
            )Payables,
      deferred revenue and other current liabilities
            
            
            (1,997,055
            )
            
            
            (1,561,120
            )Due
      to/from Manager and affiliates
            
            
            (137,181
            )
            
            
            229,033Distributions
      from joint ventures
            
            
            573,503
            
            
            
            1,286,296Net
      cash provided by operating activities
            
            
            2,971,158
            
            
            
            39,186,512Cash
      flows from investing activities:Proceeds
      from sales of new and leased equipment
            
            
            217,600
            
            
            
            580,832Repayments
      of note receivable
            
            
            7,579,899
            
            
            
            -Other
      assets
            
            
            (517
            )
            
            
            (3,859,923
            )Distributions
      received from joint ventures in excess of profits
            
            
            2,158,828
            
            
            
            2,827,930Net
      cash provided by (used in) investing activities
            
            
            9,955,810
            
            
            
            (451,161
            )Cash
      flows from financing activities:Repayments
      of non-recourse long-term debt
            
            
            (1,147,500
            )
            
            
            (24,850,000
            )Proceeds
      from revolving line of credit, recourse
            
            
            -
            
            
            
            2,260,000Repayments
      of revolving line of credit, recourse
            
            
            (2,260,000
            )
            
            
            -Shares
      of limited liability company interests repurchased
            
            
            (333,216
            )
            
            
            (80,647
            )Cash
      distributions to members
            
            
            (16,671,731
            )
            
            
            (16,691,547
            )Distributions
      to noncontrolling interests
            
            
            (1,766,058
            )
            
            
            (3,178,922
            )Net
      cash used in financing activities
            
            
            (22,178,505
            )
            
            
            (42,541,116
            )Effects
      of exchange rates on cash and cash equivalents
            
            
            11,760
            
            
            
            (32,289
            )Net
      decrease in cash and cash equivalents
            
            
            (9,239,777
            )
            
            
            (3,838,054
            )Cash
      and cash equivalents, beginning of period
            
            
            18,615,323
            
            
            
            7,670,929Cash
      and cash equivalents, end of period
            
            $
            9,375,546
            
            
            $
            3,832,875









4
 Table of Contents





ICON
      Leasing Fund Eleven, LLC(A
      Delaware Limited Liability Company)Consolidated
      Statements of Cash Flows(unaudited)Six Months Ended June 30,2010
            
            
            2009Supplemental
      disclosure of cash flow information:Cash
      paid during the period for interest
            
            $
            1,743,199
            
            
            $
            2,932,098Principal
      and interest paid on non-recourse long-term debtdirectly
      to lenders by lessees
            
            $
            6,052,000
            
            
            $
            6,120,000









5
 Table of Contents
 ICON Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 June 30,
2010
 (unaudited)




(1)
              Organization
  ICON
Leasing Fund Eleven, LLC (the “LLC”) was formed on December 2, 2004, as a
Delaware limited liability company. The LLC is engaged in one business
segment, the business of purchasing equipment and leasing it to third parties,
providing equipment and other financing, acquiring equipment subject to lease
and, to a lesser degree, acquiring ownership rights to items of leased equipment
at lease expiration. The LLC will continue until December 31, 2024, unless
terminated sooner.





The LLC’s
principal investment objective is to obtain the maximum economic return from its
investments for the benefit of its members.  To achieve this
objective, the LLC: (i) acquires a diversified portfolio by making investments
in leases, notes receivable and other financing transactions; (ii) makes monthly
cash distributions, at the LLC’s manager’s discretion, to its members commencing
with each member’s admission to the LLC, continuing until the end of the
operating period; (iii) reinvests substantially all undistributed cash from
operations and cash from sales of equipment and other financing transactions
during the operating period; and (iv) will dispose of its investments and
distribute the excess cash from such dispositions to its members beginning with
the commencement of the liquidation period. The LLC is currently in its
operating period, which commenced in April 2007.





The
manager of the LLC is ICON Capital Corp., a Delaware corporation (the
“Manager”).  The Manager manages and controls the business affairs of
the LLC, including, but not limited to, the equipment leases and other financing
transactions that the LLC enters into pursuant to the terms of the LLC’s amended
and restated limited liability company agreement (the “LLC
Agreement”).  Additionally, the Manager has a 1% interest in the
profits, losses, cash distributions and liquidation proceeds of the
LLC.




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 (a) received cash distributions and liquidation
proceeds sufficient to reduce its adjusted capital account to zero and (b)
received, in addition, other distributions and allocations that would provide an
8% per year cumulative return, compounded daily, on its outstanding adjusted
capital account. After such time, distributions will be allocated 90% to the
additional members and 10% to the Manager.





(2)
            Basis
      of Presentation and Consolidation





The
accompanying consolidated financial statements of the LLC have been prepared in
accordance with U.S. generally accepted accounting principles (“US 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. In the
opinion of the Manager, all adjustments considered necessary for a fair
presentation have been included. These 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, 2009.
The results for the interim period are not necessarily indicative of the results
for the full year.







6
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 June 30,
2010
 (unaudited)


(2)
            Basis
      of Presentation and Consolidation -
continued





The
consolidated financial statements include the accounts of the LLC and its
majority-owned subsidiaries and other controlled entities. All intercompany
accounts and transactions have been eliminated in consolidation. In joint
ventures where the LLC has majority ownership, the financial condition and
results of operations of the joint venture are
consolidated.  Noncontrolling interest represents the minority owner’s
proportionate share of its equity in the joint venture. The noncontrolling
interest is adjusted for the minority owner’s share of the earnings, losses,
investments and distributions of the joint venture.





The LLC
accounts for its noncontrolling interests in joint ventures where the LLC has
influence over financial and operational matters, generally 50% or less
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 policy.





Use of
Estimates





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





Reclassifications





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





Recently
Adopted Accounting Pronouncements





In June
2009, the Financial Accounting Standards Board (“FASB”) issued an update to
Accounting Standard Codification 810 – Consolidation (“ASC 810”). The update
amends the consolidation guidance applicable to variable interest entities
(“VIEs”) and changes how a reporting entity evaluates whether an entity is
considered the primary beneficiary of a VIE and is therefore required to
consolidate such VIE. ASC 810 also requires assessments at each reporting period
of which party within the VIE is considered the primary beneficiary and requires
a number of new disclosures related to VIEs.  The adoption of this
guidance, effective January 1, 2010, did not have a material impact on the
LLC’s consolidated financial statements.






7
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 June 30,
2010
 (unaudited)
 (2)
              Basis
      of Presentation and Consolidation -
continued


In
January 2010, the FASB issued Accounting Standards Update 2010-06, Fair Value
Measurements and Disclosures (Topic 820), Improving Disclosures about Fair Value
Measurements (“ASU 2010-06”), amending Accounting Standards Codification 820.
ASU 2010-06 requires new disclosures and clarifies existing disclosures on fair
value measurements.  It requires new disclosures including (i)
separate disclosure of the amounts of significant transfers in and out of Level
1 and Level 2 fair value measurements and a description of the reasons for the
transfers and (ii) separate presentation of information about purchases, sales,
issuances and settlements in the reconciliation of Level 3 fair value
measurements. This update also clarifies existing disclosures requiring the LLC
to (i) determine each class of assets and liabilities based on the nature and
risks of the investments rather than by major security type and (ii) for each
class of assets and liabilities, disclose the valuation techniques and inputs
used to measure fair value for both Level 2 and Level 3 fair value
measurements. The new disclosures and clarifications of existing
disclosures are effective for interim and annual reporting periods beginning
after December 15, 2009, except for the disclosures about purchases, sales,
issuances, and settlements in Level 3 fair value measurements, which are
effective for fiscal years beginning after December 15, 2010. The adoption
of ASU 2010-06 did not have a material effect on the LLC’s consolidated
financial statements.




(3)
              Net
      Investment in Finance Leases


Net
investment in finance leases consisted of the following:





June
      30,
            
            
            December
      31,2010
            
            
            2009Minimum
      rents receivable
            
            $
            19,854,720
            
            
            $
            24,311,785Estimated
      residual values
            
            
            3,070,295
            
            
            
            3,070,295Initial
      direct costs, net
            
            
            290,309
            
            
            
            361,899Unearned
      income
            
            
            (2,089,288
            )
            
            
            (3,062,827
            )Net
      investment in finance leases
            
            
            21,126,036
            
            
            
            24,681,152Less:
      Current portion of net investment in finance leases
            
            
            8,353,458
            
            
            
            9,448,439Net
      investment in finance leases, less current portion
            
            $
            12,772,578
            
            
            $
            15,232,713







8
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 June 30,
2010
 (unaudited)
 (4)
              Leased
      Equipment at Cost


Leased
equipment at cost consisted of the following:





June
      30,
            
            
            December
      31,2010
            
            
            2009Marine
      vesselsContainer
      vessels
            
            $
            107,353,324
            
            
            $
            107,353,324Handymax
      product tankers
            
            
            109,270,860
            
            
            
            109,270,860Aframax
      product tankers
            
            
            90,798,632
            
            
            
            90,798,632Manufacturing
      equipment
            
            
            27,123,748
            
            
            
            29,100,777Telecommunications
      equipment
            
            
            5,579,498
            
            
            
            5,579,498340,126,062
            
            
            
            342,103,091Less:
      Accumulated depreciation
            
            
            178,428,061
            
            
            
            158,488,912$
            161,698,001
            
            
            $
            183,614,179





Depreciation
expense was $10,183,706 and $15,105,729 for the three months ended June 30, 2010
and 2009, respectively.  Depreciation expense was $20,608,944 and
$28,803,009 for the six months ended June 30, 2010 and 2009,
respectively.




Manufacturing
Equipment
  On April
15, 2009, Groupe Henri Heuliez (the guarantor of the LLC’s leases with Heuliez
SA (“HSA”) and Heuliez Investissements SNC (with HSA, “Heuliez”)) and HSA filed
for “Redressement Judiciaire,” a proceeding under French law similar to a
Chapter 11 reorganization under the U.S. Bankruptcy Code. Heuliez subsequently
filed for Redressement Judiciaire on June 10, 2009. Since the time of the
Redressement Judiciaire filings, two French government agencies agreed to
provide Heuliez with financial support and a third party, Bernard Krief
Consultants (“BKC”), agreed to purchase Heuliez. On July 8, 2009, the French
Commercial Court approved the sale of Heuliez to BKC, which approval included
the transfer of the LLC’s leases. Subsequently, BKC defaulted on its obligation
to purchase Heuliez and Heuliez re-entered Redressement Judiciaire. On June 30,
2010, the administrator for the Redressement Judiciaire sold Heuliez to Baelen
Gaillard (“Baelen”). The LLC and Baelen have agreed to restructure the LLC’s
leases so that the LLC can recover its investment.


(5)
            Assets
      Held for Sale





On June 2, 2010, ICON EAR II, LLC
(“ICON EAR II”), a wholly-owned subsidiary of the LLC, in conjunction with ICON
EAR, LLC (“ICON EAR”), a joint venture owned 45% by the LLC and 55% by ICON
Leasing Fund Twelve, LLC (“Fund Twelve”), sold a parcel of real property in
Jackson Hole, Wyoming that was received as additional security under their
respective leases with Equipment Acquisition Resources, Inc. (“EAR”) for
the aggregate net purchase price of approximately $757,000.  As a
result, the LLC recorded a loss on sale of approximately $120,000, which was
included in loss on assets held for sale. In
addition, on June 7, 2010, ICON EAR II and ICON EAR received judgments in New
York State Supreme Court against two principals of EAR who had guaranteed EAR’s
lease obligations.  ICON EAR II and ICON EAR are in the process of having
the judgments recognized in Illinois, where the principals live.  At this
time, it is not possible to determine the abilities of ICON EAR II and ICON EAR
to collect the amounts due under their respective leases from EAR’s
principals.




The Manager periodically reviews the
significant assets in the LLC’s portfolio to determine whether events or changes
in circumstances indicate that the net book value of an asset may not be
recoverable. In light of recent developments in the real estate market and the
sale of a parcel of real property located in Jackson Hole, Wyoming on June 2,
2010, the Manager reviewed the LLC’s investment in ICON EAR II.





Based on the Manager’s review, the net
book value of the remaining parcels of real property located in Jackson Hole,
Wyoming exceeded their fair market value.  As a result, ICON EAR II
recognized a non-cash impairment charge of approximately $517,000.






9
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 June 30,
2010
 (unaudited)
  (6)
                    Promissory
      Note
 
 On April
13, 2010, Cerion MPI, LLC (“Cerion MPI”) made an unscheduled principal payment
on the promissory note in the amount of approximately $6,704,000.  On
June 22, 2010, Cerion MPI made an additional unscheduled principal payment on
the promissory note in the amount of $500,000.  On July 26, 2010,
Cerion MPI satisfied in full its remaining obligations under the promissory
note.
 (7)
                Non-Recourse
      Long-Term Debt





The LLC had the following non-recourse
long-term debt:





June
      30,
            
            
            December
      31,2010
            
            
            2009ICON
      European Container, LLC
            
            $
            19,000,178
            
            
            $
            19,112,200ICON
      European Container II, LLC
            
            
            26,954,732
            
            
            
            26,905,800ICON
      Senang, LLC
            
            
            18,811,557
            
            
            
            21,210,529ICON
      Sebarok, LLC
            
            
            18,811,557
            
            
            
            21,210,529ICON
      Doubtless, LLC
            
            
            6,375,000
            
            
            
            6,625,000ICON
      Spotless, LLC
            
            
            6,375,000
            
            
            
            6,625,000ICON
      Faithful, LLC
            
            
            6,375,000
            
            
            
            6,625,000Isomar
      Marine Company Limited
            
            
            6,375,000
            
            
            
            6,625,000Total
      non-recourse long-term debt
            
            
            109,078,024
            
            
            
            114,939,058Less:
      Current portion of non-recourse long-term debt
            
            
            20,585,728
            
            
            
            43,603,558Total
      non-recourse long-term debt, less current portion
            
            $
            88,492,296
            
            
            $
            71,335,500





Container
Vessels





On
February 9, 2010, the LLC, through its wholly-owned subsidiaries, ICON European
Container, LLC (“ICON European Container”) and ICON European Container II, LLC
(“ICON European Container II”), amended the facility agreement (the “HSH Loan
Agreement”) with HSH Nordbank AG (“HSH”) to correspond with the revised payment
schedule in the bareboat charters for the container vessels, the M/V ZIM Andaman
Sea (f/k/a ZIM America), the M/V ZIM Japan Sea, the M/V ZIM Hong Kong and the
M/V ZIM Israel (collectively, the “ZIM Vessels”), all of which had been amended
in October 2009.  This amendment also cured the default under the HSH
Loan Agreement as of December 31, 2009.





Handymax Product
Tankers




On
September 23, 2009, ICON Doubtless, LLC (“ICON Doubtless”), ICON Faithful, LLC
(“ICON Faithful”), ICON Spotless, LLC (“ICON Spotless”), and Isomar Marine
Company Limited (“Isomar Marine Company”) (collectively, the “Top Ships
Purchasers”) defaulted on the two-year non-recourse long-term loan (the “New
Fortis Loan”) with Fortis Bank NV/SA (“Fortis”) due to their failure to make
required payments under the agreement.  On April 1, 2010, the LLC,
through the Top Ships Purchasers, amended the terms of the New Fortis Loan. In
connection with the amendment of the New Fortis Loan, Fortis agreed to waive all
defaults under the loan and the Top Ships Purchasers paid $1,000,000 towards
repayment of the outstanding balance of the non-recourse long-term debt related
to the M/T Doubtless, the M/T Faithful, the M/T Spotless and the M/T Vanguard
(collectively, the “Top Ships Vessels”) and paid $2,000,000 towards funding the
operation of the Top Ships Vessels.  In addition, in accordance with
the amendments to the New Fortis Loan, the Top Ships Purchasers paid an
additional $1,000,000 towards funding the operation of the Top Ships
Vessels.  Accordingly, management reclassified approximately
$23,900,000 of the current portion of the non-recourse long-term debt to
non-current as of March 31, 2010.




10
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 June 30,
2010
 (unaudited)
 (7)
                Non-Recourse
      Long-Term Debt - continued


On April
30, 2010, in connection with the amendment of the New Fortis Loan, ICON
Doubtless, ICON Spotless, and Isomar Marine Company extended the term of their
underlying time charters until November 2010. On May 29, 2010, ICON Faithful
entered into a ten-month time charter for the M/T Faithful.





As of
June 30, 2010 and December 31, 2009, the LLC had net debt financing costs of
$417,921 and $563,955, respectively. For the three months ended June 30, 2010
and 2009, the amortization of debt financing costs resulted in the recognition
of interest expense of $70,629 and $72,607, respectively.  For the six
months ended June 30, 2010 and 2009, the amortization of debt financing costs
resulted in the recognition of interest expense of $146,034 and $149,384,
respectively.





The
aggregate maturities of non-recourse long-term debt over the next five years
were as follows at June 30, 2010. There are no additional maturities of
non-recourse long-term debt after 2014.





For
      the period July 1 to December 31, 2010
            
            $
            12,242,524For
      the year ending December 31, 2011
            
            
            17,366,800For
      the year ending December 31, 2012
            
            
            43,060,700For
      the year ending December 31, 2013
            
            
            5,325,000For
      the year ending December 31, 2014
            
            
            31,083,000$
            109,078,024





(8)
            Revolving
      Line of Credit, Recourse





The LLC
and certain entities managed by the Manager, ICON Income Fund Eight B L.P., ICON
Income Fund Nine, LLC, ICON Income Fund Ten, LLC (“Fund Ten”), Fund Twelve and
ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P. (collectively,
the “Borrowers”), are parties to a Commercial Loan Agreement, as amended (the
“Loan Agreement”), with California Bank & Trust (“CB&T”). The Loan
Agreement provides for a revolving line of credit of up to $30,000,000 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. At June 30, 2010, no amounts were
accrued related to the LLC’s joint and several obligations 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 and loans in which the Borrowers have
a beneficial interest.





The
Facility expires on June 30, 2011 and the Borrowers may request a one year
extension to the revolving line of credit within 390 days of the then-current
expiration date, but CB&T has no obligation to extend. The interest rate for
general advances under the Facility is CB&T’s prime rate and the interest
rate on up to five separate non-prime rate advances that are permitted to be
made under the Facility is the rate at which U.S. dollar deposits can be
acquired by CB&T in the London Interbank Eurocurrency Market plus 2.5% per
year, provided that neither interest rate is permitted to be less than 4.0% per
year. The interest rate at June 30, 2010 was 4.0%. In addition, the Borrowers
are obligated to pay a quarterly commitment fee of 0.50% on unused commitments
under the Facility.




11
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 June 30,
2010
 (unaudited)




(8)
            Revolving
      Line of Credit, Recourse -
continued





Aggregate
borrowings by all Borrowers under the Facility amounted to $1,350,000
at June 30, 2010, all of which was borrowed by Fund Ten.  Subsequent
to June 30, 2010, Fund Ten repaid $1,350,000, which reduced its outstanding loan
balance to $0.





Pursuant
to the Loan Agreement, the Borrowers are required to comply with certain
covenants. At June 30, 2010, the Borrowers were in compliance with all
covenants.





(9)
            Foreign
      Income Taxes





Certain
of the LLC’s 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 three months ended June 30, 2010, the
provision for income taxes was comprised of $12,110 in current taxes and $91,790
in deferred taxes. For the six months ended June 30, 2010, the provision for
income taxes was comprised of $12,110 in current taxes and $93,129 in deferred
taxes. The LLC’s Canadian subsidiaries, under the laws of Canada, are subject to
income tax examination for the 2006 through 2009 periods. The LLC has not
identified any uncertain tax positions as of June 30, 2010.





As of
June 30, 2010, the LLC has a net deferred tax asset of approximately $105,000
relating to (i) net operating losses that are currently expected to expire
starting in 2027 through 2028 and (ii) a net unrealized capital loss on foreign
currency for a note receivable.  This deferred tax asset has a full
valuation allowance.  The remaining components of the deferred income
taxes reflect the net tax effects of temporary differences between the carrying
amounts of assets and liabilities for financial reporting for income tax
purposes.





(10)
            Transactions
      with Related Parties





In
accordance with the terms of the LLC Agreement, the LLC pays or paid the Manager
(i) management fees ranging from 1% to 7% based on a percentage of the rentals
and other contractual payments 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 purchase price of the LLC’s investments.  In
addition, the Manager is reimbursed for administrative expenses incurred in
connection with the LLC’s operations. The Manager also has a 1% interest in
the LLC’s profits, losses, cash distributions and liquidation
proceeds.







The
Manager performs certain services relating to the management of the LLC’s
equipment leasing and other financing activities.  Such services
include, but are not limited to, the collection of lease
payments from the lessees of the equipment or loan payments from borrowers,
re-leasing services in connection with equipment which is off-lease, inspections
of the equipment, liaising with and general supervision of lessees and borrowers
to ensure 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.




12
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 June 30,
2010
 (unaudited)


(10)
            Transactions
      with Related Parties - continued





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 costs, 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, office rent, travel expenses
and other administrative costs incurred by individuals with a controlling
interest in the Manager.





During
the six months ended June 30, 2010, the Manager suspended the collection of a
portion of its management fees.





Fees and
other expenses paid or accrued by the LLC to the Manager or its affiliates were
as follows:




Three
      Months Ended June 30,
            
            
            Six
      Months Ended June 30,Entity
            
            Capacity
            
            Description
            
            2010
            
            
            2009
            
            
            2010
            
            
            2009ICON
      Capital Corp.
            
            Manager
            
            Management
      fees (1) (2)
            
            $
            186,728
            
            
            $
            1,037,758
            
            
            $
            541,090
            
            
            $
            2,015,688ICON
      Capital Corp.
            
            Manager
            
            Administrative
      expense reimbursements (1)
            
            
            507,171
            
            
            
            736,270
            
            
            
            844,995
            
            
            
            1,285,474$
            693,899
            
            
            $
            1,774,028
            
            
            $
            1,386,085
            
            
            $
            3,301,162(1)  Charged
      directly to operations.(2) 
      The Manager suspended the collection of a portion of its management fees
      in the amount of $308,328 and $492,689 during the three and six months
      ended June 30, 2010, respectively.




At June
30, 2010, the LLC had an obligation of $1,595,158 due to the Manager and
affiliates, which consisted primarily of an accrued obligation in the amount of
approximately $1,356,000 to Fund Twelve in connection with the credit support
agreement (see Note 14) and a payable to the Manager for administrative expense
reimbursements.


(11)
              Derivative
      Financial Instruments


The LLC
may enter into derivative transactions for purposes of hedging specific
financial exposures, including movements in foreign currency exchange rates and
changes in interest rates on its non-recourse long-term debt. The LLC enters
into these instruments only for hedging underlying exposures. The LLC does not
hold or issue derivative financial instruments for purposes other than hedging,
except for warrants, which are not hedges.  Certain derivatives may
not meet the established criteria to be designated as qualifying accounting
hedges, even though the LLC believes that these are effective economic
hedges.






13
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 June 30,
2010
 (unaudited)





(11)
            Derivative
      Financial Instruments -continued





The LLC
accounts for derivative financial instruments in accordance with the accounting
pronouncements that established accounting and reporting standards for
derivative financial instruments. These accounting pronouncements require the
LLC to recognize all derivatives as either assets or liabilities on the
consolidated balance sheets and measure those instruments at fair value. The LLC
recognizes the fair value of all derivatives as either assets or liabilities on
the consolidated balance sheets and changes in the fair value of such
instruments are recognized immediately in earnings unless certain accounting
criteria established by the accounting pronouncements are met. These criteria
demonstrate that the derivative is expected to be highly effective at offsetting
changes in the fair value or expected cash flows of the underlying exposure at
both the inception of the hedging relationship and on an ongoing basis and
include an evaluation of the counterparty risk and the impact, if any, on the
effectiveness of the derivative. If these criteria are met, which the LLC must
document and assess at inception and on an ongoing basis, the LLC recognizes the
changes in fair value of such instruments in accumulated other comprehensive
income or loss (“AOCI”), a component of equity on the consolidated balance
sheets. Changes in the fair value of the ineffective portion of all derivatives
are recognized immediately in earnings.





Interest
Rate Risk





The LLC’s
objectives in using interest rate derivatives are to add stability to interest
expense and to manage its exposure to interest rate movements on its variable
non-recourse debt. The LLC’s hedging strategy to accomplish this objective is to
match the projected future cash flows with the underlying debt service. Interest
rate swaps designated as cash flow hedges involve the receipt of floating-rate
interest payments from a counterparty in exchange for the LLC making fixed
interest rate payments over the life of the agreements without exchange of the
underlying notional amount.





As of
June 30, 2010, the LLC had four floating-to-fixed interest rate swaps relating
to ICON Senang, LLC, ICON Sebarok, LLC, ICON European Container and ICON
European Container II designated and qualifying as cash flow hedges with an
aggregate notional amount of approximately $66,143,000.  These
interest rate swaps have maturity dates ranging from November 19, 2010 to April
11, 2012.





For these
derivatives, the LLC records the gain or loss from the effective portion of
changes in the fair value of derivatives designated and qualifying as cash flow
hedges in AOCI and such gain or loss is subsequently reclassified into earnings
in the period that the hedged forecasted transaction affects earnings and within
the same line item on the statements of operations as the impact of the hedged
transaction. During the three and six months ended June 30, 2010, the LLC
recorded $1,020,827 and $1,596,687 of hedge ineffectiveness in earnings,
respectively. At June 30, 2010, the total unrealized loss recorded to AOCI
related to the change in fair value of these interest rate swaps was
approximately $1,501,000.





During
the twelve months ending June 30, 2011, the LLC estimates that approximately
$2,291,000 will be transferred from AOCI to interest expense.







14
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 June 30,
2010
 (unaudited)


(11)
            Derivative
      Financial Instruments -continued





Non-designated
Derivatives





The
LLC holds an interest rate swap with a notional balance of approximately
$19,829,000 that is not speculative and is used to meet the LLC’s objectives in
using interest rate derivatives to add stability to interest expense and to
manage its exposure to interest rate movements. The LLC’s strategy to
accomplish this objective is to match the projected future cash flows with the
underlying debt service. The interest rate swap involves the receipt of
floating-rate interest payments from a counterparty in exchange for the LLC
making fixed interest rate payments over the life of the agreement without
exchange of the underlying notional amount. Additionally, the LLC holds
warrants that are held for purposes other than hedging. All changes in the
fair value of the interest rate swap not designated as a hedge and the warrants
are recorded directly in earnings.





The table
below presents the fair value of the LLC’s derivative financial instruments as
well as their classification within the LLC’s consolidated balance sheets as of
June 30, 2010 and December 31, 2009:




Asset Derivatives
            
            
            
            Liability DerivativesJune
      30,
            
            
            December
      31,
            
            
            
            June
      30,
            
            
            December
      31,2010
            
            
            2009
            
            
            
            2010
            
            
            2009Balance Sheet Location
            
            Fair Value
            
            
            Fair Value
            
            Balance Sheet Location
            
            Fair Value
            
            
            Fair ValueDerivatives
      designated as hedginginstruments:Interest
      rate swaps
            
            
            $
            -
            
            
            $
            -
            
            Derivative
      instruments
            
            $
            2,869,468
            
            
            $
            3,942,837Derivatives
      not designated as hedginginstruments:Interest
      rate swaps
            
            
            $
            -
            
            
            $
            -
            
            Derivative
      instruments
            
            $
            734,435
            
            
            $
            1,106,490Warrants
            Other
      non-current assets
            
            $
            75,250
            
            
            $
            79,371
            
            
            
            $
            -
            
            
            $
            -




The
tables below present the effect of the LLC’s derivative financial instruments
designated ascash
flow hedging instruments on the consolidated statements of operations for the
three and six months ended June 30, 2010:





Three Months Ended June 30, 2010Derivatives
            
            Amount
      of Gain (Loss) Recognized
              in
      AOCI on Derivative (Effective Portion)
            
            Location
      of Gain (Loss) Reclassified
              from
      AOCI into Income (Effective Portion)
            
            Gain (Loss)
      Reclassified from
              AOCI
      into Income (Effective Portion)
            
            Location
      of Gain (Loss) Recognized in Incomeon
      Derivative (Ineffective
              Portion
      and Amounts Excluded
              from
      Effectiveness Testing)
            
            Gain (Loss)
      Recognized in IncomeonDerivative
              (Ineffective
      Portionand
      Amounts Excludedfrom
      Effectiveness Testing)Interest
      rate swaps
            
            $
            (705,885
            )
            Interest
      expense
            
            $
            (780,878
            )
            Gain
      (loss) on financial instruments
            
            $
            -




15
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 June 30,
2010
 (unaudited)
 (11)
                Derivative
      Financial Instruments – continued


Six Months Ended June 30, 2010Derivatives
            
            Amount
      of Gain (Loss) Recognized
              in
      AOCI on Derivative (Effective Portion)
            
            Location
      of Gain (Loss) Reclassified
              from
      AOCI into Income (Effective Portion)
            
            Gain (Loss)
      Reclassified from
              AOCI
      into Income (Effective Portion)
            
            Location
      of Gain (Loss) Recognized in Incomeon
      Derivative (Ineffective Portion and Amounts Excluded
              from
      Effectiveness Testing)
            
            Gain (Loss)
      Recognized in Incomeon
      Derivative
              (Ineffective
      Portion and Amounts Excluded from Effectiveness Testing)Interest
      rate swaps
            
            $
            (1,250,601
            )
            Interest
      expense
            
            $
            (1,611,783
            )
            Gain
      (loss) on financial instruments
            
            $
            -




The
tables below present the effect of the LLC’s derivative financial instruments
designated ascash
flow hedging instruments on the consolidated statements of operations for the
three and six months ended June 30, 2009:





Three Months Ended June 30, 2009Derivatives
            
            Amount
      of Gain (Loss) Recognized
              in
      AOCI on Derivative (Effective Portion)
            
            Location
      of Gain (Loss) Reclassified
              from
      AOCI into Income (Effective Portion)
            
            Gain (Loss)
      Reclassified from
              AOCI
      into Income (Effective Portion)
            
            Location
      of Gain (Loss) Recognized in Incomeon
      Derivative (Ineffective Portion and Amounts Excluded
              from
      Effectiveness Testing)
            
            Gain (Loss)
      Recognized in Incomeon
      Derivative (Ineffective Portion and Amounts Excluded from Effectiveness
      Testing)Interest
      rate swaps
            
            $
            3,444
            
            Interest
      expense
            
            $
            (1,779,607
            )
            Gain
      (loss) on financial instruments
            
            $
            -




Six Months Ended June 30, 2009Derivatives
            
            Amount
      of Gain (Loss) Recognized
              in
      AOCI on Derivative (Effective Portion)
            
            Location
      of Gain (Loss) Reclassified
              from
      AOCI into Income (Effective Portion)
            
            Gain (Loss)
      Reclassified from
              AOCI
      into Income (Effective Portion)
            
            Location
      of Gain (Loss) Recognized in Incomeon
      Derivative (Ineffective Portion and Amounts Excluded
              from
      Effectiveness Testing)
            
            Gain (Loss)
      Recognized in Incomeon
      Derivative (Ineffective Portion and Amounts Excluded from Effectiveness
      Testing)Interest
      rate swaps
            
            $
            80,099
            
            Interest
      expense
            
            $
            (2,767,638
            )
            Gain
      (loss) on financial instruments
            
            $
            -







16
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 June 30,
2010
 (unaudited)
 (11)
                Derivative
      Financial Instruments –
continued





The LLC’s
derivative financial instruments not designated as hedging instruments generated
a gain on financial instruments on the consolidated statements of operations for
the three and six months ended June 30, 2010 of $1,018,495 and $1,592,566,
respectively. The LLC’s derivative financial instruments not designated as
hedging instruments generated a gain on financial instruments on the
consolidated statements of operations for the three and six months ended June
30, 2009 of $27,765 and $21,983, respectively. The gain (loss) recorded for the
three months ended June 30, 2010 was comprised of a gain of $1,020,827 relating
to interest rate swap contracts and a loss of $2,332 relating
to warrants. The gain (loss) recorded for the six months ended June 30, 2010 was
comprised of a gain of $1,596,687 relating to interest rate swap contracts and a
loss of $4,121 relating to warrants. The gain recorded for the three months
ended June 30, 2009 was comprised of a gain of $25,255 relating to an interest
rate swap contract and a gain of $2,510 relating to warrants. The gain recorded
for the six months ended June 30, 2009 was comprised of a gain of $25,255
relating to interest rate swap contracts and a loss of $3,272 relating to
warrants.





Derivative
Risks





The LLC
manages exposure to possible defaults on derivative financial instruments by
monitoring the concentration of risk that the LLC has with any individual bank
and through the use of minimum credit quality standards for all counterparties.
The LLC does not require collateral or other security in relation to derivative
financial instruments. Since it is the LLC’s policy to enter into derivative
contracts with banks of internationally acknowledged standing only, the LLC
considers the counterparty risk to be remote.





As of
June 30, 2010, the fair value of the derivatives in a liability position was
$3,603,903. In the event that the LLC would be required to settle its
obligations under the agreements as of June 30, 2010, the termination value
would be $3,679,193.





(12)
            Accumulated
      Other Comprehensive Loss





AOCI
included accumulated losses on derivative financial instruments and accumulated
losses on currency translation adjustments of $1,500,752 and $1,007,588,
respectively, at June 30, 2010 and accumulated losses on derivative financial
instruments of $1,861,934 and accumulated gains on currency translation
adjustments of $376,294 at December 31, 2009.





Total
comprehensive loss for the three and six months ended June 30, 2010 was
$6,586,155 and $8,814,414, which included: (i) net loss of $5,851,038 and
$7,791,714, (ii) the net change in unrealized gain on derivative financial
instruments of $74,993 and $361,182 and (iii) the net change in unrealized loss
on currency translation adjustments of $810,110 and $1,383,882, respectively.
Total comprehensive income for the three and six months ended June 30, 2009 was
$30,180,483 and $33,578,597, which included: (i) net income of $27,703,650 and
$30,798,784, (ii) the net change in unrealized gain on derivative financial
instruments of $1,783,051 and $2,847,737 and (iii) the net change in unrealized
gain (loss) on currency translation adjustments of $693,782 and ($67,924),
respectively.







17
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 June 30,
2010
 (unaudited)
 (13)
                Fair
      Value Measurements


The LLC
accounts for the fair value of financial instruments in accordance with the
accounting pronouncements, which require assets and liabilities carried at fair
value to be classified and disclosed in one of the following three
categories:





·
            Level
      1: Quoted market prices available in active markets for identical assets
      or liabilities as of the reporting
date.


·
            Level
      2: Pricing inputs other than quoted prices in active markets included in
      Level 1, which are either directly or indirectly observable as of the
      reporting date.


·
            Level
      3: Pricing inputs that are generally unobservable and cannot be
      corroborated by market data.





Financial
Assets and Liabilities Measured on a Recurring Basis





Financial
assets and liabilities are classified in their entirety based on the lowest
level of input that is significant to the fair value measurement. The Manager’s
assessment, on the LLC’s behalf, of the significance of a particular input to
the fair value measurement requires judgment and may affect the valuation of the
assets and liabilities being measured and their placement within the fair value
hierarchy.





The
following table summarizes the valuation of the LLC’s material financial assets
and liabilities measured at fair value on a recurring basis as of June 30,
2010:





Level
      1(1)
            
            
            Level
      2(2)
            
            
            Level
      3(3)
            
            
            TotalAssets:Warrants
            
            $
            -
            
            
            $
            75,250
            
            
            $
            -
            
            
            $
            75,250Liabilities:Derivative
      liabilities
            
            $
            -
            
            
            $
            3,603,903
            
            
            $
            -
            
            
            $
            3,603,903(1)
      Quoted prices in active markets for identical assets or
      liabilities.(2)
      Observable inputs other than quoted prices in active markets for identical
      assets and liabilities.(3)
      No observable pricing inputs in the market.





18
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 June 30,
2010
 (unaudited)
 (13)
                Fair
      Value Measurements -
continued





The LLC’s
derivative contracts, including interest rate swaps and warrants, are valued
using models based on readily observable market parameters for all substantial
terms of the LLC’s derivative contracts and are classified within Level 2. As
permitted by the accounting pronouncements, the LLC uses market prices and
pricing models for fair value measurements of its derivative instruments. The
fair value of the warrants was recorded in other non-current assets and the fair
value of the derivative liabilities was recorded in derivative instruments
within the consolidated balance sheets.





Assets
and Liabilities Measured at Fair Value on a Nonrecurring Basis





The LLC
is required, on a nonrecurring basis, to adjust the carrying value or provide
valuation allowances for certain assets and liabilities using fair value
measurements.  The LLC’s non-financial assets, such as leased equipment at
cost, are measured at fair value when there is an indicator of impairment and
recorded at fair value only when an impairment charge is recognized.  The
following table summarizes the carrying value of the LLC’s material
non-financial assets and liabilities after valuation allowance using fair value
measurement on a nonrecurring basis as of June 30, 2010:





June 30, 2010(1)
            
            
            Level 1(2)
            
            
            Level 2(3)
            
            
            Level 3(4)
            
            
            Total Impairment LossAssets
      held for sale, net
            
            $
            1,387,006
            
            $
            
            -
            
            
            $
            1,387,006
            
            
            $
            -
            
            
            $
            517,432(1)
      Represents the current value of the assets prior to measurement at fair
      value.(2)
      Quoted prices in active markets for identical assets or
      liabilities.(3)
      Observable inputs other than quoted prices in active markets for identical
      assets and liabilities.(4)
      No observable pricing inputs in the market.




Fair
value information with respect to the LLC’s leased assets and liabilities is not
separately provided since (i) the current accounting pronouncements do not
require fair value disclosures of lease arrangements and (ii) the carrying value
of financial assets, other than lease-related investments, and the recorded
value of recourse debt approximate fair value due to their short-term maturities
and variable interest rates. The estimated fair value of the LLC’s
non-recourse long-term debt and mortgage note receivable and interest receivable
was based on the discounted value of future cash flows related to the loans
based on recent transactions of this type.





June
      30, 2010Carrying Amount
            
            
            Fair ValueNon-recourse
      long-term debt
            
            $
            7,070,422
            
            
            $
            6,926,018Mortgage
      note and interest receivable
            
            $
            14,696,247
            
            
            $
            17,279,787




(14)
            Commitments
      and Contingencies





At the
time the LLC acquires or divests of its interest in an equipment lease or
other financing transaction, the LLC may, under very limited circumstances,
agree to indemnify the seller or buyer for specific contingent
liabilities.  The Manager believes that any liability of the LLC that
may arise as a result of any such indemnification obligations will not have
a material adverse effect on the consolidated financial condition of the LLC
taken as a whole.





The LLC,
Fund Ten and Fund Twelve (collectively, the “Participating Funds”)
have entered into a credit support agreement, pursuant to which losses
incurred by a Participating Fund with respect to any financing provided to any
subsidiary of MW Universal, Inc. (“MWU”) are shared among the Participating
Funds in proportion to their respective capital investments. The term of the
credit support agreement matches the term of the schedules to the master lease
agreement. At June 30, 2010, the LLC accrued approximately $1,356,000 in
connection with the obligation to Fund Twelve under the credit support agreement
as of such date.





The LLC
has entered into a remarketing agreement with a third party. In connection with
this agreement, residual proceeds received in excess of specific amounts will be
shared with this third party based on specific formulas. The obligation related
to this agreement is recorded at fair value.







19
 Table of Contents





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





The
following is a discussion of our current financial position and results of
operations. This discussion should be read together with our unaudited
consolidated financial statements and related notes included elsewhere in this
Quarterly Report on Form 10-Q and the audited consolidated financial statements
and related notes included in our Annual Report on Form 10-K for the year ended
December 31, 2009. This discussion should also be read in conjunction with
the disclosures below regarding “Forward-Looking Statements” and the “Risk
Factors” set forth in Item 1A of Part II of this Quarterly Report on Form
10-Q.





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,” “expect,” “continue,” “further,” “plan,” “seek,”
“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. We undertake no obligation to update publicly or review
any forward-looking statement, whether as a result of new information, future
developments or otherwise.





Overview





We
operate as an equipment leasing and finance program in which the capital
our members invested was pooled together to make investments, pay fees and
establish a small reserve. We primarily acquire equipment subject to lease,
purchase equipment and lease it to third parties, provide equipment and other
financing and, to a lesser degree, acquire ownership rights to items of
leased equipment at lease expiration.





Our
Manager manages and controls our business affairs, including, but not limited
to, our equipment leases and other financing transactions, under the terms
of our LLC Agreement.





We
are currently in our operating period. During our operating period, additional
investments will continue to be made with the cash generated from our initial
investments and our additional investments to the extent that the cash is not
used for expenses, reserves and distributions to members.  The investment
in additional equipment leases and other financing transactions in this manner
is called “reinvestment.” We anticipate investing in equipment leases, other
financing transactions and residual ownership rights in leased equipment from
time to time until April 2012, unless that date is extended, at our Manager’s
sole discretion, for up to an additional three years.







20
 Table of Contents







Recent
Significant Transactions





We
engaged in the following significant transactions since December 31,
2009:





Assets
Held for Sale





On June
2, 2010, ICON EAR II, our wholly-owned subsidiary, in conjunction with ICON EAR,
a joint venture owned 45% by us and 55% by Fund Twelve, sold a parcel of real
property in Jackson Hole, Wyoming that was received as additional security under
their respective leases with EAR for the aggregate net purchase price of
approximately $757,000.  As a result, we recorded a loss on sale of
approximately $120,000, which was included in loss on assets held for sale.
In
addition, on June 7, 2010, ICON EAR II and ICON EAR received judgments in New
York State Supreme Court against two principals of EAR who had guaranteed EAR’s
lease obligations.  ICON EAR II and ICON EAR are in the process of having
the judgments recognized in Illinois, where the principals live.  At this
time, it is not possible to determine the abilities of ICON EAR II and ICON EAR
to collect the amounts due under their respective leases from EAR’s
principals.





Our
Manager periodically reviews the significant assets in our portfolio to
determine whether events or changes in circumstances indicate that the net book
value of an asset may not be recoverable. In light of recent developments in the
real estate market and the sale of a parcel of real property located in Jackson
Hole, Wyoming on June 2, 2010, our Manager reviewed our investment in ICON EAR
II.





Based on
our Manager’s review, the net book value of the remaining parcels of real
property located in Jackson Hole, Wyoming exceeded their fair market
value.  As a result, ICON EAR II recognized a non-cash impairment
charge of approximately $517,000.





Container
Vessels




On
February 9, 2010, we, through our wholly-owned subsidiaries, ICON European
Container and ICON European Container II, amended the HSH Loan Agreement to
correspond with the revised payment schedule in the bareboat charters for the
ZIM Vessels, all of which had been amended in October 2009.  This
amendment also cured the default under the HSH Loan Agreement as of December 31,
2009.




Handymax Product
Tankers





On April
1, 2010, we, through the Top Ships Purchasers, amended the terms of the New
Fortis Loan. In connection with the amendment of the New Fortis Loan, Fortis
agreed to waive all defaults under the loan and the Top Ships Purchasers paid
$1,000,000 towards repayment of the outstanding balance of the non-recourse
long-term debt related to the Top Ships Vessels and paid $2,000,000 towards
funding the operation of the Top Ships Vessels.  In addition, in
accordance with the amendments to the New Fortis Loan, the Top Ships Purchasers
paid an additional $1,000,000 towards funding the operation of the Top Ships
Vessels. Accordingly, management reclassified approximately $23,900,000 of the
current portion of the non-recourse long-term debt to non-current as of March
31, 2010.




On April
30, 2010, in connection with the amendment of the New Fortis Loan, ICON
Doubtless, ICON Spotless, and Isomar Marine Company extended the term of their
underlying time charters until November 2010. On May 29, 2010, we entered into a
ten-month time charter for the M/T Faithful.




Manufacturing
Equipment
  On April
15, 2009, Groupe Henri Heuliez (the guarantor of our leases with Heuliez) and
HSA filed for “Redressement Judiciaire,” a proceeding under French law similar
to a Chapter 11 reorganization under the U.S. Bankruptcy Code. Heuliez
subsequently filed for Redressement Judiciaire on June 10, 2009. Since the time
of the Redressement Judiciaire filings, two French government agencies agreed to
provide Heuliez with financial support and a third party, BKC, agreed to
purchase Heuliez. On July 8, 2009, the French Commercial Court approved the sale
of Heuliez to BKC, which approval included the transfer of our leases.
Subsequently, BKC defaulted on its obligation to purchase Heuliez and Heuliez
re-entered Redressement Judiciaire. On June 30, 2010, the administrator for the
Redressement Judiciaire sold Heuliez to Baelen. We and Baelen have agreed to
restructure our leases so that we can recover our investment.


Promissory
Note





On April
13, 2010, Cerion MPI made an unscheduled principal payment on the promissory
note in the amount of approximately $6,704,000.  On June 22, 2010,
Cerion MPI made an additional unscheduled principal payment on the promissory
note in the amount of $500,000.  On July 26, 2010, Cerion MPI
satisfied in full its remaining obligations under the promissory
note.







21
 Table of Contents








Recently
Adopted Accounting Pronouncements





There are
no recent accounting pronouncements that are expected to have a significant
impact on our consolidated financial statements as of June 30, 2010. See Note 2
to our consolidated financial statements for a discussion of accounting
pronouncements that we have recently adopted.





Other
Recent Events





Since the
onset of the recession in December 2007, the rate of payment defaults by
lessees, borrowers and other financial counterparties has generally risen
significantly. Our Manager continuously reviews and evaluates our transactions
to take such action as it deems necessary to mitigate any adverse developments
on our liquidity, cash flows or profitability, which may include agreeing to
restructure a transaction with one or more of our lessees, borrowers or other
financial counterparties. In the event of a restructuring of a transaction, our
Manager generally expects that the lessee, borrower and/or other financial
counterparty will ultimately be able to satisfy its obligations to us. As a
result thereof, our Manager has discussed and continues to discuss restructuring
options with some of our lessees, borrowers and other financial
counterparties.  In many instances, the transaction is not
restructured and continues as initially structured.  Nevertheless,
there can be no assurance that any future restructurings will not have an
adverse effect on our financial position, results of operations or cash
flows.  Except as otherwise disclosed in this Quarterly Report on Form
10-Q, our Manager has not agreed to restructure any of our transactions and we
have not taken any impairment charges during the six months ended June 30, 2010
and there is no information that would cause our Manager to take an impairment
charge on any of our transactions at this time.




Results
of Operations for the Three Months Ended June 30, 2010 (the “2010 Quarter”) and
2009 (the “2009 Quarter”)





Revenue
for the 2010 Quarter and the 2009 Quarter is summarized as follows:




Three Months Ended June 30,2010
              
              
              2009
              
              
              ChangeRental
      income
              
              $
              9,169,223
              
              
              $
              19,221,569
              
              
              $
              (10,052,346
              )Time
      charter revenue
              
              
              2,801,002
              
              
              
              300,961
              
              
              
              2,500,041Finance
      income
              
              
              458,917
              
              
              
              663,448
              
              
              
              (204,531
              )(Loss)
      income from investments in joint ventures
              
              
              (462,937
              )
              
              
              608,264
              
              
              
              (1,071,201
              )Loss
      on assets held for sale
              
              
              (120,168
              )
              
              
              -
              
              
              
              (120,168
              )Net
      (loss) gain on lease termination
              
              
              (218,890
              )
              
              
              26,138,416
              
              
              
              (26,357,306
              )Interest
      and other income
              
              
              944,937
              
              
              
              845,382
              
              
              
              99,555Total
      revenue
              
              $
              12,572,084
              
              
              $
              47,778,040
              
              
              $
              (35,205,956
              )




Total
revenue for the 2010 Quarter decreased $35,205,956, or 73.7%, as compared to the
2009 Quarter. The decrease in total revenue was primarily due to no significant
gains or losses on lease termination during the 2010 Quarter, and decreases in
rental income, income from investments in joint ventures and finance income
during the 2010 Quarter. The net gain on lease termination during the 2009
Quarter was a result of our termination of the bareboat charters related to the
Top Ships Vessels in June 2009 (the “Bareboat Charter
Termination”).  The decrease in rental income was the result of (i)
our Manager’s decision to put the leases with ICON French Equipment I, LLC
(“ICON Heuliez”) on a cash basis, (ii) the sale of equipment previously on lease
to W Forge Holdings, Inc. (“W Forge”), (iii) the Bareboat Charter Termination,
which took place during the 2009 Quarter, (iv) the liquidation of our investment
in ICON Global Crossing, LLC (“ICON Global Crossing”), (v) the sale of certain
equipment on lease by ICON Global Crossing III, LLC (“ICON Global Crossing
III”), (vi) the restructured bareboat charters for the ZIM Vessels, and (vii)
the bankruptcy of EAR, which took place during October 2009.  These
factors accounted for a cumulative decrease in rental income of approximately
$10,052,000 during the 2010 Quarter. The decrease in income from investments in
joint ventures was primarily due to a reduction in the income recorded by ICON
Northern Leasing, LLC (“ICON Northern Leasing”), which will continue to decline
as the investment matures, and the bankruptcy of EAR, which took place in
October 2009. The decrease in finance income was primarily due to a reduction in
the income recorded from our finance leases held by ICON Global Crossing III and
ICON Global Crossing V, LLC (“ICON Global Crossing V”), which will continue to
decline as the leases mature. The decrease in total revenue was partially offset
by increases in time charter revenue and interest and other income. The increase
in time charter revenue of approximately $2,500,000 during the 2010 Quarter was
due to our assumption of the underlying time charters in connection with the
Bareboat Charter Termination during June 2009.  Interest and other
income increased primarily due to interest income from the note receivable with
Cerion MPI that was issued to us in December 2009.






22
 Table of Contents





Expenses
for the 2010 Quarter and the 2009 Quarter are summarized as
follows:





Three Months Ended June 30,2010
            
            
            2009
            
            
            ChangeManagement
      fees - Manager
            
            $
            186,728
            
            
            $
            1,037,758
            
            
            $
            (851,030
            )Administrative
      expense reimbursements - Manager
            
            
            507,171
            
            
            
            736,270
            
            
            
            (229,099
            )General
      and administrative
            
            
            975,159
            
            
            
            620,622
            
            
            
            354,537Vessel
      operating expense
            
            
            3,580,958
            
            
            
            313,865
            
            
            
            3,267,093Interest
            
            
            1,964,220
            
            
            
            2,698,045
            
            
            
            (733,825
            )Depreciation
      and amortization
            
            
            10,250,311
            
            
            
            15,209,329
            
            
            
            (4,959,018
            )Impairment
      loss
            
            
            517,432
            
            
            
            -
            
            
            
            517,432Gain
      on financial instruments
            
            
            (1,018,495
            )
            
            
            (27,765
            )
            
            
            (990,730
            )Loss
      on guaranty
            
            
            1,355,738
            
            
            
            -
            
            
            
            1,355,738Total
      expenses
            
            $
            18,319,222
            
            
            $
            20,588,124
            
            
            $
            (2,268,902
            )





Total
expenses for the 2010 Quarter decreased $2,268,902, or 11.0%, as compared to the
2009 Quarter. The decrease in total expenses was primarily due to (i) a decrease
in depreciation and amortization expense as a result of the liquidation of our
investment in ICON Global Crossing, the sale of certain equipment on lease by
ICON Global Crossing III and equipment previously on lease to W Forge and the
bankruptcy of EAR during October 2009, (ii) the gain on financial instruments
recorded during the 2010 Quarter, (iii) a decrease in management fees – Manager
due to our Manager’s suspension of its collection of a portion of management
fees from July 1, 2009 through January 31, 2010 and May 1, 2010 through June 30,
2010, (iv) a decrease in interest expense due to the continued repayment of our
outstanding non-recourse debt, and (v) a decrease in administrative expense
reimbursements – Manager. These decreases were partially offset by (i) the
increase in vessel operating expense as a result of our management of the Top
Ships Vessels, which commenced on June 24, 2009, (ii) the loss on guaranty in
connection with the credit support agreement related to financing provided to
the MWU subsidiaries, and (iii) the impairment charge of $517,432 recognized on
a parcel of real property recorded under assets held for sale for
ICON EAR II.





(Provision)
Benefit 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 2010
Quarter, the provision for income taxes was comprised of $12,110 in current
taxes and $91,790 in deferred taxes.





Noncontrolling
Interests





Net
income attributable to noncontrolling interests for the 2010 Quarter decreased
$327,663, or 66.1%, as compared to the 2009 Quarter due to the liquidation of
our investment in ICON Global Crossing during 2009.





Net
(Loss) Income Attributable to Fund Eleven





As a
result of the foregoing factors, net (loss) income attributable to us for the
2010 Quarter and the 2009 Quarter was ($6,018,811) and $27,208,214,
respectively. Net (loss) income attributable to us per weighted average
additional share of limited liability company interests outstanding (“Share”)
for the 2010 Quarter and the 2009 Quarter was ($16.43) and $74.17,
respectively.







23
 Table of Contents








Results
of Operations for the Six Months Ended June 30, 2010 (the “2010 Period”) and
2009 (the “2009 Period”)





Revenue
for the 2010 Period and the 2009 Period is summarized as follows:





Six Months Ended June 30,2010
            
            
            2009
            
            
            ChangeRental
      income
            
            $
            18,612,659
            
            
            $
            38,978,829
            
            
            $
            (20,366,170
            )Time
      charter revenue
            
            
            5,711,479
            
            
            
            300,961
            
            
            
            5,410,518Finance
      income
            
            
            973,539
            
            
            
            1,378,597
            
            
            
            (405,058
            )(Loss)
      income from investments in joint ventures
            
            
            (144,352
            )
            
            
            1,286,296
            
            
            
            (1,430,648
            )Net
      gain on sales of new equipment
            
            
            -
            
            
            
            75,185
            
            
            
            (75,185
            )Net
      loss on assets held for sale
            
            
            (120,168
            )
            
            
            -
            
            
            
            (120,168
            )Net
      (loss) gain on lease termination
            
            
            (218,890
            )
            
            
            26,138,416
            
            
            
            (26,357,306
            )Interest
      and other income
            
            
            2,195,570
            
            
            
            1,645,027
            
            
            
            550,543Total
      revenue
            
            $
            27,009,837
            
            
            $
            69,803,311
            
            
            $
            (42,793,474
            )





Total
revenue for the 2010 Period decreased $42,793,474, or 61.3%, as compared to the
2009 Period. The decrease in total revenue was primarily due to no significant
gains or losses on lease termination during the 2010 Period, and decreases in
rental income, income from investments in joint ventures and finance income
during the 2010 Period. The net gain on lease termination was a result of the
Bareboat Charter Termination, which took place during the 2009 Period. The
decrease in rental income was the result of (i) our Manager’s decision to put
the leases with ICON Heuliez on a cash basis, (ii) the sale of equipment
previously on lease to W Forge, (iii) the Bareboat Charter Termination, (iv) the
liquidation of our investment in ICON Global Crossing, (v) the sale of certain
equipment on lease by ICON Global Crossing III, (vi) the restructured bareboat
charters for the ZIM Vessels, and (vii) the bankruptcy of EAR, which took place
during October 2009.  These factors accounted for a cumulative
decrease in rental income of approximately $20,366,000 during the 2010 Period.
The decrease in income from investments in joint ventures was primarily due to a
reduction in the income recorded by ICON Northern Leasing, which will continue
to decline as the investment matures, and the bankruptcy of EAR, which took
place in October 2009. The decrease in finance income was primarily due to a
reduction in the income recorded from our finance leases held by ICON Global
Crossing III and ICON Global Crossing V, which will continue to decline as the
leases mature. The decrease in total revenue was partially offset by increases
in time charter revenue and interest and other income. The increase in time
charter revenue of approximately $5,411,000 during the 2010 Period was due to
our assumption of the underlying time charters in connection with the Bareboat
Charter Termination during June 2009.  Interest and other income
increased primarily due to interest income from the note receivable with Cerion
MPI that was issued to us in December 2009.





24
 Table of Contents





Expenses
for the 2010 Period and the 2009 Period are summarized as follows:





Six Months Ended June 30,2010
            
            
            2009
            
            
            ChangeManagement
      fees - Manager
            
            $
            541,090
            
            
            $
            2,015,688
            
            
            $
            (1,474,598
            )Administrative
      expense reimbursements - Manager
            
            
            844,995
            
            
            
            1,285,474
            
            
            
            (440,479
            )General
      and administrative
            
            
            1,612,002
            
            
            
            1,197,861
            
            
            
            414,141Vessel
      operating expense
            
            
            6,618,058
            
            
            
            313,865
            
            
            
            6,304,193Interest
            
            
            4,076,807
            
            
            
            5,326,473
            
            
            
            (1,249,666
            )Depreciation
      and amortization
            
            
            20,722,756
            
            
            
            29,012,767
            
            
            
            (8,290,011
            )Impairment
      loss
            
            
            517,432
            
            
            
            -
            
            
            
            517,432Gain
      on financial instruments
            
            
            (1,592,566
            )
            
            
            (21,983
            )
            
            
            (1,570,583
            )Loss
      on guaranty
            
            
            1,355,738
            
            
            
            -
            
            
            
            1,355,738Total
      expenses
            
            $
            34,696,312
            
            
            $
            39,130,145
            
            
            $
            (4,433,833
            )





Total
expenses for the 2010 Period decreased $4,433,833, or 11.3%, as compared to the
2009 Period. The decrease in total expenses was primarily due to (i) a decrease
in depreciation and amortization expense as a result of the liquidation of our
investment in ICON Global Crossing, the sale of certain equipment on lease by
ICON Global Crossing III and equipment previously on lease to W Forge and the
bankruptcy of EAR during October 2009, (ii) the gain on financial instruments,
(iii) a decrease in management fees – Manager due to our Manager’s suspension of
its collection of a portion of management fees from July 1, 2009 through January
31, 2010 and May 1, 2010 through June 30, 2010, (iv) a decrease in interest
expense due to the continued repayment of our outstanding non-recourse debt and
(v) a decrease in administrative expense reimbursements – Manager recorded
during the 2010 Period. These decreases were partially offset by (i) the
increase in vessel operating expense as a result of our management of the Top
Ships Vessels, which commenced on June 24, 2009, (ii) the loss on guaranty in
connection with the credit support agreement related to financing provided to
the MWU subsidiaries, and (iii) the impairment charge of $517,432 recognized
on a parcel of real property recorded under assets held for sale for
ICON EAR II.





(Provision)
Benefit 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 2010
Period, the provision for income taxes was comprised of $12,110 in current taxes
and $93,129 in deferred taxes.





Noncontrolling
Interests





Net
income attributable to noncontrolling interests for the 2010 Period decreased
$661,777, or 62.6%, as compared to the 2009 Period due to the liquidation of our
investment in ICON Global Crossing during 2009.





Net
(Loss) Income Attributable to Fund Eleven





As a
result of the foregoing factors, net (loss) income attributable to us for the
2010 Period and the 2009 Period was ($8,186,832) and $29,741,889, respectively.
Net (loss) income attributable to us per weighted average additional Share for
the 2010 Period and the 2009 Period was ($22.35) and $81.08,
respectively.






25
 Table of Contents




Financial
Condition





This
section discusses the major balance sheet variances at June 30, 2010 compared to
December 31, 2009.





Total
Assets





Total
assets decreased $37,936,816, from $272,120,852 at December 31, 2009 to
$234,184,036 at June 30, 2010.  The decrease was primarily due to (i)
approximately $20,723,000 of continued depreciation and amortization of our
leased equipment, (ii) approximately $18,438,000 of cash distributions to
our members and noncontrolling interests and (iii) approximately
$6,618,000 in vessel operating expenses paid in connection with the
operations of the Top Ships Vessels during the 2010 Period. These decreases were
partially offset by an increase of approximately $8,076,000 in deferred revenue
relating to the decline in the charter hire billed for the ZIM
Vessels.





Current
Assets





Current
assets decreased $9,855,424, from $34,711,095 at December 31, 2009 to
$24,855,671 at June 30, 2010.  The decrease was primarily due to
approximately $18,438,000 of cash distributions to our members and
noncontrolling interests partially offset by approximately $7,580,000 of
scheduled and unscheduled principal repayments received on our note receivable
with Cerion MPI.





Total
Liabilities





Total
liabilities decreased $10,351,397, from $128,538,345 at December 31, 2009 to
$118,186,948 at June 30, 2010. The decrease was primarily due to (i)
approximately $5,861,000 of scheduled repayments of our non-recourse debt, (ii)
$2,260,000 in repayments under the Facility, (iii) a decrease of
approximately $1,933,000 of accrued expenses and other liabilities
primarily due to the payment of accrued vessel operating expenses for the
operations of the Top Ships Vessels, and (iv) a decrease of approximately
$1,445,000 in the fair value of our derivative instruments. These decreases were
partially offset by an increase in due to our Manager and affiliates of
approximately $1,295,000 primarily due to the loss on guaranty in connection
with the credit support agreement related to financing provided
to the MWU subsidiaries.





Current
Liabilities





Current
liabilities decreased $27,508,193, from $57,202,845 at December 31, 2009 to
$29,694,652 at June 30, 2010. The decrease was primarily due to (i)
approximately $23,018,000 of the current portion of our non-recourse long-term
debt being reclassified to non-current liabilities due to our restructuring of
the New Fortis Loan, which cured the prior debt default, (ii) $2,260,000
 in repayments under our revolving line of credit, (iii) a decrease of
approximately $1,933,000 of accrued expenses and other liabilities
primarily due to the payment of accrued vessel operating expenses for the
operations of the Top Ships Vessels, and (iv) a decrease of approximately
$1,445,000 in the fair value of our derivative instruments. These decreases were
partially offset by an increase in due to Manager and affiliates of
approximately $1,295,000 primarily due to the loss on guaranty in connection
with the credit support agreement related to financing provided to the MWU
subsidiaries.





Equity





Equity
decreased $27,585,419, from $143,582,507 at December 31, 2009 to
$115,997,088 at June 30, 2010. The decrease was primarily due to (i) the net
loss recorded during the 2010 Period, (ii) distributions to our members and
noncontrolling interests, and (iii) the unrealized loss recorded on our currency
translation adjustments. These decreases were partially offset by the net
decrease in the unrealized loss recorded on our derivative
instruments.








26
 Table of Contents





Liquidity and Capital
Resources





Summary





At June
30, 2010 and December 31, 2009, we had cash and cash equivalents of $9,375,546
and $18,615,323, respectively. During our operating period, our main source of
cash has been from rental and finance lease payments and our main use of cash
has been in (i) investments in leasing and other financing transactions, (ii)
distributions to our members and noncontrolling interests and (iii) repayment of
our non-recourse long-term debt. Our liquidity will vary in the future,
increasing to the extent cash flows from investments and proceeds from the sale
of our investments exceed expenses and decreasing as we enter into new
investments, pay distributions to our members and to the extent that expenses
exceed cash flows from operations and the proceeds from the sale of our
investments.





We
currently have adequate cash balances and generate a sufficient amount of cash
flow from operations to meet our short-term working capital requirements. We
expect to generate sufficient cash flows from operations to sustain our working
capital requirements in the foreseeable future. In the event that our working
capital is not adequate to fund our short-term liquidity needs, we could borrow
against the Facility, with $28,650,000 available at June 30, 2010, to meet such
requirements. For additional information, see Note 8 to our consolidated
financial statements.





We
anticipate that our liquidity requirements for the remaining life of the fund
will be financed by the expected results of our operations, as well as cash
received from our investments at maturity.





We
anticipate being able to meet our liquidity requirements into the foreseeable
future. However, our ability to generate cash in the future is subject to
general economic, financial, competitive, regulatory and other factors that
affect us and our lessees’ and borrowers’ businesses that are beyond our
control.





Pursuant
to the terms of our offering, we established a cash reserve in the amount of
0.5% of the gross offering proceeds. As of June 30, 2010, the cash reserve was
$1,825,993.




Cash
Flows




The
following table sets forth summary cash flow data:




Six Months Ended June 30,2010
            
            
            2009Net
      cash provided by (used in):Operating
      activities
            
            $
            2,971,158
            
            
            $
            39,186,512Investing
      activities
            
            
            9,955,810
            
            
            
            (451,161
            )Financing
      activities
            
            
            (22,178,505
            )
            
            
            (42,541,116
            )Effects
      of exchange rates on cash and cash equivalents
            
            
            11,760
            
            
            
            (32,289
            )Net
      decrease in cash and cash equivalents
            
            $
            (9,239,777
            )
            
            $
            (3,838,054
            )




Note:
See the Consolidated Statements of Cash Flows included in “Item 1. Consolidated
Financial Statements” of this Quarterly Report on Form 10-Q for additional
information.






27
 Table of Contents




Operating
Activities




Cash
provided by operating activities decreased $36,215,354, from $39,186,512 in the
2009 Period to $2,971,158 in the 2010 Period. The decrease was primarily due to
(i) the net loss recorded in the 2010 Period as compared to the net income
recorded in the 2009 Period and (ii) a decrease in accrued expenses, deferred
revenue and other current liabilities.





Investing
Activities




Cash
provided by investing activities increased $10,406,971, from a use of cash of
$451,161 in the 2009 Period to a source of cash of $9,955,810 in the 2010
Period. This increase was primarily due to an increase in the repayments from
our note receivable with Cerion MPI and a decrease in the restricted cash
activity during the 2010 Period.





Financing
Activities




Cash used
in financing activities decreased $20,362,611, from $42,541,116 in the 2009
Period to $22,178,505 in the 2010 Period. The decrease was primarily related to
(i) a decrease in the repayments of our non-recourse long-term debt, and (ii) a
decrease in the distributions paid to noncontrolling interests, partially offset
by an increase in the repayments of the Facility.





Financings
and Borrowings





Non-Recourse
Long-Term Debt





We had
non-recourse long-term debt obligations at June 30, 2010 of $109,078,024. Most
of our non-recourse long-term debt obligations consist of notes payable in which
the lender has a security interest in the equipment and an assignment of the
rental payments under the lease, in which 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.




Distributions





We, at
our Manager’s discretion, pay monthly distributions to each of our additional
members and noncontrolling interests starting with the first month after each
such member’s admission and the commencement of our joint venture operations,
respectively, and we expect to continue to pay such distributions until the end
of our operating period. We paid distributions to our Manager, additional
members and noncontrolling interests of $166,717, $16,505,014 and $1,766,058,
respectively, during the 2010 Period.




Commitments
and Contingencies and Off-Balance Sheet Transactions





Commitments
and Contingencies





At June
30, 2010, we had non-recourse debt obligations. The lender has a security
interest in the majority of the equipment collateralizing each non-recourse
long-term debt instrument and an assignment of the rental payments under the
lease associated with the equipment. In such cases, the lender is being paid
directly by the lessee. If the lessee defaults on the lease, the equipment would
be returned to the lender in extinguishment of the non-recourse debt. At June
30, 2010, our outstanding non-recourse long-term indebtedness, inclusive of
certain accrued interest, was $109,078,024. We are a party to the Facility and
had no borrowings under the Facility at June 30, 2010.





The
Participating Funds have entered into a credit support agreement, pursuant to
which losses incurred by a Participating Fund with respect to any financing
provided to any MWU subsidiary are shared among the Participating Funds in
proportion to their respective capital investments. The term of the credit
support agreement matches the term of the schedules to the master lease
agreement.  At June 30, 2010, we accrued approximately $1,356,000 in
connection with the obligation to Fund Twelve under the credit support
agreement as of such date.





We have
entered into a remarketing agreement with a third party. In connection with this
agreement, residual proceeds received in excess of specific amounts will be
shared with this third party based on specific formulas. The obligation related
to this agreement is recorded at fair value.





Off-Balance
Sheet Transactions





None.







28
 Table of Contents





Item 3. Quantitative and Qualitative Disclosures About Market
Risk





There are
no material changes to the disclosures related to this item since the filing of
our Annual Report on Form 10-K for the year ended December 31,
2009.





Item 4. Controls and Procedures





Evaluation of disclosure controls
and procedures





In
connection with the preparation of this Quarterly Report on Form 10-Q for the
three months ended June 30, 2010, as well as the financial statements for our
Manager, our Manager carried out an evaluation, under the supervision and with
the participation of the management of our Manager, including its Co-Chief
Executive Officers and the Chief Financial 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, as amended. Based on the foregoing evaluation, the Co-Chief
Executive Officers and the Chief Financial Officer concluded that our Manager’s
disclosure controls and procedures were effective.





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.





Evaluation
of internal control over financial reporting





There
have been no changes in our internal control over financial reporting during the
three months ended June 30, 2010 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.







29
 Table of Contents


PART II - OTHER INFORMATION





Item 1.  Legal Proceedings





In the
ordinary course of conducting our business, we may be subject to certain claims,
suits and complaints filed against us.  In our Manager’s opinion, the
outcome of such matters, if any, will not have a material impact on our
consolidated financial position, cash flows or results of
operations.  We are not aware of any material legal proceedings that
are currently pending 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,
2009.





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





We did
not sell or repurchase any shares of limited liability company interests during
the three months ended June 30, 2010.





Item 3.  Defaults Upon Senior Securities





Not
applicable.





Item 4.  (Removed and Reserved)





Item 5.  Other Information





Not
applicable.







30
 Table of Contents






Item 6. Exhibits





3.1
              Certificate
      of Formation of Registrant (Incorporated by reference to Exhibit 3.1 to
      Amendment No. 1 to the Registration Statement on Form S-1 filed with the
      SEC on February 15, 2005 (File No.
      333-121790)).4.1
              Amended and Restated Limited Liability Company
      Agreement of Registrant (Incorporated by reference to Exhibit 4.1 to
      Amendment No. 1 to the Registration Statement on Form S-1 filed with the
      SEC on June 29, 2006 (File No.
      333-133730)).4.2
              Amendment No. 1 to the Amended and Restated
      Limited Liability Company Agreement of Registrant (Incorporated by
      reference to Exhibit 4.3 to Registrant’s Quarterly Report on Form 10-Q for
      the quarterly period ended June 30, 2006, filed August 23,
      2006).10.1
              Commercial Loan Agreement, dated as of August 31,
      2005, by and among California Bank & Trust and ICON Income Fund Eight
      B L.P., ICON Income Fund Nine, LLC, ICON Income Fund Ten, LLC and ICON
      Leasing Fund Eleven, LLC (Incorporated by reference to Exhibit 10.1 to
      Registrant’s Current Report on Form 8-K dated August 31,
      2005).10.2
              Loan Modification Agreement, dated as of December
      26, 2006, between California Bank & Trust and ICON Income Fund Eight B
      L.P., ICON Income Fund Nine, LLC, ICON Income Fund Ten, LLC and ICON
      Leasing Fund Eleven, LLC (Incorporated by reference to Exhibit 10.1 to
      Registrant’s Current Report on Form 8-K dated December 26,
      2006).10.3
              Loan Modification Agreement, dated as of June 20,
      2007, between California Bank & Trust, ICON Income Fund Eight B L.P.,
      ICON Income Fund Nine, LLC, ICON Income Fund Ten, LLC, ICON Leasing Fund
      Eleven, LLC and ICON Leasing Fund Twelve, LLC (Incorporated by reference
      to Exhibit 10.3 to Registrant’s Quarterly Report on Form 10-Q for the
      quarterly period ended September 30, 2009, filed November 16,
      2009).10.4
              Third Loan Modification Agreement, dated as of May
      1, 2008, between California Bank & Trust, ICON Income Fund Eight B
      L.P., ICON Income Fund Nine, LLC, ICON Income Fund Ten, LLC, ICONLeasingFund Eleven, LLC and ICON Leasing Fund Twelve,
      LLC (Incorporated by reference to Exhibit 10.3 to Registrant’s Quarterly
      Report on Form 10-Q for the quarterly period ended March 31, 2008, filed
      June 6, 2008).10.5
              Fourth Loan Modification Agreement, dated as of
      August 12, 2009, between California Bank & Trust, ICON Income Fund
      Eight B L.P., ICON Income Fund Nine, LLC, ICON Income FundTen, LLC, ICON Leasing Fund Eleven, LLC, ICON Leasing
      Fund Twelve, LLC and ICON Equipment and Corporate Infrastructure Fund
      Fourteen, L.P. (Incorporated by reference to Exhibit 10.4 to Registrant’s
      Quarterly Report on Form 10-Q for the quarterly period ended June 30,
      2009, filed August 14, 2009).31.1
              Rule
      13a-14(a)/15d-14(a) Certification of Co-Chief Executive
      Officer.31.2
              Rule
      13a-14(a)/15d-14(a) Certification of Co-Chief Executive
      Officer.31.3
              Rule
      13a-14(a)/15d-14(a) Certification of Chief Financial
    Officer.32.1
              Certification
      of Co-Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002.32.2
              Certification
      of Co-Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906
      of the Sarbanes-Oxley Act of 2002.32.3
              Certification
      of Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906
      of the Sarbanes-Oxley Act of
2002.




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 Table of Contents







SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
 ICON
Leasing Fund Eleven, LLC
 (Registrant)
 
 By: ICON
Capital Corp.
 (Manager
of the Registrant)
 
 August 13,
2010
 By:
      /s/ Michael A.
      ReisnerMichael
      A. ReisnerCo-Chief
      Executive Officer and Co-President
                  (Co-Principal
      Executive Officer)
 August 13,
2010
 By:
      /s/ Mark
      GattoMark
      GattoCo-Chief
      Executive Officer and Co-President
                  (Co-Principal
      Executive Officer)
 August 13,
2010
 
 By:
      /s/ Anthony J.
      BrancaAnthony
      J. BrancaChief
      Financial Officer
                (Principal
      Accounting and Financial
Officer)






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