Item 9A. Controls and Procedures
Item 9A. Controls and Procedures.
Disclosure Controls and Procedures
The Trust and each of BDRY and BWET maintain disclosure
controls and procedures that are designed to ensure that material information required to be disclosed in the Trust’s periodic reports
filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time
period specified in the SEC’s rules and forms.
The duly appointed officers of the Sponsor, including
its principal executive officer and principal financial officer, have evaluated the effectiveness of the Trust’s , BRDY’s
and BWET’s controls and procedures and have concluded that the disclosure controls and procedures of the Trust and each of BRDY
and BWET have been effective as of the end of the period covered by this annual report on Form 10-K.
Management’s Annual Report on Internal
Control Over Financial Reporting
Management of the Sponsor, on behalf of the Trust
and each of BRDY and BWET, are responsible for establishing and maintaining adequate internal control over financial reporting. The internal
control system for each of the Trust, BRDY and BWET is designed to provide reasonable assurance to the Sponsor regarding the preparation
and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations.
Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation
and presentation.
Management of the Sponsor, including Christian
Magoon, Principal Executive Officer of the Sponsor, and Bradley H. Bailey, Principal Financial Officer of the Sponsor, who perform functions
equivalent to those of a principal executive officer and principal financial officer of the Trust if the Trust had any officers, assessed
the effectiveness of each of the internal control over financial reporting for each of the Trust, BRDY and BWET as of June 30, 2024.
In making this assessment, it used the criteria in the Internal Control - Integrated framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission in 2013. Based on the assessment, Management believes that, as of June 30, 2024, the internal control
over financial reporting is effective for the Trust and each of BRDY and BWET.
The Trust confirms that the certifications of
the principal executive officer and principal financial officer filed with this annual report on Form 10-K are applicable to the Trust
and each of BRDY and BWET.
Change in Internal Control Over Financial Reporting
There were no changes in the Trust’s or
the Funds’ internal control over financial reporting during the last fiscal quarter that have materially affected, or are reasonably
likely to materially affect, the Trust’s or each of the Funds internal control over financial reporting.
Item 9B. Other Information.
None of the Sponsor’s officers have adopted ,
modified or terminated trading plans under either a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item
408 of Regulation S-K of the Securities Act of 1933) for the Trust or the Funds for the three months ended June 30, 2024.
Item 9C. Disclosure Regarding Foreign Jurisdictions
that Prevent Inspections.
Not applicable.
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Part III
Item 10. Directors, Executive Officers and
Corporate Governance.
The Sponsor and its Management
Neither the Trust nor the Funds have executive
officers. Pursuant to the terms of the Trust Agreements for the Funds, the Fund’s affairs are managed by the Sponsor. The business
and affairs of the Sponsor are managed by its chief executive officer, Christian Magoon.
The following are individual Principals, as that
term is defined in CFTC Rule 3.1, for the Sponsor: Christian W. Magoon, Bradley H. Bailey, David F. Wilding, Edward H. Keiley III and
William Belden III. These individuals are principals due to their positions; however, Mr. Magoon is also a principal due to his controlling
stake in Amplify. Amplify also was listed as a principal of the Sponsor, due to its controlling stake, on June 14, 2023.
Christian W. Magoon. Mr. Magoon
has been the Chief Executive Officer and President of the Sponsor since January 2015. Mr. Magoon was listed as a principal, as that term
is defined in CFTC Rule 3.1, of the Sponsor on October 3, 2023. He has also served as Chief Executive Officer and President, and Chair
of the Board of Trustees, of Amplify ETF Trust, including the seventeen series thereof (the “Amplify Funds”). He has also
served as Chief Executive Officer of YieldShares, LLC since April 2013, and of Magoon Capital since January 2010. In these roles, Mr.
Magoon has general and active management and control of the business and affairs of the firm.
Bradley H. Bailey. Mr. Bailey has
been Chief Financial Officer of the Sponsor since March 2016, and Chief Financial Officer of Amplify Funds since March 2016. He was listed
as a principal, as that term is defined in CFTC Rule 3.1, of the Sponsor on September 21, 2023. Mr. Bailey has primary responsibility
for the financial management and reporting of the Sponsor and Amplify Funds and is in charge of its books of account and accounting records,
and its accounting procedures.
David F. Wilding . Mr. Wilding
serves as the Chief Operating Officer of the Sponsor since February 2023. Mr. Wilding was listed as a principal, as that term is defined
in CFTC Rule 3.1, of the Sponsor on August 8, 2023. Mr. Wilding is overseeing and managing the implementation of all elements of operations
of the firm. Mr. Wilding has served as the Secretary of the Amplify Funds since February 2023 and as General Counsel and Chief Compliance
Officer of Performance Trust Capital Partners LLC (investment adviser and broker-dealer) and PT Asset Management, LLC (investment adviser)
from August 1996 to June 2022. He was listed as a principal of Performance Trust Capital Partners LLC from October 2020 to March 2022.
Edward H. Keiley III. Mr. Keiley
has been Chief Compliance Officer of the Sponsor since August 2015. Mr. Keiley was listed as a principal of the Sponsor on July 13, 2023,
and has been a registered associated person and a swap associated person, and an NFA associate member of the Sponsor, since October 25,
2023. Mr. Keiley is responsible for overseeing and managing the implementation of all elements of the regulatory compliance requirements
and reporting pursuant to SEC, FINRA and NYSE Arca rules and regulations. Mr. Keiley has served as the Chief Compliance Officer of the
Amplify Funds since January 2015 and as a Compliance Consultant for R.J. O’Brien Securities LLC (futures broker) from December 2007
to June 2023. He has been Chief Compliance Officer of OASIS Investment Strategies, LLC from October 2009 to December 2023, and was listed
as a principal of OASIS Investment Strategies, LLC (investment adviser and commodity pool operator) from December 19, 2022 to January
1, 2024.
William Belden III . Mr. Belden has
been President of the Sponsor since November 2018. Mr. Belden was listed as a principal, as that term is defined in CFTC Rule 3.1, of
the Sponsor on September 21, 2023. Mr. Belden manages the day-to-day operations of the firm. Mr. Belden has also served as the Vice President
of the Amplify Funds since October 2020.
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Commodity Trading Advisor
Breakwave
The Sponsor has also entered into a Licensing
and Services Agreement with Breakwave. Under this agreement, Breakwave has agreed to compose and maintain the BDRY and BWET Benchmark
Portfolios and license to the Sponsor the use of the BDRY and BWET Benchmark Portfolios.
Breakwave is a limited liability company. The
following individual is the President, sole investment professional and Principal, as that term is defined in CFTC Rule 3.1:
John Kartsonas . John Kartsonas is
the Principal and Managing Partner of Breakwave Advisors LLC., a Commodity Trading Advisory firm based in New York. Mr. Kartsonas was
listed as a principal of the Sponsor on May 17, 2017. He has been a registered associated person and an NFA associate member of Breakwave
since May 17, 2017. From 2017 to the present Mr. Kartsonas has also served as a Director of Seanergy Maritime, an international shipping
company listed in the Nasdaq Capital Market. Prior to that, Mr. Kartsonas was a Senior Portfolio Manager at Carlyle Commodity Management
from October 2012 to January 2017, a commodity-focused investment firm based in New York and part of the Carlyle Group. He was
responsible for the firm’s Shipping and Freight investments. During his tenure, he managed one of the largest freight futures funds
globally. Mr. Kartsonas received his MBA from the Simon School of Business, University of Rochester.]
Code of Ethics
The Sponsor has adopted a Code of Business Conduct
and Ethics (the “Code of Ethics”) which applies to all of its officers (including senior financial officers) and employees;
the Sponsor’s Code of Ethics covers all officers and employees that manage the Trust and the Funds. A printed copy of the Code of
Ethics is available to any person free of charge, upon request, by contracting the Sponsor at:
Amplify Commodity Trust
c/o Amplify Investments LLC
3333 Warrenville Road
Suite 350
Lisle, IL 60532
Item 11. Executive Compensation.
The Funds have no employees, officers or directors
and are managed by the Sponsor. None of the directors or officers of the Sponsor receive compensation from the Funds.
The Sponsor receives a management fee from BDRY,
monthly in arrears, in an amount equal to the greater of 0.15% per annum on the daily NAV of BDRY or $125,000. The Sponsor receives a
management fee from BWET, monthly in arrears, in an amount equal to the greater of 0.30% per annum on the daily NAV of BWET or $50,000.
The Sponsor has contractually agreed to assume the Funds’ expenses (excluding brokerage fees, interest expense, and extraordinary
expenses) in order to cap each Funds’ total annual expenses at 3.50% per annum through March 31, 2025. The management fees
paid to the Sponsor by BDRY amounted to $125,001 and $128, for the years ended June 30, 2024 and 2023, respectively. The management fees
paid to the Sponsor by BWET amounted to $50,001 and $8,083 for year ended June 30, 2024, and the period from May 3, 2023 (commencement
of operations) to June 30, 2023.
The Sponsor also provides Principal Financial
Officer, Chief Compliance Officer, Regulatory Reporting and Wholesale Support services to the Funds. The fees for each service provided
to BDRY for the year ended June 30, 2024, all of which had been paid, or accrued, at June 30, 2024, were as follows:
Service
BDRY
Amount
Principal Financial Officer
$ 24,978
Chief Compliance Officer
24,978
Regulatory Reporting
24,978
Legal
80,314
Wholesale Support
93,035
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The fees for the above services provided to BWET
for the year ended June 30, 2024, all of which had been paid, or accrued, at June 30, 2024, were as follows:
Service
BWET
Amount
Principal Financial Officer
$ 24,978
Chief Compliance Officer
24,978
Regulatory Reporting
24,978
Legal
75,906
Wholesale Support
20,391
In addition to the above, the Distributor provides
Distribution services to the Funds. The fees for Distribution services paid to the Distributor were $15,193 for BDRY for the year ended
June 30, 2024 and $11,339 for BWET for the year ended June 30, 2024.
Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters.
Security Ownership of Certain Beneficial Owners.
The following table sets forth shares as of June 30, 2024, information with respect to each person known to own beneficially more
than 5% of the outstanding shares of any series in the Trust:
Series of the Trust
Name and
Address
of Beneficial
Owner
Amount and
nature
of Beneficial
Ownership
Percent
of Class
BDRY
Citibank 3801 Citibank Center
B/3RD Floor/Zone 12
Tampa, Florida 33610
585,183 shares
18.14 %
BDRY
Charles Schwab & Co Inc.
211 Main Street San Francisco,
California 94105-1905
501,856 shares
15.56 %
BDRY
Interactive Brokers LLC
One Pickwick Plaza,
Greenwich, CT 06830
493,169
15.29 %
BDRY
National Financial Services LLC
499 Washington Boulevard
Jersey City, New Jersey
07310-1995
368,184 shares
11.42 %
BDRY
Morgan Stanley Smith Barney LLC
1300 Thames Street, 6th Floor
Baltimore, Maryland 21231
225,538 shares
6.99 %
BWET
National Financial Services LLC
499 Washington Boulevard
Jersey City, New Jersey
07310-1995
28,317 shares
22.64 %
BWET
Interactive Brokers LLC
One Pickwick Plaza,
Greenwich, CT 06830
28,217 shares
22.56 %
BWET
Charles Schwab & Co Inc.
211 Main Street San Francisco,
California 94105-1905
13,957 shares
11.16 %
BWET
Citibank 3801 Citibank Center
B/3RD Floor/Zone 12
Tampa, Florida 33610
11,955 shares
9.56 %
BWET
Morgan Stanley & Co International PLC
35 Cabot Square
Canary Wharf, London
E14 4QA
11,900 shares
8.79 %
BWET
JP Morgan Chase Bank, National Association
14201 Dallas Parkway,
Chase International Plaza
Dallas, TX 75254-2916
7,379 shares
5.90 %
BWET
D.A. Davidson & Co.
277 W. Monroe Street, #5250
Chicago, Illinois 60606
6,800 shares
5.44 %
Security Ownership of Management.
None of the directors or executive officers of
the Sponsor owns any shares of the Funds.
Change in Control.
Effective after the close of trading on February
14, 2024, ETF Managers Capital LLC, as the prior sponsor and commodity pool operator (the “Former Sponsor”) of the Trust,
entered into an agreement (the “Transfer Agreement”) to resign as Sponsor to the Trust and transfer its role as the Trust’s
sponsor to Amplify Investments LLC (“the Sponsor”) Under the terms of the Transfer Agreement, the Former Sponsor no longer
has any involvement in the operations, management or marketing of the Fund. In connection with this change of Sponsor, Trust changed
its name from the ETF Managers Group Commodity Trust I to the Amplify Commodity Trust. This change in control did not affect the Trust,
its shareholders or an investment in the Funds’ shares in any way.
- 78 -
Item 13. Certain Relationships and Related
Transactions, and Director Independence.
Certain Relationships and Related Transactions
See Items 11 and 12.
Neither the Trust nor the Funds entered into any
transaction in excess of $120,000 in which any related person had a direct or indirect material interest and the Trust and the Funds do
not propose to enter into any such transaction.
Director Independence
As an unincorporated entity, the registrant does
not have a Board of Directors.
Item 14. Principal Accountant Fees and Services.
The fees for services accrued and/or billed to
BDRY and to BWET by its independent auditors for the year ended June 30, 2024 and 2023 were as follows:
2024
2023
Audit Fees
$ 135,872
$ 98,000
Audit-Related Fees
-
-
Tax Fees
324,496
221,641
All Other Fees
-
-
Total
$ 460,368
$ 319,641
Approval of Independent Registered Public Accounting
Firm Services and Fees
The Sponsor approved all of the services provided
by WithumSmith+Brown, PC to the Funds described above. The Sponsor pre-approves all audit and allowed non-audit services of the Funds’
independent registered public accounting firm, including all engagement fees and terms.
- 79 -
Part IV
Item 15. Exhibits and Financial Statement Schedules.
1. See Index to Financial Statements on page 33.
2. No financial statement schedules are filed herewith because
(i) such schedules are not required or (ii) the information required has been presented in the aforementioned financial statements.
3. Exhibits required to be filed by Item 601 of Regulation S-K.
Exhibit Index
Listed below are the exhibits which are filed
or furnished as part of this annual report on Form 10-K (according to the number assigned to them in Item 601 of Regulation S-K):
3.1(a)
Second Amended and Restated Declaration of Trust and Trust Agreement (Incorporated by reference to Post-Effective Amendment No. 3 to Registration Statement No. 333-263425, filed on February 15, 2024)
3.1(b)
Instrument Establishing the Fund. (Incorporated by reference to Pre-Effective Amendment No. 1 to Registration Statement No. 333-218453, filed on October 6, 2017.)
3.1(c)
Amended Exhibit C to the Amended and Restated Declaration of Trust and Trust Agreement of the Trust. (Incorporated by reference to Pre-Effective Amendment No. 1 to Registration Statement No. 333-218453, filed on October 6, 2017.)
3.1(d)
Instrument Establishing the Fund. (Incorporated by reference to Form S-1, Registration Statement No. 333-266945, filed on August 17, 2022.)
3.2
Certificate of Trust of the Registrant. (Incorporated by reference to Pre-Effective Amendment No. 1 to Registration Statement No. 333-2199190, filed on November 26, 2014).
3.2(a)
Certificate of Amendment to Certificate of Trust (Incorporated by reference to Post-Effective Amendment No. 3 to Registration Statement No. 333-263425, filed on February 15, 2024)
4.1
Description of the Trust’s securities. (Incorporated by reference to the Trust’s Annual Report on Form 10-K, filed on September 30, 2019.)
10.1
Form of Authorized Participant Agreement. (Incorporated by reference to Pre-Effective Amendment No. 3 to Registration Statement No. 333-199190, filed on January 28, 2015.)
10.2
Market Agent Agreement. (Incorporated by reference to Post-Effective Amendment No. 3 to Registration Statements No. 333-263425, filed on February 15, 2024)
10.3
Licensing and Services Agreement with respect to BDRY. (Incorporated by reference to Pre-Effective Amendment No. 3 to Registration Statement No. 333-218453, filed on March 7, 2018.)
10.4
Assignment and Assumption of Licensing Services Agreement with respect to BDRY. (Incorporated by reference to Post-Effective Amendment No. 2 to Registration Statement No. 333-263425, filed on February 2, 2024.)
10.5
Licensing and Services Agreement with respect to BWET. (Incorporated by reference to Pre-Effective Amendment No. 1 to Registration Statement No. 333-266945, filed on March 30, 2023.)
10.6
Assignment and Assumption of Licensing Services Agreement with respect to BWET. (Incorporated by reference to Post-Effective Amendment No. 2 to Registration Statement No. 333-266945, filed on February 2, 2024.)
10.7
Custody Agreement. (Incorporated by reference to Post-Effective Amendment No. 3 to Registration Statements No. 333-263425, filed on February 15, 2024)
10.8
Fund Administration Servicing Agreement. ( Incorporated by reference to Post-Effective Amendment No. 3 to Registration Statements No. 333-263425, filed on February 15, 2024)
10.9
Fund Accounting Servicing Agreement. (Incorporated by reference to Post-Effective Amendment No. 3 to Registration Statements No. 333-263425, filed on February 15, 2024)
10.10
Transfer Agent Servicing Agreement. (Incorporated by reference to Post-Effective Amendment No. 3 to Registration Statements No. 333-263425, filed on February 15, 2024)
- 80 -
10.11
Fee Waiver Agreement with respect to BDRY. (Incorporated by reference to Post-Effective Amendment No. 2 to Registration Statement No. 333-263425, filed on February 2, 2024.)
10.12
Expense Limitation Agreement with respect to BDRY. (Filed herewith.)
10.13
Fee Waiver Agreement with respect to BWET. (Incorporated by reference to Post-Effective Amendment No. 2 to Registration Statement No. 333-266945, filed on February 2, 2024.)
10.14
Expense Limitation Agreement with respect to BWET. (Filed herewith) .
10.15
Sponsor Transfer Agreement (Incorporated by reference to Post-Effective Amendment No. 2 to Registration Statements No. 333-263425, filed on February 2, 2024)
10.16
Amendment No. 1 to the Sponsor Transfer Agreement (Incorporated by reference to Post-Effective Amendment No. 3 to Registration Statements No. 333-263425, filed on February 15, 2024)
23.1
Consent of Potter Anderson & Corroon LLP. (Incorporated by reference to Post-Effective Amendment No. 3 to Registration Statement No. 333-263425, filed on February 15, 2024)
23.2
Consent of Eversheds Sutherland (US) LLP. (Incorporated by reference to Post-Effective Amendment No. 3 to Registration Statement No. 333-263425, filed on February 15, 2024)
23.3
Consent of WithumSmith & Brown, P.C. as to the Trust (Filed herewith.)
23.4
Consent of WithumSmith & Brown, P.C. as to the Sponsor. (Incorporated by reference to the Trust’s Current Report on Form 8-K, filed on April 28, 2022.)
31.1
Certification by the Principal Executive Officer of the Registrant pursuant to Rules 13a-14 and 15d-14 of the Exchange Act. (Filed herewith.)
31.2
Certification by the Principal Financial Officer of the Registrant pursuant to Rules 13a-14 and 15d-14 of the Exchange Act. (Filed herewith.)
32.1
Certification by the Principal Executive Officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)
32.2
Certification by the Principal Financial Officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)
101.INS
Inline XBRL Instance Document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document.
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
- 81 -
SIGNATURES
Pursuant to the requirements of Section 13 or
15(d) 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.
Amplify Commodity Trust
(Registrant)
By:
Amplify Investments LLC
its Sponsor
By:
/s/ Christian Magoon
Name:
Christian Magoon
Principal Executive Officer
By:
/s/ Bradley H. Bailey
Name:
Bradley H. Bailey
Principal Financial Officer
Date: September 27, 2024.
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