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The occurrence of recessions or other periods of low or negative economic growth will typically have a direct adverse impact on commodity prices, demand and, therefore, may have an adverse impact on commodity prices.
−Removed: Other factors that affect general economic conditions in the world or in a major region, such as changes in population growth rates, periods of civil unrest, military conflicts, war (such as the current war between Russia and Ukraine), pandemics (e.g., COVID-19), government austerity programs, or currency exchange rate fluctuations, can also impact the demand for commodities.
−Removed: Sovereign debt downgrades, defaults, inability to access debt markets due to credit or legal constraints, liquidity crises, the breakup or restructuring of fiscal, monetary, or political systems such as the European Union, and other events or conditions (e.g., pandemics such as COVID-19)that impair the functioning of financial markets and institutions also may adversely impact the demand for commodities.
+Added: Other factors that affect general economic conditions in the world or in a major region, such as changes in population growth rates, periods of civil unrest, military conflicts, war, pandemics (e.g., the COVID-19 pandemic in 2020), government austerity programs, or currency exchange rate fluctuations, can also impact the demand for commodities.
+Added: Sovereign debt downgrades, defaults, inability to access debt markets due to credit or legal constraints, liquidity crises, the breakup or restructuring of fiscal, monetary, or political systems such as the European Union, and other events or conditions that impair the functioning of financial markets and institutions also may adversely impact the demand for commodities.
Other demand-related factors .
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Similarly, increases in industry manufacturing capacity may impact the supply of a particular crop.
−Removed: World food supply levels can also be affected by factors that reduce available supplies, such as embargoes, the occurrence of geopolitical
−Removed: risk associated with wars, terrorist attacks and tensions between countries, including sanctions imposed as a result of the foregoing that can adversely affect commodity trade flows by limiting or disrupting trade between countries or regions, natural disasters, disruptions in competitors’ operations, or unexpected unavailability of distribution channels that may disrupt supplies.
+Added: World food supply levels can also be affected by factors that reduce available supplies, such as embargoes, the occurrence of geopolitical risk associated with wars, terrorist attacks and tensions between countries, including sanctions imposed as a result of the foregoing that can adversely affect commodity trade flows by limiting or disrupting trade between countries or regions, natural disasters, disruptions in competitors’ operations, or unexpected unavailability of distribution channels that may disrupt supplies.
Technological change can also alter the relative costs for companies to produce, and process and distribute a commodity, which in turn may affect the supply of and demand of such commodity.
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Consequently, you could lose all or substantially all of your investment in a Trust Series.
−Removed: Significant market volatility has recently occurred in the commodities markets.
−Removed: Such volatility is attributable in part to the COVID-19 pandemic, related supply chain disruptions, war, including the war between Russia and Ukraine, and continuing disputes among oil-producing countries.
−Removed: These and other events could cause continuing or increased volatility in the future, which may affect the value, pricing and liquidity of some investments or other assets, including those held by or invested in by a Trust Series and the impact of which could limit the Trust Series’ ability to have a substantial portion of its assets invested in the Applicable Benchmark Component Futures Contracts.
+Added: Market volatility is attributable to things like the COVID-19 pandemic in 2020 and related supply chain disruptions, war, such as the war between Russia and Ukraine, and continuing disputes among oil-producing countries.
+Added: Events such as these, and others, could cause volatility in the future, which may affect the value, pricing and liquidity of some investments or other assets, including those held by or invested in by a Trust Series and the impact of which could limit the Trust Series’ ability to have a substantial portion of its assets invested in the Applicable Benchmark Component Futures Contracts.
In such a circumstance, the Trust Series could, if it determined it appropriate to do so in light of market conditions and regulatory requirements, invest in other Futures Contracts and/or Other Related Investments.
−Removed: Russia’s invasion of Ukraine, and sanctions brought by the United States and other countries against Russia and others, have caused disruptions in many business sectors, resulting in significant market disruptions that may lead to increased volatility in the price of certain commodities, and may lead to volatility in a Trust Series’ NAV or share price.
−Removed: On February 24, 2022, Russia launched a large-scale invasion of Ukraine.
−Removed: The extent and duration of the military action, and resulting sanctions, and future market or supply disruptions in the region, are impossible to predict, but could be significant and may have a severe adverse effect on the region.
−Removed: The United States and other countries and certain international organizations have imposed broad-ranging economic sanctions on Russia and certain Russian individuals, banking entities and corporations as a response to Russia’s invasion of Ukraine, and additional sanctions may be imposed in the future.
−Removed: Such sanctions (and any future sanctions) will adversely impact the economies of Russia and Ukraine, and certain sectors of each country’s economy may be particularly affected, including but not limited to, financial services, energy, metals and mining, engineering and defense and defense-related materials sectors.
−Removed: Among other things, the extent and duration of the military action, the responses of countries and political bodies to Russia’s actions, including sanctions, future market or supply disruptions, and Ukraine’s military response and the potential for wider conflict may increase financial market volatility generally, have severe adverse effects on regional and global economic markets, and cause volatility in the markets for commodities including the price of commodity futures, and the NAV or share price of a Trust Series.
−Removed: A resolution to the war in Ukraine also could impact the markets for certain commodities, and may have collateral impacts, including increased volatility, and cause disruptions to the availability of certain commodities, commodity and futures prices and the supply chain globally.
−Removed: The longer-term impact on commodities and futures prices, including the spot price of the commodities that the Trust Series invest in and the prices of the Applicable Benchmark Component Futures Contracts, is difficult to predict and depends on a number of factors that may have a negative impact on the Trust Series in the future.
−Removed: Infectious disease outbreaks like COVID-19 could negatively affect the valuation and performance of the Trust Series’ investments.
−Removed: An outbreak of infectious respiratory illness caused by a novel coronavirus known as COVID-19 was first detected in China in December 2019 and spread globally.
−Removed: In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic.
−Removed: COVID-19 resulted in numerous deaths, travel restrictions, closed international borders, enhanced health screenings at ports of entry and elsewhere, disruption of and delays in healthcare service preparation and delivery, prolonged quarantines and the imposition of both local and more widespread “work from home” measures, cancellations, loss of employment, supply chain disruptions, and lower consumer and institutional demand for goods and services, as well as general concern and uncertainty.
−Removed: The ongoing spread of COVID-19 has had, and may continue to have, a material adverse impact on local economies in the affected jurisdictions and also on the global economy, as cross border commercial activity and market sentiment were impacted by the outbreak and government and other measures seeking to contain its spread.
−Removed: Infectious disease outbreaks like COVID-19 may arise in the future and could adversely affect individual issuers and capital markets in ways that cannot necessarily be foreseen.
−Removed: In addition, actions taken by government and quasi-governmental authorities and regulators throughout the world in response to such an outbreak, including the potential for significant fiscal and monetary policy changes, may affect the value, volatility, pricing and liquidity of some investments or other assets, including those held by or invested in by the Trust Series.
−Removed: Public health crises caused by infectious disease outbreaks may exacerbate other pre-existing political, social and economic risks in certain countries or globally and their duration cannot be determined with certainty.
+Added: Natural disasters, public health disruptions (such as the COVID-19 pandemic), and international armed conflicts could impact the price of commodities and/or the value, pricing and liquidity of a Trust Series’ investments or assets which, in turn, could cause the loss of your investment in the Trust Series.
+Added: Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including public health disruptions, pandemics and epidemics (for example, the COVID-19 pandemic), can be highly disruptive to economies and markets.
+Added: Such events can, directly or indirectly, negatively impact, and/or cause volatility in, the price of commodities and the value, pricing, and liquidity of the investments or other assets held by a Trust Series.
+Added: Geopolitical conflict, including war and armed conflicts (such as Russia’s continued military actions against Ukraine that started in February 2022, conflicts in the Middle East, and the expansion of such conflicts in surrounding areas), sanctions, and acts of terrorism, can also, directly or indirectly, negatively impact, and/or cause volatility in, the price of commodities such as crude oil and the value, pricing, and liquidity of the investments or other assets held by a Trust Series.
+Added: A negative impact on, or volatility in, the price of crude oil or the value, pricing and liquidity of a Trust Series’ investments or other assets resulting from the occurrence of any of the aforementioned events, or similar events, could cause you to lose all, or substantially all, of your investment in a Trust Series.
Historical performance of a Trust Series and the Applicable Benchmark Component Futures Contracts is not indicative of future performance.
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In such a case, a Trust Series may have no gains to offset losses from other investments, and investors may suffer losses on their investment in a Trust Series at the same time they incur losses with respect to other investments.
−Removed: Variables such as drought, floods, weather military conflicts, pandemics (such as COVID-19), embargoes, tariffs and other political events may have a larger impact on commodity prices and commodity-linked instruments, including Futures Contracts and Other Commodity-Related Investments, than on traditional securities.
+Added: Variables such as drought, floods, weather military conflicts, pandemics (such as the COVID-19 pandemic), embargoes, tariffs and other political events may have a larger impact on commodity prices and commodity-linked instruments, including Futures Contracts and Other Commodity-Related Investments, than on traditional securities.
These additional variables may create additional investment risks that subject a Trust Series’ investments to greater volatility than investments in traditional securities.
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The public trading price at which an investor buys or sells shares during the day from their broker may be different from the NAV of the shares.
−Removed: Generally, price differences may relate primarily to supply and demand forces at work in the secondary trading market for shares that are closely related to, but not identical to, the same forces influencing the prices of the commodities comprising
−Removed: the Applicable Index and the Applicable Index at any point in time.
+Added: Generally, price differences may relate primarily to supply and demand forces at work in the secondary trading market for shares that are closely related to, but not identical to, the same forces influencing the prices of the commodities comprising the Applicable Index and the Applicable Index at any point in time.
USCF expects that exploitation of certain arbitrage opportunities by Authorized Participants and their clients will tend to cause the public trading price to track NAV per share closely over time, but there can be no assurance of that.
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the changes in the Trust Series’ NAV do not correlate closely with the changes in the price of the Benchmark Component Futures Contract;
−Removed: or the changes in the price of the Benchmark Component Futures Contract does not closely correlate with the changes in the
−Removed: cash or spot price of the commodities.
+Added: or the changes in the price of the Benchmark Component Futures Contract does not closely correlate with the changes in the cash or spot price of the commodities.
This is a risk because if these correlations do not exist, then investors may not be able to use the Trust Series as a cost-effective way to indirectly invest in commodities or as a hedge against movements in the spot price of commodities.
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federal income taxes on any imputed underpayment, the resulting tax liability would reduce the net assets of the Trust Series and would likely have an adverse impact on the value of the shares.
−Removed: Under certain
−Removed: circumstances, the Trust Series may be eligible to make an election to cause the investors to take into account the amount of any imputed underpayment, including any associated interest and penalties.
+Added: Under certain circumstances, the Trust Series may be eligible to make an election to cause the investors to take into account the amount of any imputed underpayment, including any associated interest and penalties.
The ability of a publicly traded partnership such as the Trust Series to elect this treatment is uncertain.
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OTC Contract Risk
−Removed: Each Trust Series will be subject to credit risk with respect to counterparties to OTC contracts entered into by the Trust on behalf of a Trust Series or held by special purpose or structured vehicles.
−Removed: Each Trust Series faces the risk of non-performance by the counterparties to the OTC contracts.
−Removed: Unlike in futures contracts, the counterparty to these contracts is generally a single bank or other financial institution, rather than a clearing organization backed by a group of financial institutions.
+Added: Each Trust Series will be subject to credit risk with respect to counterparties to OTC contracts entered into by the Trust on behalf of a Trust Series.
+Added: Each Trust Series faces the risk of non-performance by counterparties to its OTC contracts.
+Added: Unlike in futures contracts, the counterparty to OTC contracts is generally a single bank or other financial institution, rather than a clearing organization backed by a group of financial institutions.
As a result, there will be greater counterparty credit risk in these transactions.
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Each Trust Series mitigates these risks by typically entering into transactions only with major, global financial institutions.
−Removed: Valuing OTC derivatives may be less certain than actively traded financial instruments.
+Added: Valuing OTC derivatives may be less certain than valuing exchange-traded and/or cleared financial instruments.
In general, valuing OTC derivatives is less certain than valuing actively traded financial instruments such as exchange-traded futures contracts and securities or cleared swaps because, for OTC derivatives, the price and terms on which such OTC derivatives are entered into or can be terminated are individually negotiated, and those prices and terms may not reflect the best price or terms available from other sources.
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jurisdictions that may apply to each Trust Series’ counterparties located in those jurisdictions.
−Removed: It is possible that these new requirements, as well as potential additional resulted government regulation, could adversely affect each Trust Series’ ability to terminate existing derivatives contracts, exercise default rights, or satisfy obligations owed to it with collateral received under such contracts.
+Added: These requirements could adversely affect each Trust Series’ ability to terminate existing derivatives contracts, exercise default rights, or satisfy obligations owed to it with collateral received under such contracts if a Trust Series and/or its affiliates is subject to resolution or insolvency proceedings.
The use of swap agreements may expose a Trust Series to early termination risk, which could result in significant losses to the Trust Series.
Swap agreements do not have uniform terms.
−Removed: A swap counterparty may have the right to close out the Trust Series’ position due to the occurrence of certain events (for example, if a counterparty is unable to hedge its obligations to the Trust Series, or if the Trust Series defaults on certain terms of the swap agreement, or if there is a material decline in the Trust Series’ NAV on a particular day) and request immediate payment of amounts owed by the Trust Series under the agreement.
−Removed: If the level of the Trust Series’ NAV has a dramatic intraday move, the terms of the swap agreement may permit the counterparty to close out a transaction with the Trust Series at a price calculated by the counterparty that, in good faith, represents such counterparty’s loss.
−Removed: which may not represent fair market value.
−Removed: A swap counterparty may also have the right to close out the Trust Series’ position for no reason, in some cases with same day notice.
+Added: A swap counterparty may have the right to close out the Trust Series’ position due to the occurrence of certain events (for example, if there is a material decline in the Trust Series’ NAV on a particular day) and request immediate payment of amounts owed by the Trust Series under the agreement.
+Added: If the level of the Trust Series’ NAV has a dramatic intraday move, the terms of the swap agreement may permit the counterparty to close out a transaction with the Trust Series at a price calculated by the counterparty that, in good faith, represents such counterparty’s loss, but such loss may not represent fair market value.
Neither Trust Series is leveraged, but a Trust Series could become leveraged if it had insufficient assets to completely meet its margin or collateral requirements relating to its investments.
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It is difficult to execute a trade at a specific price when there is a relatively small volume of buy and sell orders in a market.
−Removed: A market disruption, such as war or a foreign government taking political
−Removed: actions that disrupt the market for its currency, its crude oil production or exports, or another major export, can also make it difficult to liquidate a position.
+Added: A market disruption, such as war or a foreign government taking political actions that disrupt the market for its currency, its crude oil production or exports, or another major export, can also make it difficult to liquidate a position.
Because both Futures Contracts and Other Commodity-Related Investments may be illiquid, a Trust Series’ Commodity Interests may be more difficult to liquidate at favorable prices in periods of illiquid markets and losses may be incurred during the period in which positions are being liquidated.
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USCF’s LLC Agreement provides limited authority to the Non-Management Directors, and any Director of USCF may be removed by USCF’s parent company, which is wholly owned by The Marygold Companies, Inc., a controlled public company where the majority of shares are owned by Nicholas D.
−Removed: Gerber along with certain of his other family members and certain other shareholders.
+Added: Gerber along with certain of his family members and certain other shareholders.
USCF’s Board of Directors currently consists of four Management Directors, who are also executive officers or employees of USCF, and three Non-Management Directors, who are considered independent for purposes of applicable NYSE Arca and SEC rules.
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The futures markets are subject to comprehensive statutes, regulations, and margin requirements.
−Removed: In addition, the CFTC and futures exchanges are authorized to take extraordinary actions in the event of a market emergency, including, for example, the retroactive implementation of speculative position limits or higher margin requirements, the establishment of daily price limits and the suspension of trading.
−Removed: Regulation of commodity interest transactions in the United States is a rapidly changing area of law and is subject to ongoing modification by governmental and judicial action.
−Removed: Considerable regulatory attention has been focused on non-traditional investment pools that are publicly distributed in the United States.
−Removed: In addition, the SEC, CFTC and the exchanges are authorized to take extraordinary actions in the event of a market emergency, including, for example, the retroactive implementation of speculative position limits or higher margin requirements, the establishment of daily price limits and the suspension of trading.
−Removed: Further, various national governments outside of the United States have expressed concern regarding the disruptive effects of speculative trading in the commodities markets and the need to regulate the derivatives markets in general.
+Added: Such statutes, regulations and requirements are subject to ongoing modification by governmental and judicial action.
The effect of any future regulatory change on a Trust Series is impossible to predict, but it could be substantial and adverse.
+Added: In addition, the CFTC, SEC, futures exchanges, and other entities are authorized to take extraordinary actions in the event of a market emergency including, for example, the retroactive implementation of speculative position limits or higher margin requirements, the establishment of daily price limits and the suspension of trading.
For a more detailed discussion of the regulations to be imposed by the CFTC and the SEC and the potential impacts thereof on a Trust Series, please see “ Item 1.
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counterparts, including potentially different or diminished investor protections.
−Removed: In trading contracts denominated in currencies other
+Added: In trading contracts denominated in currencies other than U.S.
dollars, a Trust Series is subject to the risk of adverse exchange-rate movements between the dollar and the functional currencies of such contracts.
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If such a determination is made, the same consequences associated with a suspension of the offering of Creation Baskets, as described in the foregoing risk factor, “The suspension in the ability of Authorized Participants to purchase Creation Baskets could cause a Trust Series’ NAV to differ materially from its trading price,” could also occur as a result of a Trust Series determining to limit the offering of creation baskets.
−Removed: In a rising rate environment, the Trust Series may not be able to fully invest at prevailing rates until any current investments in Treasury Bills mature in order to avoid selling those investments at a loss.
+Added: The Trust Series may be subject to interest rate risk, which may prevent them from investing fully at prevailing rates until any current investments in Treasury Bills mature in order to avoid selling those investments at a loss.
+Added: Interest rate risk is the risk that fixed income securities and other investments in a Trust Series’ portfolio will fluctuate in value because of a change in interest rates.
+Added: Interest rate changes can be sudden and unpredictable, and a Trust Series may lose money because of movements in interest rates.
When interest rates rise, the value of fixed income securities typically falls.
−Removed: In a rising interest rate environment, a Trust Series may not be able to fully invest at prevailing rates until any current investments in Treasury Bills mature in order to avoid selling those investments at a loss.
+Added: In a rising interest rate environment, the Trust Series may not be able to fully invest at prevailing rates until any current investments in Treasury Bills mature in order to avoid selling those investments at a loss.
Interest rate risk is generally lower for shorter term investments and higher for longer term investments.
−Removed: The risk to the Trust Series of rising interest rates may be greater in the future due to the end of a long period of historically low rates, the effect of potential monetary policy initiatives, including actions taken by the U.S.
−Removed: Federal Reserve and other foreign equivalents to curb inflation, and resulting market reactions to those initiatives.
−Removed: When interest rates fall, the Trust Series may be required to reinvest the proceeds from the sale, redemption or early prepayment of a Treasury Bill or money market security at a lower interest rate.
+Added: In addition, in risk interest rate environments, it is possible that the Treasury Bills held by a Trust Series will decline in value.
+Added: When interest rates fall, a Trust Series may be required to reinvest the proceeds from the sale, redemption or early prepayment of a Treasury Bill or money market security at a lower interest rate.
A Trust Series may potentially lose money by investing in government money market funds.
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This is because if such a bankruptcy were to occur, the Trust Series would be afforded the protections granted to customers of an FCM, and participants to transactions cleared through a clearing house, under the United States Bankruptcy Code and applicable CFTC regulations.
−Removed: provisions generally provide for a pro rata distribution to customers of customer property held by the bankrupt FCM or an Exchange’s clearing house if the customer property held by the FCM or the Exchange’s clearing house is insufficient to satisfy all customer claims.
+Added: Such provisions generally provide for a pro rata distribution to customers of customer property held by the bankrupt FCM or an Exchange’s clearing house if the customer property held by the FCM or the Exchange’s clearing house is insufficient to satisfy all customer claims.
Bankruptcy of a clearing FCM can be caused by, among other things, the default of one of the FCM’s customers.
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In addition, it may have the effect of discouraging lawsuits against USCF, the Trust, the Trustee, or their respective directors and officers.
−Removed: Although the Trust Agreement contains the exclusive choice of forum provision described above and such provisions are expressly permitted under the Trust Act, there are no court cases that
−Removed: we are aware of that have interpreted the Trust Act in this regard and thus, it is possible that a court could rule that such a provision is inapplicable for a particular claim or action or that such provision is unenforceable.
+Added: Although the Trust Agreement contains the exclusive choice of forum provision described above and such provisions are expressly permitted under the Trust Act, there are no court cases that we are aware of that have interpreted the Trust Act in this regard and thus, it is possible that a court could rule that such a provision is inapplicable for a particular claim or action or that such provision is unenforceable.
With the validity and enforceability of exclusive forum selection provisions still somewhat in question outside of the State of Delaware, there may be increased litigation over such provisions.
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Political and other actors and their agents increasingly seek to advance climate change objectives indirectly, such as by seeking to reduce the availability of or increase the cost for, financial and investment in the oil and gas sector and taking actions intended to promote changes in business strategy for oil and gas companies.
−Removed: Many governments are also providing tax
−Removed: advantages and other subsidies to support transitioning to alternative energy sources or mandating the use of specific fuels other than oil or natural gas.
+Added: Many governments are also providing tax advantages and other subsidies to support transitioning to alternative energy sources or mandating the use of specific fuels other than oil or natural gas.
Depending on how policies are formulated and applied, they could have the potential to negatively affect a Trust Series’ investment returns and make oil and natural gas products more expensive or less competitive.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.