| Agreements | (4)
Agreements (a)
Management Fee The
Fund pays the Sponsor a sponsor fee (the “Sponsor Fee”) in consideration of the Sponsor’s advisory services to the
Fund. Additionally, the Fund pays its commodity trading advisor a license and service fee (the “CTA fee”). BDRY
pays the Sponsor an annual Sponsor Fee, monthly in arrears, in an amount calculated as the greater of 0.15% of its average daily net
assets, or $125,000. BDRY also pays an annual fee to Breakwave, monthly in arrears, in an amount equal to 1.45% of BDRY’s average
daily net assets. Breakwave has agreed to waive its CTA fee to the extent necessary, and the Sponsor has voluntarily agreed to correspondingly
assume the remaining expenses of BDRY such that Fund expenses do not exceed an annual rate of 3.50%, excluding brokerage commissions
and interest expense, of the value of BDRY’s average daily net assets through March 31, 2024 (the “BDRY Expense Cap,”).
The assumption of expenses by the Sponsor and waiver of BDRY’s CTA fee are contractual on the part of the Sponsor and Breakwave,
respectively. The
waiver of BDRY’s CTA fees, pursuant to the undertaking, amounted to $38,707 and $-0-, for the three months ended December 31, 2022
and 2021, respectively, and $66,332 and $-0- for the six months ended December 31, 2022 and 2021, respectively, as disclosed in the Statements
of Operations. The
Fund currently accrues its daily expenses up to the Expense Cap, or if less, at accrual estimates established by the Sponsor. At the
end of each month, the accrued amount is remitted to the Sponsor as the Sponsor has assumed, and is responsible for the payment of the
routine operational, administrative and other ordinary expenses of the Fund in excess of the Fund’s Expense Cap, which in the case
of BDRY, aggregated $-0- and $-0- for the three months ended December 31, 2022 and 2021, respectively, and $-0- and $-0- for the six
months ended December 31, 2022 and 2021, respectively, as disclosed in the Statements of Operations. (b)
The Administrator, Custodian, Fund Accountant and Transfer Agent The
Fund has appointed U.S. Bank, a national banking association, with its principal office in Milwaukee, Wisconsin, as the custodian (the
“Custodian”). Its affiliate, U.S. Bancorp Fund Services, is the Fund accountant (“the Fund accountant”) of the
Fund, transfer agent (the “Transfer Agent”) for Fund shares and administrator for the Fund (the “Administrator”).
It performs certain administrative and accounting services for the Fund and prepares certain SEC, NFA and CFTC reports on behalf of the
Fund. (U.S. Bank and U.S. Bancorp Fund Services are referred to collectively hereinafter as “U.S. Bank”). BDRY
has agreed to pay U.S. Bank 0.05% of AUM, with a $45,000 minimum annual fee payable for its administrative, accounting and transfer agent
services and 0.01% of AUM, with an annual minimum of $4,800 for custody services. BDRY paid U.S. Bank $16,637 and $16,284 for the three
months ended December 31, 2022 and 2021, respectively, and $33,274 and $32,581 for the six months ended December 31, 2022 and 2021, respectively,
as disclosed in the Statements of Operations. (c) The Distributor The Fund pays ETFMG Financial LLC. (the “Distributor”),
an affiliate of the Sponsor, an annual fee for statutory and wholesaling distribution services and related administrative services equal
to the greater of $15,000 or 0.02% of the Fund’s average daily net assets, payable monthly. Pursuant to the Marketing Agent Agreement
between the Sponsor, the Fund and the Distributor, the Distributor assists the Sponsor and the Fund with certain functions and duties
relating to distribution and marketing services to the Fund, including reviewing and approving marketing materials and certain regulatory
compliance matters. The Distributor also assists with the processing of creation and redemption orders. BDRY incurred $3,959 and $3,959 for the three
months ended December 31, 2022 and 2021, respectively, and $7,918 and $7,918 for the six months ended December 31, 2022 and 2021, respectively,
as disclosed in the Statements of Operations. BDRY pays the Sponsor an annual fee for wholesale
support services of $25,000 plus 0.12% of BDRY’s average daily net assets, payable monthly. BDRY incurred $17,422 and $30,294 in wholesale
support fees for the three months ended December 31, 2022 and 2021, respectively, and $35,122 and $64,101 for the six months ended December
31, 2022 and 2021, respectively, as disclosed in the Statements of Operations. (d) The Commodity Broker Marex Financial (formerly ED&F Man Capital
Markets Inc.), registered in England, serves as BDRY’s clearing broker (the “Commodity Broker”). In its capacity as clearing
broker, the Commodity Broker executes and clears the Fund’s futures transactions and performs certain administrative services for
the Fund. The Fund pays brokerage commissions, including
applicable exchange fees, National Futures Association (“NFA”) fees, give–up fees, pit brokerage fees and other transaction
related fees and expenses charged in connection with trading activities in CFTC regulated investments. Brokerage commissions on futures
contracts are recognized on a half-turn basis. The Sponsor does not expect brokerage commissions
and fees to exceed 0.40% (excluding the impact on the Fund of creation and/or redemption activity) of the net asset value of the Fund
for execution and clearing services on behalf of the Fund, although the actual amount of brokerage commissions and fees in any year or
any part of any year may be greater. The effects of trading spreads, financing costs associated with financial instruments, and costs
relating to the purchase of U.S. Treasury Securities or similar high credit quality short-term fixed-income or similar securities are
not included in the foregoing analysis. BDRY incurred $142,544 and $198,545 in brokerage commissions and fees for the three months ended
December 31, 2022 and 2021, respectively, and $252,166 and $376,338 for the six months ended December 31, 2022 and 2021, respectively,
as disclosed in the Statements of Operations. (e) The Trustee Under the Amended and Restated Declaration of
Trust and Trust Agreement (the “Trust Agreement”) for the Fund, Wilmington Trust Company, the Trustee of the Fund (the “Trustee”)
serves as the sole trustee of the Fund in the State of Delaware. The Trustee will accept service of legal process on the Fund in the
State of Delaware and will make certain filings under the Delaware Statutory Trust Act. Under the Trust Agreement for the Fund, the Sponsor
has the exclusive management and control of all aspects of the business of the Fund. The Trustee does not owe any other duties to the
Fund, the Sponsor or the Shareholders of the Fund. The Trustee has no duty or liability to supervise or monitor the performance of the
Sponsor, nor does the Trustee have any liability for the acts or omissions of the Sponsor. BDRY incurred $1,260 and $630 in trustee fees
for the three months ended December 31, 2022 and 2021, respectively, and $2,520 and $1,260 for the six months ended December 31, 2022
and 2021, respectively, which is included in Other Expenses in the Statements of Operations. (f) Routine Offering, Operational, Administrative
and Other Ordinary Expenses The Sponsor, in accordance with the BDRY Expense
Cap limitation paid, after the waiver of the CTA fee for BDRY by Breakwave, if any, all of the routine offering, operational, administrative
and other ordinary expenses of BDRY in excess of 3.50% (excluding brokerage commissions and interest expense) of BDRY’s average
daily net assets, including, but not limited to, accounting and computer services, the fees and expenses of the Trustee, Administrator,
Custodian, Transfer Agent and Distributor, legal and accounting fees and expenses, tax return preparation expenses, filing fees, and
printing, mailing and duplication costs. BDRY incurred $505,629 and $955,267 for the three months ended December 31, 2022 and 2021, respectively,
and $976,903 and $1,751,167 for the six months ended December 31, 2022 and 2021, respectively, in routine offering, operational, administrative
or other ordinary expenses. Effective September 1, 2022, Breakwave may recoup
any fees waived on or after such date, pursuant to the Expense Cap; however, no repayment will be made if such repayment causes the Fund’s
Total Expenses after the repayment to exceed either the Expense Cap in place at the time such amounts were waived, or the Fund’s
current Expense Cap. Such recoupment is limited to three years from the date the amount is initially waived. The CTA fee waiver for BDRY by Breakwave was $38,707
and $-0- for the three months ended December 31, 2022 and 2021, respectively, and $66,332 and $-0- for the six months ended December 31,
2022 and 2021, respectively. In addition, the assumption of Fund expenses above
the BDRY Expense Cap by the Sponsor, pursuant to the undertaking (as discussed in Note 4a), amounted to $-0- and $-0- for the three months
ended December 31, 2022 and 2021, respectively, and $-0- and $-0- for the six months ended December 31, 2022 and 2021, respectively. (g) Organizational and Offering Costs Expenses incurred in connection with organizing
BDRY and up to the offering of its Shares upon commencement of its investment operations on March 22, 2018, were paid by the Sponsor and
Breakwave without reimbursement. Accordingly, all such expenses are not reflected
in the Statements of Operations. The Fund will bear the costs of its continuous offering of Shares and ongoing offering expenses. Such
ongoing offering costs will be included as a portion of the Routine Offering, Operational, Administrative and Other Ordinary Expenses.
For the three and six months ended December 31, 2022 and 2021, respectively, BDRY incurred no such expenses. During the year ended June 30, 2021 the Sponsor,
in order to maintain the continuous offering of Shares, undertook to register additional Shares of the Fund, the costs of which were borne
by the Fund and aggregated $28,997, of which $28,997 and $19,544 was amortized to expense at December 31, 2022 and 2021, respectively.
Amortization of offering costs amounted to $-0- and $7,309, respectively, for the three and six months ended December 31, 2022 and $7,309
and $14,618 respectively for the three and six months ended December 31, 2021. |
