| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The
Dividend Fund is an investment company, as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (“ASC”) Topic 946 Financial Services — Investment Companies. As such, the ETF follows the investment company
accounting and reporting guidance. The
accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America
(“GAAP”) for financial information and with the instructions for Form 10-K and the rules and regulations of the U.S. Securities
and Exchange Commission (the “SEC”). In the opinion of management, all material adjustments, consisting only of normal recurring
adjustments, considered necessary for a fair statement of the interim period financial statements have been made. Following
is a summary of the significant accounting policies followed by the Funds: Use
of Estimates The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the
reported amounts of investment income and expenses during the reporting period. Actual results could differ from those estimates. Concentration
of Credit Risk Credit
risk is the risk that a financial loss will be incurred if a Fund’s counterparty does not fulfill its financial obligations in
a timely manner. Financial instruments that potentially subject the Funds to concentrations of credit risk consist principally of
investments and cash deposits. As set forth above, IDIV was liquidated on December 21, 2022, and therefore did not hold any
investment after that date. Cash of IDIV fund at December 21, 2022 is held at Brown Brothers, Harriman & Co. Investments and
cash of IDIV Fund at December 31, 2021, 2020 and 2019 are held at Brown Brothers, Harriman & Co., and Morgan Stanley & Co.
LLC. Final
Net Asset Value for Fiscal Period The
NAV per Share for a Fund is determined by dividing the net assets of the Fund by the number of outstanding Shares. The NAVs of the ETFs
are determined as soon as practicable after the close of regular trading of the Shares on the NYSE Arca on each Business Day. Each Fund’s
net assets on a Business Day is obtained by subtracting accrued expenses and other liabilities borne by such Fund, if any, from the total
value of the assets held by the Fund, in each case, as of the time of calculation. SEI Investments Global Fund Services, Inc., the administrator
of the ETFs is responsible for making these determinations. Fair
Value of Financial Instruments Security
Valuation — The Fund values investments and financial instruments at fair value. Securities listed on a securities exchange, market
or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ), including securities
traded over the counter, are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they
are traded (or at approximately 4:00 pm Eastern Time if a security’s primary exchange is normally open at that time), or, in the
case of the futures contracts held by the Fund, at the daily settlement price published by the Chicago Mercantile Exchange for such futures
contracts. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. Treasury
Securities, as defined below held by the Fund generally are priced based upon valuations provided by independent, third-party pricing
agents. Securities
for which market prices are not “readily available” are valued in accordance with Fair Value Procedures established by the
Sponsor or a committee of its personnel thereof. Some of the more common reasons that may necessitate that a security be valued using
Fair Value Procedures include: the security’s trading has been halted or suspended; the security has been de-listed from a national
exchange; the security’s primary trading market is temporarily closed at a time when under normal conditions it would be open;
the security has not been traded for an extended period of time; the security’s primary pricing source is not able or willing to
provide a price; or trading of the security is subject to local government-imposed restrictions. In addition, the Fund may fair value
their securities if an event that may materially affect the value of a Fund’s securities that traded outside of the United States
(a “Significant Event”) has occurred between the time of the security’s last close and the time that the Fund calculates
its net asset value. A Significant Event may relate to a single issuer or to an entire market sector. Events that may be Significant
Events include: government actions, natural disasters, armed conflict, acts of terrorism and significant market fluctuations. If the
Advisor becomes aware of a Significant Event that has occurred with respect to a security or group of securities after the closing of
the exchange or market on which the security or securities principally trade, but before the time at which the Fund calculates its NAV,
it may request that a valuation meeting be called. When a security is valued in accordance with the Fair Value Procedures, the Sponsor
or its designees will determine the fair value after taking into consideration relevant information reasonably available to it. In
accordance with the authoritative guidance on fair value measurements and disclosure under GAAP, the Fund discloses fair value of their
investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The objective of a fair
value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority
to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable
inputs (Level 3). The three levels of the fair value hierarchy are described below:
Level 1 – Unadjusted quoted prices
in active markets for identical, unrestricted assets or liabilities that the Fund has the ability to access at the measurement date;
Level 2 – Quoted prices which are
not active, or inputs that are observable (either directly or indirectly) for substantially the full term of the asset or liability;
and
Level 3 – Prices, inputs or exotic
modeling techniques which are both significant to the fair value measurement and unobservable (supported by little or no market activity). In
some instances, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. The level in the
fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest input level
that is significant to the fair value measurement in its entirety. As set forth above, IDIV was liquidated on December
21, 2022, and therefore did not hold any investment after that date. The following table summarizes the inputs used to value the Fund’s
investments at December 31, 2021 using the fair value hierarchy: U.S.
Equity Cumulative Dividends Fund–Series 2027 December
31, 2021
Investments in Securities Level 1 Level 2 Level 3 Total
U.S. Treasury Obligations $ - $ 33,020,279 $ - $ 33,020,279
Total Investments in Securities $ - $ 33,020,279 $ - $ 33,020,279
Other Financial Instruments Level 1 Level 2 Level 3 Total
Futures Contracts*
Unrealized Appreciation $ 1,468,182 $ - $ - $ 1,468,182
Unrealized Depreciation - - - -
Total Other Financial Instruments $ 1,468,182 $ - $ - $ 1,468,182
* Futures
contracts are valued at unrealized appreciation (depreciation) on the instrument. Amounts
designated as “-” are $0. The
inputs or methodology used for valuing investments are not necessarily an indication of the risk associated with investing in those securities. Investment
Transactions and Related Income Investment
transactions are recorded on trade date. Dividend income is recorded on the ex-dividend date. Discounts and premiums on securities purchased
are amortized or accreted using the effective interest method. Realized gains and losses from securities transactions and unrealized
appreciation and depreciation of securities are determined using the identified cost basis method for financial reporting. Trading
and Transaction Costs and Fees Each
Fund will pay (or will reimburse the Clearing FCM if previously paid) any other transaction costs and fees associated with trading of
the Fund’s instruments (including floor brokerage, exchange, clearing, give-up, user and National Futures Association (“NFA”)
fees) that are not related to the creation and redemption of Baskets. Brokerage commissions on futures contracts are recognized on a
half-turn basis (e.g., the first half is recognized when the contract is opened and the second half is recognized when the contract is
closed). Income
Taxes The
Fund is a series of a Delaware statutory trust and will be treated as a partnership for U.S. federal income tax purposes. Accordingly,
no Fund expects to incur U.S. federal income tax; rather each beneficial owner of Shares will be required to take into account its allocable
share of the Fund’s income, gain, loss deductions and other items for the Fund’s taxable year ending with or within the beneficial
owner’s taxable year. The
Fund files an income tax return in the U.S. federal jurisdiction and may file income tax returns in various U.S. states and foreign jurisdictions.
Generally, the Funds are subject to income tax examinations by federal, state and local jurisdictions, where applicable. The
Fund is required to determine whether their tax positions are more likely than not to be sustained upon examination by the applicable
taxing authority based on the technical merits of the position. Tax positions not deemed more-likely-than-not threshold would be recorded
as a tax expense in the current period. At December 21, 2022 and December 31, 2021, the
Fund had no unrecognized tax benefits related to their tax positions. The Fund does not expect that their assessments related to unrecognized
tax benefits will materially change over the next 12 months. However, the Fund’s conclusions may be subject to review and adjustment
at a later date based on factors including, but not limited to, the nexus of income among various tax jurisdictions; compliance with U.S.
federal, state and foreign tax laws; and changes in the administrative practices and precedents of the relevant taxing authorities. The Fund’s policy is to classify interest
and penalties associated with the failure to file U.S. federal and state income tax returns, as income tax expenses on their Statements
of Operations. For the period ended December 21, 2022 and years ended December 31, 2021, 2020, and 2019, the Funds did not have any interest
or penalties associated with the failure to file any income tax returns. Distribution
Policy The
Dividend Fund expects to pay monthly cash distributions to its Shareholders throughout each calendar year. Such distributions shall,
on an annual basis, before fees and expenses, equal all or a substantial portion of the Dividend Fund’s NAV attributable to the
ordinary cash dividends accumulated by the Dividend Points Index for the year (as reflected in the current year’s S&P 500 Dividend
Futures Contracts held by the Dividend Fund). Such distributions may consist of ordinary income, capital gains and/or return of capital
whose character will be determined at fiscal year-end once final year-end figures have been calculated. The Dividend Fund’s capital
gains, if any, for a calendar year may include any net unrealized appreciation in its futures contracts that expire in future calendar
years. |
