NOTES TO FINANCIAL STATEMENTS

December 31, 2021 and 2020

(See Independent Auditor’s Report)

Note 1 - Organization and nature of business

ETF Managers Capital, LLC (the “Company”), a Delaware limited liability company, was formed June 12, 2014 and is a wholly-owned subsidiary of Exchange Traded Managers Group LLC (“ETFMG”). The Company is registered with the Commodity Futures Trading Commission as a commodity pool operator (“CPO”) and is a member of the National Futures Association (“NFA”). The Company serves as the Sponsor and Managing Owner of ETF Managers Group Commodity Trust I (the “Trust”), a Delaware series trust, of which “BDRY” or the “Fund” is currently the sole series of the Trust. BDRY commenced operations with the listing and commencement of trading of BDRY shares on the NYSE Arca on March 22, 2018.

Breakwave Advisors, LLC (“Breakwave”) is registered as a “commodity trading advisor” (“CTA”) and acts as such for BDRY.

The operations of the Company began on February 19, 2015.

RISE Closure

On October 16, 2020, the Sponsor announced that it would close and liquidate the SIT RISING RATE ETF (“RISE”) because of the then current market conditions and the Fund’s asset size. The last day the liquidated fund accepted creation orders was on October 30, 2020. Trading in RISE was suspended after the close of the NYSE Arca on October 30, 2020. Proceeds of the liquidation were sent to shareholders on November 18, 2020 (the “Distribution Date”). From October 30, 2020 through the distribution date, shares of RISE did not trade on the NYSE Arca nor was there a secondary market for the shares. Any shareholders that remained in RISE on the Distribution Date automatically had their shares redeemed for cash at the current net asset value on November 18, 2020.

During the years ended December 31, 2021 and December 31, 2020, the Company paid expenses on behalf of RISE and BDRY in the amount of $2,987 and $291,545, respectively, as disclosed in the Statements of Operations and Other Comprehensive Income (Loss). In addition, the Company bore the RISE operating loss including expenses arising subsequent to the RISE liquidation, aggregating $15,313 and $362,696, respectively during the years ended December 31, 2021 and December 31, 2020, as disclosed in the Statements of Operations and Other Comprehensive Income (Loss).

Legal Matters

ETFMG and certain other affiliates of the Company, including ETF Managers Group, LLC (the “Adviser”) were defendants in a case filed on October 26, 2017 in the United States District Court for the Southern District of New York (SDNY) by NASDAQ, Inc. (“Nasdaq”) captioned Nasdaq, Inc. v. Exchange Traded Managers Group, LLC et al., Case 1:17-cv 08252 (the “New York Action”). This action asserted claims for breach of contract, conversion and certain other claims based on disputes arising out of contractual relationships with the Adviser relating to certain series of the Trust. The matter was the subject of a bench trial in May 2019, and on December 20, 2019, the Court issued an Opinion and Order awarding compensatory damages to Plaintiff in the amount of $78,403,172, plus prejudgment interest (the “Judgment”). In its decision, the Court in the New York Action stated that its damages award, which gave rise to the Judgment, “includes the share of profits to which Nasdaq’s venture partner PureShares was entitled”.

ETFMG filed a Notice of Appeal from the Judgment in the United States Court of Appeals for the Second Circuit on January 19, 2020, Docket No. 20-300. On October 28, 2021, Nasdaq and ETFMG entered into a Judgment Payment Agreement, which settled the matter and satisfied the Judgment. On November 1, 2021, Nasdaq recorded a Satisfaction of Judgment with the United States District Court for the Southern District of New York reflecting that the Judgment in the amount of $80,581,135 was paid in full, and ETFMG withdrew its appeal of the Judgment with prejudice before the United States Court of Appeals for the Second Circuit.

NOTES TO FINANCIAL STATEMENTS

December 31, 2021 and 2020

(See Independent Auditor’s Report)

The Trust, the Adviser, and certain officers and affiliated persons of the Adviser (“Adviser Parties”) have been named as defendants in an action filed December 21, 2021, in the Superior Court of New Jersey, Union County, captioned PureShares, LLC, d/b/a PureFunds et al. v. ETF Managers Group, LLC et al., Docket No. UNN-C-152-21. This action asserts breach of contract and tort claims arising from the same facts and circumstances, and relates to the same series of the Trust, that gave rise to the New York Action. The new action seeks damages in unspecified amounts and injunctive relief. On February 19, 2022 and February 24, 2022, the Adviser Parties and the Trust, respectively, each filed motions for an Order dismissing the complaint filed by the Plaintiffs, in part, on the basis that Plaintiffs’ claims overlap with, and are barred by, those claims previously asserted by Nasdaq (and resolved on PureShares’ behalf) in the New York Action that resulted in the judgment against the defendants, which has been satisfied. The defendants intend to vigorously defend themselves in this new action.

Note 2 – Summary of Significant Accounting Policies

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America.

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenues and expenses and disclosure of contingent assets and liabilities during the reporting periods of the financial statements. Actual results could differ from those estimates.

The Company values its investment in BDRY at the last quoted sales price on the NYSE Arca on the valuation date, or, if there is no such reported sale on the valuation date, at the most recent quoted bid price.

ETF Managers Capital, LLC is not a tax paying entity for federal income tax purposes, and thus no income tax expense has been recorded in the financial statements. The Company is a single member limited liability company.

NOTES TO FINANCIAL STATEMENTS

December 31, 2021 and 2020

(See Independent Auditor’s Report)

Note 3 – Revenue Recognition

The Company follows ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”). The revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved.

Revenue from contracts with customers includes management fees. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified, when to recognize revenue based on the appropriate measure of the Company’s progress under the contract; and whether constraints on variable consideration should be applied due to uncertain future events.

Accounts receivable arise when the Company has an unconditional right to receive payment under a contract with a customer and are derecognized when the cash is received. As of December 31, 2021, and December 31, 2020 there were accounts receivable of $335,359, and $125,454, respectively. Substantially all accounts receivable balances are with related parties (see Note 4).

Note 4 – Related Party Transactions

BDRY pays the Company 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 paid 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 Company 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 (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, through September 30, 2023. At December 31, 2021 and December 31, 2020, BDRY owed to Breakwave, $81,324 and $20,380, respectively, as disclosed in the Statements of Financial Condition.

NOTES TO FINANCIAL STATEMENTS

December 31, 2021 and 2020

(See Independent Auditor’s Report)

In addition to the Sponsor fee, the Company receives additional fees from the Fund for providing necessary services for its operations. For the years ended December 31, 2021 and December 31, 2020, the Company received the following fees:

Breakwave had agreed to deposit with the Company such amounts as are necessary to enable the Company to assume the expenses of the Fund pursuant to the Expense Cap. At December 31, 2021 and December 31, 2020, the Company held $-0- and $-0-, respectively, in an expense reimbursement account representing the balance of such deposit account for the payment of assumed expenses of the Fund. In addition, the Company waived reimbursement of assumed expenses by Breakwave in the amount of $-0- and $73,301 for the years ended December 31, 2021 and December 31, 2020, respectively.

The waiver of BDRY’s CTA fees, pursuant to the undertaking, amounted to $20,752 and $62,988 for the years ended December 31, 2021 and December 31, 2020, respectively.

BDRY currently accrues its daily expenses up to the Expense Cap, or if less, at accrual estimates. At the end of each month, the accrued amount is remitted to the Company as the Company 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 RISE through November 18, 2020, the date of liquidation, aggregated $328,467, and in the case of BDRY, aggregated $0 and $67,532 for the years ended December 31, 2021 and December 31, 2020, respectively.

The routine operational, administrative and other ordinary expenses of RISE, through November 18, 2020, the date of liquidation, aggregated $414,131 of which $205,693 were for services provided by the Company and its affiliates.

The routine operational, administrative and other ordinary expenses of BDRY aggregated $2,981,504 and $1,217,380 for the years ended December 31, 2021 and December 31, 2020, respectively, of which $418,300 and $330,863, respectively, were for services provided by the Company and its affiliates.

The Funds pay ETFMG Financial LLC. (“Distributor”), an affiliate of the Company, 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 Company, the Fund and the Distributor, the Distributor assists the Company and the applicable 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.

NOTES TO FINANCIAL STATEMENTS

December 31, 2021 and 2020

(See Independent Auditor’s Report)

For the years ended December 31, 2021 and December 31, 2020, the Company paid the Distributor, on behalf of the Fund, and RISE through November 18, 2020, the date of liquidation, $17,429 and $28,628, respectively, in distribution and related administrative services. As of December 31, 2021 and December 31, 2020, the Company owed to the Distributor, $1,293 and $1,274, respectively, as disclosed in the Statements of Financial Condition.

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 paid the Sponsor $112,582 and $23,234 in wholesale support fees for the years ended December 31, 2021 and December 31, 2020, respectively. RISE paid the Sponsor $4,162 in wholesale support fees through November 18, 2020, the date of liquidation.

The Company paid ETFMG a parent company service fee at the rate of $10,000 per month effective January 1, 2019 for providing it with the office space and personnel necessary to fulfill its responsibilities as Sponsor of the Fund. For the years ended December 31, 2021 and December 31, 2020, the parent service fee aggregated $120,000 and $120,000, respectively.

Due to and from related parties as shown on the Statements of Financial Condition, represent amounts payable or receivable from the Sponsor and its affiliates, Exchange Traded Managers Group, LLC and ETF Managers Group, LLC.

The Company owns 40 Shares of BDRY.

These Shares were issued to the Company in exchange for its initial capital contribution to the Fund and represent units of beneficial interest in and ownership of the Fund.

Expenses incurred in connection with organizing the Fund and the offering of the Shares upon the commencement of its operations were paid by ETFMG, the parent and sole owner of the Company.

Expenses incurred in connection with the continuous offering of Shares of the Fund are the responsibility of the Fund.

Note 5 – Subsequent Events

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. See Note 1 – Legal matters.

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