NOTES TO FINANCIAL STATEMENTS

December 31, 2019 and 2018

(See Independent Auditors’ Report)

Note 1 - Organization and nature of business

ETF Managers Capital, LLC (the “Company”), a Delaware limited liability company, was formed June 14, 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 Sit Rising Rate ETF (“RISE”) and Breakwave Dry Bulk Shipping ETF (the “Funds”) are currently the two series of the Trust. Breakwave Dry Bulk Shipping ETF (“BDRY”) commenced operations with the listing and commencement of trading of BDRY shares on the NYSE Arca on March 22, 2018.

Sit Fixed Income Advisors II, LLC (“SIT”) is registered as a “commodity trading advisor” (“CTA”), and acts as such for RISE.

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

The operations of the Company began with the listing and commencement of trading of the Fund’s shares on the NYSE Arca on February 19, 2015.

Legal matters

Samuel Masucci III, a principal of the Company, and Bernard Karol, a principal of the Company’s parent, were defendants, along with certain affiliates of the Company, in an action filed May 2, 2017 in the Superior Court of New Jersey captioned PureShares, LLC d/b/a PureFunds et al. v. ETF Managers Group, LLC et al., Docket No. C-63-17 (the “PureShares Action”). The PureShares Action alleged claims based on disputes arising out of contractual relationships with ETF Managers Group LLC, (“ETFMG”), an affiliate of the Company. The action sought damages in unspecified amounts and injunctive relief based on breach of contract, wrongful termination, and several other theories.

Samuel Masucci II, a principal of the Company, was a defendant, along with certain affiliates of the Company, in a case filed on October 26, 2017 in the United States District Court for the Southern District of New York by NASDAQ, Inc. (“Nasdaq”) captioned Nasdaq, Inc. v. Exchange Traded Managers Group, LLC et al., Case 1:17-cv-08252 (the “Nasdaq Action”). This action arose out of the same facts and circumstances as the PureShares Action and asserts claims for breach of contract, conversion and certain other claims with respect to the same exchange traded funds as in the PureShares Action. Mr. Masucci was dismissed as a defendant pursuant to a motion to dismiss in August 2018. 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 $78,403,172.36, plus prejudgment interest. The Court also denied Plaintiff’s requests for punitive damages and equitable relief.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2019 and 2018

(See Independent Auditors’ Report)

Note 1 – Organization and nature of business (continued)

Legal matters (continued)

On May 1, 2020, Nasdaq, PureShares LLC (“PureShares”), and ETFMG announced a global settlement that resolves all claims in both the PureShares Action and the Nasdaq Action. The settlement is subject to future negotiations and approvals among independent third parties. As part of the settlement, Nasdaq and ETFMG have agreed to certain cash payments from ETFMG to Nasdaq and PureShares, and have executed an asset purchase agreement to transfer certain ETFMG intellectual property and related assets, to a Nasdaq affiliate. The transaction is expected to close in the last half of 2020. The Sponsor does not believe that this settlement will have a material adverse effect on the Company’s financial statements. If the events set forth in the settlement agreement do not occur, and a subsequent settlement is not reached, the resulting conditions may adversely affect the Company’s future operations.

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 defines cash and cash equivalents to be highly liquid investments, with original maturities of three months or less.

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 (CONTINUED)

December 31, 2019 and 2018

(See Independent Auditors’ Report)

Note 3 – Related Party Transactions

The Company has agreed to waive receipt of the Sponsor Fee for RISE and/or assume RISE’s expenses (excluding brokerage fees, interest expense, and extraordinary expenses) so that RISE’s total annual expenses do not exceed 1.00% of average net assets per annum through January 31, 2021.

Further, RISE pays a sub-advisory fee (“CTA fee”), calculated daily and paid monthly in arrears, at the rate of 0.20% per annum of average daily net assets.

In addition to the expense limitation agreement, RISE pays a Sponsor Fee, calculated daily and paid monthly, at the annual rate of the greater of 0.15% of its average daily net assets, or $75,000. RISE also pays fees for Principal Financial Officer and Chief Compliance Officer services provided to RISE by the Sponsor at the rate of $25,000 per annum. RISE also pays $25,000 per annum for regulatory reporting services provided by the Sponsor.

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 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 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,” and together with the RISE Expense Cap, the “Expense Caps”). 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 February 28, 2021.

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, 2019 and December 31, 2018, the Company received the following fees:

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2019 and 2018

(See Independent Auditors’ Report)

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, 2019 and 2018, the Company held $-0- and $5,680, 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 $69,192 and $-0- for the years ended December 31, 2019 and 2018, respectively.

The waiver of RISE’s Sponsor Fee, pursuant to the undertaking, amounted to $ -0- and $24,657 for the years ended December 31, 2019 and 2018, respectively.

The waiver of BDRY’s CTA fees, pursuant to the undertaking, amounted to $38,174 and $38,066, for the year ended December 31, 2019 and the period from March 22, 2018 to December 31, 2018, respectively.

The Funds currently accrue their daily expenses up to the applicable Expense Cap. 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 Funds in excess of the Fund’s respective Expense Cap, which in the case of RISE, aggregated $333,758 and $124,925 for the years ended December 31, 2019 and 2018, respectively, and in the case of BDRY, aggregated $438,364 and $422,059 for the year ended December 31, 2019 and the period from March 22, 2018 to December 31, 2018, respectively.

The routine operational, administrative and other ordinary expenses of RISE aggregated $529,332 and $734,047 for the year ended December 31, 2019 and 2018, respectively, of which $234,684 and $407,807, respectively, were for services provided by the Company and its affiliate.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2019 and 2018

(See Independent Auditors’ Report)

Note 3 – Related Party Transactions (continued)

The routine operational, administrative and other ordinary expenses of BDRY aggregated $603,699 and $583,241 for the year ended December 31, 2019 and for the period from March 22, 2018, respectively, of which $293,908 and $355,295, respectively, were for services provided by the Company and its affiliate.

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 respective Marketing Agent Agreement between the Company, each 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 applicable Fund, including reviewing and approving marketing materials and certain regulatory compliance matters. The Distributor also assists with the processing of creation and redemption orders. For the years ended December 31, 2019 and 2018, the Company paid the Distributor, on behalf of the Funds, $32,623 and $61,660, respectively, in distribution and related administrative services.

RISE also pays the Company an annual fee for wholesale support services equal to 0.1% of the Fund’s average daily net assets, payable monthly. 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.

RISE paid the Company $17,629 and $51,359 in wholesale support fees for the years ended December 31, 2019 and 2018, respectively. BDRY paid $28,125 and $23,714 in wholesale support fees for the year ended December 31, 2019 and for the period from March 22, 2018 to December 31, 2018, respectively

The Company paid ETFMG a parent company service fee at the rate of $10,000 per month effective January 1, 2019 per month ($30,000 per month for the year ended December 31, 2018) 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, 2019 and 2018, the parent service fee aggregated $120,000 and $360,000, respectively.

The Company owns 40 Shares of each Fund.

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 each 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.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2019 and 2018

(See Independent Auditors’ Report)

Note 4 – 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.