United States Commodity Funds Trust I - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - United States Commodity Funds Trust I	Financial_Report.xls
EX-32.2 - EXHIBIT 32.2 - United States Commodity Funds Trust I	v359049_ex32-2.htm
EX-31.2 - EXHIBIT 31.2 - United States Commodity Funds Trust I	v359049_ex31-2.htm
EX-32.1 - EXHIBIT 32.1 - United States Commodity Funds Trust I	v359049_ex32-1.htm
EX-31.1 - EXHIBIT 31.1 - United States Commodity Funds Trust I	v359049_ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2013.

¨	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to .

Commission File Number: 001-35818

UNITED STATES COMMODITY FUNDS TRUST I

(Exact name of registrant as specified in its charter)

Delaware		45-3326410
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

1999 Harrison Street, Suite 1530

Oakland, California 94612

(Address of principal executive offices) (Zip code)

(510) 522-9600

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). xYes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨		Accelerated filer ¨

Non-accelerated filer x		Smaller reporting company ¨
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

UNITED STATES COMMODITY FUNDS TRUST I

Table of Contents

	Page
Part I. FINANCIAL INFORMATION

Item 1. Condensed Financial Statements.	1

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	32

Item 3. Quantitative and Qualitative Disclosures About Market Risk.	43

Item 4. Controls and Procedures.	44

Part II. OTHER INFORMATION

Item 1. Legal Proceedings.	45

Item 1A. Risk Factors.	45

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	45

Item 3. Defaults Upon Senior Securities.	45

Item 4. Mine Safety Disclosures.	45

Item 5. Other Information.	45

Item 6. Exhibits.	45

Part I. FINANCIAL INFORMATION

Item 1. Condensed Financial Statements.

Index to Condensed Financial Statements

Documents		Page
Condensed Statements of Financial Condition at September 30, 2013 (Unaudited) and December 31, 2012		2

Condensed Statements of Operations (Unaudited) for the three and nine months ended September 30, 2013 and 2012		7

Condensed Statements of Changes in Capital (Unaudited) for the nine months ended September 30, 2013		12

Condensed Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2013 and 2012		17

Notes to Condensed Financial Statements for the period ended September 30, 2013 (Unaudited)		22

	1

United States Commodity Funds Trust I

Condensed Statements of Financial Condition

At September 30, 2013 (Unaudited) and December 31, 2012

United States Asian Commodities Basket Fund

	September 30, 2013		December 31, 2012
Assets
Cash and cash equivalents (Notes 2 and 6)	$	1,000	$	1,000

Total assets	$	1,000	$	1,000

Commitments and Contingencies (Notes 4, 5 and 6)

Capital
Sponsor	$	1,000	$	1,000
Unitholders		–		–
Total Capital		1,000		1,000

Total capital	$	1,000	$	1,000

See accompanying notes to condensed financial statements.

	2

United States Commodity Funds Trust I

Condensed Statements of Financial Condition

At September 30, 2013 (Unaudited) and December 31, 2012

United States Sugar Fund

	September 30, 2013		December 31, 2012
Assets
Cash and cash equivalents (Notes 2 and 6)	$	1,000	$	1,000

Total assets	$	1,000	$	1,000

Commitments and Contingencies (Notes 4, 5 and 6)

Capital
Sponsor	$	1,000	$	1,000
Unitholders		–		–
Total Capital		1,000		1,000

Total capital	$	1,000	$	1,000

See accompanying notes to condensed financial statements.

	3

United States Commodity Funds Trust I

Condensed Statements of Financial Condition

At September 30, 2013 (Unaudited) and December 31, 2012

United States Gasoil Fund

	September 30, 2013		December 31, 2012
Assets
Cash and cash equivalents (Notes 2 and 6)	$	1,000	$	1,000

Total assets	$	1,000	$	1,000

Commitments and Contingencies (Notes 4, 5 and 6)

Capital
Sponsor	$	1,000	$	1,000
Unitholders		–		–
Total Capital		1,000		1,000

Total capital	$	1,000	$	1,000

See accompanying notes to condensed financial statements.

	4

United States Commodity Funds Trust I

Condensed Statements of Financial Condition

At September 30, 2013 (Unaudited) and December 31, 2012

United States Natural Gas Double Inverse Fund

	September 30, 2013		December 31, 2012
Assets
Cash and cash equivalents (Notes 2 and 6)	$	1,000	$	1,000

Total assets	$	1,000	$	1,000

Commitments and Contingencies (Notes 4, 5 and 6)

Capital
Sponsor	$	1,000	$	1,000
Unitholders		–		–
Total Capital		1,000		1,000

Total capital	$	1,000	$	1,000

See accompanying notes to condensed financial statements.

	5

United States Commodity Funds Trust I

Condensed Statements of Financial Condition

At September 30, 2013 (Unaudited) and December 31, 2012

United States Commodity Funds Trust I

	September 30, 2013		December 31, 2012
Assets
Cash and cash equivalents (Notes 2 and 6)	$	4,000	$	4,000

Total assets	$	4,000	$	4,000

Commitments and Contingencies (Notes 4, 5 and 6)

Capital
Sponsor	$	4,000	$	4,000
Unitholders		–		–
Total Capital		4,000		4,000

Total capital	$	4,000	$	4,000

See accompanying notes to condensed financial statements.

	6

United States Commodity Funds Trust I

Condensed Statements of Operations (Unaudited)

For the three and nine months ended September 30, 2013 and 2012

United States Asian Commodities Basket Fund*

Three months
ended
September 30,
2013

Three months
ended
September 30,
2012

Nine months
ended
September 30,
2013

Nine months
ended
September 30,
2012

Income

Gain (loss) on trading of commodity contracts:

Realized gain (loss) on closed positions

–

Change in unrealized gain (loss) on open positions

–

Dividend income

–

Interest income

–

Other income

–

Total income (loss)

–

Expenses

Management fees (Note 4)

–

Professional fees

–

Brokerage commissions

–

Other expenses

–

Total expenses

–

Net income (loss)

–

*The United States Asian Commodities Basket Fund had not commenced operations as of September 30, 2013.

See accompanying notes to condensed financial statements.

	7

United States Commodity Funds Trust I

Condensed Statements of Operations (Unaudited)

For the three and nine months ended September 30, 2013 and 2012

United States Sugar Fund*

Three months
ended
September 30,
2013

Three months
ended
September 30,
2012

Nine months
ended
September 30,
2013

Nine months
ended
September 30,
2012

Income

Gain (loss) on trading of commodity contracts:

Realized gain (loss) on closed positions

–

Change in unrealized gain (loss) on open positions

–

Dividend income

–

Interest income

–

Other income

–

Total income (loss)

–

Expenses

Management fees (Note 4)

–

Professional fees

–

Brokerage commissions

–

Other expenses

–

Total expenses

–

Net income (loss)

–

*The United States Sugar Fund had not commenced operations as of September 30, 2013.

See accompanying notes to condensed financial statements.

	8

United States Commodity Funds Trust I

Condensed Statements of Operations (Unaudited)

For the three and nine months ended September 30, 2013 and 2012

United States Gasoil Fund*

Three months
ended
September 30,
2013

Three months
ended
September 30,
2012

Nine months
ended
September 30,
2013

Nine months
ended
September 30,
2012

Income

Gain (loss) on trading of commodity contracts:

Realized gain (loss) on closed positions

–

Change in unrealized gain (loss) on open positions

–

Dividend income

–

Interest income

–

Other income

–

Total income (loss)

–

Expenses

Management fees (Note 4)

–

Professional fees

–

Brokerage commissions

–

Other expenses

–

Total expenses

–

Net income (loss)

–

*The United States Gasoil Fund had not commenced operations as of September 30, 2013.

See accompanying notes to condensed financial statements.

	9

United States Commodity Funds Trust I

Condensed Statements of Operations (Unaudited)

For the three and nine months ended September 30, 2013 and 2012

United States Natural Gas Double Inverse Fund*

Three months
ended
September 30,
2013

Three months
ended
September 30,
2012

Nine months
ended
September 30,
2013

Nine months
ended
September 30,
2012

Income

Gain (loss) on trading of commodity contracts:

Realized gain (loss) on closed positions

–

Change in unrealized gain (loss) on open positions

–

Dividend income

–

Interest income

–

Other income

–

Total income (loss)

–

Expenses

Management fees (Note 4)

–

Professional fees

–

Brokerage commissions

–

Other expenses

–

Total expenses

–

Net income (loss)

–

*The United States Natural Gas Double Inverse Fund had not commenced operations as of September 30, 2013.

See accompanying notes to condensed financial statements.

	10

United States Commodity Funds Trust I

Condensed Statements of Operations (Unaudited)

For the three and nine months ended September 30, 2013 and 2012

United States Commodity Funds Trust I*

Three months
ended
September 30,
2013

Three months
ended
September 30,
2012

Nine months
ended
September 30,
2013

Nine months
ended
September 30,
2012

Income

Gain (loss) on trading of commodity contracts:

Realized gain (loss) on closed positions

–

Change in unrealized gain (loss) on open positions

–

Dividend income

–

Interest income

–

Other income

–

Total income (loss)

–

Expenses

Management fees (Note 4)

–

Professional fees

–

Brokerage commissions

–

Other expenses

–

Total expenses

–

Net income (loss)

–

* No Series of the Trust had commenced operations as of September 30, 2013.

See accompanying notes to condensed financial statements.

	11

United States Commodity Funds Trust I

Condensed Statements of Changes in Capital (Unaudited)

For the nine months ended September 30, 2013

United States Asian Commodities Basket Fund*

	Sponsor		Unitholders		Total

Balances, at December 31, 2012	$	1,000	$	–	$	1,000
Additions		–		–		–
Redemptions		–		–		–
Net income (loss)		–		–		–

Balances, at September 30, 2013	$	1,000	$	–	$	1,000

*The United States Asian Commodities Basket Fund had not commenced operations as of September 30, 2013.

See accompanying notes to condensed financial statements.

	12

United States Commodity Funds Trust I

Condensed Statements of Changes in Capital (Unaudited)

For the nine months ended September 30, 2013

United States Sugar Fund*

	Sponsor		Unitholders		Total

Balances, at December 31, 2012	$	1,000	$	–	$	1,000
Additions		–		–		–
Redemptions		–		–		–
Net income (loss)		–		–		–

Balances, at September 30, 2013	$	1,000	$	–	$	1,000

*The United States Sugar Fund had not commenced operations as of September 30, 2013.

See accompanying notes to condensed financial statements.

	13

United States Commodity Funds Trust I

Condensed Statements of Changes in Capital (Unaudited)

For the nine months ended September 30, 2013

United States Gasoil Fund*

	Sponsor		Unitholders		Total

Balances, at December 31, 2012	$	1,000	$	–	$	1,000
Additions		–		–		–
Redemptions		–		–		–
Net income (loss)		–		–		–

Balances, at September 30, 2013	$	1,000	$	–	$	1,000

*The United States Gasoil Fund had not commenced operations as of September 30, 2013.

See accompanying notes to condensed financial statements.

	14

United States Commodity Funds Trust I

Condensed Statements of Changes in Capital (Unaudited)

For the nine months ended September 30, 2013

United States Natural Gas Double Inverse Fund*

	Sponsor		Unitholders		Total

Balances, at December 31, 2012	$	1,000	$	–	$	1,000
Additions		–		–		–
Redemptions		–		–		–
Net income (loss)		–		–		–

Balances, at September 30, 2013	$	1,000	$	–	$	1,000

*The United States Natural Gas Double Inverse Fund had not commenced operations as of September 30, 2013.

See accompanying notes to condensed financial statements.

	15

United States Commodity Funds Trust I

Condensed Statements of Changes in Capital (Unaudited)

For the nine months ended September 30, 2013

United States Commodity Funds Trust I*

	Sponsor		Unitholders		Total

Balances, at December 31, 2012	$	4,000	$	–	$	4,000
Additions		–		–		–
Redemptions		–		–		–
Net income (loss)		–		–		–

Balances, at September 30, 2013	$	4,000	$	–	$	4,000

* No Series of the Trust had commenced operations as of September 30, 2013.

See accompanying notes to condensed financial statements.

	16

United States Commodity Funds Trust I

Condensed Statements of Cash Flows (Unaudited)

For the nine months ended September 30, 2013 and 2012

United States Asian Commodities Basket Fund*

	Nine months ended September 30, 2013		Nine months ended September 30, 2012
Cash Flows from Operating Activities:
Net income (loss)	$	–	$	–
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:
(Increase) decrease in commodity futures trading account - cash and cash equivalents		–		–
Unrealized (gain) loss on open futures contracts		–		–
(Increase) decrease in interest receivable		–		–
(Increase) decrease in other assets		–		–
Increase (decrease) in management fees payable		–		–
Increase (decrease) in professional fees payable		–		–
Increase (decrease) in brokerage commissions payable		–		–
Increase (decrease) in other liabilities		–		–
Net cash provided by (used in) operating activities		–		–

Cash Flows from Financing Activities:
Addition of units		–		–
Redemption of units		–		–
Net cash provided by (used in) financing activities		–		–

Net Increase (Decrease) in Cash and Cash Equivalents		–		–

Cash and Cash Equivalents, beginning of period		1,000		1,000
Cash and Cash Equivalents, end of period	$	1,000	$	1,000

*The United States Asian Commodities Basket Fund had not commenced operations as of September 30, 2013.

See accompanying notes to condensed financial statements.

	17

United States Commodity Funds Trust I

Condensed Statements of Cash Flows (Unaudited)

For the nine months ended September 30, 2013 and 2012

United States Sugar Fund*

	Nine months ended September 30, 2013		Nine months ended September 30, 2012
Cash Flows from Operating Activities:
Net income (loss)	$	–	$	–
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:
(Increase) decrease in commodity futures trading account - cash and cash equivalents		–		–
Unrealized (gain) loss on open futures contracts		–		–
(Increase) decrease in interest receivable		–		–
(Increase) decrease in other assets		–		–
Increase (decrease) in management fees payable		–		–
Increase (decrease) in professional fees payable		–		–
Increase (decrease) in brokerage commissions payable		–		–
Increase (decrease) in other liabilities		–		–
Net cash provided by (used in) operating activities		–		–

Cash Flows from Financing Activities:
Addition of units		–		–
Redemption of units		–		–
Net cash provided by (used in) financing activities		–		–

Net Increase (Decrease) in Cash and Cash Equivalents		–		–

Cash and Cash Equivalents, beginning of period		1,000		1,000
Cash and Cash Equivalents, end of period	$	1,000	$	1,000

*The United States Sugar Fund had not commenced operations as of September 30, 2013.

See accompanying notes to condensed financial statements.

	18

United States Commodity Funds Trust I

Condensed Statements of Cash Flows (Unaudited)

For the nine months ended September 30, 2013 and 2012

United States Gasoil Fund*

	Nine months ended September 30, 2013		Nine months ended September 30, 2012
Cash Flows from Operating Activities:
Net income (loss)	$	–	$	–
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:
(Increase) decrease in commodity futures trading account - cash and cash equivalents		–		–
Unrealized (gain) loss on open futures contracts		–		–
(Increase) decrease in interest receivable		–		–
(Increase) decrease in other assets		–		–
Increase (decrease) in management fees payable		–		–
Increase (decrease) in professional fees payable		–		–
Increase (decrease) in brokerage commissions payable		–		–
Increase (decrease) in other liabilities		–		–
Net cash provided by (used in) operating activities		–		–

Cash Flows from Financing Activities:
Addition of units		–		–
Redemption of units		–		–
Net cash provided by (used in) financing activities		–		–

Net Increase (Decrease) in Cash and Cash Equivalents		–		–

Cash and Cash Equivalents, beginning of period		1,000		1,000
Cash and Cash Equivalents, end of period	$	1,000	$	1,000

*The United States Gasoil Fund had not commenced operations as of September 30, 2013.

See accompanying notes to condensed financial statements.

	19

United States Commodity Funds Trust I

Condensed Statements of Cash Flows (Unaudited)

For the nine months ended September 30, 2013 and 2012

United States Natural Gas Double Inverse Fund*

	Nine months ended September 30, 2013		Nine months ended September 30, 2012
Cash Flows from Operating Activities:
Net income (loss)	$	–	$	–
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:
(Increase) decrease in commodity futures trading account - cash and cash equivalents		–		–
Unrealized (gain) loss on open futures contracts		–		–
(Increase) decrease in interest receivable		–		–
(Increase) decrease in other assets		–		–
Increase (decrease) in management fees payable		–		–
Increase (decrease) in professional fees payable		–		–
Increase (decrease) in brokerage commissions payable		–		–
Increase (decrease) in other liabilities		–		–
Net cash provided by (used in) operating activities		–		–

Cash Flows from Financing Activities:
Addition of units		–		–
Redemption of units		–		–
Net cash provided by (used in) financing activities		–		–

Net Increase (Decrease) in Cash and Cash Equivalents		–		–

Cash and Cash Equivalents, beginning of period		1,000		1,000
Cash and Cash Equivalents, end of period	$	1,000	$	1,000

*The United States Natural Gas Double Inverse Fund had not commenced operations as of September 30, 2013.

See accompanying notes to condensed financial statements.

	20

United States Commodity Funds Trust I

Condensed Statements of Cash Flows (Unaudited)

For the nine months ended September 30, 2013 and 2012

United States Commodity Funds Trust I*

	Nine months ended September 30, 2013		Nine months ended September 30, 2012
Cash Flows from Operating Activities:
Net income (loss)	$	–	$	–
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:
(Increase) decrease in commodity futures trading account - cash and cash equivalents		–		–
Unrealized (gain) loss on open futures contracts		–		–
(Increase) decrease in interest receivable		–		–
(Increase) decrease in other assets		–		–
Increase (decrease) in management fees payable		–		–
Increase (decrease) in professional fees payable		–		–
Increase (decrease) in brokerage commissions payable		–		–
Increase (decrease) in other liabilities		–		–
Net cash provided by (used in) operating activities		–		–

Cash Flows from Financing Activities:
Addition of units		–		–
Redemption of units		–		–
Net cash provided by (used in) financing activities		–		–

Net Increase (Decrease) in Cash and Cash Equivalents		–		–

Cash and Cash Equivalents, beginning of period		4,000		4,000
Cash and Cash Equivalents, end of period	$	4,000	$	4,000

* No Series of the Trust had commenced operations as of September 30, 2013.

See accompanying notes to condensed financial statements.

	21

United States Commodity Funds Trust I

Notes to Condensed Financial Statements

For the period ended September 30, 2013 (Unaudited)

NOTE 1 - ORGANIZATION AND BUSINESS

The United States Commodity Funds Trust I (the “Trust”) was organized as a Delaware statutory trust on September 8, 2011. The Trust is a series trust formed pursuant to the Delaware Statutory Trust Act and includes the United States Asian Commodities Basket Fund (“UAC”), a commodity pool that intends to issue units (“units”) that may be purchased and sold on the NYSE Arca Inc., (the “NYSE Arca”). As of the date of the filing of this quarterly report on Form 10-Q, no units of any Trust Series have been publicly offered. The other Trust Series are the United States Sugar Fund (“USSF”), the United States Gasoil Fund (“USGO”) and the United States Natural Gas Double Inverse Fund (“UNGD”). UAC, USSF, USGO and UNGD are collectively referred to as the “Trust Series”). Additional series may also be publicly offered in the future. Additional series of the Trust that will be separate commodity pools may be created in the future. The Trust and each Trust Series operate pursuant to the Amended and Restated Declaration of Trust and Trust Agreement dated as of March 22, 2013 (the “Trust Agreement”). United States Commodity Funds LLC (“USCF”) is the sponsor of the Trust and the Trust Series and is also responsible for the management of the Trust and the Trust Series.

USCF has the power and authority to establish and designate one or more series and to issue units thereof, from time to time as it deems necessary or desirable. USCF has exclusive power to fix and determine the relative rights and preferences as between the units of any series as to right of redemption, special and relative rights as to dividends and other distributions and on liquidation, conversion rights, and conditions under which the series shall have separate voting rights or no voting rights. The term for which the Trust is to exist commenced on the date of the filing of the Certificate of Trust, and the Trust and any Trust Series will exist in perpetuity, unless earlier terminated in accordance with the provisions of the Trust Agreement. Separate and distinct records must be maintained for each Trust Series and the assets associated with a Trust Series must be held in such separate and distinct records (directly or indirectly, including a nominee or otherwise) and accounted for in such separate and distinct records separately from the assets of any other Trust Series. Each Trust Series is separate from all other Trust Series created as series of the Trust in respect of the assets and liabilities allocated to that Trust Series and represents a separate investment portfolio of the Trust.

The sole Trustee of the Trust is Wilmington Trust, National Association (the “Trustee”), a Delaware banking corporation. The Trustee is unaffiliated with USCF. The Trustee’s duties and liabilities with respect to the offering of units and the management of the Trust are limited to its express obligations under the Trust Agreement.

USCF is a member of the National Futures Association (the “NFA”), became a commodity pool operator (“CPO”) registered with the Commodity Futures Trading Commission (the “CFTC”) effective December 1, 2005 and a swaps firm registered with the NFA and CFTC effective August 8, 2013. The Trust and each Trust Series have a fiscal year ending on December 31.

USCF is also the general partner of the United States Oil Fund, LP (“USOF”), the United States Natural Gas Fund, LP (“USNG”), the United States 12 Month Oil Fund, LP (“US12OF”), the United States Gasoline Fund, LP (“UGA”) and the United States Diesel-Heating Oil Fund, LP (formerly, the United States Heating Oil Fund, LP) (“USDHO”), which listed their limited partnership units on the American Stock Exchange (the “AMEX”) under the ticker symbols “USO” on April 10, 2006, “UNG” on April 18, 2007, “USL” on December 6, 2007, “UGA” on February 26, 2008 and “UHN” on April 9, 2008, respectively. As a result of the acquisition of the AMEX by NYSE Euronext, each of USOF’s, USNG’s, US12OF’s, UGA’s and USDHO’s units commenced trading on the NYSE Arca on November 25, 2008. USCF is also the general partner of the United States Short Oil Fund, LP (“USSO”), the United States 12 Month Natural Gas Fund, LP (“US12NG”) and the United States Brent Oil Fund, LP (“USBO”), which listed their limited partnership units on the NYSE Arca under the ticker symbols “DNO” on September 24, 2009, “UNL” on November 18, 2009 and “BNO” on June 2, 2010, respectively. USCF is also the sponsor of the United States Commodity Index Fund (“USCI”), the United States Copper Index Fund (“CPER”), the United States Agriculture Index Fund (“USAG”) and the United States Metals Index Fund (“USMI”), each a series of the United States Commodity Index Funds Trust. USCI, CPER, USAG and USMI listed their units on the NYSE Arca under the ticker symbol “USCI” on August 10, 2010, “CPER” on November 15, 2011, “USAG” on April 13, 2012 and “USMI” on June 19, 2012, respectively. All funds listed previously are referred to collectively herein as the “Related Public Funds.” USCF has also filed registration statements to register units of USSF, UNGD and USGO, each a series of the Trust, and the US Golden Currency Fund (“HARD”), a series of the United States Currency Funds Trust. USSF, USGO, UNGD and HARD are currently not available to the public, as such funds are still in the process of review by various regulatory agencies which have regulatory authority over USCF and such funds. UAC has been declared effective by the regulatory agencies which have regulatory authority over USCF and UAC, but at the time of the filing of this quarterly report on Form 10-Q, UAC has not been made available to the public.

	22

Each Trust Series will issue units to certain authorized purchasers (“Authorized Purchasers”) by offering baskets consisting of 50,000 units (“Creation Baskets”) through ALPS Distributors, Inc., as the marketing agent (the “Marketing Agent”). The purchase price for a Creation Basket will be based upon the net asset value (“NAV”) of a unit calculated shortly after the close of the core trading session on the NYSE Arca on the day the order to create the basket is properly received.

In addition, Authorized Purchasers will pay each Trust Series $350 for each order placed to create one or more Creation Baskets or to redeem one or more baskets (“Redemption Baskets”), consisting of 50,000 units. Units may be purchased or sold on a nationally recognized securities exchange in smaller increments than a Creation Basket or Redemption Basket. Units purchased or sold on a nationally recognized securities exchange are not purchased or sold at the per unit NAV of each Trust Series but rather at market prices quoted on such exchange.

The accompanying unaudited condensed financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X promulgated by the SEC and, therefore, do not include all information and footnote disclosure required under generally accepted accounting principles (“GAAP”) in the United States of America. The financial information included herein is unaudited; however, such financial information reflects all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of USCF, necessary for the fair presentation of the condensed financial statements for the interim period.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

Commodity futures contracts, forward contracts, physical commodities, and related options are recorded on the trade date. All such transactions are recorded on the identified cost basis and marked to market daily. Unrealized gains or losses on open contracts are reflected in the condensed statements of financial condition and represent the difference between the original contract amount and the market value (as determined by exchange settlement prices for futures contracts and related options and cash dealer prices at a predetermined time for forward contracts, physical commodities, and their related options) as of the last business day of the year or as of the last date of the condensed financial statements. Changes in the unrealized gains or losses between periods are reflected in the condensed statements of operations. Each Trust Series will earn interest on its assets denominated in U.S. dollars on deposit with the futures commission merchant at the 90-day Treasury bill rate. In addition, each Trust Series will earn income on funds held at the custodian and/or futures commission merchant at prevailing market rates earned on such investments.

Brokerage Commissions

Brokerage commissions on all open commodity futures contracts will be accrued on a full-turn basis.

Income Taxes

The Trust Series will not be subject to federal income taxes; each investor will report his/her allocable share of income, gain, loss deductions or credits on his/her own income tax return.

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In accordance with GAAP, each Trust Series will be required to determine whether a tax position is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any tax related appeals or litigation processes, based on the technical merits of the position. Each Trust Series will file an income tax return in the U.S. federal jurisdiction, and may file income tax returns in various U.S. states. None of the Trust Series will be subject to income tax return examinations by major taxing authorities for years before 2011 (year of the Trust Series’ inception, but not necessarily the commencement of operations for each Trust Series). The tax benefit recognized is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. De-recognition of a tax benefit previously recognized results in each Trust Series recording a tax liability that reduces net assets. However, each Trust Series’ conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analysis of and changes to tax laws, regulations and interpretations thereof. Each Trust Series will recognize interest accrued related to unrecognized tax benefits and penalties related to unrecognized tax benefits in income tax fees payable, if assessed. No interest expense or penalties have been recognized as of and for the period ended September 30, 2013 for any Trust Series as no Trust Series has commenced operations as of the date of the filing of this quarterly report on Form 10-Q.

Trust Capital and Allocation of Income and Losses

Profit or loss shall be allocated among the unitholders of each Trust Series in proportion to the number of units each investor holds as of the close of each month. USCF may revise, alter or otherwise modify this method of allocation as described in the Trust Agreement.

Creations and Redemptions

Authorized Purchasers may purchase Creation Baskets or redeem Redemption Baskets only in blocks of 50,000 units at a price equal to the net asset value of the units calculated shortly after the close of the core trading session on the NYSE Arca on the day the order is placed.

Each Trust Series will receive or pay the proceeds from units sold or redeemed within three business days after the trade date of the purchase or redemption. The amounts due from Authorized Purchasers will be reflected in each Trust Series’ condensed statements of financial condition as receivable for units sold, and amounts payable to Authorized Purchasers upon redemption will be reflected as payable for units redeemed.

Calculation of Net Asset Value Per Unit

Each Trust Series’ per unit NAV will be calculated on each NYSE Arca trading day by taking the current market value of its total assets, subtracting any liabilities and dividing the amount by the total number of units outstanding. Each Trust Series will use the closing prices on the relevant Futures Exchanges (as defined in Note 3) of the Benchmark Component Futures Contracts (determined at the earlier of the close of such exchange or 2:30 p.m. New York time) for the contracts traded on the Futures Exchanges, but will calculate or determine the value of all other Trust Series’ investments using market quotations, if available, or other information customarily used to determine the fair value of such investments.

Net Income (Loss) per Unit

Net income (loss) per unit is the difference between the per unit net asset value at the beginning of each period and at the end of each period. The weighted average number of units outstanding will be computed for purposes of disclosing net income (loss) per weighted average unit. The weighted average units will be equal to the number of units outstanding at the end of the period, adjusted proportionately for units redeemed based on the amount of time the units were outstanding during such period. As of September 30, 2013, USCF held only an expected capital contribution of each of UAC, USSF, USGO and UNGD.

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Offering Costs

Offering costs incurred in connection with the registration of additional units after the initial registration of units will be borne by the Trust Series. These costs will include registration fees paid to regulatory agencies and all legal, accounting, printing and other expenses associated with such offerings. These costs will be accounted for as a deferred charge and thereafter amortized to expense over twelve months on a straight-line basis or a shorter period if warranted. As of the date of the filing of this quarterly report on Form 10-Q, all costs have been borne by USCF, since no Trust Series has commenced operations.

Cash Equivalents

Cash equivalents include money market funds and overnight deposits or time deposits with original maturity dates of six months or less.

Use of Estimates

The preparation of condensed financial statements in conformity with GAAP requires USCF to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements, and the reported amounts of the revenue and expenses during the reporting period. Actual results may differ from those estimates and assumptions.

NOTE 3 - TRUST SERIES

In connection with the execution of the Trust Agreement on September 8, 2011, USCF contributed $1,000 for each of UAC, USSF, USGO and UNGD to the Trust (for a total of $4,000) upon its formation on September 8, 2011, representing an initial contribution of capital to the Trust. Following the designation of UAC as the first series of the Trust, the initial capital contribution of $1,000 was transferred from the Trust to UAC and $1,000 was transferred from the Trust to each of USSF, USGO and UNGD and deemed an initial contribution for each of UAC, USSF, USGO and UNGD. In connection with the commencement of UAC’s, USSF’s, USGO’s and UNGD’s initial offering of units, USCF expects to receive 40 Sponsor Units of each of UAC, USSF, USGO and UNGD in exchange for the previously received capital contribution, representing a beneficial ownership interest in UAC, USSF, USGO and UNGD.

On February 14, 2013, UAC received a notice of effectiveness from the U.S. Securities and Exchange Commission (the “SEC”) for its registration of 20,000,000 units on Form S-1 with the SEC, however, as of the date of the filing of this quarterly report on Form 10-Q, UAC has not commenced operations. As of the date of the filing of this quarterly report on Form 10-Q, USSF, USGO and UNGD have not been declared effective by the applicable regulatory agencies.

The Trustee will accept service of legal process on the Trust in the State of Delaware and will make certain filings under the Delaware Statutory Trust Act. The Trustee does not owe any other duties to the Trust, USCF or the unitholders.

UAC’s Investment Objective

UAC will invest in futures contracts for commodities that are currently traded on the Chicago Mercantile Exchange (“CME”), the Chicago Board of Trade (“CBOT”), the New York Mercantile Exchange (“NYMEX”), the Commodity Exchange, Inc. (“COMEX”), the ICE Futures US (“ICE US”), the ICE Futures Canada (“ICE Canada”), the ICE Futures Europe (“ICE Europe”), the London Mercantile Exchange (“LME”), the Tokyo Commodity Exchange (“TOCOM”), the Dubai Mercantile Exchange (“DME”) and the Bursa Malaysia (“Malaysia”) (collectively, “Futures Contracts”, and CME, CBOT, NYMEX, COMEX, ICE US, ICE Canada, ICE Europe, LME, TOCOM, DME and Malaysia are collectively referred to herein as “Futures Exchanges”) and, to a lesser extent, in order to comply with regulatory requirements or in view of market conditions, other Asian commodities-related investments such as exchange-listed cash-settled options on Asian Futures Contracts, forward contracts for Asian commodities, cleared swap contracts, and other non exchange traded (“over-the-counter”) transactions that are based on the price of Asian commodities, and indices based on the Asian Futures Contracts (collectively “Other Asian Commodities-Related Investments”).

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The investment objective of UAC will be for the daily changes in percentage terms of its units’ per unit NAV to reflect the daily changes in percentage terms of the price of a basket of Asian Futures Contracts, each of which tracks one of the Asian Benchmark Commodities (the “Asian Futures Basket”), less UAC’s expenses. The Asian Benchmark Commodities are commodities elected by USCF that are of importance to Asian economies, including the three major Asian economies of China, Japan and India. The Asian Futures Contracts designated for inclusion in the Asian Futures Basket will be selected by USCF, and are referred to as the “Asian Benchmark Futures Contracts.” It is not the intent of UAC to be operated in a fashion such that its per unit NAV will equal, in dollar terms, the spot price of any particular commodity or any particular Asian Benchmark Futures Contract. It is not the intent of UAC to be operated in a fashion such that its per unit NAV will reflect the percentage change of the price of the Asian Futures Basket as measured over a time period greater than one day. USCF does not believe that is an achievable goal due to the potential impact of backwardation and contango on returns of any portfolio of Asian Futures Contracts.

USSF’s Investment Objective

USSF will invest in futures contracts for sugar that are traded on ICE US (formerly the New York Board of Trade), the NYMEX, or other U.S. and foreign exchanges (collectively, “Sugar Futures Contracts”) and other sugar-related investments such as cash-settled options on Sugar Futures Contracts, forward contracts for sugar, cleared swap contracts, and over-the-counter transactions that are based on the price of sugar, Sugar Futures Contracts and indices based on the foregoing (collectively, “Other Sugar-Related Investments”). USCF is authorized by USSF in its sole judgment to employ, establish the terms of employment for, and terminate commodity trading advisors or futures commission merchants.

The investment objective of USSF is to have the daily changes in percentage terms of its units’ per unit NAV reflect the changes in percentage terms of the world price of sugar, as measured by the changes in the daily price of the futures contract on sugar #11 traded on ICE US (the “Sugar Benchmark Futures Contract”) that is the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next month contract to expire, less USSF’s expenses. It is not the intent of USSF to be operated in a fashion such that its per unit NAV will equal, in dollar terms, the spot price of sugar or any particular futures contract based on sugar. It is not the intent of USSF to be operated in a fashion such that its per unit NAV will reflect the percentage change of the price of any particular futures contract as measured over a time period greater than one day. USCF does not believe that is an achievable goal due to the potential impact of backwardation and contango on the returns of a portfolio of futures contracts.

USGO’s Investment Objective

USGO will invest in futures contracts for gasoil, crude oil, heating oil, gasoline, and other petroleum-based fuels that are traded on the ICE Europe (collectively, “Gasoil Futures Contracts”) and other gasoil-related investments such as cash-settled options on Gasoil Futures Contracts, forward contracts for gasoil, cleared swap contracts, and over-the-counter transactions that are based on the price of gasoil, crude oil and other petroleum-based fuels, Gasoil Futures Contracts and indices based on the foregoing (collectively, “Other Gasoil-Related Investments”). USCF is authorized by USGO in its sole judgment to employ, establish the terms of employment for, and terminate commodity trading advisors or futures commission merchants.

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The investment objective of USGO is to have the daily changes in percentage terms of its units’ per unit NAV reflect the changes in percentage terms of the price of gasoil, as measured by the changes in the price of the futures contract on gasoil traded on the ICE Europe (the “Gasoil Benchmark Futures Contract”) that is the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next month contract to expire, less USGO’s expenses. It is not the intent of USGO to be operated in a fashion such that its per unit NAV will equal, in dollar terms, the spot price of gasoil or any particular futures contract based on gasoil, heating oil or diesel. It is not the intent of USGO to be operated in a fashion such that its per unit NAV will reflect the percentage change of the price of any particular futures contract as measured over a time period greater than one day. USCF does not believe that it is an achievable goal due to the potential impact of backwardation and contango on the returns of a portfolio of futures contracts.

UNGD’s Investment Objective

UNGD will invest in futures contracts for natural gas that are traded on the NYMEX, ICE Europe (formerly, the International Petroleum Exchange) or other U.S. and foreign exchanges (collectively, “Natural Gas Futures Contracts”) and other natural gas-related investments such as cash-settled options on Natural Futures Contracts, forward contracts for natural gas, cleared swap contracts, and over-the-counter transactions that are based on the price of natural gas, Natural Gas Futures Contracts and indices based on the foregoing (collectively, “Other Natural Gas-Related Investments”). USCF is authorized by UNGD in its sole judgment to employ, establish the terms of employment for, and terminate commodity trading advisors or futures commission merchants.

The investment objective of UNGD (before fees and expenses) is to reflect two times (200%) the inverse daily percentage change in the price of the natural gas futures contract traded on the NYMEX (the “Natural Gas Benchmark Futures Contract”), less UNGD’s expenses. The Natural Gas Benchmark Futures Contract is the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case the Natural Gas Benchmark Futures Contract will be the next month contract to expire. It is not the intent of UNGD to be operated in a fashion such that its per unit NAV will equal, in dollar terms, two times the inverse of the spot price of natural gas or any particular futures contract based on natural gas. It is not the intent of UNGD to be operated in a fashion such that its per unit NAV will inversely reflect two times the change in the percentage terms of the Natural Gas Benchmark Futures Contract, or the spot price, measured over any time period greater than one day. USCF does not believe that it is an achievable goal because mathematical compounding prevents UNGD from achieving such results.

As of September 30, 2013, none of the Trust Series held Futures Contracts on the Futures Exchanges as none of the Trust Series have commenced operations.

Other Defined Terms – Trust Series

Asian Benchmark Futures Contracts, Sugar Benchmark Futures Contracts, Gasoil Benchmark Futures Contracts and Natural Gas Benchmark Futures Contracts are referred to throughout this annual report on Form 10-K collectively as “Applicable Benchmark Futures Contracts.” Asian Futures Contracts, Sugar Futures Contracts, Gasoil Futures Contracts and Natural Gas Futures Contracts are referred to throughout this annual report on Form 10-K collectively as “Applicable Futures Contracts.”

Other Asian Commodity-Related Investments, Other Sugar-Related Investments, Other Gasoil-Related Interests and Other Natural Gas-Related Investments are referred to throughout this annual report on Form 10-K collectively as “Other Related Investments.”

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NOTE 4 - FEES PAID BY UAC AND RELATED PARTY TRANSACTIONS

USCF Management Fee

Under the Trust Agreement, USCF will be responsible for investing the assets of each Trust Series in accordance with the objectives and policies of each such Trust Series. In addition, USCF has arranged for one or more third parties to provide trading advisory, administrative, custody, accounting, transfer agency and other necessary services to each Trust Series. For these services, UAC will be contractually obligated to pay USCF a fee, which will be paid monthly, equal to 0.90% per annum of average daily total net assets. Each of USSF, USGO and UNGD will be contractually obligated to pay USCF a fee, which will be paid monthly, equal to 0.75% per annum of average daily total net assets.

Trustee Fee

The Trustee is the Delaware trustee of the Trust. In connection with the Trustee’s services, USCF is responsible for paying the Trustee’s annual fee in the amount of $3,000.

Ongoing Registration Fees and Other Offering Expenses

Each Trust Series will pay the costs and expenses associated with the ongoing registration of its units subsequent to the initial offering. These costs include registration or other fees paid to regulatory agencies in connection with the offer and sale of units, and all legal, accounting, printing and other expenses associated with such offer and sale. During the nine months ended September 30, 2013, none of the Trust Series’ incurred registration fees or other offering expenses as none of the Trust Series have commenced operations as of the date of the filing of this quarterly report on Form 10-Q.

Directors’ Fees and Expenses

Each Trust Series will be responsible for paying its portion of the directors’ and officers’ liability insurance for the Trust Series and the Related Public Funds. In addition, each Trust Series will be responsible for paying the fees and expenses of the independent directors who also serve as audit committee members of each Trust Series and the Related Public Funds. Each Trust Series will share the fees and expenses on a pro rata basis with each Related Public Fund, as described above, based on the relative assets of each fund computed on a daily basis.

Investor Tax Reporting Cost

The fees and expenses associated with each Trust Series’ audit expenses and tax accounting and reporting requirements, with the exception of certain initial implementation service fees and base service fees which will be borne by USCF, will be paid by each Trust Series.

Other Expenses and Fees and Expense Waivers

In addition to the fees described above, each Trust Series will pay all brokerage fees and other expenses in connection with the operation of each Trust Series, excluding costs and expenses paid by USCF as outlined in Note 5 below.

NOTE 5 - CONTRACTS AND AGREEMENTS

USCF and the Trust, on its own behalf and on behalf of each Trust Series, are party to a marketing agent agreement, dated as of January 1, 2013, as amended from time to time, with the Marketing Agent, whereby the Marketing Agent provides certain marketing services for each Trust Series as outlined in the agreement. The fee of the Marketing Agent, which will be borne by USCF, will be equal to 0.06% on each Trust Series’ average net assets up to $3 billion and 0.04% on each Trust Series’ average net assets in excess of $3 billion.

The above fee does not include the following expenses, which are also borne by USCF: the cost of placing advertisements in various periodicals; website construction and development; or the printing and production of various marketing materials.

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USCF and the Trust, on its own behalf and on behalf of each Trust Series, are party to a custodian agreement, dated as of June 26, 2012, as amended from time to time, with Brown Brothers Harriman & Co. (“BBH&Co.”), whereby BBH&Co. will hold investments on behalf of each Trust Series. USCF will pay the fees of the custodian, which will be determined by the parties from time to time. In addition, USCF and the Trust, on its own behalf and on behalf of each Trust Series, are party to an administrative agency agreement, dated as of June 26, 2012, as amended from time to time, with BBH&Co., whereby BBH&Co. will act as the administrative agent, transfer agent and registrar for each Trust Series. USCF will also pay the fees of BBH&Co. for its services under such agreement and such fees will be determined by the parties from time to time.

USCF will pay BBH&Co. for its services, in the foregoing capacities, a minimum amount of $75,000 annually for its custody, fund accounting and fund administration services rendered to each Trust Series and each of the Related Public Funds, as well as a $20,000 annual fee for its transfer agency services. In addition, USCF will pay BBH&Co. an asset-based charge of: (a) 0.06% for the first $500 million of each Trust Series’ and the Related Public Funds’ combined net assets, (b) 0.0465% for each Trust Series’ and the Related Public Funds’ combined net assets greater than $500 million but less than $1 billion, and (c) 0.035% once each Trust Series and the Related Public Funds’ combined assets exceed $1 billion. The annual minimum amount will not apply if the asset-based charge for all accounts in the aggregate exceeds $75,000. USCF will also pay transaction fees ranging from $7 to $15 per transaction.

Each Trust Series and the futures commission merchant, UBS USA, LLC (“UBS”) have entered into an Institutional Futures Client Account Agreement. This agreement allows UBS to provide services to each Trust Series in connection with the purchase and sale of the applicable Futures Interests that may be purchased or sold by or through UBS for each Trust Series’ account. Each Trust Series will pay the futures commission merchant fees.

NOTE 6 - FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES

Each Trust intends to engage in the trading of futures contracts and options on futures contracts and may engage in cleared swaps (collectively, “derivatives”). As such, Each Trust Series will be exposed to both market risk, which is the risk arising from changes in the market value of the contracts, and credit risk, which is the risk of failure by another party to perform according to the terms of a contract.

Each Trust Series may enter into futures contracts and options on futures contracts to gain exposure to changes in the value of an underlying commodity. A futures contract obligates the seller to deliver (and the purchaser to accept) the future delivery of a specified quantity and type of a commodity at a specified time and place. Some futures contracts may call for physical delivery of the asset, while others are settled in cash. The contractual obligations of a buyer or seller may generally be satisfied by taking or making physical delivery of the underlying commodity or by making an offsetting sale or purchase of an identical futures contract on the same or linked exchange before the designated date of delivery.

The purchase and sale of futures contracts and options on futures contracts require margin deposits with a futures commission merchant. Additional deposits may be necessary for any loss on contract value. The Commodity Exchange Act requires a futures commission merchant to segregate all customer transactions and assets from the futures commission merchant’s proprietary activities.

Futures contracts involve, to varying degrees, elements of market risk (specifically commodity price risk) and exposure to loss in excess of the amount of variation margin. The face or contract amounts reflect the extent of the total exposure each Trust Series will have in the particular classes of instruments. Additional risks associated with the use of futures contracts are an imperfect correlation between movements in the price of the futures contracts and the market value of the underlying securities and the possibility of an illiquid market for a futures contract.

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Initially, all of the Futures Contracts held by each Trust Series are expected to be exchange-traded. The risks associated with exchange-traded contracts are generally perceived to be less than those associated with over-the-counter transactions since, in over-the-counter transactions, a party must rely solely on the credit of its respective individual counterparties. However, in the future, if each Trust Series were to enter into non-exchange traded contracts, it would be subject to the credit risk associated with counterparty non-performance. The credit risk from counterparty non-performance associated with such instruments is the net unrealized gain, if any, on the transaction. Each Trust Series will also incur credit risk under its futures contracts since the sole counterparty to all domestic and foreign futures contracts is the clearinghouse for the exchange on which the relevant contracts are traded. In addition, each Trust Series will bear the risk of financial failure by the clearing broker.

Each Trust Series’ cash and other property, such as short-term obligations of the United States of two years or less (“Treasuries”), deposited with a futures commission merchant are considered commingled with all other customer funds, subject to the futures commission merchant’s segregation requirements. In the event of a futures commission merchant’s insolvency, recovery may be limited to a pro rata share of segregated funds available. It is possible that the recovered amount could be less than the total of cash and other property deposited. The insolvency of a futures commission merchant could result in the complete loss of a Trust Series’ assets posted with that futures commission merchant; however, the majority of each Trust Series’ assets will be held in Treasuries, cash and/or cash equivalents with the Trust Series’ custodian and would not be impacted by the insolvency of a futures commission merchant. The failure or insolvency of the Trust Series’ custodian, however, could result in a substantial loss of each Trust Series’ assets.

USCF intends to invest a portion of each Trust Series’ cash in money market funds that seek to maintain a stable per unit NAV. Each Trust Series may be exposed to any risk of loss associated with an investment in such money market funds. Each Trust Series may hold cash deposits with its custodian. Pursuant to a written agreement with BBH&Co., uninvested overnight cash balances will be swept to offshore branches of U.S. regulated and domiciled banks located in Toronto, Canada, London, United Kingdom, Grand Cayman, Cayman Islands and Nassau, Bahamas which are subject to U.S. regulation and regulatory oversight. As of September 30, 2013 and December 31, 2012, each Trust Series held cash deposits in the amounts of $1,000 and $1,000, respectively, with the custodian, for a total of $4,000 held in the Trust.

For derivatives, risks arise from changes in the market value of the contracts. Theoretically, each Trust Series will be exposed to market risk equal to the value of the Applicable Futures Contracts purchased and unlimited liability on such contracts sold short. As both a buyer and a seller of options, each Trust Series pays or receives a premium at the outset and then bears the risk of unfavorable changes in the price of the contract underlying the option.

The Trust Series’ policy will be to continuously monitor its exposure to market and counterparty risk through the use of a variety of financial, position and credit exposure reporting controls and procedures. In addition, the Trust Series or USCF have a policy of requiring review of the credit standing of each broker or counterparty with which they conduct business.

The financial instruments that will be held by each Trust Series will be reported in its condensed statements of financial condition at market or fair value, or at carrying amounts that approximate fair value, because of their highly liquid nature and short-term maturity.

NOTE 7 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The Trust and each Trust Series will value their investments in accordance with Accounting Standards Codification 820 – Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurement. The changes to past practice resulting from the application of ASC 820 relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurement. ASC 820 establishes a fair value hierarchy that distinguishes between: (1) market participant assumptions developed based on market data obtained from sources independent of the Trust and each Trust Series (observable inputs) and (2) the Trust’s and each Trust Series’ own assumptions about market participant assumptions developed based on the best information available under the circumstances (unobservable inputs). The three levels defined by the ASC 820 hierarchy are as follows:

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Level I – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level II – Inputs other than quoted prices included within Level I that are observable for the asset or liability, either directly or indirectly. Level II assets include the following: quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs).

Level III – Unobservable pricing input at the measurement date for the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available.

In some instances, the inputs used to measure fair value might fall in 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.

The Trust and each Trust Series intend to adopt the provisions of Accounting Standards Codification 815 – Derivatives and Hedging, which require presentation of qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts and gains and losses on derivatives.

NOTE 8 – SUBSEQUENT EVENTS

The Trust and each Trust Series have performed an evaluation of subsequent events through the date the condensed financial statements were issued. This evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with the condensed financial statements and the notes thereto of the United States Commodity Funds Trust I (the “Trust”) included elsewhere in this quarterly report on Form 10-Q.

Forward-Looking Information

This quarterly report on Form 10-Q, including this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding the plans and objectives of management for future operations. This information may involve known and unknown risks, uncertainties and other factors that may cause the Trust’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe the Trust’s future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project,” the negative of these words, other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and the Trust cannot assure investors that the projections included in these forward-looking statements will come to pass. The Trust’s actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors.

The Trust has based the forward-looking statements included in this quarterly report on Form 10-Q on information available to it on the date of this quarterly report on Form 10-Q, and the Trust assumes no obligation to update any such forward-looking statements. Although the Trust undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, investors are advised to consult any additional disclosures that the Trust may make directly to them or through reports that the Trust in the future files with the U.S. Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Introduction

The United States Commodity Funds Trust I (the “Trust”) was organized as a Delaware statutory trust on September 8, 2011. The Trust is a series trust formed pursuant to the Delaware Statutory Trust Act and includes the United States Asian Commodities Basket Fund (“UAC”), a commodity pool which intends to issue units (“units”) that may be purchased and sold on the NYSE Arca Inc., (the “NYSE Arca”). As of the date of the filing of this quarterly report on Form 10-Q, no units of any Trust Series have been publicly offered. The other Trust Series are the United States Sugar Fund (“USSF”), the United States Gasoil Fund (“USGO”) and the United States Natural Gas Double Inverse Fund (“UNGD”). UAC, USSF, USGO and UNGD are collectively referred to as the “Trust Series”. Additional series may also be publicly offered in the future. Additional series of the Trust that will be separate commodity pools may be created in the future.

United States Asian Commodities Basket Fund

UAC will invest in futures contracts for commodities that are currently traded on the Chicago Mercantile Exchange (“CME”), the Chicago Board of Trade (“CBOT”), the New York Mercantile Exchange (“NYMEX”), the Commodity Exchange, Inc. (“COMEX”), the ICE Futures US (“ICE US”), the ICE Futures Canada (“ICE Canada”), the ICE Futures Europe (“ICE Europe”), the London Mercantile Exchange (“LME”), the Tokyo Commodity Exchange (“TOCOM”), the Dubai Mercantile Exchange (“DME”) and the Bursa Malaysia (“Malaysia”) (collectively, “Futures Contracts”, and CME, CBOT, NYMEX, COMEX, ICE US, ICE Canada, ICE Europe, LME, TOCOM, DME and Malaysia are collectively referred to herein as “Futures Exchanges”) and, to a lesser extent, in order to comply with regulatory requirements or in view of market conditions, other Asian commodities-related investments such as exchange-listed cash-settled options on Asian Futures Contracts, forward contracts for Asian commodities, cleared swap contracts, and other non exchange traded (“over-the-counter”) transactions that are based on the price of Asian commodities, and indices based on the Futures Contracts (collectively “Other Asian Commodities-Related Investments.”). Market conditions that United States Commodity Funds LLC (“USCF”) currently anticipates could cause UAC to invest in Other Asian Commodity-Related Investments would be those allowing UAC to obtain greater liquidity or to execute transactions with more favorable pricing. Asian Futures Contracts and Other Asian Commodity-Related Investments are collectively referred to as “Asian Commodity Interests” in this quarterly report on Form 10-Q.

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The investment objective of UAC will be for the daily changes in percentage terms of its units’ per unit net asset value (“NAV”) to reflect the daily changes in percentage terms of the price of a basket of Futures Contracts, each of which tracks one of the Asian Benchmark Commodities (the “Asian Futures Basket”), less UAC’s expenses. The Asian Benchmark Commodities are commodities elected by USCF that are of importance to Asian economies, including the three major Asian economies of China, Japan and India. The Asian Futures Contracts designated for inclusion in the Asian Futures Basket will be selected by USCF, and are referred to as the “Asian Benchmark Futures Contracts.” It is not the intent of UAC to be operated in a fashion such that its per unit NAV will equal, in dollar terms, the spot price of any particular commodity or any particular Asian Benchmark Futures Contract. It is not the intent of UAC to be operated in a fashion such that its per unit NAV will reflect the percentage change of the price of the Asian Futures Basket as measured over a time period greater than one day. USCF does not believe that is an achievable goal due to the potential impact of backwardation and contango on returns of any portfolio of Asian Futures Contracts.

UAC will seek to achieve its investment objective by investing in Asian Futures Contracts and Other Asian Commodity-Related Investments such that daily changes in its per unit NAV closely track the daily changes in percentage terms of the price of a basket of Asian Futures Contracts. After fulfilling the margin and collateral requirements with respect to its Asian Commodity Interests, USCF will invest the remainder of UAC’s proceeds from the sale of units in short-term obligations of the United States of two years or less (“Treasuries”) or cash equivalents, and/or merely hold such assets in cash (generally in interest-bearing accounts).

United States Sugar Fund

USSF seeks to achieve its investment objective by primarily investing in futures contracts for sugar that are traded on ICE US (formerly the New York Board of Trade), the NYMEX, or other U.S. and foreign exchanges (collectively, “Sugar Futures Contracts”) and other sugar-related investments such as cash-settled options on Futures Contracts, forward contracts for sugar, cleared swap contracts, and over-the-counter transactions that are based on the price of sugar, Sugar Futures Contracts and indices based on the foregoing (collectively, “Other Sugar-Related Investments”). Sugar Futures Contracts and Other Sugar-Related Investments are collectively referred to as “Sugar Interests” in this quarterly report on Form 10-Q. USCF is authorized by USSF in its sole judgment to employ, establish the terms of employment for, and terminate commodity trading advisors or futures commission merchants (“FCMs”).

USSF will invest in Sugar Interests, to the fullest extent possible without being leveraged or unable to satisfy its current or potential margin and/or collateral obligations with respect to its investments in Sugar Futures Contracts and Other Sugar-Related Investments. The primary focus of USCF will be the investment in Sugar Futures Contracts and the management of USSF’s investments in Treasuries, cash and cash equivalents for margining purposes and as collateral.

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United States Gasoil Fund

USGO seeks to achieve its investment objective by primarily investing in investments in futures contracts for gasoil, crude oil, heating oil, gasoline, and other petroleum-based fuels that are traded on the ICE Europe (collectively, “Gasoil Futures Contracts”) and other gasoil-related investments such as cash-settled options on Gasoil Futures Contracts, forward contracts for gasoil, cleared swap contracts, and over-the-counter transactions that are based on the price of gasoil, crude oil and other petroleum-based fuels, Gasoil Futures Contracts and indices based on the foregoing (collectively, “Other Gasoil-Related Investments”). Gasoil Futures Contracts and Other Gasoil-Related Investments are collectively referred to as “Gasoil Interests” in this quarterly report on Form 10-Q. USCF is authorized by USGO in its sole judgment to employ, establish the terms of employment for, and terminate commodity trading advisors or FCMs.

USGO will invest in Gasoil Interests to the fullest extent possible without being leveraged or unable to satisfy its current or potential margin or collateral obligations with respect to its investments in Gasoil Futures Contracts and Other Gasoil-Related Investments. The primary focus of USCF will be the investment in Gasoil Futures Contracts and the management of USGO’s investments in Treasuries, cash and cash equivalents for margining purposes and as collateral.

United States Natural Gas Double Inverse Fund

UNGD seeks to achieve its investment objective by primarily investing in futures contracts for natural gas that are traded on the NYMEX, ICE Europe (formerly, the International Petroleum Exchange) or other U.S. and foreign exchanges (collectively, “Natural Gas Futures Contracts”) and other natural gas-related investments such as cash-settled options on Natural Gas Futures Contracts, forward contracts for natural gas, cleared swap contracts, and over-the-counter transactions that are based on the price of natural gas, Natural Gas Futures Contracts and indices based on the foregoing (collectively, “Other Natural Gas-Related Investments”). Natural Gas Futures Contracts and Other Natural Gas-Related Investments are collectively referred to as “Natural Gas Interests” in this quarterly report on Form 10-Q. USCF is authorized by UNGD in its sole judgment to employ, establish the terms of employment for, and terminate commodity trading advisors or FCMs.

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UNGD will invest in Natural Gas Interests, to the fullest extent possible, up to approximately two times leveraged inverse exposure without limiting its ability to satisfy its current or potential margin and/or collateral obligations with respect to its investments in Natural Gas Futures Contracts and Other Natural Gas-Related Investments. The primary focus of USCF will be the investment in Futures Contracts and the management of UNGD’s investments in Treasuries, cash and cash equivalents for margining purposes and as collateral.

Other Defined Terms – Trust Series

Asian Benchmark Futures Contracts, Sugar Benchmark Futures Contracts, Gasoil Benchmark Futures Contracts and Natural Gas Benchmark Futures Contracts are referred to throughout this quarterly report on Form 10-Q collectively as “Applicable Benchmark Futures Contracts.” Asian Futures Contracts, Sugar Futures Contracts, Gasoil Futures Contracts and Natural Gas Futures Contracts are referred to throughout this quarterly report on Form 10-Q collectively as “Applicable Futures Contracts.”

Other Asian Commodity-Related Investments, Other Sugar-Related Investments, Other Gasoil-Related Interests and Other Natural Gas-Related Investments are referred to throughout this quarterly report on Form 10-Q collectively as “Other Related Investments.”

Regulatory Disclosure

Impact of Accountability Levels, Position Limits and Price Fluctuation Limits. Futures contracts include typical and significant characteristics. Most significantly, the Commodity Futures Trading Commission (the “CFTC”) and the futures exchanges have established accountability levels and position limits on the maximum net long or net short futures contracts in commodity interests that any person or group of persons under common trading control (other than as a hedge, which is not applicable to the Trust Series’ investments) may hold, own or control. The net position is the difference between an individual’s or firm’s open long contracts and open short contracts in any one commodity. In addition, most U.S.-based futures exchanges, such as the NYMEX, limit the daily price fluctuation for futures contracts. Currently, the ICE Futures imposes position and accountability limits that are similar to those imposed by U.S.-based futures exchanges and also limits the maximum daily price fluctuation, while some other non-U.S. futures exchanges have not adopted such limits.

The accountability levels for the Benchmark Futures Contract and other Futures Contracts traded on U.S.-based futures exchanges, such as the NYMEX, are not a fixed ceiling, but rather a threshold above which the NYMEX may exercise greater scrutiny and control over an investor’s positions.

Position limits differ from accountability levels in that they represent fixed limits on the maximum number of futures contracts that any person may hold and cannot allow such limits to be exceeded without express CFTC authority to do so. In addition to accountability levels and position limits that may apply at any time, the Futures Exchanges may impose position limits on contracts held in the last few days of trading in the near month contract to expire. It is unlikely that a Trust Series will run up against such position limits because each Trust Series’ investment strategy is to close out its positions during each Rebalancing Period in advance of the period right before expiration and purchase new contracts. As such, the Trust Series does not anticipate that position limits that apply to the last few days prior to a contract’s expiration will impact it.

The regulation of commodity interest trading in the United States and other countries is an evolving area of the law, as exemplified by the various discussions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The various statements made in this summary are subject to modification by legislative action and changes in the rules and regulations of the CFTC, the National Futures Association (the “NFA”), the futures exchanges, clearing organizations and other regulatory bodies. Pending final resolution of all applicable regulatory requirements, some specific examples of how the new Dodd-Frank Act provisions and rules adopted thereunder could impact the Trust are discussed below.

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Futures Contracts and Position Limits

The CFTC is prohibited by statute from regulating trading on non-U.S. futures exchanges and markets. The CFTC, however, has adopted regulations relating to the marketing of non-U.S. futures contracts in the United States. These regulations permit certain contracts on non-U.S. exchanges to be offered and sold in the United States.

In October 2011, the CFTC adopted rules that impose new position limits on Referenced Contracts (as defined below) involving 28 energy, metals and agricultural commodities (the “Position Limit Rules”). The Position Limit Rules were scheduled to become effective on October 12, 2012. However, on September 28, 2012, the United States District Court for the District of Columbia vacated these regulations on the basis of ambiguities in the provisions of the Commodity Exchange Act (“CEA”) (as modified by the Dodd-Frank Act) upon which the regulations were based. In its September 28, 2012 decision, the court remanded the Position Limit Rules to the CFTC with instructions to use its expertise and experience to resolve the ambiguities in the statute. On November 15, 2012, the CFTC indicated that it will move forward with an appeal of the District Court’s decision to vacate the Position Limit Rules. At this time, it is not possible to predict how the CFTC’s appeal could affect Trust Series, but it may be substantial and adverse. Furthermore, until such time as the appeal is resolved or, if applicable revisions to the Position Limit Rules are proposed and adopted, the regulatory architecture in effect prior to the enactment of the Position Limit Rules will govern transactions in commodities and related derivatives (collectively, “Referenced Contracts”). Under that system, the CFTC enforces federal limits on speculation in agricultural products (e.g., corn, wheat and soy), while futures exchanges enforce position limits and accountability levels for agricultural and certain energy products (e.g., oil and natural gas). As a result, the Trust Series may be limited with respect to the size of its investments in any commodities subject to these limits. Finally, subject to certain narrow exceptions, the vacated Position Limit Rules would have required the aggregation, for purposes of the position limits, of all positions in the 28 Referenced Contracts held by a single entity and its affiliates, regardless of whether such position existed on U.S. futures exchanges, non-U.S. futures exchanges, in cleared swaps or in over-the-counter swaps. The CFTC is presently considering new aggregation rules, under a rulemaking proposal that is distinct from the Position Limit Rules. At this time, it is unclear how any modified aggregation rules may affect UAC, but it may be substantial and adverse. By way of example, the aggregation rules in combination with any potential revised Position Limit Rules may negatively impact the ability of a Trust Series to meet its investment objectives through limits that may inhibit USCF’s ability to sell additional Creation Baskets of a Trust Series.

Based on its current understanding of the final position limit regulations, USCF does not anticipate significant negative impact on the ability of a Trust Series to achieve its investment objective.

“Swap” Transactions

The Dodd-Frank Act imposes new regulatory requirements on certain “swap” transactions that UAC is authorized to engage in that may ultimately impact the ability of a Trust Series to meet its investment objective. On August 13, 2012, the CFTC and the SEC published joint final rules defining the terms “swap” and “security-based swap.” The term “swap” is broadly defined to include various types of over-the-counter derivatives, including swaps and options. The effective date of these final rules was October 12, 2012.

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The Dodd-Frank Act requires that certain transactions ultimately falling within the definition of “swap” be executed on organized exchanges or “swap execution facilities” and cleared through regulated clearing organizations (which are referred to in the Dodd-Frank Act as “derivative clearing organizations” (“DCOs”)), if the CFTC mandates the central clearing of a particular contract. On November 28, 2012, the CFTC issued its final clearing determination requiring that certain credit default swaps and interest rate swaps be cleared by registered DCOs. This is the CFTC’s first clearing determination under the Dodd-Frank Act and became effective on February 11, 2013. Beginning on March 11, 2013, “swap dealers,” “major swap participants” and certain active funds were required to clear certain credit default swaps and interest rate swaps; and beginning on June 10, 2013, commodity pools, certain private funds and entities predominantly engaged in financial activities were required to clear the same types of swaps. As a result, if a Trust Series enters into or has entered into certain interest rate and credit default swaps on or after June 10, 2013, such swaps will be required to be centrally cleared. Determination on other types of swaps are expected in the future, and, when finalized, could require a Trust Series to centrally clear certain over-the-counter instruments presently entered into and settled on a bi-lateral basis. If a swap is required to be cleared, the initial margin will be set by the clearing organization, subject to certain regulatory requirements and guidelines. Initial and variation margin requirements for swap dealers and major swap participants who enter into uncleared swaps and capital requirements for swap dealers and major swap participants who enter into both cleared and uncleared trades will be set by the CFTC, the SEC or the applicable “Prudential Regulator.”

The Dodd-Frank Act also requires that certain swaps determined to be available to trade on a swap execution facility (“SEF”) must be executed over such a facility. On June 5, 2013, the CFTC published a final rule regarding the obligations of SEFs, including the obligation for facilities offering multiple person execution services to register as a SEF by October 2, 2013. On September 27 and 30, 2013, the CFTC’s Division of Market Oversight granted no-action relief to SEFs from compliance with certain regulatory and reporting requirements. The no-action relief granted on September 27, 2013 included relief, in effect until November 1, 2013, from a requirement that a SEF enforce its own rulebooks and compel its participants to consent to the jurisdiction of the SEF. Based upon applications filed by several SEFs with the CFTC in the second half of October 2013, it is expected that the CFTC will determine that certain interest rate swaps will be determined to be available to trade on those SEFs in the first quarter of 2014.

On April 11, 2013, the CFTC published a final rule to exempt swaps between certain affiliated entities within a corporate group from the clearing requirement. The rule permits affiliated counterparties to elect not to clear a swap subject to the clearing requirement if, among other things, the counterparties are majority-owned affiliates whose financial statements are included in the same consolidated financial statements and whose swaps are documented and subject to a centralized risk management program. However, the exemption does not apply to swaps entered into by affiliated counterparties with unaffiliated counterparties.

On November 14, 2012, the CFTC proposed new regulations that would require enhanced customer protections, risk management programs, internal monitoring and controls, capital and liquidity standards, customer disclosures and auditing and examination programs for FCMs. The proposed rules are intended to afford greater assurances to market participants that customer segregated funds and secured amounts are protected, customers are provided with appropriate notice of the risks of futures trading and of the FCMs with which they may choose to do business, FCMs are monitoring and managing risks in a robust manner, the capital and liquidity of FCMs are strengthened to safeguard their continued operations and the auditing and examination programs of the CFTC and the self-regulatory organizations are monitoring the activities of FCMs in a thorough manner. The final regulations have not yet been adopted.

Additionally, the CFTC published rules on February 17, 2012 and April 3, 2012 that require “swap dealers” and “major swap participants” to: 1) adhere to business conduct standards, 2) implement policies and procedures to ensure compliance with the CEA and 3) maintain records of such compliance. These new requirements may impact the documentation requirements for both cleared and non-cleared swaps and cause swap dealers and major swap participants to face increased compliance costs that, in turn, may be passed along to counterparties (such as a Trust Series) in the form of higher fees and expenses that related to trading swaps.

On April 5, 2013, the CFTC’s Division of Clearing and Risk issued a letter granting no-action relief from certain swap data reporting requirements for swaps entered into between affiliated counterparties. In general, the letter grants relief from, among others: real-time, historical and regular swap reporting (under Part 43, Part 45 and Part 46 of the CFTC’s regulations, respectively).

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On April 9, 2013, the CFTC’s Division of Market Oversight issued a letter granting time-limited no-action relief to non-swap dealer, non-major swap participant counterparties from the real-time, regular and historical swap reporting requirements (under Part 43, Part 45 and Part 46 of the CFTC’s regulations, respectively). The regular reporting requirements (Part 45 of the CFTC regulations) for interest rate and credit swaps of a financial entity (including a commodity pool such as UAC) began on April 10, 2013. The letter delays implementation of the reporting requirements based upon the asset class underlying the swap and the classification of the reporting counterparty. For a financial entity (including a commodity pool such as UAC), regular reporting requirements for equity, foreign exchange and other commodity swaps (including swaps on oil) began on May 29, 2013 and reporting of all historical swaps for all asset classes begins on September 30, 2013.

In addition to the rules and regulations imposed under the Dodd-Frank Act, swap dealers that are European banks may also be subject to European Market Infrastructure Regulation (“EMIR”). These regulations have not yet been fully implemented.

General Regulation Applicable to each Trust Series

On August 12, 2013, the CFTC issued final rules establishing compliance obligations for commodity pool operators (“CPOs”) of investment companies registered under the Investment Company Act of 1940 (the “Investment Company Act”) that are required to register due to recent changes to CFTC Regulation 4.5. The final rules were issued in a CFTC release entitled “Harmonization of Compliance Obligations for Registered Investment Companies Required to Register as Commodity Pool Operators.” For entities that are registered with both the CFTC and the SEC, the CFTC will accept the SEC’s disclosure, reporting and recordkeeping regime as substituted compliance for substantially all of Part 4 of the CFTC’s regulations, so long as they comply with comparable requirements under the SEC’s statutory and regulatory compliance regime. Thus, the final rules (the “Harmonization Rules”) allow dually registered entities to meet certain CFTC regulatory requirements for CPOs by complying with SEC rules to which they are already subject. Although none of the Trust Series is a registered investment company under the Investment Company Act, the Harmonization Rules amended certain CFTC disclosure rules to make the requirements for all CPOs to periodically update their disclosure documents consistent with those of the SEC. This change will decrease the burden to each Trust Series and USCF of having to comply with inconsistent regulatory requirements. It is not known whether the CFTC will make additional amendments to its disclosure, reporting and recordkeeping rules to further harmonize these obligations with those of the SEC as they apply to each Trust Series and USCF, but any such further rule changes could result in additional operating efficiencies for each Trust Series and USCF.

With regard to any other rules that the CFTC may adopt in the future, the effect of any such regulatory changes on each Trust Series is impossible to predict, but it could be substantial and adverse.

USCF is a limited liability company formed in Delaware on May 10, 2005, that is registered as a CPO and a swaps firm with the CFTC and is a member of the National Futures Association (the “NFA”). USCF will manage each Trust Series’ investments directly and USCF’s selection of investments on behalf of each Trust Series. USCF is also authorized to select FCMs to execute each Trust Series’ transactions in Futures Contracts and Other Related Investments.

Valuation of Futures Contracts and the Computation of the Per Unit NAV

Each Trust Series’ NAV will be calculated once each NYSE Arca trading day. The per unit NAV for a particular trading day will be released after 4:00 p.m. New York time. Trading during the core trading session on the NYSE Arca typically closes at 4:00 p.m. New York time. The Trust Series’ Administrator will use the closing prices on the relevant Futures Exchanges of the Applicable Benchmark Futures Contracts (determined at the earlier of the close of such exchange or 2:30 p.m. New York time) for the contracts held on the Applicable Futures Exchanges, but will calculate or determine the value of all other investments of each Trust Series using market quotations, if available, or other information customarily used to determine the fair value of such investments.

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Results of Operations

In connection with the execution of the Trust Agreement on September 8, 2011, USCF contributed $1,000 for each of UAC, USSF, USGO and UNGD to the Trust, for a total of $4,000, upon its formation on September 8, 2011, representing an initial contribution of capital to the Trust. Following the designation of UAC as the first series of the Trust, the initial capital contribution of $1,000 was transferred from the Trust to UAC and $1,000 was transferred from the Trust to each of USSF, USGO and UNGD and deemed an initial contribution for each of UAC, USSF, USGO and UNGD. In connection with the commencement of UAC’s, USSF’s, USGO’s and UNGD’s initial offering of units, USCF will receive 40 Sponsor Units of each of UAC, USSF, USGO and UNGD in exchange for the previously received capital contribution, representing a beneficial ownership interest in UAC, USSF, USGO and UNGD.

On February 14, 2013, UAC received a notice of effectiveness from the SEC for its registration of 20,000,000 units on Form S-1 with the SEC, however, as of the date of the filing of this quarterly report on Form 10-Q, UAC has not commenced operations. As of the date of the filing of this quarterly report on Form 10-Q, USSF, USGO and UNGD have not been declared effective by the applicable regulatory agencies.

During the nine months ended September 30, 2013, none of the Trust Series had commenced investment activities nor issued units. In addition, none of the Trust Series’ purchased or owned any Applicable Benchmark Futures Contracts or Other Related Investments during the nine months ended September 30, 2013, nor were there any receipts or disbursements of cash from each Trust Series during this reporting period. Also, none of the Trust Series’ received any revenue or capital gains (losses), or incurred any expenses during this reporting period.

Expenses incurred during the nine months ended September 30, 2013 in connection with organizing the Trust Series and the initial offering costs of the units were borne by USCF, and will not be subject to reimbursement by a Trust Series as none of the Trust Series have commenced operations.

Portfolio Expenses. Each Trust Series’ expenses will consist of investment management fees, brokerage fees and commissions, certain offering costs and expenses relating to tax accounting and reporting requirements. The management fee that each Trust Series will pay to USCF will be calculated as a percentage of the total net assets of each Trust Series. UAC will pay USCF a management fee of 0.90% of its average net assets. The fee will be accrued daily and paid monthly. Each of USSF, USGO and UNGD will pay USCF a management fee of 0.75% of its average net assets. The fee will be accrued daily and paid monthly.

In addition to the management fee, each Trust Series will pay all brokerage fees and other expenses, including certain tax reporting costs, ongoing registration or other fees paid to the SEC, the Financial Industry Regulatory Authority (“FINRA”) and any other regulatory agency in connection with offers and sales of its units subsequent to the initial offering and all legal, accounting, printing and other expenses associated therewith.

Each Trust Series will incur commissions to brokers for the purchase and sale of Applicable Benchmark Futures Contracts, Other Related Investments or Treasuries.

Dividend and Interest Income. Each Trust Series will seek to invest its assets such that it holds the Applicable Benchmark Futures Contracts and Other Related Investments in an amount equal to the total net assets of its portfolio. Typically, such investments will not require each Trust Series to pay the full amount of the contract value at the time of purchase, but rather require each Trust Series to post an amount as a margin deposit against the eventual settlement of the contract. As a result, each Trust Series will retain an amount that is approximately equal to its total net assets, which each Trust Series will invest in Treasuries, cash and/or cash equivalents. This will include both the amount on deposit with the FCM as margin, as well as unrestricted cash and cash equivalents held with each Trust Series’ Custodian. The Treasuries, cash and/or cash equivalents will earn income that accrues on a daily basis.

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Critical Accounting Policies

Preparation of the condensed financial statements and related disclosures in compliance with accounting principles generally accepted in the United States of America requires the application of appropriate accounting rules and guidance, as well as the use of estimates. The Trust’s application of these policies involves judgments and actual results may differ from the estimates used.

USCF has evaluated the nature and types of estimates that it makes in preparing the Trust’s condensed financial statements and related disclosures and has determined that the valuation of the applicable Commodity Interests, which are not traded on a United States or internationally recognized futures exchange (such as swaps and other over-the-counter contracts) involves a critical accounting policy. The values which will be used by each Trust Series for its Applicable Benchmark Futures Contracts will be provided by its commodity broker who uses market prices when available, while over-the-counter contracts will be valued based on the present value of estimated future cash flows that would be received from or paid to a third party in settlement of these derivative contracts prior to their delivery date and valued on a daily basis. In addition, each Trust Series will estimate dividend and interest income on a daily basis using prevailing rates earned on its cash and cash equivalents. These estimates will be adjusted to the actual amount received on a monthly basis and the difference, if any, is not considered material.

Liquidity and Capital Resources

None of the Trust Series has made, and does not anticipate making, use of borrowings or other lines of credit to meet its obligations. It is anticipated that each Trust Series will meet its liquidity needs in the normal course of business from the proceeds of the sale of its investments, or from the Treasuries, cash and/or cash equivalents that it intends to hold at all times. Each Trust Series’ liquidity needs include: redeeming units, providing margin deposits for its existing Applicable Benchmark Futures Contracts or the purchase of additional Applicable Benchmark Futures Contracts and posting collateral for its over-the-counter Applicable Commodity Interests, respectively, if applicable, and, except as noted below, payment of its expenses, summarized below under “Contractual Obligations.”

Each Trust Series will generate cash primarily from: (i) the sale of baskets consisting of 50,000 units (“Creation Baskets”) and (ii) income earned on Treasuries, cash and/or cash equivalents. Each Trust Series will allocate substantially all of its net assets to trading in Applicable Interests. Each Trust Series will invest in Applicable Interests to the fullest extent possible without being leveraged or unable to satisfy its current or potential margin or collateral obligations with respect to its investments in Applicable Interests. A significant portion of each Trust Series’ NAV will be held in cash and cash equivalents that are used as margin and as collateral for its trading in Applicable Interests. The balance of the assets will be held in each Trust Series’ account at its custodian bank and in Treasuries at the FCM. Income received from any investments in money market funds and Treasuries by a Trust Series will be paid to such Trust Series. To the extent expenses exceed income, each Trust Series’ NAV will be negatively impacted.

Each Trust Series’ investments in Applicable Interests may be subject to periods of illiquidity because of market conditions, regulatory considerations and other reasons. For example, most commodity exchanges limit the fluctuations in futures contract prices during a single day by regulations referred to as “daily limits.” During a single day, no trades may be executed at prices beyond the daily limit. Once the price of a futures contract has increased or decreased by an amount equal to the daily limit, positions in the contracts can neither be taken nor liquidated unless the traders are willing to effect trades at or within the specified daily limit. Such market conditions could prevent a Trust Series from promptly liquidating its positions in Futures Contracts.

Prior to the initial offering of each Trust Series, all payments with respect to each Trust Series’ expenses will be paid by USCF. None of the Trust Series has an obligation or intention to refund such payments made by USCF. USCF is under no obligation to pay any Trust Series’ future expenses. Following the initial offering of units, each Trust Series will be responsible for expenses relating to: (i) management fees, (ii) brokerage fees and commissions, (iii) ongoing registration expenses in connection with offers and sales of its units subsequent to the initial offering, (iv) other expenses, including tax reporting costs, (v) the fees of the Trustee in connection with its services as Delaware trustee of the Trust, (vi) fees and expenses of the independent directors of USCF and (vii) other extraordinary expenses not in the ordinary course of business, while USCF will be responsible for expenses relating to the fees of the Trust Series’ Marketing Agent, Administrator and Custodian and offering expenses relating to the initial offering of units of each Trust Series. If USCF and each Trust Series are unsuccessful in raising sufficient funds to cover these respective expenses or in locating any other source of funding, one or more of the Trust Series could terminate and investors may lose all or part of their investment.

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Market Risk

Trading in Applicable Interests such as the Applicable Benchmark Futures Contracts will involve each Trust Series entering into contractual commitments to purchase or sell specified amounts of commodities at a specified date in the future. The aggregate market value of the contracts may significantly exceed each Trust Series’ future cash requirements since each Trust Series intends to close out its open positions prior to settlement. As a result, each Trust Series will generally be only subject to the risk of loss arising from the change in value of the contracts. Each Trust Series will consider the “fair value” of its derivative instruments to be the unrealized gain or loss on the contracts. The market risk associated with each Trust Series’ commitments to purchase a specific commodity will be limited to the aggregate market value of the contracts held.

Each Trust Series’ exposure to market risk depends on a number of factors, including the markets for commodities, the volatility of interest rates and foreign exchange rates, the liquidity of the Applicable Interest markets and the relationships among the contracts held by each such Trust Series. The limited experience that each Trust Series has had in utilizing its model to trade in Applicable Interests in a manner intended to track the changes in the Applicable Index, as well as drastic market occurrences, could ultimately lead to the loss of all or substantially all of an investor’s capital.

Credit Risk

When a Trust Series enters into Futures Contracts and Other Related Investments, it is exposed to the credit risk that the counterparty will not be able to meet its obligations. The counterparty for the Futures Contracts traded on the Futures Exchanges is the clearinghouse associated with the particular exchange. In general, in addition to margin required to be posted by the clearinghouse in connection with cleared trades, clearinghouses are backed by their members who may be required to share in the financial burden resulting from the nonperformance of one of their members and, therefore, this additional member support should significantly reduce credit risk. Some foreign exchanges are not backed by their clearinghouse members but may be backed by a consortium of banks or other financial institutions. Unlike in the case of exchange-traded Futures Contracts, the counterparty to an over-the-counter contract is generally a single bank or other financial institution. As a result, there will be greater counterparty credit risk in over-the-counter transactions. There can be no assurance that any counterparty, clearinghouse, or their members or their financial backers will satisfy their obligations to a Trust Series in such circumstances.

USCF will attempt to manage the credit risk of each Trust Series by following various trading limitations and policies. In particular, each Trust Series will generally post margin and/or hold liquid assets that are approximately equal to the market value of its obligations to counterparties under the Applicable Futures Contracts and Other Related Investments it will hold. USCF has implemented procedures that include, but are not limited to, executing and clearing trades and entering into over-the-counter transactions only with creditworthy parties and/or requiring the posting of collateral or margin by such parties for the benefit of each Trust Series to limit its credit exposure. An FCM, when acting on behalf of a Trust Series in accepting orders to purchase or sell Futures Contracts on United States exchanges, will be required by CFTC regulations to separately account for and segregate as belong to a Trust Series, all assets of a Trust Series relating to domestic Futures Contracts trading. These FCMs are not allowed to commingle a Trust Series’ assets with their other assets. In addition, the CFTC requires commodity brokers to hold in a secure account a Trust Series’ assets related to foreign Futures Contracts trading.

If, in the future, a Trust Series purchases over-the-counter contracts, see “Item 3. Quantitative and Qualitative Disclosures About Market Risk” in this quarterly report on Form 10-Q for a discussion of over-the-counter contracts.

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As of September 30, 2013, each of UAC, USSF, USGO and UNGD held cash deposits in the amount of $1,000 each.

Off Balance Sheet Financing

As of September 30, 2013, neither the Trust nor any Trust Series had any loan guarantee, credit support or other off-balance sheet arrangement of any kind other than agreements entered into in the normal course of business, which may include indemnification provisions relating to certain risks that service providers undertake in performing services which are in the best interests of any Trust Series. While each Trust Series’ exposure under these indemnification provisions cannot be estimated, they are not expected to have a material impact on any Trust Series’ financial position.

European Sovereign Debt

None of the Trust Series had direct exposure to European sovereign debt as of September 30, 2013 or had direct exposure to European sovereign debt as of the filing of this quarterly report on Form 10-Q as none of the Trust Series have commenced operations.

Redemption Basket Obligation

In order to meet its investment objective and pay its contractual obligations described below, each Trust Series requires liquidity to redeem units, which redemptions must be in blocks of 50,000 units called “Redemption Baskets.” Each Trust Series will satisfy this obligation by paying from the cash or cash equivalents it holds or through the sale of its Treasuries in an amount proportionate to the number of units being redeemed. Authorized Purchasers will pay each Trust Series $350 for each order placed to create one or more Creation Baskets or to redeem one or more Redemption Baskets.

Contractual Obligations

The Trust’s (and each series thereunder) primary contractual obligations will be with USCF and certain other service providers. USCF, in return for its services, is entitled to a management fee calculated as a fixed percentage of a Trust Series’ NAV. UAC will be contractually obligated to pay USCF a fee, which is paid monthly, equal to 0.90% per annum of average daily total net assets. Each of USSF, USGO and UNGD will be contractually obligated to pay USCF a fee, which is paid monthly, equal to 0.75% per annum of average daily total net assets. Ongoing fees, costs and expenses of its operation for which a Trust Series is responsible will include:

	⋅	brokerage and other fees and commissions incurred in connection with the trading activities of each Trust Series;

	⋅	expenses incurred in connection with registering additional units of each Trust Series or offering units of each Trust Series after the time any units of each Trust Series have begun trading on the NYSE Arca;

	⋅	the routine expenses associated with distribution, including printing and mailing, of any monthly, annual and other reports to unitholders required by applicable U.S. federal and state regulatory authorities;

	⋅	payment for routine services of the Trustee, legal counsel and independent accountants;

	⋅	payment for fees associated with tax accounting and reporting, routine accounting, bookkeeping, whether performed by an outside service provider or by affiliates of USCF;

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	⋅	costs and expenses associated with investor relations and services;

	⋅	the payment of any distributions related to redemption of units;

	⋅	payment of all federal, state, local or foreign taxes payable on the income, assets or operations of each Trust Series and the preparation of all tax returns related thereto;

	⋅	fees and expenses of the independent directors of USCF; and

	⋅	extraordinary expenses (including, but not limited to, indemnification of any person against liabilities and obligations to the extent permitted by law and required under the Trust Agreement and the bringing and defending of actions at law or in equity and otherwise engaging in the conduct of litigation and the incurring of legal expense and the settlement of claims and litigation).

While USCF has agreed to pay registration fees to the SEC, FINRA, NYSE Arca or any other regulatory agency or exchange in connection with the initial offer and sale of the units and the legal, printing, accounting and other expenses associated with such registration, each Trust Series will be responsible for any registration fees and related expenses incurred in connection with any subsequent offer and sale of its units after the initial offering of units.

Each Trust Series will pay its own brokerage and other transaction costs. Each Trust Series will pay fees to FCMs in connection with its transactions in Futures Contracts. In general, transaction costs on over-the-counter Applicable Interests and on Treasuries and other short-term securities are embedded in the purchase or sale price of the instrument being purchased or sold, and may not readily be estimated.

The parties cannot anticipate the amount of payments that will be required under these arrangements for future periods, as each Trust Series’ NAVs and trading levels to meet its investment objective will not be known until a future date. These agreements are effective for a specific term agreed upon by the parties with an option to renew, or, in some cases, are in effect for the duration of a Trust Series’ existence. Either party may terminate these agreements earlier for certain reasons described in the agreements.

For a list of each of UAC’s, USSF’s, USGO’s and UNGD’s future holdings, please see UAC’s website at www.unitedstatesasiancommoditiesbasketfund.com, USSF’s website at www.unitedstatessugarfund.com, USGO’s website at www.unitedstatesgasoilfund.com and UNGD’s website at www.unitedstatesnaturalgasdoubleinversefund.com.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Over-the-Counter Derivatives (Including Spreads and Straddles)

In the future, a Trust Series may purchase over-the-counter contracts (“OTC Contracts”). Unlike most exchange-traded futures contracts or exchange-traded options on such futures, each party to an OTC Contract bears the credit risk that the other party may not be able to perform its obligations under its contract.

Swap transactions, like other financial transactions, involves a variety of significant risks. The specific risks presented by a particular swap transaction necessarily depend upon the terms and circumstances of the transaction. In general, however, all swap transactions involve some combination of market risk, credit risk, counterparty risk, funding risk, liquidity risk and operational risk.

Highly customized swap transactions in particular may increase liquidity risk, which may result in a suspension of redemptions. Highly leveraged transactions may experience substantial gains or losses in value as a result of relatively small changes in the value or level of an underlying or related market factor.

In evaluating the risks and contractual obligations associated with a particular swap transaction, it is important to consider that a swap transaction may be modified or terminated only by mutual consent of the original parties and subject to agreement on individually negotiated terms. Therefore, it may not be possible for USCF to modify, terminate or offset a Trust Series’ obligations or its exposure to the risks associated with a transaction prior to its scheduled termination date.

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To reduce the credit risk that arises in connection with such contracts, a Trust Series will generally enter into an agreement with each counterparty based on the Master Agreement published by the International Swaps and Derivatives Association, Inc. that provides for the netting of its overall exposure to its counterparty if the counterparty is unable to meet its obligations to the Trust Series due to the occurrence of a specified event, such as the insolvency of the counterparty.

A Trust Series assesses or reviews, as appropriate, the creditworthiness of each potential or existing counterparty to an OTC Contract pursuant to guidelines approved by USCF’s Board. Furthermore, USCF on behalf of a Trust Series only enters into OTC Contracts with counterparties who are, or are affiliates of, (a) banks regulated by a United States federal bank regulator, (b) broker-dealers regulated by the SEC, (c) insurance companies domiciled in the United States, or (d) producers, users or traders of energy, whether or not regulated by the CFTC. Any entity acting as a counterparty shall be regulated in either the United States or the United Kingdom unless otherwise approved by the Board after consultation with its legal counsel. Existing counterparties are also reviewed periodically by USCF. A Trust Series will also require that the counterparty be highly rated and/or provide collateral or other credit support. Even if collateral is used to reduce counterparty credit risk, sudden changes in the value of OTC transactions may leave a party open to financial risk due to a counterparty default since the collateral held may not cover a party’s exposure on the transaction in such situations.

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 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. In addition, while market makers and dealers generally quote indicative prices or terms for entering into or terminating OTC Contracts, they typically are not contractually obligated to do so, particularly if they are not a party to the transaction. As a result, it may be difficult to obtain an independent value for an outstanding OTC derivatives transaction.

During the nine months ended September 30, 2013, none of the Trust Series had commenced operations. Therefore, during such period, none of the Trust Series’ was exposed to counterparty risk.

Each Trust Series anticipates that the use of Other Related Investments together with its investments in Futures Contracts will produce price and total return results that closely track the investment goals of such Trust Series. However, there can be no assurance of this. OTC Contracts may result in higher transaction-related expenses than the brokerage commissions paid in connection with the purchase of Applicable Futures Contracts, which may impact a Trust Series’ ability to successfully track its Applicable Benchmark Futures Contracts.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

The Trust and each Trust Series maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in the Trust’s periodic reports filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms.

The duly appointed officers of USCF, including its chief executive officer and chief financial officer, who perform functions equivalent to those of a principal executive officer and principal financial officer of the Trust if the Trust had any officers, have evaluated the effectiveness of the Trust’s and each Trust Series’ disclosure controls and procedures and have concluded that the disclosure controls and procedures of the Trust and each Trust Series have been effective as of the end of the period covered by this quarterly report on Form 10-Q.

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Change in Internal Control Over Financial Reporting

There were no changes in the Trust’s or any Trust Series’ internal control over financial reporting during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Trust’s or any Trust Series’ internal control over financial reporting.

Part II. OTHER INFORMATION

Item 1. Legal Proceedings.

Not applicable.

Item 1A. Risk Factors.

There have been no material changes to the risk factors previously disclosed in the Trust’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, filed on May 14, 2013.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Not applicable.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Monthly Account Statements

Pursuant to the requirement under Rule 4.22 under the Commodity Exchange Act, each month the Trust and each Trust Series will publish account statements for each Trust Series’s unitholders, which include Statements of Income (Loss) and Statements of Changes in Net Asset Value. The account statements will be furnished to the SEC on a current report on Form 8-K pursuant to Section 13 or 15(d) of the Exchange Act and posted each month on each Trust Series’ website at ww.unitedstatesasiancommoditiesbasketfund.com, www.unitedstatessugarfund.com, ww.unitedstatesgasoilfund.com and www.unitedstatesnaturalgasdoubleinversefund.com.

Item 6. Exhibits.

Listed below are the exhibits, which are filed as part of this quarterly report on Form 10-Q (according to the number assigned to them in Item 601 of Regulation S-K):

Exhibit Number		Description of Document
31.1(1)		Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2(1)		Certification by Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1(1)		Certification by Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2(1)		Certification by Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS(2)		XBRL Instance Document.
101.SCH(2)		XBRL Taxonomy Extension Schema.
101.CAL(2)		XBRL Taxonomy Extension Calculation Linkbase.
101.DEF(2)		XBRL Taxonomy Extension Definition Linkbase.
101.LAB(2)		XBRL Taxonomy Extension Label Linkbase.
101.PRE(2)		XBRL Taxonomy Extension Presentation Linkbase.

	(1)	Filed herewith.
	(2)	In accordance with Rule 406T of Regulation S-T, the information in these exhibits is furnished and deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

United States Commodity Funds Trust I (Registrant)

By: United States Commodity Funds LLC, its Sponsor

By:	/s/ Nicholas D. Gerber
Nicholas D. Gerber
President and Chief Executive Officer
(Principal executive officer)

Date: November 14, 2013

By:	/s/ Howard Mah
Howard Mah
Chief Financial Officer
(Principal financial and accounting officer)

Date: November 14, 2013

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Attached files

United States Commodity Funds Trust I Reports

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