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EX-23.2B - United States Commodity Index Funds Trustv180089_ex-23x2b.htm
EX-23.2A - United States Commodity Index Funds Trustv180089_ex-23x2a.htm

As filed with the Securities and Exchange Commission on April 8, 2010

Registration No. 333-164024

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



 

AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933



 

UNITED STATES COMMODITY INDEX FUNDS TRUST

(Exact Name of Registrant as Specified in Its Charter)

   
Delaware   6770   27-1537655
(State or Other Jurisdiction of
Incorporation or Organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification Number)

 
United States Commodity Funds LLC
1320 Harbor Bay Parkway, Suite 145
Alameda, California 94502
510.522.9600
  Nicholas D. Gerber
1320 Harbor Bay Parkway, Suite 145
Alameda, California 94502
510.522.9600
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant’s Principal Executive Offices)
  (Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)


 

Copies to:

James M. Cain, Esq.
W. Thomas Conner, Esq.
Sutherland Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, DC 20004-2415
202.383.0100



 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

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

 


 
 

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CALCULATION OF REGISTRATION FEE

       
Title of Each Class of Securities to Be Registered   Amount to Be
Registered
  Proposed Maximum
Offering Price
Per Unit(1)
  Proposed Maximum
Aggregate
Offering Price(1)
  Amount of
Registration Fee(2)
Units of United States Commodity Index Fund     50,000,000     $ 50.00     $ 2,500,000,000     $ 178,250  

(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(d) under the Securities Act of 1933.
(2) The amount of $3.57 was previously paid in connection with the initial filing of the registration statement on December 24, 2009.


 

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.


 
 

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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and the Sponsor and the Trust are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 
PRELIMINARY PROSPECTUS   SUBJECT TO COMPLETION

United States Commodity Index Fund

50,000,000 Units

United States Commodity Index Fund (“USCI”) is a commodity pool that is a series of United States Commodity Index Funds Trust, a Delaware statutory trust. USCI will issue common units representing fractional undivided beneficial interests in USCI, called “Units.” USCI intends to continuously offer creation baskets consisting of 100,000 Units to “Authorized Purchasers” through ALPS Distributors, Inc., which is the marketing agent for the Units of USCI. Authorized Purchasers, in turn, may offer to the public Units of any baskets it creates. Merrill Lynch Professional Clearing Corp. is expected to be the initial Authorized Purchaser. USCI’s Units are expected to trade on the secondary market on the NYSE Arca under the symbol “USCI” and may trade in the secondary market at prices that are lower or higher than their net asset value per Unit.

The investment objective of USCI is to have the daily changes in percentage terms of the Units’ net asset value reflect the daily changes in percentage terms of the SummerHaven Dynamic Commodity Index Total Return (the “Index”), less USCI’s expenses. The Index is designed to reflect the performance of a diversified group of commodities. The Index is owned and maintained by SummerHaven Index Management, LLC, and calculated and published by Bloomberg, L.P.. The Index was developed based upon academic research by Yale University professors Gary B. Gorton and K. Geert Rouwenhorst, and Hitotsubashi University professor Fumio Hayashi.

USCI’s sponsor is United States Commodity Funds LLC (the “Sponsor”), a Delaware limited liability company that is registered as a commodity pool operator with the Commodity Futures Trading Commission and a member of the National Futures Association. The Sponsor controls the operations of USCI. USCI’s trading advisor is SummerHaven Investment Management, LLC, a Delaware limited liability company that is registered as a commodity trading advisor and a commodity pool operator with the CFTC and is a member of the NFA. SummerHaven provides advisory services to the Sponsor with respect to the Index and the investment decisions of USCI.

It is anticipated that on the effective date, the initial authorized purchaser will, though it is under no obligation to do so, purchase one or more initial creation baskets of 100,000 units at a price per unit of $50.00. It is expected that the proceeds from that purchase will be invested on that day and that USCI’s initial per unit net asset value will be established as of 4:00 p.m. New York City time that day. An Authorized Purchaser is under no obligation to offer to the public units of any baskets it creates. Authorized purchasers that offer to the public units from the baskets they create will do so at per-unit offering prices that are expected to reflect, among other factors, the trading price of the units on the NYSE Arca, the net asset value of USCI at the time the authorized purchaser purchased the creation basket and the net asset value at the time of the offer of the units to the public, the supply of and demand for units at the time of sale, and the liquidity of the commodity futures contract market and the market for other commodity-related investments. The prices of units offered by authorized purchasers are expected to fall between USCI’s net asset value and the trading price of the units on the NYSE Arca at the time of sale. The difference between the price paid by authorized purchasers as underwriters and the price paid to such authorized purchasers by investors will be deemed underwriting compensation.

This is a best efforts offering; the Marketing Agent is not required to sell any specific number or dollar amount of Units, but will use its best efforts to sell Units. An Authorized Purchaser is under no obligation to purchase Units. This is intended to be a continuous offering and is not expected to terminate until all of the registered Units have been sold or three years from the date of the prospectus, whichever is earlier, although the offering may be temporarily suspended if and when no suitable investments for USCI are available or practicable.

Investing in USCI involves significant risks. See “What Are the Risk Factors Involved with an Investment in USCI?” beginning on page 13.

USCI is not a mutual fund registered under the Investment Company Act of 1940 and is not subject to regulation under such Act.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION (“SEC”) NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OFFERED IN THIS PROSPECTUS, OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE COMMODITY FUTURES TRADING COMMISSION HAS NOT PASSED UPON THE MERITS OF PARTICIPATING IN THIS POOL NOR HAS THE COMMISSION PASSED ON THE ADEQUACY OR ACCURACY OF THIS DISCLOSURE DOCUMENT.

This prospectus is in two parts: a disclosure document and a statement of additional information. These parts are bound together, and both contain important information.

   
  Per Unit   Per Basket
Price of the Units in the first basket(s) sold   $ 50.00     $ 5,000,000  

The date of this prospectus is [      ]


 
 

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COMMODITY FUTURES TRADING COMMISSION
RISK DISCLOSURE STATEMENT

YOU SHOULD CAREFULLY CONSIDER WHETHER YOUR FINANCIAL CONDITION PERMITS YOU TO PARTICIPATE IN A COMMODITY POOL. IN SO DOING, YOU SHOULD BE AWARE THAT FUTURES AND OPTIONS TRADING CAN QUICKLY LEAD TO LARGE LOSSES AS WELL AS GAINS. SUCH TRADING LOSSES CAN SHARPLY REDUCE THE NET ASSET VALUE OF THE POOL AND CONSEQUENTLY THE VALUE OF YOUR INTEREST IN THE POOL. IN ADDITION, RESTRICTIONS ON REDEMPTIONS MAY AFFECT YOUR ABILITY TO WITHDRAW YOUR PARTICIPATION IN THE POOL.

FURTHER, COMMODITY POOLS MAY BE SUBJECT TO SUBSTANTIAL CHARGES FOR MANAGEMENT, ADVISORY AND BROKERAGE FEES. IT MAY BE NECESSARY FOR THOSE POOLS THAT ARE SUBJECT TO THESE CHARGES TO MAKE SUBSTANTIAL TRADING PROFITS TO AVOID DEPLETION OR EXHAUSTION OF THEIR ASSETS. THIS DISCLOSURE DOCUMENT CONTAINS A COMPLETE DESCRIPTION OF EACH EXPENSE TO BE CHARGED THIS POOL BEGINNING ON PAGE 75 AND A STATEMENT OF THE PERCENTAGE RETURN NECESSARY TO BREAK EVEN, THAT IS, TO RECOVER THE AMOUNT OF YOUR INITIAL INVESTMENT, ON PAGE 7.

THIS BRIEF STATEMENT CANNOT DISCLOSE ALL THE RISKS AND OTHER FACTORS NECESSARY TO EVALUATE YOUR PARTICIPATION IN THIS COMMODITY POOL. THEREFORE, BEFORE YOU DECIDE TO PARTICIPATE IN THIS COMMODITY POOL, YOU SHOULD CAREFULLY STUDY THIS DISCLOSURE DOCUMENT, INCLUDING THE DESCRIPTION OF THE PRINCIPAL RISK FACTORS OF THIS INVESTMENT, BEGINNING ON PAGE 13.

YOU SHOULD ALSO BE AWARE THAT THIS COMMODITY POOL MAY TRADE FOREIGN FUTURES OR OPTIONS CONTRACTS. TRANSACTIONS ON MARKETS LOCATED OUTSIDE THE UNITED STATES, INCLUDING MARKETS FORMALLY LINKED TO A UNITED STATES MARKET, MAY BE SUBJECT TO REGULATIONS WHICH OFFER DIFFERENT OR DIMINISHED PROTECTION TO THE POOL AND ITS PARTICIPANTS. FURTHER, UNITED STATES REGULATORY AUTHORITIES MAY BE UNABLE TO COMPEL THE ENFORCEMENT OF THE RULES OF REGULATORY AUTHORITIES OR MARKETS IN NON-UNITED STATES JURISDICTIONS WHERE TRANSACTIONS FOR THE POOL MAY BE EFFECTED.


 
 

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UNITED STATES COMMODITY INDEX FUND

TABLE OF CONTENTS

 
  Page
Statements Regarding Forward-Looking Statements     iii  
Prospectus Summary     1  
Overview of USCI     1  
The Units     3  
USCI’s Investments in Commodity Interests     4  
Principal Investment Risks of an Investment in USCI     4  
Principal Offices of USCI and the Sponsor     6  
Financial Condition of USCI     6  
Defined Terms     6  
Breakeven Analysis     7  
The Offering     8  
What Are the Risk Factors Involved with an Investment in USCI?     13  
Risks Associated With Investing Directly or Indirectly in Indices and Commodity Interests     13  
USCI’s Operating Risks     18  
Risk of Leverage and Volatility     26  
Over-the-Counter Contract Risk     27  
Tax Risk     28  
The Offering     30  
What Is USCI?     30  
Who Is the Sponsor?     30  
Who Is SummerHaven?     52  
Who Is the Trustee?     53  
How Does USCI Operate?     54  
What Are Futures Contracts?     56  
What Is the Index?     62  
What Are Over-the-Counter Derivatives?     72  
USCI’s Investments in Treasury Securities, Cash and Cash Equivalents     73  
What are the Trading Policies of USCI?     73  
Who are the Service Providers?     74  
Fees to be Paid by USCI     75  
Form of Units     75  
Transfer of Units     76  
Inter-Series Limitation on Liability     76  
Recognition of the Trust in Certain States     77  
What Is the Plan of Distribution?     77  
What Is the Flow of Units?     79  
Calculating NAV     79  

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  Page
Creation and Redemption of Units     80  
Secondary Market Transactions     84  
Use of Proceeds     84  
Management’s Discussion and Analysis of Financial Condition and Results of Operations     85  
The Trust Agreement     88  
The Sponsor and SummerHaven Have Conflicts of Interest     91  
Interests of Named Experts and Counsel     92  
Provisions of Federal and State Securities Laws     92  
Books and Records     92  
Analysis of Critical Accounting Policies     92  
Statements, Filings, and Reports to Unitholders     92  
Fiscal Year     93  
Governing Law; Consent to Delaware Jurisdiction     93  
Legal Matters     93  
Experts     93  
Privacy Policy     93  
U.S. Federal Income Tax Considerations     94  
Investment by ERISA Accounts     102  
Information You Should Know     105  
Where You Can Find More Information     105  
Index to Financial Statements     F-1  
Appendix A
        
Glossary of Defined Terms     A-1  
Appendix B
     
Amended and Restated Declaration of Trust and Trust Agreement     B-1  

Until [date] (25 days after the date of this prospectus), all dealers effecting transactions in the offered Units, whether or not participating in this distribution, may be required to deliver a prospectus. This requirement is in addition to the obligations of dealers to deliver a prospectus when acting as underwriters and with respect to unsold allotments or subscriptions.

AS OF THE DATE OF THIS PROSPECTUS THIS POOL HAS NOT YET COMMENCED TRADING AND DOES NOT HAVE ANY PERFORMANCE HISTORY.

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STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus includes “forward-looking statements” which generally relate to future events or future performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or the negative of these terms or other comparable terminology. All statements (other than statements of historical fact) included in this prospectus that address activities, events or developments that will or may occur in the future, including such matters as movements in the commodities markets and indexes that track such movements, USCI’s operations, the Sponsor’s plans and references to USCI’s future success and other similar matters, are forward-looking statements. These statements are only predictions. Actual events or results may differ materially. These statements are based upon certain assumptions and analyses the Sponsor has made based on its perception of historical trends, current conditions and expected future developments, as well as other factors appropriate in the circumstances. Whether or not actual results and developments will conform to the Sponsor’s expectations and predictions, however, is subject to a number of risks and uncertainties, including the special considerations discussed in this prospectus, general economic, market and business conditions, changes in laws or regulations, including those concerning taxes, made by governmental authorities or regulatory bodies, and other world economic and political developments. See “What Are the Risk Factors Involved with an Investment in USCI?” Consequently, all the forward-looking statements made in this prospectus are qualified by these cautionary statements, and there can be no assurance that actual results or developments the Sponsor anticipates will be realized or, even if substantially realized, that they will result in the expected consequences to, or have the expected effects on, USCI’s operations or the value of its Units.

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PROSPECTUS SUMMARY

This is only a summary of the prospectus and, while it contains material information about USCI and its Units, it does not contain or summarize all of the information about USCI and the Units contained in this prospectus that is material and/or which may be important to you. You should read this entire prospectus, including “What Are the Risk Factors Involved with an Investment in USCI?” beginning on page 13, before making an investment decision about the Units. In addition, this prospectus includes a statement of additional information that follows and is bound together with the primary disclosure document. Both the primary disclosure document and the statement of additional information contain important information.

Overview of USCI

United States Commodity Index Fund (“USCI” or “Us” or “We”), is a commodity pool that will issue Units that may be purchased and sold on the NYSE Arca. USCI is a series of the United States Commodity Index Funds Trust (“Trust”), a Delaware statutory trust organized on December 21, 2009. Additional series of the Trust that will be separate commodity pools may be created in the future, but USCI is currently the Trust’s only series. The Trust and USCI operate pursuant to the Trust’s Amended and Restated Declaration of Trust and Trust Agreement (the “Trust Agreement”), dated April 1, 2010. Wilmington Trust Company, a Delaware banking corporation, is the Delaware trustee of the Trust. USCI and the Trust are managed and controlled by United States Commodity Funds LLC (the “Sponsor”). The Sponsor is a limited liability company formed in Delaware on May 10, 2005, that is registered as a commodity pool operator (“CPO”) with the CFTC and is a member of the National Futures Association (“NFA”). USCI’s trading advisor is SummerHaven Investment Management, LLC (“SummerHaven”), a Delaware limited liability company that is registered as a commodity trading advisor (“CTA”) and CPO with the CFTC and is a member of the NFA. SummerHaven provides advisory services to the Sponsor with respect to the Index and the investment decisions of USCI.

It is anticipated that the net assets of USCI will consist primarily of investments in futures contracts for commodities that are traded on the New York Mercantile Exchange (“NYMEX”), ICE Futures (“ICE”), Chicago Board of Trade (“CBOT”), Chicago Mercantile Exchange (“CME”), London Metal Exchange (“LME”), Commodity Exchange, Inc. (“COMEX”) or on other foreign exchanges (such exchanges, collectively, the “Futures Exchanges”) (such futures contracts, collectively, “Futures Contracts”) and, to a lesser extent, in order to comply with regulatory requirements or in view of market conditions, other commodity-based contracts and instruments such as cash-settled options on Futures Contracts, forward contracts relating to commodities, cleared swap contracts and other over-the-counter transactions that are based on the price of commodities and Futures Contracts (collectively, “Other Commodity-Related Investments”). Futures Contracts and Other Commodity-Related Investments collectively are referred to as “Commodity Interests” in this prospectus. The Sponsor expects to manage USCI’s investments directly, using the trading advisory services of SummerHaven for guidance with respect to the Index and USCF’s selection of investments on behalf of USCI. The Sponsor is also authorized to select futures commission merchants to execute USCI’s transactions in Futures Contracts and Other Commodity-Related Investments.

The investment objective of USCI is to have the daily changes in percentage terms of the Units’ net asset value (“NAV”) reflect the daily changes in percentage terms of the Index, less USCI’s expenses. The Index is comprised of 14 Futures Contracts that will be selected on a monthly basis from a list of 27 possible Futures Contracts. The Futures Contracts that at any given time make up the Index are referred to herein as “Benchmark Component Futures Contracts.” For more information on the composition of the Index and selection of the Benchmark Component Futures Contracts, see the section of this prospectus entitled “What is the Index?”

USCI seeks to achieve its investment objective by investing in Futures Contracts and Other Commodity-Related Investments such that daily changes in USCI’s NAV will closely track the changes in the Index. USCI’s positions in Commodity Interests will be rebalanced on a monthly basis in order to track the changing nature of the Index. If Futures Contracts relating to a particular commodity remain in the Index from one month to the next, such Futures Contracts will be rebalanced to the 7.14% target weight, as described below. Specifically, on a specified day near the end of each month called the Selection Date, it will be determined if a current Benchmark Component Futures Contract will be replaced by a new Futures Contract in either the same or different underlying commodity to be used as a Benchmark Component Futures Contract for the

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following month, in which case USCI’s investments would have to be changed accordingly. In order that USCI’s trading does not unduly cause extraordinary market movements, and to make it more difficult for third parties to profit by trading based on market movements that could be expected from changes in the Benchmark Component Futures Contracts, USCI’s investments typically will not be rebalanced entirely on a single day, but rather will typically be rebalanced over a period of four days. After fulfilling the margin and collateral requirements with respect to its Commodity Interests, USCI will invest the remainder of its proceeds from the sale of baskets in short-term obligations of the United States government (“Treasury Securities”) or cash equivalents, and/or merely hold such assets in cash (generally in interest-bearing accounts).

The Sponsor endeavors to place USCI’s trades in Commodity Interests and otherwise manage USCI’s investments so that A will be within plus/minus 10 percent of B, where:

A is the average daily change in USCI’s NAV for any period of 30 successive valuation days, i.e., any NYSE Arca trading day as of which USCI calculates its NAV, and
B is the average daily change in the Index over the same period.

The Sponsor believes that market arbitrage opportunities will cause USCI’s Unit price on the NYSE Arca to closely track USCI’s NAV per Unit. The Sponsor believes that the net effect of this expected relationship and the expected relationship described above between USCI’s NAV and the Index will be that the changes in the price of USCI’s Units on the NYSE Arca will closely track, in percentage terms, changes in the Index, less USCI’s expenses.

USCI will invest in Commodity Interests to the fullest extent possible without being leveraged or unable to satisfy its expected current or potential margin or collateral obligations with respect to its investments in Commodity Interests. The primary focus of the Sponsor is the investment in Commodity Interests and the management of USCI’s investments in Treasury Securities, cash and/or cash equivalents.

The Sponsor will employ a “neutral” investment strategy intended to track the changes in the Index regardless of whether the Index goes up or goes down. USCI’s “neutral” investment strategy is designed to permit investors generally to purchase and sell USCI’s Units for the purpose of investing indirectly in the commodities market in a cost-effective manner, and/or to permit participants in the commodities or other industries to hedge the risk of losses in their commodity-related transactions. Accordingly, depending on the investment objective of an individual investor, the risks generally associated with investing in the commodities market and/or the risks involved in hedging may exist. In addition, an investment in USCI involves the risks that the changes in the price of USCI’s Units will not accurately track the changes in the Index, and that changes in the Index will not closely correlate with changes in the price of the commodities underlying the Index on the spot market. Furthermore, USCI also invests in short-term Treasury Securities, cash and/or cash equivalents to meet its current or potential margin or collateral requirements with respect to its investments in Commodity Interests and to invest cash not required to be used as margin or collateral. USCI does not expect there to be any meaningful correlation between the performance of USCI’s investments in Treasury Securities/cash/cash equivalents and the changes in the price of the Index or Commodity Interests. While the level of interest earned on or the market price of these investments may in some respect correlate to changes in the price of the Index, this correlation is not anticipated as part of USCI’s efforts to meet its objective. This and certain risk factors discussed in this prospectus may cause a lack of correlation between changes in USCI’s NAV and changes in the price of the Index. The Sponsor does not intend to operate USCI in a fashion such that its per unit NAV will equal, in dollar terms, the spot prices of the commodities comprising the Index or the prices of any particular group of Futures Contracts.

USCI creates and redeems Units only in blocks called Creation Baskets and Redemption Baskets, respectively. Only Authorized Purchasers may purchase or redeem Creation Baskets or Redemption Baskets. An Authorized Purchaser is under no obligation to create or redeem baskets, and an Authorized Purchaser is under no obligation to offer to the public Units of any baskets it does create. Baskets are generally created when there is a demand for Units, including, but not limited to, when the market price per Unit is at a premium to the NAV per Unit. Authorized Purchasers will then sell such Units, which will be listed on the NYSE Arca, to the public at per-unit offering prices that are expected to reflect, among other factors, the trading price of the Units on the NYSE Arca, the NAV of USCI at the time the Authorized Purchaser

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purchased the Creation Baskets and the NAV at the time of the offer of the Units to the public, the supply of and demand for Units at the time of sale, and the liquidity of the Futures Contracts market and the market for Other Commodity-Related Investments. The prices of Units offered by Authorized Purchasers are expected to fall between USCI’s NAV and the trading price of the Units on the NYSE Arca at the time of sale. Similarly, baskets are generally redeemed when the market price per Unit is at a discount to the NAV per Unit. Retail investors seeking to purchase or sell Units on any day are expected to effect such transactions in the secondary market, on the NYSE Arca, at the market price per Unit, rather than in connection with the creation or redemption of baskets.

All proceeds from the sale of Creation Baskets will be invested as quickly as practicable in the investments described in this prospectus. Investments and related margin or collateral are held through USCI’s custodian, Brown Brothers Harriman & Co. (“Custodian”), in accounts with USCI’s commodity futures brokers or, in some instances when agreed to by USCI, in collateral accounts held by third parties with respect to its non-exchange traded or cleared over-the-counter Commodity Interests. There is no stated maximum time period for USCI’s operations and USCI will continue until all Units are redeemed or USCI is liquidated pursuant to the terms of the Trust Agreement.

There is no specified limit on the maximum amount of Creation Baskets that can be sold. At some point, position limits on Futures Contracts or Other Commodity-Related Investments may practically limit the number of Creation Baskets that will be sold if the Sponsor determines that the other investment alternatives available to USCI at that time will not enable it to meet its stated investment objective.

Units may also be purchased and sold by individuals and entities that are not Authorized Purchasers in smaller increments than Creation Baskets on the NYSE Arca. However, these transactions are effected at bid and ask prices established by specialist firm(s). Like any listed security, Units of USCI can be purchased and sold at any time a secondary market is open.

Other than to address monthly changes in the Benchmark Component Futures Contracts, in managing USCI’s assets, the Sponsor does not use a technical trading system that automatically issues buy and sell orders. Instead, each time one or more baskets are purchased or redeemed, the Sponsor will purchase or sell Commodity Interests with an aggregate market value that approximates the amount of cash received or paid upon the purchase or redemption of the basket(s).

Note to Secondary Market Investors:  The Units can be directly purchased from or redeemed by USCI only in Creation Baskets or Redemption Baskets, respectively, and only by Authorized Purchasers. Each Creation Basket and Redemption Basket consists of 100,000 Units and is expected to be worth millions of dollars. Individual investors, therefore, will not be able to directly purchase Units from or redeem Units with USCI. Some of the information contained in this prospectus, including information about buying and redeeming Units directly from and to USCI is only relevant to Authorized Purchasers. Units will be listed and traded on the NYSE Arca under the ticker symbol “USCI” and may be purchased and sold as individual Units. Individuals interested in purchasing Units in the secondary market should contact their broker. Units purchased or sold through a broker may be subject to commissions.

Except when aggregated in Redemption Baskets, Units are not redeemable securities. There is no guarantee that Units will trade at or near the per-Unit NAV.

The Units

The Units are registered as securities under the Securities Act of 1933 (“1933 Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”) and do not provide dividend rights or conversion rights and there will not be sinking funds. The Units may only be redeemed when aggregated in Redemption Baskets as discussed under “Creation and Redemption of Units” and holders of USCI Units (“Unitholders”) generally have very limited voting rights as discussed below under “The Trust Agreement – Voting Rights” below. Cumulative voting is neither permitted nor required and there are no preemptive rights. As discussed in the Trust Agreement, upon liquidation of USCI its assets will be distributed first, to creditors, and second, to the Unitholders in accordance with their positive book capital account balances, after giving effect to all contribution distributions and allocations for all periods.

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This is a continuous offering under Rule 415 of the 1933 Act and is not expected to terminate until all of the registered Units have been sold, although the offering may be temporarily suspended during such period when suitable investments for USCI are not available or practicable. It is anticipated that when all registered Units have been sold pursuant to this registration statement, additional Units will be registered in subsequent registration statements. As discussed above, the minimum purchase requirement for Authorized Purchasers is a Creation Basket, which consists of 100,000 Units. Under the plan of distribution, USCI does not require a minimum purchase amount for investors who purchase Units from Authorized Purchasers. There are no arrangements to place funds in an escrow, trust, or similar account.

USCI’s Investments in Commodity Interests

A brief description of the principal types of Commodity Interests in which USCI may invest is set forth below.

A futures contract is an exchange-traded contract traded with standard terms that calls for the delivery of a specified quantity of a commodity at a specified price, on a specified date and at a specified location.
A forward contract is a non-standardized, non-exchange traded (“over-the-counter”) bilateral contract for the purchase or sale of a specified quantity of a commodity at a specified price, on a specified date and at a specified location.
A swap is an over-the-counter bilateral contract to exchange a periodic stream of payments determined by reference to a notional amount, with one party’s payments determined by reference to a specified price for an underlying asset or index, and the other’s determined by reference to the current market price of that asset or index.
An option on a futures contract, forward contract or a commodity on the spot market gives the buyer of the option the right, but not the obligation, to buy or sell a futures contract, forward contract or commodity, as applicable, at a specified price on or before a specified date. Options on futures contracts, like the future contracts to which they relate, are standardized contracts traded on an exchange, while options on forward contracts and commodities generally are individually negotiated, over-the-counter, bilateral contracts.

Unlike exchange-traded contracts, over-the-counter contracts expose USCI to the credit risk of the other party to the contract. (As discussed below, exchange-traded contracts may expose USCI to the risk of the clearing broker’s and/or the exchange clearing house(s)’ bankruptcy.) The Sponsor does not currently intend to purchase and sell commodities in the “spot market” for USCI. Spot market transactions are cash transactions in which the buyer and seller agree to the immediate purchase and sale of a commodity, usually with a two-day settlement.

A more detailed description of Commodity Interests and other aspects of the commodities and Commodity Interest markets can be found later in this prospectus.

As noted above, USCI invests in Futures Contracts, including those traded on the NYMEX, ICE Futures, CBOT, CME, LME and COMEX. USCI expressly disclaims any association with such exchanges or endorsement of USCI by such exchanges and acknowledges that “New York Mercantile Exchange”, “NYMEX”, “ICE Futures”, “Chicago Board of Trade”, “CBOT”, “Chicago Mercantile Exchange”, “CME”, “London Metal Exchange”, “LME”, “Commodity Exchange, Inc.” and “COMEX” are registered trademarks of such exchanges.

Principal Investment Risks of an Investment in USCI

An investment in USCI involves a degree of risk. Some of the risks you may face are summarized below. A more extensive discussion of these risks appears beginning on page 13.

Unlike mutual funds, commodity pools or other investment pools that manage their investments in an attempt to realize income and gains and distribute such income and gains to their investors, USCI generally will not distribute dividends to Unitholders. You should not invest in USCI if you will need cash distributions from USCI to pay taxes on your share of income and gains of USCI, if any, or for any other reason.

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Investors may choose to use USCI as a means of investing indirectly in commodities, and there are risks involved in such investments. The risks and hazards that are inherent in commodity production may cause the price of commodities to fluctuate widely.
To the extent that investors use USCI as a means of investing indirectly in commodities, there is the risk that the changes in the price of USCI’s Units on the NYSE Arca will not closely track the changes in the spot price of the commodities comprising the Index. This could happen if the price of Units traded on the NYSE Arca does not correlate closely with USCI’s NAV; the changes in USCI’s NAV do not correlate closely with changes in the Index; or the changes in the Index do not correlate closely with changes in the cash or spot price of the commodities underlying the Benchmark Component Futures Contracts. This is a risk because if these correlations are not sufficiently close, then investors may not be able to use USCI as a cost-effective way to invest indirectly in commodities or as a hedge against the risk of loss in commodity-related transactions.
USCI has no operating history, so there is no performance history to serve as a basis for you to evaluate an investment in USCI.
The price relationship between the nearer month Futures Contracts to expire and the later month Futures Contracts to expire that compose the Index will vary and may impact both USCI’s total return over time and the degree to which such total return tracks the total return of the Index. For example, in cases in which the near month contract’s price is lower than later-expiring contracts’ prices (a situation known as “contango” in the futures markets), then, absent the impact of the overall movement in commodity prices, the value of the Benchmark Component Futures Contracts would tend to decline as they approach expiration. In cases in which the near month contract’s price is higher than later-expiring contracts’ prices (a situation known as “backwardation” in the futures markets), then, absent the impact of the overall movement in commodity prices, the value of the Benchmark Component Futures Contracts would tend to rise as they approach expiration.
Investors, including those who directly participate in the commodities market, may choose to use USCI as a vehicle to hedge against the risk of loss and there are risks involved in hedging activities. While hedging can provide protection against an adverse movement in market prices, it can also preclude a hedger’s opportunity to benefit from a favorable market movement.
The structure and operation of USCI may involve conflicts of interest. The Sponsor has sole current authority to manage the investments and operations of USCI, which may create a conflict with the Unitholders’ best interests. The Sponsor may also have a conflict to the extent that its trading decisions may be influenced by the effect they would have on 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”), the United States Heating Oil Fund, LP (“USHO”), the United States Short Oil Fund, LP (“USSO”), and the United States 12 Month Natural Gas Fund, LP (“US12NG”), the other commodity pools it manages, or any other commodity pool the Sponsor may form in the future. USOF, USNG, US12OF, UGA, USHO, USSO and US12NG are referred to herein as the “Related Public Funds”.
You will have no rights to participate in the management of USCI and will have to rely on the duties and judgment of the Sponsor to manage USCI.
USCI pays fees and expenses that are incurred regardless of whether it is profitable.
USCI seeks to have the changes in its Units’ NAV in percentage terms track changes in the Index in percentage terms, rather than profit from speculative trading of Commodity Interests. The Sponsor therefore endeavors to manage USCI so that USCI’s assets are, unlike those of many other commodity pools, not leveraged (i.e., so that the aggregate value of USCI’s unrealized losses from its investments in Commodity Interests at any time will not exceed the value of USCI’s assets). There is no assurance that the Sponsor will successfully implement this investment strategy. If the Sponsor permits USCI to become leveraged, you could lose all or substantially all of your investment if USCI’s trading positions suddenly turn unprofitable. These movements in price may be the result of factors outside of the Sponsor’s control and may not be anticipated by the Sponsor.

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USCI may invest in Other Commodity-Related Investments. To the extent that these Other Commodity-Related Investments are contracts individually negotiated between their parties, they may not be as liquid as Futures Contracts and will expose USCI to credit risk that its counterparty may not be able to satisfy its obligations to USCI.
Regulation of the commodity interest and energy markets is extensive and constantly changing. Currently, a number of proposals that would alter the regulation of Commodity Interests are being considered by federal regulators and Congress. These proposals include the imposition of fixed position limits on commodity futures contracts, extension of position and accountability limits to futures contracts on non-U.S. exchanges previously exempt from such limits, and the forced use of clearinghouse mechanisms for all over-the-counter transactions. Certain proposals would aggregate and limit all positions in commodity futures held by a single entity, whether such positions exist on U.S. futures exchanges, non-U.S. futures exchanges, or in over-the-counter contracts. While it cannot be predicted at this time what reforms will eventually be made or how they will impact USCI, if any of the aforementioned proposals are implemented, USCI’s ability to meet its investment objective may be negatively impacted and investors could be adversely affected.
USCI will invest primarily in Commodity Interests that are traded or sold in the United States. However, a portion of USCI’s trades may take place in markets and on exchanges outside the United States. Some non-U.S. markets present risks because they are not subject to the same degree of regulation as their U.S. counterparts. In some of these non-U.S. markets, the performance on a contract is the responsibility of the counterparty and is not backed by an exchange or clearing corporation and therefore exposes USCI to credit risk. Trading in non-U.S. markets also leaves USCI susceptible to fluctuations in the value of the local currency against the U.S. dollar.

For additional risks, see “What Are the Risk Factors Involved with an Investment in USCI?”

Principal Offices of the USCI and the Sponsor

The principal office of the Trust and USCI is located at 1320 Harbor Bay Parkway, Suite 145, Alameda, California 94502. The telephone number is (510) 522-9600. The Sponsor’s principal office is also located at 1320 Harbor Bay Parkway, Suite 145, Alameda, California 94502.

Financial Condition of USCI

USCI’s NAV is determined as of the earlier of the close of the New York Stock Exchange or 4:00 p.m. New York time on each day that the NYSE Arca is open for trading.

Defined Terms

For a glossary of defined terms, see Appendix A.

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Breakeven Analysis

The breakeven analysis below indicates the approximate dollar returns and percentage required for the redemption value of a hypothetical $50.00 initial investment in a single Unit to equal the amount invested twelve months after the investment was made. This breakeven analysis refers to the redemption of baskets by Authorized Purchasers and is not related to any gains an individual investor would have to achieve in order to break even. The breakeven analysis is an approximation only.

 
Assumed initial selling price per Unit   $ 50.00  
Sponsor’s Management Fee (0.95%)(1)   $ 0.48  
Creation Basket Fee(2)   $ (0.01 ) 
Estimated Brokerage Fees (0.19%)(3)   $ 0.10  
Interest Income (0.14%)(4)   $ (0.07 ) 
Fees to Trustee(s)   $ 0.01  
Fees and expenses associated with tax accounting and reporting(6)   $ 0.25  
Amount of trading income (loss) required for the redemption value at the end of one year to equal the initial selling price of the Unit   $ 0.76  
Percentage of initial selling price per Unit     1.52 %(6) 

(1) USCI is obligated to pay the Sponsor a management fee based on average daily net assets and paid monthly at the annual rate 0.95%.
(2) Authorized Purchasers are required to pay a Creation Basket fee of $1,000 for each order they place to create one or more baskets. An order must be at least one basket, which is 100,000 Units. This breakeven analysis assumes a hypothetical investment in a single Unit so the Creation Basket fee is $.01 (1,000/100,000).
(3) USCI determined this amount as follows. Assuming that the price of a Unit is $50.00, USCI would receive $5,000,000 upon the sale of a Creation Basket (100,000 Units multiplied by $50.00). Assuming that this entire amount is invested in Futures Contracts and that there is no change in the settlement price of such contracts, USCI would be required to purchase approximately 98 Futures Contracts to support the Creation Basket ($5,000,000 divided by $51,000, the average value of the Benchmark Component Futures Contracts as of December 31, 2009). Assuming further that futures commission merchants charge approximately $4.00 per Futures Contract for each purchase or sale, the annual futures commission merchant charge would be approximately $9,408 (196 total Futures Contract transactions (98 purchases and 98 sales) multiplied by 12 times per year multiplied by $4.00). As a percentage of the total investment of $5,000,000, this annual commission expense would be approximately 0.19%.
(4) USCI earns interest on funds it deposits with the futures commission merchant and the Custodian and it estimates that the interest rate will be 0.14% based on the current interest rate on three-month Treasury Bills as of March 25, 2010. The actual rate may vary.
(5) In connection with its service as Trustee, Wilmington Trust Corporation is entitled to receive annual fees in the amount of $6,000. The number in the break-even table assumes that USCI has $30 million in assets.
(6) USCI assumed the aggregate costs attributable to tax accounting and reporting to be $150,000. This estimate is based on the experience of the Sponsor in its management of the Related Public Funds. The number in the break-even table assumes USCI has $30 million in assets.
(7) For purposes of this breakeven analysis, we have assumed that USCI has $30 million in assets. If, however, only the initial creation basket is sold for proceeds of $5 million, the amount of trading income required for the redemption value at the end of the year to equal the initial selling price of one unit would be $2.06 or 4.12% of the initial selling price per unit.

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THE OFFERING

Offering    
    USCI will offer Creation Baskets consisting of 100,000 Units through the Marketing Agent to Authorized Purchasers. Authorized Purchasers may purchase Creation Baskets consisting of 100,000 Units at USCI’s NAV, which is expected to initially be $50.00. The initial Authorized Purchaser intends to offer the Units of the initial Creation Basket(s) publicly. The initial Creation Basket is expected to be purchased by the initial Authorized Purchaser on the day the SEC declares the registration statement effective. The Units are expected to begin trading on the NYSE Arca on the day following the purchase of the initial Creation Basket(s) by the initial Authorized Purchaser.
Use of Proceeds    
    The Sponsor will apply substantially all of USCI’s assets toward investing in Commodity Interests, Treasury Securities, cash and/or cash equivalents. The Sponsor will deposit a portion of USCI’s net assets with the futures commission merchant, Newedge USA, LLC (“Newedge”), or other custodians to be used to meet its current or potential margin or collateral requirements in connection with its investment in Commodity Interests. Only Treasury Securities, cash and/or cash equivalents will be used to satisfy these requirements. The Sponsor expects that all entities that will hold or trade USCI’s assets will be based in the United States and will be subject to United States regulations. The Sponsor believes that approximately 5% to 20% of USCI’s assets will normally be committed as margin for Futures Contracts and collateral for Other Commodity-Related Investments. However, from time to time, the percentage of assets committed as margin/collateral may be substantially more, or less, than such range. The remaining portion of USCI’s assets will be held in Treasury Securities, cash and/or cash equivalents by the Custodian. All interest income earned on these investments is retained for USCI’s benefit.
NYSE Arca Symbol    
    “USCI”
Creation and Redemption    
    Authorized Purchasers pay a $1,000 fee for each order to create or redeem one or more Creation Baskets or Redemption Baskets. Authorized Purchasers are not required to sell any specific number or dollar amount of Units. The per Unit price of Units offered in Creation Baskets on any day after the effective date of the registration statement relating to this prospectus is the total NAV of USCI calculated as of the close of the NYSE Arca on that day divided by the number of issued and outstanding Units.
Inter-Series Limitation on Liability    
    While USCI is currently the sole series of the Trust, additional series may be created in the future. The Trust has been formed and will be operated with the goal that USCI and any other series of the Trust will be liable only for obligations of such series, and a series will not be responsible for or affected by any liabilities or losses of or claims against any other series. If any creditor or Unitholder in any particular series (such as USCI) were to successfully assert against a series a claim with

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    respect to its indebtedness or Units, the creditor or Unitholder could recover only from that particular series and its assets. Accordingly, the debts and other obligations incurred, contracted for or otherwise existing solely with respect to a particular series will be enforceable only against the assets of that series, and not against any other series or the Trust generally or any of their respective assets. The assets of USCI and any other series will include only those funds and other assets that are paid to, held by or distributed to the series on account of and for the benefit of that series, including, without limitation, amounts delivered to the Trust for the purchase of Units in a series.
Registration Clearance and
Settlement
   
    Individual certificates will not be issued for the Units. Instead, Units will be represented by one or more global certificates, which will be deposited by the Custodian with the Depository Trust Company (“DTC”) and registered in the name of Cede & Co., as nominee for DTC. The global certificates evidence all of the Units outstanding at any time. Beneficial interests in Units will be held through DTC’s book-entry system, which means that Unitholders are limited to:
   

•  

participants in DTC such as banks, brokers, dealers and trust companies (“DTC Participants”),

   

•  

those who maintain, either directly or indirectly, a custodial relationship with a DTC Participant (“Indirect Participants”), and

   

•  

those who hold interests in the Units through DTC Participants or Indirect Participants, in each case who satisfy the requirements for transfers of Units.

    DTC Participants acting on behalf of investors holding Units through such participants’ accounts in DTC will follow the delivery practice applicable to securities eligible for DTC’s Same-Day Funds Settlement System. Units will be credited to DTC Participants’ securities accounts following confirmation of receipt of payment.
Net Asset Value    
    The NAV will be calculated by taking the current market value of USCI’s total assets and subtracting any liabilities. Under USCI’s current operational procedures, the Administrator will calculate the NAV of USCI’s Units as of the earlier of 4:00 p.m. New York time or the close of the New York Stock Exchange each day. NYSE Arca will calculate an approximate net asset value every 15 seconds throughout each day that USCI’s Units are traded on the NYSE Arca for as long as the main pricing mechanisms are open for the Futures Exchanges upon which the Benchmark Component Futures Contracts are traded.
Fund Expenses    
    USCI pays the Sponsor a management fee at an annual rate of 0.95% on its average net assets, paid on a monthly basis. USCI is also responsible for other ongoing fees, costs and expenses of its operations, including

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•  

brokerage and other fees and commissions incurred in connection with the trading activities of USCI;

   

•  

expenses incurred in connection with registering additional Units of USCI or offering Units of USCI after the time any Units of USCI have begun trading on 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;

   

•  

fees and expenses associated with compensation to the directors;

   

•  

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 the Sponsor;

   

•  

postage and insurance, including directors and officers’ liability insurance;

   

•  

costs and expenses associated with client 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 USCI and the preparation of all tax returns related thereto; 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).

    The Sponsor will bear the costs and expenses incurred in connection with the formation, qualification and registration of the Trust, USCI and the Units under applicable U.S. federal and state law, and any other expenses actually incurred and, directly or indirectly, related to the organization of the Trust or USCI or the offering of USCI’s Units prior to the time such Units begin trading on the NYSE Arca, including, registration fees paid to the SEC, FINRA, or any other regulatory agency, and the legal, printing, accounting and other expenses associated therewith.

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Termination Events    
    USCI shall continue in existence from the date of its formation in perpetuity, unless sooner terminated upon the occurrence of any one or more of the following events:
   

•  

the filing of a certificate of dissolution or revocation of the Sponsor’s charter or the withdrawal of the Sponsor, unless a majority in interest of Unitholders elects within ninety (90) days after such event to continue the business of the Trust and appoints a successor Sponsor;

   

•  

the occurrence of any event which would make the existence of the Trust or USCI unlawful;

   

•  

the suspension, revocation, or termination of the Sponsor’s registration as a CPO or membership as a CPO with the NFA;

   

•  

The Trust or USCI, as the case may be, becomes insolvent or bankrupt.

   

•  

Unitholders owning at least seventy-five percent (75%) of the outstanding Units held in USCI, voting together as a single class, vote to dissolve the Trust, upon notice to the Sponsor of not less than ninety (90) Business Days prior to the effective date of termination.

   

•  

Upon written notice to the Trustee and the Unitholders by the Sponsor of its determination, in the Sponsor’s sole discretion, that the Trust’s or USCI’s aggregate net assets in relation to the operating expenses of the Trust or USCI make it unreasonable or imprudent to continue the business of the Trust or USCI.

   

•  

The Trust is required to be registered as an investment company under the Investment Company Act of 1940, as amended.

   

•  

DTC is unable or unwilling to continue to perform its functions, and a comparable replacement is unavailable.

    Upon the dissolution of the Trust or USCI, the Sponsor (or in the event there is no Sponsor, such person (the “Liquidating Trustee”) as the majority in interest of the Unitholders may propose and approve) shall take full charge of the trust estate. Thereafter, in accordance with applicable law, the business and affairs of the Trust or USCI shall be wound up and all assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom shall be applied and distributed in the following order of priority: (a) to the expenses of liquidation and termination and to creditors, including Unitholders who are creditors, to the extent otherwise permitted by law, in satisfaction of liabilities of the Trust or USCI (whether by payment or the making of reasonable provision for payment thereof) other than liabilities for distributions to Unitholders, and (b) to the Unitholders in accordance with their positive book capital account balances, after giving effect to all contributions, distributions and

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    allocations for all periods. Following the dissolution and distribution of the assets of USCI, the Trust shall terminate and the Sponsor or the Liquidating Trustee, as the case may be, shall instruct the Trustee to execute and cause such certificate of cancellation of the Certificate of Trust to be filed in accordance with applicable law.
Authorized Purchasers    
    We expect the initial Authorized Purchaser to be Merrill Lynch Professional Clearing Corp., and we expect that there will be additional Authorized Purchasers in the future. A list of Authorized Purchasers will be available from the Marketing Agent. Authorized Purchasers must be (1) registered broker-dealers or other securities market participants, such as banks and other financial institutions, that are not required to register as broker-dealers to engage in securities transactions, and (2) DTC Participants. To become an Authorized Purchaser, a person must enter into an Authorized Purchaser Agreement with the Marketing Agent.

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WHAT ARE THE RISK FACTORS INVOLVED WITH AN INVESTMENT IN USCI?

You should consider carefully the risks described below before making an investment decision. You should also refer to the other information included in this prospectus, which includes USCI’s financial statements and the related notes.

Risks Associated With Investing Directly or Indirectly in Indices and Commodity Interests

Changes in USCI’s NAV may not correlate with changes in the level of its corresponding Index.

It is possible that a USCI’s performance may not correspond to the changes in the level of its Index due to disruptions in the markets for the relevant commodities or due to other extraordinary circumstances. In addition, USCI is not able to replicate the changes in the Index because its NAV is reduced by expenses and transactions costs, including those incurred in connection with USCI’s trading activities, and increased by interest income from the USCI’s holdings of Treasury securities, cash and/or cash-equivalents. Tracking the Index is dependent upon the skills of the Sponsor and its management and trading personnel, among other factors.

While close tracking of USCI to the Index may be achieved on any single trading day, over time the cumulative percentage increase or decrease in the NAV of the Units of USCI may diverge significantly from the cumulative percentage decrease or increase in the Index due to a compounding effect. Therefore, USCI does not seek to achieve their stated investment objective over a period of time greater than one day.

Historical Performance of the Index is no guide to the future performance of the Units.

Past performance of the Index is not necessarily indicative of its future performance over the life of the Units. There can be no guarantee that the level of the Index will increase or decrease. You may lose some or all of your investment in the Units.

The Index is not designed to correlate exactly with the spot price of any commodity and this could cause the changes in the price of the Units to substantially vary from the changes in the spot prices of the commodities underlying the Benchmark Component Futures Contracts. Therefore, you may not be able to effectively use USCI to hedge against commodity-related losses or to indirectly invest in commodities.

The Index reflects the price for future delivery of the commodities underlying the Benchmark Component Futures Contracts, not the current spot price of such commodities, so at best the correlation between changes in such Benchmark Component Futures Contracts and the spot price of the underlying commodities will be only approximate. Weak correlation between the Index and the spot price of the underlying commodities may result from the typical seasonal fluctuations in commodity prices. Imperfect correlation may also result from speculation in Commodity Interests, technical factors in the trading of Futures Contracts, and expected inflation in the economy as a whole. If there is a weak correlation between the Index and the spot price of the related commodities, then the price of Units may not accurately track the spot price of such commodities and you may not be able to effectively use USCI as a way to hedge the risk of losses in your commodity-related transactions or as a way to indirectly invest in commodities.

Changes in the composition and valuation of the Index may adversely affect your Units.

The composition of the Index may change over time as additional commodities satisfy the eligibility criteria or commodities currently included in the Index fail to satisfy those criteria. In addition, SummerHaven Indexing may modify the method for determining the composition and weighting of the Index and for calculating its value in order to ensure that the Index represents a measure of the performance over time of the markets for the underlying commodities. Such changes could adversely affect the value of your Units. For more information about the methodology for determining the compositions and weighting of the Index, see the section of this prospectus entitled “What is the Index?”.

The Index is currently composed exclusively of futures contracts traded on regulated futures exchanges. The Index may in the future include contracts traded in the over-the-counter market or on trading facilities that are subject to lesser degrees of regulation or, in some cases, no substantive regulation. If this were to occur, increased investment by the USCI in the over-the-counter market or on alternative trading facilities may become necessary in order for USCI to track the Index. Many electronic trading facilities have only recently

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initiated trading and do not have significant trading histories. As a result, the trading of contracts on such facilities and the inclusion of such contracts in the Index may be subject to risks not presented by most exchange-traded futures contracts, including risks related to the liquidity and price histories of relevant contracts.

Changes in USCI’s NAV may not correlate well with changes in the price of the Index. If this were to occur, you may not be able to effectively use USCI as a way to hedge against commodity-related losses or as a way to indirectly invest in commodities.

The Sponsor endeavors to invest USCI’s assets as fully as possible in Commodity Interests so that the changes in percentage terms in the NAV closely correlate with the changes in percentage terms in the Index. However, changes in USCI’s NAV may not correlate with the changes in the Index for several reasons as set forth below:

USCI does not intend to invest only in Futures Contracts. While its investments in Other Commodity-Related Investments would generally be for the purpose of tracking the Index most effectively and efficiently, the performance of these Other Commodity-Related Investments may not correlate well with the performance of the Benchmark Component Futures Contracts, resulting in a greater potential for error in tracking price changes in those futures contracts. If the trading market for Benchmark Component Futures Contracts is suspended or closed, USCI may not be able to purchase these investments at the last reported price for such investments.
USCI will incur certain expenses in connection with its operations, and will hold most of its assets in income-producing, short-term securities for margin and other liquidity purposes and to meet redemptions that may be necessary on an ongoing basis. These expenses and income will cause imperfect correlation between changes in USCI’s NAV and changes in the Index.
The Sponsor may not be able to invest USCI’s assets in Commodity Interests having an aggregate notional amount exactly equal to USCI’s NAV. As standardized contracts, the Benchmark Component Futures Contracts included in the Index are for a specified amount of a particular commodity, and USCI’s NAV and the proceeds from the sale of a Creation Basket is unlikely to be an exact multiple of the amounts of those contracts. In such case, USCI could not invest the entire proceeds from the purchase of the Creation Basket in such futures contracts. (For example, assuming USCI receives $4,679,000 for the sale of a Creation Basket and that the price of a natural gas Benchmark Component Futures Contract is $46,800, USCI could only invest in 99 Futures Contracts with an aggregate value of $4,633,200). The foregoing example is based upon the investment of proceeds from the sale of a Creation Basket into the Futures Contracts of a single commodity. The investment of proceeds from the sale of a Creation Basket by USCI may be more complex due to the fact that USCI will use such proceeds to purchase Futures Contracts in multiple commodities. While USCI may be better able to achieve the exact amount of exposure to the commodities market through the use of Other Commodity-Related Investments such as over-the-counter contracts, there is no assurance that the Sponsor will be able to continually adjust USCI’s exposure to such Other Commodity- Related Investments to maintain such exact exposure. Furthermore, as noted above, the use of Other Commodity-Related Investments may itself result in imperfect correlation with the Index. Any amounts not invested in Commodity Interests will be held in short-term Treasury Securities, cash and/or cash equivalents.
As USCI grows, there may be more or less correlation. On the one hand, as USCI grows it should be able to invest in Futures Contracts with a notional amount that is closer on a percentage basis to USCI’s NAV. For example, if the proportionate amount of USCI’s NAV allocable to a particular Benchmark Component Futures Contract is equal to 4.9 times the value of the Benchmark Component Futures Contract, it can purchase only four such futures contracts, which would cause only 81.6% of USCI’s assets to be exposed to the market for that commodity. On the other hand, if USCI’s NAV is equal to 100.9 times the value of a single commodity Futures Contract, it can purchase 100 such contracts, resulting in 99.1% exposure. However, at certain asset levels USCI may be limited in its ability to purchase Futures Contracts due to position limits imposed by the CFTC or position limits or accountability levels imposed by the relevant exchanges. In these instances, USCI would likely invest to a greater extent in Commodity Interests not subject to these

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position limits or accountability levels. To the extent that USCI invests in Other Commodity-Related Investments, the correlation between USCI’s NAV and the Index may be lower. In certain circumstances, position limits could limit the number of Creation Baskets that will be sold.

If changes in USCI’s NAV do not correlate with changes in the Index, then investing in USCI may not be an effective way to hedge against commodity-related losses or indirectly invest in commodities.

Changes in the price of USCI’s Units on the NYSE Arca may not correlate perfectly with changes in the NAV of USCI’s Units. If this variation occurs, then you may not be able to effectively use USCI to hedge against commodity-related losses or to indirectly invest in commodities.

While it is expected that the trading prices of the Units will fluctuate in accordance with the changes in USCI’s NAV, the prices of Units may also be influenced by other factors, including the short-term supply of and demand for the Units. There is no guarantee that the Units will not trade at appreciable discounts from, and/or premiums to, USCI’s NAV. This could cause the changes in the price of the Units to substantially vary from the changes in the spot price of the commodities comprising the Index. If this occurs, you may not be able to effectively use USCI to hedge the risk of losses in your commodity-related transactions or to indirectly invest in commodities.

USCI may experience a loss if it is required to sell Treasury Securities or cash equivalents at a price lower than the price at which they were acquired.

If USCI is required to sell Treasury Securities or cash equivalents at a price lower than the price at which they were acquired, USCI will experience a loss. This loss may adversely impact the price of the Units and may decrease the correlation between the price of the Units, the Index, and the spot price of the commodities underlying the Benchmark Component Futures Contracts. The value of Treasury Securities and other debt securities generally moves inversely with movements in interest rates. The prices of longer maturity securities are subject to greater market fluctuations as a result of changes in interest rates. While the short-term nature of USCI’s investments in Treasury Securities and cash equivalents should minimize the interest rate risk to which USCI is subject, it is possible that the Treasury Securities and cash equivalents held by USCI will decline in value.

Certain of USCI’s investments could be illiquid which could cause large losses to investors at any time or from time to time.

USCI may not always be able to liquidate its positions in its investments at the desired price. As to futures contracts, it may be difficult to execute a trade at a specific price when there is a relatively small volume of buy and sell orders in a market. Limits imposed by futures exchanges or other regulatory organizations, such as accountability levels, position limits and price fluctuation limits, may contribute to a lack of liquidity with respect to some exchange-traded Commodity Interests. In addition, over-the-counter contracts may be illiquid because they are contracts between two parties and generally may not be transferred by one party to a third party without the counterparty’s consent. Conversely, a counterparty may give its consent, but USCI still may not be able to transfer an over-the-counter Commodity Interest to a third party., e.g., due to concerns regarding the counterparty’s credit risk.

A market disruption, such as a foreign government taking political actions that disrupt the market in its currency, its commodity production or exports, or in another major export, can also make it difficult to liquidate a position. Unexpected market illiquidity may cause major losses to investors at any time or from time to time. In addition, USCI does not intend at this time to establish a credit facility, which would provide an additional source of liquidity and instead will rely only on the Treasury Securities, cash and/or cash equivalents that it holds. The anticipated large value of the positions in Commodity Interests that the Sponsor will acquire or enter into for USCI increases the risk of illiquidity. Because Commodity Interests may be illiquid, USCI’s holdings may be more difficult to liquidate at favorable prices in periods of illiquid markets and losses may be incurred during the period in which positions are being liquidated.

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If the nature of the participants in the futures market shifts such that commodity purchasers are the predominant hedgers in the market, USCI might have to reinvest at higher futures prices or choose Other Commodity-Related Investments.

The changing nature of the participants in the commodities market will influence whether futures prices are above or below the expected future spot price. Commodity producers will typically seek to hedge against falling commodity prices by selling futures contracts. Therefore, if commodity producers become the predominate hedgers in the futures market, prices of futures contracts will typically be below expected futures spot prices. Conversely, if the predominant hedgers in the futures market are the purchasers of the commodities who purchase futures contracts to hedge against a rise in prices, prices of futures contracts will likely be higher than expected future spot prices. This can have significant implications for USCI when it is time to sell a Futures Contract that is no longer part of the Index and purchase a new Futures Contract that is part of the Index.

While USCI does not intend to take physical delivery of commodities under its Commodity Interests, the possibility of physical delivery impacts the value of the contracts which would make it more difficult for USCI to trade the Index and achieve its investment objective.

While it is not the current intention of USCI to take physical delivery of commodities under its Commodity Interests, Futures Contracts are traditionally not cash-settled contracts, and it is possible to take delivery under these and some Other Commodity-Related Investments. Storage costs associated with purchasing commodities could result in costs and other liabilities that could impact the value of Futures Contracts or Other Commodity-Related Investments. Storage costs include the time value of money invested in a physical commodity plus the actual costs of storing the commodity less any benefits from ownership of the commodity that are not obtained by the holder of a futures contract. In general, Futures Contracts have a one-month delay for contract delivery and back month contracts (the back month is any future delivery month other than the spot month) includes storage costs. To the extent that these storage costs change for commodities while USCI holds Commodity Interests, the value of the Commodity Interests, and therefore USCI’s NAV, may change as well.

The price relationship between the Index at any point in time and the Futures Contacts that will become the Benchmark Component Futures Contracts on the next rebalancing date will vary and may impact both USCI’s total return and the degree to which its total return tracks that of commodity price indices.

The design of the Index is such that every month it is made up of different Futures Contracts, and USCI’s investments must be rebalanced on an ongoing basis to reflect the changing composition of the Index. In the event of a commodity futures market where near-to-expire contracts trade at a higher price than longer-to-expire contracts, a situation referred to as “backwardation,” then absent the impact of the overall movement in commodity prices the value of the Index would tend to rise as it approaches expiration. As a result USCI may benefit because it would be selling more expensive contracts and buying less expensive ones on an ongoing basis. Conversely, in the event of a commodity futures market where near-to-expire contracts trade at a lower price than longer-to-expire contracts, a situation referred to as “contango,” then absent the impact of the overall movement in commodity prices the value of the Index would tend to decline as they approach expiration. As a result USCI’s total return may be lower than might otherwise be the case because it would be selling less expensive contracts and buying more expensive ones. The impact of backwardation and contango may lead the total return of USCI to vary significantly from the total return of other price references, such as the spot price of the commodities comprising the Index. In the event of a prolonged period of contango, and absent the impact of rising or falling commodity prices, this could have a significant negative impact on USCI’s NAV and total return.

Regulation of the commodity interests and energy markets is extensive and constantly changing; future regulatory developments are impossible to predict but may significantly and adversely affect USCI.

The futures markets are subject to comprehensive statutes, regulations, and margin requirements. In addition, the CFTC and the exchanges are authorized to take extraordinary actions in the event of a market emergency, including, for example, the retroactive implementation of speculative position limits or higher margin requirements, the establishment of daily price limits and the suspension of trading.

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The regulation of commodity interest transactions in the United States is a rapidly changing area of law and is subject to ongoing modification by governmental and judicial action. Considerable regulatory attention has been focused on non-traditional investment pools which are publicly distributed in the United States. There is a possibility of future regulatory changes altering, perhaps to a material extent, the nature of an investment in USCI or the ability of USCI to continue to implement its investment strategy. In addition, various national governments have expressed concern regarding the disruptive effects of speculative trading in the energy markets and the need to regulate the derivatives markets in general. The effect of any future regulatory change on USCI is impossible to predict, but could be substantial and adverse.

In the wake of the economic crisis last year, the Administration, federal regulators and Congress are revisiting the regulation of the financial sector, including securities and commodities markets. These efforts are likely to result in significant changes in the regulation of these markets.

Currently, a number of proposals that would alter the regulation of Commodity Interests are being considered by federal regulators and Congress. These proposals include the imposition of fixed position limits on energy-based commodity futures contracts, extension of position and accountability limits to futures contracts on non-U.S. exchanges previously exempt from such limits, and the forced use of clearinghouse mechanisms for all over-the-counter transactions. Certain proposals would aggregate and limit all positions in energy futures held by a single entity, whether such positions exist on U.S. futures exchanges, non-U.S. futures exchanges, or in over-the-counter contracts. While it cannot be predicted at this time what reforms will eventually be made or how they will impact USCI, if any of the aforementioned proposals are implemented, USCI’s ability to meet its investment objective may be negatively impacted and investors could be adversely affected.

If you are investing in USCI for purposes of hedging, you might be subject to several risks, including the possibility of losing the benefit of favorable market movements.

Producers and commercial users of commodities may use USCI as a vehicle to hedge the risk of losses in their commodity-related transactions. There are several risks in connection with using USCI as a hedging device. While hedging can provide protection against an adverse movement in market prices, it can also preclude a hedger’s opportunity to benefit from a favorable market movement. For instance, in a hedging transaction the hedger may be a user of a commodity concerned that the hedged commodity will increase in price, but must recognize the risk that the price may instead decline. If this happens, he will have lost the benefit of being able to purchase the commodity at the lower price because the hedging transaction will result in a loss that would offset (at least in part) this benefit. Thus, the hedger forgoes the opportunity to profit from favorable price movements.

In addition, if the hedge is not a perfect one, the hedger can lose on the hedging transaction and not realize an offsetting gain in the value of the underlying item being hedged.

When using Commodity Interests as a hedging technique, at best, the correlation between changes in prices of futures contracts and of the items being hedged can be only approximate. The degree of imperfection of correlation depends upon circumstances such as: variations in speculative markets, demand for futures and for commodity products, technical influences in futures trading, and differences between anticipated costs being hedged and the instruments underlying the standard futures contracts available for trading. Even a well-conceived hedge may be unsuccessful to some degree because of unexpected market behavior as well as the expenses associated with creating the hedge.

An investment in USCI may provide you little or no diversification benefits. Thus, in a declining market, USCI may have no gains to offset your losses from other investments, and you may suffer losses on your investment in USCI at the same time you incur losses with respect to other asset classes.

Historically, Commodity Interests have not generally been correlated to the performance of other asset classes such as stocks and bonds. Non-correlation means that there is a low statistical relationship between the performance of Commodity Interests, on the one hand, and stocks or bonds, on the other hand. However, there can be no assurance that such non-correlation will continue during future periods. If, contrary to historic patterns, USCI’s performance were to move in the same general direction as the financial markets, you will

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obtain little or no diversification benefits from an investment in the Units. In such a case, USCI may have no gains to offset your losses from other investments, and you may suffer losses on your investment in USCI at the same time you incur losses with respect to other investments.

Variables such as drought, floods, weather, embargoes, tariffs and other political events may have a larger impact on commodity prices and commodity-linked instruments, including Futures Contracts and Other Commodity-Related Investments, than on traditional securities. These additional variables may create additional investment risks that subject USCI’s investments to greater volatility than investments in traditional securities.

Non-correlation should not be confused with negative correlation, where the performance of two asset classes would be opposite of each other. There is no historic evidence that the spot prices of commodities and prices of other financial assets, such as stocks and bonds, are negatively correlated. In the absence of negative correlation, USCI cannot be expected to be automatically profitable during unfavorable periods for the stock market, or vice versa.

USCI’s Operating Risks

USCI is not a registered investment company, so you do not have the protections of the Investment Company Act of 1940.

USCI is not an investment company subject to the Investment Company Act of 1940. Accordingly, you do not have the protections afforded by that statute which, for example, requires investment companies to have a majority of disinterested directors and regulates the relationship between the investment company and its investment manager.

USCI has no operating history so there is no performance history to serve as a basis for you to evaluate an investment in USCI.

USCI is new and has no operating history. Therefore, you do not have the benefit of reviewing the past performance of USCI as a basis to evaluate an investment in USCI. The Sponsor’s current experience involves managing the Related Public Funds that seek to trade a single benchmark futures contract. The Sponsor’s results with the Related Public Funds may not be directly applicable to USCI since USCI seeks to track the Index comprised of 14 futures contracts that is rebalanced monthly.

The Sponsor is leanly staffed and relies heavily on key personnel and its trading advisor, SummerHaven, to manage trading activities.

In managing and directing the day-to-day activities and affairs of USCI, the Sponsor relies heavily on Mr. Nicholas Gerber, Mr. Ray Allen, and Mr. John Hyland. If Mr. Gerber, Mr. Allen, or Mr. Hyland were to leave or be unable to carry out their present responsibilities, it may have an adverse effect on the management of USCI. Furthermore, Mr. Gerber and Mr. Hyland are involved in the management of the Related Public Funds. In addition, Mr. Allen is involved in the management of UGA, USHO, USSO and US12NG. Mr. Gerber is also employed by Ameristock Corporation, a registered investment adviser that manages a public mutual fund. It is estimated that Mr. Gerber will spend approximately 50% of his time on fund matters. Mr. Allen will spend approximately 100% of his time on fund matters and Mr. Hyland will spend approximately 85% of his time on fund matters. To the extent that the Sponsor establishes additional funds, even greater demands will be placed on Mr. Gerber, Mr. Allen and Mr. Hyland, as well as the other officers of the Sponsor, including Mr. Howard Mah, the Chief Financial Officer, and its Board of Directors.

SummerHaven is leanly staffed and relies heavily on key personnel to manage advisory activities.

In providing trading advisory services to USCI with respect to the Index, SummerHaven relies heavily on Mr. Adam Dunsby, Mr. Kurt Nelson, Mr. Ashraf Rizvi and Mr. K. Geert Rouwenhorst. If Mr. Dunsby, Mr. Nelson, Mr. Rizvi or Mr. Rouwenhorst were to leave or be unable to carry out their present responsibilities, it may have an adverse effect on the management of SummerHaven. It is estimated that Mr. Dunsby will spend approximately 10% of his time on USCI matters. Mr. Nelson will spend approximately 35% of his time on USCI matters. Mr. Rizvi will spend approximately 50% of his time on USCI matters and Mr. Rouwenhorst will spend approximately 10% of his time on USCI matters.

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Accountability levels, position limits, and daily price fluctuation limits set by the exchanges have the potential to cause a tracking error, which could cause the price of units to substantially vary from the price of the Index and prevent you from being able to effectively use USCI as a way to hedge against commodity-related losses or as a way to indirectly invest in commodities.

U.S. designated contract markets such as the NYMEX, COMEX, CME and CBOT 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 an investment by USCI is not) may hold, own or control. For example, the current accountability level for investments at any one month in natural gas Futures Contracts traded on NYMEX is 6,000. In addition, the NYMEX imposes an accountability level for all months of 12,000 net futures contracts in natural gas. While this is not a fixed ceiling, it is a threshold above which the NYMEX may exercise greater scrutiny and control over an investor, including limiting an investor to holding no more than 12,000 natural gas Futures Contracts.

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. For example, the current position limit for feeder cattle Futures Contracts on the CME is 1,600 futures contracts in any contract month. USCI will not be able to hold, own or control feeder cattle Futures Contracts in excess of this limit.

In addition to accountability levels and position limits, the Futures Exchanges may also set daily price fluctuation limits on the Futures Contracts. The daily price fluctuation limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous day’s settlement price. Once the daily price fluctuation limit has been reached in a particular futures contract, no trades may be made at a price beyond that limit.

For example, the NYMEX imposes a $3.00 per mmBtu ($30,000 per contract) price fluctuation limit for natural gas Futures Contracts. This limit is initially based off of the previous NYMEX trading day’s settlement price. If any natural gas Futures Contract is traded, bid, or offered at the limit for five minutes, trading is halted for five minutes. When trading resumes it begins at the point where the limit was imposed and the limit is reset to be $3.00 per mmBtu in either direction of that point. If another halt were triggered, the market would continue to be expanded by $3.00 per mmBtu in either direction after each successive five-minute trading halt. There is no maximum price fluctuation limit during any one trading session.

All of these limits may potentially cause a tracking error between the price of the Units and the price of the Index. This may in turn prevent you from being able to effectively use USCI as a way to hedge against commodity-related losses or as a way to indirectly invest in commodities.

USCI is not limiting the size of the offering and is committed to utilizing substantially all of its proceeds to purchase Futures Contracts and Other Commodity-Related Investments. If USCI encounters accountability levels, position limits, or price fluctuation limits for Benchmark Component Futures Contracts on a particular Futures Exchange, it may then, if permitted under applicable regulatory requirements, purchase Futures Contracts on the other Futures Exchanges that trade listed futures in the relevant commodity. The Futures Contracts available on other Futures Exchanges may be comparable to the Benchmark Component Futures Contracts, but they may have different underlying commodities, sizes, deliveries, and prices.

No independent advisers were involved in the formation of USCI or the preparation of this registration statement. As a result, you will not have the benefit of an independent due diligence review of us.

The Sponsor has consulted with legal counsel, accountants and other advisers regarding the formation and operation of the Trust and USCI. No counsel has been appointed to represent you in connection with the offering of Units. Accordingly, you should consult your own legal, tax and financial advisers regarding the desirability of an investment in the Units.

USCI and the Sponsor and SummerHaven may have conflicts of interest, which may cause them to favor their own interests to your detriment.

USCI and the Sponsor and SummerHaven may have inherent conflicts to the extent the Sponsor and SummerHaven attempt to maintain USCI’s asset size in order to preserve its fee income and this may not always be consistent with USCI’s objective of having the value of its Units’ NAV track changes in the Index.

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The Sponsor’s and SummerHaven’s officers, directors and employees do not devote their time exclusively to USCI. These persons are directors, officers or employees of other entities that may compete with USCI for their services. They could have a conflict between their responsibilities to USCI and to those other entities.

The Sponsor has sole current authority to manage the investments and operations of USCI. It has delegated management of USCI’s investments in Commodity Interests to its trading advisor, SummerHaven. This authority to manage the investments and operations of USCI may allow either the Sponsor or SummerHaven to act in a way that furthers its own interests in conflict with your best interests. Unitholders have very limited voting rights, which will limit the ability to influence matters such as amendment of the Trust Agreement, change in USCI’s basic investment policy, dissolution of USCI, or the sale or distribution of USCI’s assets.

Unitholders have only very limited voting rights and generally will not have the power to replace the Sponsor. Unitholders will not participate in the management of USCI and do not control the Sponsor so they will not have influence over basic matters that affect USCI.

Unitholders will have very limited voting rights with respect to USCI’s affairs. Unitholders may elect a replacement Sponsor only if the current Sponsor resigns voluntarily or loses its corporate charter. Unitholders will not be permitted to participate in the management or control of USCI or the conduct of its business. Unitholders must therefore rely upon the duties and judgment of the Sponsor to manage USCI’s affairs.

The Sponsor may manage a large amount of assets and this could affect USCI’s ability to trade profitably.

Increases in assets under management may affect trading decisions. In general, the Sponsor does not intend to limit the amount of assets of USCI that it may manage. The more assets the Sponsor manages, the more difficult it may be for it to trade profitably because of the difficulty of trading larger positions without adversely affecting prices and performance and of managing risk associated with larger positions.

The liability of the Sponsor and the Trustee are limited, and the value of the Units will be adversely affected if USCI is required to indemnify the Trustee or the Sponsor.

Under the Trust Agreement, the Trustee and the Sponsor are not liable, and have the right to be indemnified, for any liability or expense incurred absent gross negligence or willful misconduct on the part of the Trustee or Sponsor, as the case may be. That means the Sponsor may require the assets of USCI to be sold in order to cover losses or liability suffered by it or by the Trustee. Any sale of that kind would reduce the NAV of USCI and the value of its Units.

Although the Units of USCI are limited liability investments, certain circumstances such as bankruptcy or indemnification of USCI by the Unitholder will increase a Unitholder’s liability.

The Units of USCI are limited liability investments; Unitholders may not lose more than the amount that they invest plus any profits recognized on their investment. However, Unitholders could be required, as a matter of bankruptcy law, to return to the estate of USCI any distribution they received at a time when USCI was in fact insolvent or in violation of its Trust Agreement.

You cannot be assured of the Sponsor’s continued services, and discontinuance may be detrimental to USCI’s.

You cannot be assured that the Sponsor will be willing or able to continue to service USCI for any length of time. The Sponsor was formed for the purpose of sponsoring USCI and other commodity pools, and has limited financial resources and no significant source of income apart from its management fees from the commodity pools it operates to support its continued service for USCI. If the Sponsor discontinues its activities on behalf of USCI, USCI may be adversely affected. If the Sponsor’s registrations with the CFTC or memberships in the NFA were revoked or suspended, the Sponsor would no longer be able to provide services to USCI.

You cannot be assured of SummerHaven’s continued services, and discontinuance may be detrimental to USCI’s.

You cannot be assured that SummerHaven will be willing or able to continue to service USCI for any length of time. SummerHaven was formed for the purpose of providing investment advisory services, and provides these services to USCI on a contractual basis. If SummerHaven discontinues its activities on behalf

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of USCI, USCI may be adversely affected. If SummerHaven’s registrations with the CFTC or memberships in the NFA were revoked or suspended, SummerHaven would no longer be able to provide services to USCI.

USCI could terminate at any time and cause the liquidation and potential loss of your investment and could upset the overall maturity and timing of your investment portfolio.

USCI may terminate at any time, regardless of whether USCI has incurred losses, subject to the terms of the Trust Agreement. For example, the dissolution or resignation of the Sponsor would cause USCI to terminate unless a majority in interest of the Unitholders within 90 days of the event elects to continue the Trust and appoints a successor Sponsor. In addition, the Sponsor may terminate USCI if it determines that USCI’s aggregate net assets in relation to its operating expenses make the continued operation of USCI unreasonable or imprudent. However, no level of losses will require the Sponsor to terminate USCI. USCI’s termination would result in the liquidation of its investments and the distribution of its remaining assets to the Unitholders on a pro rata basis in accordance with their Units, and USCI could incur losses in liquidating its investments in connection with a termination. Termination could also negatively affect the overall maturity and timing of your investment portfolio.

As a Unitholder, you will not have the rights enjoyed by investors in certain other types of entities.

As interests in separate series of a Delaware statutory trust, the Units do not involve the rights normally associated with the ownership of Units of a corporation. In addition, the Units have limited voting and distribution rights (for example, Unitholders do not have the right to elect directors and generally will not receive regular distributions of the net income and capital gains earned by USCI). USCI is also not subject to certain investor protection provisions of the Sarbanes Oxley Act of 2002 and the NYSE Arca governance rules (for example, audit committee requirements). In addition, the Trust Agreement limits the rights of Unitholders to bring derivative actions.

A court could potentially conclude that the assets and liabilities of USCI are not segregated from those of another series of the Trust, thereby potentially exposing assets in USCI to the liabilities of another series.

USCI is a series of a Delaware statutory trust and not itself a separate legal entity. The Delaware Statutory Trust Act provides that if certain provisions are included in the formation and governing documents of a statutory trust organized in series and if separate and distinct records are maintained for any series and the assets associated with that series are held in separate and distinct records and are accounted for in such separate and distinct records separately from the other assets of the statutory trust, or any series thereof, then the debts, liabilities, obligations and expenses incurred by a particular series are enforceable against the assets of such series only, and not against the assets of the statutory trust generally or any other series thereof. Conversely, none of the debts, liabilities, obligations and expenses incurred with respect to any other series thereof shall be enforceable against the assets of such series. The Sponsor is not aware of any court case that has interpreted this Inter-Series Limitation on Liability or provided any guidance as to what is required for compliance. The Sponsor intends to maintain separate and distinct records for USCI and account for USCI separately from any other Trust series, but it is possible a court could conclude that the methods used do not satisfy the Delaware Statutory Trust Act, which would potentially expose assets in one Fund to the liabilities of another series.

The Sponsor and the Trustee are not obligated to prosecute any action, suit or other proceeding in respect of any USCI property.

Neither the Sponsor nor the Trustee is obligated to, although each may in its respective discretion, prosecute any action, suit or other proceeding in respect of any USCI property. The Trust Agreement does not confer upon Unitholders the right to prosecute any such action, suit or other proceeding.

USCI does not expect to make cash distributions.

The Sponsor intends to re-invest any income and realized gains of USCI in additional Commodity Interests rather than distributing cash to Unitholders. Therefore, unlike mutual funds, commodity pools or other investment pools that generally distribute income and gains to their investors, USCI generally will not distribute cash to Unitholders. You should not invest in USCI if you will need cash distributions from USCI to pay taxes on your share of income and gains of USCI, if any, or for any other reason. Although USCI does

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not intend to make cash distributions, the income earned from its investments held directly or posted as margin may reach levels that merit distribution, e.g., at levels where such income is not necessary to support its underlying investments in Commodity Interests and investors adversely react to being taxed on such income without receiving distributions that could be used to pay such tax. Cash distributions may be made in these and similar instances.

There is a risk that USCI will not earn trading gains sufficient to compensate for the fees and expenses that it must pay and as such USCI may not earn any profit.

USCI pays management fees at an annual rate of 0.95% of its average net assets, brokerage charges of approximately 0.19% (based on futures commission merchant fees of $4.00 per buy or sell), over-the-counter spreads and various other expenses of its ongoing operations (e.g., fees of the Administrator, Trustee, Marketing Agent and SummerHaven). These fees and expenses must be paid in all events, regardless of whether USCI’s activities are profitable. Accordingly, USCI must realize trading gains sufficient to cover these fees and expenses before it can earn any profit.

If this offering of Units does not raise sufficient funds to make USCI’s future operations viable, USCI may be forced to terminate and investors may lose all or part of their investment.

All of the expenses relating to USCI incurred prior to the date of this prospectus have been or will be paid by the Sponsor. These payments by the Sponsor were designed to allow USCI the ability to commence the public offering of its Units. In general, USCI now directly pays these fees and expenses. If the Sponsor and USCI are unable to raise sufficient funds so that USCI’s expenses are reasonable in relation to its NAV, USCI may be forced to terminate and investors may lose all or part of their investment.

USCI may incur higher fees and expenses upon renewing existing or entering into new contractual relationships.

The arrangements between SummerHaven, clearing brokers and counterparties on the one hand and USCI on the other generally are terminable by the clearing brokers or counterparty upon notice to USCI. Upon termination, the Sponsor may be required to renegotiate or make other arrangements for obtaining similar services if USCI intends to continue trading in Futures Contracts or Other Commodity-Related Investments under the advisement of SummerHaven. The services of SummerHaven or any clearing broker or counterparty may not be available, or even if available, these services may not be available on the terms as favorable as those of the expired or terminated arrangements.

The net asset value calculation of USCI may be overstated or understated due to the valuation method employed when a settlement price is not available on the date of net asset value calculation.

USCI’s NAV includes, in part, any unrealized profits or losses on open swap agreements, futures or forward contracts. Under normal circumstances, the NAV will reflect the settlement price of open Futures Contracts on the date when the NAV is being calculated. However, if a Futures Contract traded on an exchange could not be liquidated on such day (due to the operation of daily limits or other rules of the exchange or otherwise), the settlement price on the most recent day on which the Futures Contract position could have been liquidated will be the basis for determining the market value of such position for such day. In these situations, there is a risk that the calculation of the NAV of USCI on such day will not accurately reflect the realizable market value of the futures contracts or of its over-the-counter swap contracts since the value of such contracts is tied to the value of the futures contracts.

An unanticipated number of redemption requests during a short period of time could have an adverse effect on the NAV of USCI.

If a substantial number of requests for redemption of Redemption Baskets are received by USCI during a relatively short period of time, USCI may not be able to satisfy the requests from USCI’s assets not committed to trading. As a consequence, it could be necessary to liquidate USCI’s trading positions before the time that its trading strategies would otherwise call for liquidation.

The financial markets have recently been in a period of disruption and recession and these conditions may not improve in the near future which could adversely affect USCI’s financial condition and results of operations.

Throughout 2008 and 2009, the financial markets experienced very difficult conditions and volatility as well as significant adverse trends. The conditions in these markets resulted in a decrease in availability of

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corporate credit and liquidity and led indirectly to the insolvency, closure or acquisition of a number of major financial institutions and contributed to further consolidation within the financial services industry. A continued recession or a depression could adversely affect the financial condition and results of operations of USCI’s service providers and Authorized Purchasers, which would impact the ability of the Sponsor to achieve USCI’s investment objective.

The liquidity of the Units may be affected by the withdrawal from participation of Authorized Purchasers, which could adversely affect the market price of the Units.

In the event that one or more Authorized Purchasers that have substantial interests in the Units withdraw from participation, the liquidity of the Units will likely decrease, which could adversely affect the market price of the Units and result in your incurring a loss on your investment.

You may be adversely affected by redemption orders that are subject to postponement, suspension or rejection under certain circumstances.

The Trust may, in its discretion, suspend the right to redeem Units of USCI or postpone the redemption settlement date: (1) for any period during which an applicable exchange is closed other than customary weekend or holiday closing, or trading is suspended or restricted; (2) for any period during which an emergency exists as a result of which delivery, disposal or evaluation of USCI’s assets is not reasonably practicable; or (3) for such other period as the Sponsor determines to be necessary for the protection of Unitholders. In addition, the Trust will reject a redemption order if the order is not in proper form as described in the agreement with the Authorized Purchaser or if the fulfillment of the order, in the opinion of its counsel, might be unlawful. Any such postponement, suspension or rejection could adversely affect a redeeming Unitholder. For example, the resulting delay may adversely affect the value of the Unitholder’s redemption proceeds if the NAV of USCI declines during the period of delay. The Trust Agreement provides that the Sponsor and its designees will not be liable for any loss or damage that may result from any such suspension or postponement.

The failure or bankruptcy of a clearing broker could result in substantial losses for USCI; the clearing broker could be subject to proceedings that impair its ability to execute USCI’s trades.

Under CFTC regulations, a clearing broker with respect to USCI’s exchange-traded Commodity Interests must maintain customers’ assets in a bulk segregated account. If a clearing broker fails to do so, or is unable to satisfy a substantial deficit in a customer account, its other customers may be subject to risk of a substantial loss of their funds in the event of that clearing broker’s bankruptcy. In that event, the clearing broker’s customers, such as USCI, are entitled to recover, even in respect of property specifically traceable to them, only a proportional Unit of all property available for distribution to all of that clearing broker’s customers. USCI also may be subject to the risk of the failure of, or delay in performance by, any exchanges and markets and their clearing organizations, if any, on which Commodity Interests are traded.

From time to time, the clearing brokers may be subject to legal or regulatory proceedings in the ordinary course of their business. A clearing broker’s involvement in costly or time-consuming legal proceedings may divert financial resources or personnel away from the clearing broker’s trading operations, which could impair the clearing broker’s ability to successfully execute and clear USCI’s trades.

The failure or insolvency of USCI’s custodian could result in a substantial loss of USCI’s assets.

As noted above, the vast majority of USCI’s assets are held in short-term Treasury Securities, cash and/or cash equivalents with its custodian. The insolvency of the custodian could result in a complete loss of USCI’s assets held by that custodian, which, at any given time, would likely comprise a substantial portion of USCI’s total assets.

Third parties may infringe upon or otherwise violate intellectual property rights or assert that the Sponsor has infringed or otherwise violated their intellectual property rights, which may result in significant costs and diverted attention.

Third parties may utilize USCI’s intellectual property or technology, including the use of its business methods, trademarks and trading program software, without permission. The Sponsor has a patent pending for USCI’s business method and it is registering its trademarks. USCI does not currently have any proprietary

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software. However, if it obtains proprietary software in the future, then any unauthorized use of USCI’s proprietary software and other technology could also adversely affect its competitive advantage. USCI may have difficulty monitoring unauthorized uses of its patents, trademarks, proprietary software and other technology. Also, third parties may independently develop business methods, trademarks or proprietary software and other technology similar to that of the Sponsor or claim that the Sponsor has violated their intellectual property rights, including their copyrights, trademark rights, trade names, trade secrets and patent rights. As a result, the Sponsor may have to litigate in the future to protect its trade secrets, determine the validity and scope of other parties’ proprietary rights, defend itself against claims that it has infringed or otherwise violated other parties’ rights, or defend itself against claims that its rights are invalid. Any litigation of this type, even if the Sponsor is successful and regardless of the merits, may result in significant costs, divert its resources from USCI, or require it to change its proprietary software and other technology or enter into royalty or licensing agreements.

The success of USCI depends on the ability of the Sponsor to accurately implement its trading strategies, and any failure to do so could subject USCI to losses on such transactions.

The Sponsor’s trading strategy, as developed by SummerHaven, is quantitative in nature and it is possible that the Sponsor or SummerHaven will make errors in its implementation. The execution of the quantitative strategy is subject to human error, such as incorrect inputs into the Sponsor or SummerHaven’s computer systems and incorrect information provided to USCI’s clearing brokers. In addition, it is possible that a computer or software program may malfunction and cause an error in computation. Any failure, inaccuracy or delay in executing USCI’s transactions could affect its ability to achieve its investment objective. It could also result in decisions to undertake transactions based on inaccurate or incomplete information. This could cause substantial losses on transactions.

USCI may experience substantial losses on transactions if the computer or communications system fails.

USCI’s trading activities, including its risk management, depend on the integrity and performance of the computer and communications systems supporting them. Extraordinary transaction volume, hardware or software failure, power or telecommunications failure, a natural disaster or other catastrophe could cause the computer systems to operate at an unacceptably slow speed or even fail. Any significant degradation or failure of the systems that the Sponsor uses to gather and analyze information, enter orders, process data, monitor risk levels and otherwise engage in trading activities may result in substantial losses on transactions, liability to other parties, lost profit opportunities, damages to the Sponsor’s and Fund’s reputations, increased operational expenses and diversion of technical resources.

If the computer and communications systems are not upgraded, USCI’s financial condition could be harmed.

The development of complex computer and communications systems and new technologies may render the existing computer and communications systems supporting USCI’s trading activities obsolete. In addition, these computer and communications systems must be compatible with those of third parties, such as the systems of exchanges, clearing brokers and the executing brokers. As a result, if these third parties upgrade their systems, the Sponsor will need to make corresponding upgrades to continue effectively its trading activities. USCI’s future success will depend on USCI’s ability to respond to changing technologies on a timely and cost-effective basis.

USCI depends on the reliable performance of the computer and communications systems of third parties, such as brokers and futures exchanges, and may experience substantial losses on transactions if they fail.

USCI depends on the proper and timely function of complex computer and communications systems maintained and operated by the futures exchanges, brokers and other data providers that the Sponsor uses to conduct trading activities. Failure or inadequate performance of any of these systems could adversely affect the Sponsor’s ability to complete transactions, including its ability to close out positions, and result in lost profit opportunities and significant losses on commodity interest transactions. This could have a material adverse effect on revenues and materially reduce USCI’s available capital. For example, unavailability of price quotations from third parties may make it difficult or impossible for the Sponsor to conduct trading activities so that USCI will closely track the Index. Unavailability of records from brokerage firms may make it difficult

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or impossible for the Sponsor to accurately determine which transactions have been executed or the details, including price and time, of any transaction executed. This unavailability of information also may make it difficult or impossible for the Sponsor to reconcile its records of transactions with those of another party or to accomplish settlement of executed transactions.

The Index reflects commodities in the energy, precious metals, industrial metals, grains, softs and livestock sectors. A change in price of any of the commodities in these sectors will have a significant effect on the level of the Index and the value of the Units, which could have a material adverse effect on your investment.

The Index currently reflects commodities in six commodity sectors: energy (representing approximately 28.57% of the Index as of January 31, 2010), precious metals (representing approximately 21.43% of the Index as of January 31, 2010), industrial metals (representing approximately 28.57% of the Index as of January 31, 2010), grains (representing approximately 7.14% of the Index as of January 31, 2010), softs (representing approximately 7.14% of the Index as of as of January 31, 2010, and livestock (representing approximately 7.14% of the Index as of January 31, 2010). In addition to the factors affecting commodities generally that are described above, commodities in each sector are subject to specific risks in light of the nature of the sector.

Some specific risks of each sector are described below:

Energy commodities

The prices of energy commodities (e.g., crude oil, natural gas, heating oil, etc.), in particular, WTI crude oil, Brent crude oil and natural gas, are subject to national and global political events such as: governmental regulation and intervention in energy markets; imposition of price controls; increases or restriction of production levels by significant oil producing countries and coordination of production levels by those countries; and disruptions in oil producing areas. The prices of energy commodities have had significant price swings in recent years. Disruptions in energy producing areas, including as a result of war, armed conflict, terrorism, embargoes, social unrest and political instability, can cause significant volatility in the Index. Energy commodity production frequently occurs in politically unstable regions of the world, including Africa, the Middle East, Asia and South America.

Additionally, because a significant amount of oil is produced by a limited number of countries, many of who are members of the Organization of Petroleum Exporting Countries, or OPEC, actions of OPEC can influence the price of the energy sector and consequently the value of USCI Units. In the past, OPEC has decided to limit production, which has created upward price pressure. Subsequent decisions by OPEC to increase production could lead to oversupply and subsequent drops in energy prices. Prices for the commodities in the energy sector have also been significantly affected in recent years by weather and natural disasters, such as hurricanes, affecting production, refining and transportation facilities. For example, the U.S. General Accounting Office estimates that following Hurricanes Katrina and Rita in Fall 2005, natural gas prices spiked to prices nearly seven times the prices common during the late 1990s.

Other factors also influence supply and demand of the commodities in the energy sector. Changes in levels of global industrial activity influence demand for the commodities in the energy sector. Market expectations about events that may influence supply and demand also have an impact on the price of commodities, including expectations about the ability to develop oil and natural gas reserves. Seasonal changes in demand (such as the U.S. summer “driving season” and the winter “heating season”) also influence pricing of energy commodities.

Precious metal commodities

The prices of precious metals (e.g., gold, silver, platinum) may be influenced by macroeconomic conditions, including confidence in the global monetary system and the relative strength of various currencies, as well as demand in the industrial and jewelry sectors. Political events also influence the price of precious metals. Prices are influenced by supplies of precious metals, which may be affected by sales by central banks and government agencies that hold large amounts of these metals, particularly gold. Significant changes in the value of the precious metals sector may lead to volatility in the value of USCI Units and/or significant losses to Unitholders.

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Industrial metal commodities

The prices the commodities comprising the industrial metals portion of the Index (e.g., zinc, nickel, aluminum, copper, etc.) are subject to a number of factors that can cause price fluctuations, including: changes in the level of industrial activity using these metals (including the availability of man-made substitutes); disruptions in the mining, storage, or refining of these metals; adjustments to inventory; variations in production costs, including storage, labor and energy costs; regulatory compliance costs, including environmental regulations; and changes in government and consumer demand.

These factors can lead to price volatility for industrial metals commodities that, in turn, may lead to corresponding volatility in the value of USCI Units. For example, with respect to aluminum, the level of activity in the automotive, packaging and construction industries has significantly influenced demand because of the use of aluminum in these industries. Disruptions in the supply chain, which result in upward price pressure, also have an impact on the industrial metals sector and may have a corresponding impact on the value of the Units. For example, the industrial metals included in this sector are often mined in locations that are subject to disruption as a result of political instability, armed conflict, terrorism and labor unrest, among other factors. Production costs, particularly the cost of energy used in production, and costs associated with regulatory compliance, including environmental regulation costs, can also inflate the price of the underlying commodities in the industrial metals sector. These increases may not be sustainable. Any one or all of these sector-specific factors may result in volatility in the industrial metals sector, which could lead to corresponding volatility in the value of the Units and/or significant losses to Unitholders.

Grains and Softs product commodities

The commodities comprising the grains (e.g., wheat, corn, soybeans, etc.) and softs (e.g., sugar, cotton, coffee, cocoa) products sectors of the Index are subject to a number of factors that can cause price fluctuations, including: weather conditions, such as floods, drought and freezing conditions; changes in government policies (including subsidies) and trade agreements; planting decisions; and changes in demand for grains and softs.

These factors can lead to price volatility for grains and softs commodities that, in turn, may lead to corresponding volatility in the value of USCI Units. Weather conditions can lead to tightened supply and price increases, which may not be sustainable. Government policies and trade agreements can influence both supply and demand. Grains and softs products are also subject to the planting decisions of farmers, which can be influenced both by government policies as well as changing demands for their products.

Livestock commodities

The commodities comprising the livestock sector of the Index (e.g., live cattle, lean hogs, feeder cattle) are subject to a number of factors that can cause price fluctuations, including: weather conditions, such as floods, drought and freezing conditions; disease and famine; changes in government policies (including subsidies); and changes in demand for livestock. These factors can lead to price volatility for livestock commodities that, in turn, may lead to corresponding volatility in the value of USCI Units.

Risk of Leverage and Volatility

If the Sponsor causes or permits USCI to become leveraged, you could lose all or substantially all of your investment if USCI’s trading positions suddenly turn unprofitable.

Commodity pools’ trading positions in futures contracts or Other Commodity-Related Investments are typically required to be secured by the deposit of margin funds that represent only a small percentage of a futures contract’s (or other commodity interest’s) entire market value. This feature permits commodity pools to “leverage” their assets by purchasing or selling futures contracts (or Other Commodity-Related Investments) with an aggregate face amount in excess of the commodity pool’s assets. While this leverage can increase a pool’s profits, relatively small adverse movements in the price of the pool’s commodity interests can cause significant losses to the pool. While the Sponsor does not intend to leverage USCI’s assets, it is not prohibited from doing so under the Trust Agreement. If the Sponsor were to cause or permit USCI to become leveraged, you could lose all or substantially all of your investment if USCI’s trading positions suddenly turn unprofitable.

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Fewer representative commodities may result in greater Index volatility.

The Index is concentrated in terms of the number of commodities represented. You should be aware that other commodities indices are more diversified in terms of both the number and variety of commodities included. Concentration in fewer commodities may result in a greater degree of volatility in the Index and the NAV of USCI which tracks that Index under specific market conditions and over time.

Lengthy and substantial peak-to-valley declines in the value of the Index may lead to even greater declines in the NAV of USCI.

Because it is expected that USCI’s performance will relate to the performance of the Index, a USCI will suffer a decline in value during a period that the Index suffers such a decline, and in turn, the value of your Units will decline. It is possible or even likely that redemptions of Redemption Baskets will exceed purchases of Creation Baskets during these period in which a USCI’s Units are declining in value. While these redemptions will not directly cause the value of your Units to decline, the redemptions will accentuate the reduction in a USCI’s NAV that is caused by losses from USCI’s Commodity Interest trading, potentially resulting in increased USCI expenses as a percentage of NAV. Furthermore, redemptions may increase transaction costs by requiring the sale of Commodity Interests and Treasuries to meet redemption requests.

USCI’s exposure to the commodities markets may subject USCI to greater volatility than investments in traditional securities.

USCI’s exposure to the commodities markets may subject USCI to greater volatility than investments in traditional securities. The value of Commodity Interests may be affected by changes in the overall commodity markets or commodity indices, changes in interest rates, or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments.

Over-the-Counter Contract Risk

Over-the-counter transactions are subject to little, if any, regulation.

A portion of USCI’s assets may be used to trade over-the-counter Commodity Interests, such as forward contracts or swap or spot contracts. Over-the-counter contracts are typically traded on a principal-to-principal basis through dealer markets that are dominated by major money center and investment banks and other institutions and are essentially unregulated by the CFTC. You therefore do not receive the protection of CFTC regulation or the statutory scheme of the Commodity Exchange Act in connection with this trading activity. The markets for over-the-counter contracts rely upon the integrity of market participants in lieu of the additional regulation imposed by the CFTC on participants in the futures markets. The lack of regulation in these markets could expose USCI in certain circumstances to significant losses in the event of trading abuses or financial failure by participants.

USCI will be subject to credit risk with respect to counterparties to over-the-counter contracts entered into by USCI.

USCI faces the risk of non-performance by the counterparties to the over-the-counter contracts. Unlike in futures contracts, the counterparty to these contracts is generally a single bank or other financial institution, rather than a clearing organization backed by a group of financial institutions. As a result, there will be greater counterparty credit risk in these transactions. A counterparty may not be able to meet its obligations to USCI, in which case USCI could suffer significant losses on these contracts.

If a counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties, USCI may experience significant delays in obtaining any recovery in a bankruptcy or other reorganization proceeding. During any such period, USCI may have difficulty in determining the value of its contracts with the counterparty, which in turn could result in the overstatement or understatement of USCI’s NAV. USCI may eventually obtain only limited recovery or no recovery in such circumstances.

USCI may be subject to liquidity risk with respect to its over-the-counter contracts.

Over-the-counter contracts may have terms that make them less marketable than futures contracts. Over-the-counter contracts are less marketable because they are not traded on an exchange, do not have uniform

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terms and conditions, and are entered into based upon the creditworthiness of the parties and the availability of credit support, such as collateral, and in general, they are not transferable without the consent of the counterparty. These conditions make such contracts less liquid than standardized futures contracts traded on a commodities exchange and diminish the ability to realize the full value of such contracts.

Risk of Trading in International Markets

Trading in international markets would expose USCI to credit and regulatory risk.

The Sponsor may make substantial investments for USCI in Futures Contracts, a significant portion of which will be on United States exchanges. However, a portion of USCI’s trades may take place on markets and exchanges outside the United States. Some non-U.S. markets present risks because they are not subject to the same degree of regulation as their U.S. counterparts. None of the CFTC, NFA, or any domestic exchange regulates activities of any foreign boards of trade or exchanges, including the execution, delivery and clearing of transactions, nor has the power to compel enforcement of the rules of a foreign board of trade or exchange or of any applicable non-U.S. laws. Similarly, the rights of market participants, such as USCI, in the event of the insolvency or bankruptcy of a non-U.S. market or broker are also likely to be more limited than in the case of U.S. markets or brokers. As a result, in these markets, USCI has less legal and regulatory protection than it does when it trades domestically.

In some of these non-U.S. markets, the performance on a futures contract is the responsibility of the counterparty and is not backed by an exchange or clearing corporation and therefore exposes USCI to credit risk. Additionally, trading on non-U.S. exchanges is subject to the risks presented by exchange controls, expropriation, increased tax burdens and exposure to local economic declines and political instability. An adverse development with respect to any of these variables could reduce the profit or increase the loss earned on trades in the affected international markets.

International trading activities subject USCI to foreign exchange risk.

The price of any non-U.S. Commodity Interest and, therefore, the potential profit and loss on such investment, may be affected by any variance in the foreign exchange rate between the time the order is placed and the time it is liquidated, offset or exercised. As a result, changes in the value of the local currency relative to the U.S. dollar may cause losses to USCI even if the contract traded is profitable.

USCI’s international trading could expose it to losses resulting from non-U.S. exchanges that are less developed or less reliable than United States exchanges.

Some non-U.S. exchanges also may be in a more developmental stage so that prior price histories may not be indicative of current price dynamics. In addition, USCI may not have the same access to certain positions on foreign trading exchanges as do local traders, and the historical market data on which the Sponsor bases its strategies may not be as reliable or accessible as it is for U.S. exchanges.

Tax Risk

Please refer to “U.S. Federal Income Tax Considerations” for information regarding the U.S. federal income tax consequences of the purchase, ownership and disposition of Units.

Your tax liability from holding Units may exceed the amount of distributions, if any, on your Units.

Cash or property will be distributed at the sole discretion of the Sponsor, and the Sponsor currently does not intend to make cash or other distributions with respect to Units. You will be required to pay U.S. federal income tax and, in some cases, state, local, or foreign income tax, on your allocable Unit of USCI’s taxable income, without regard to whether you receive distributions or the amount of any distributions. Therefore, your tax liability with respect to your Units may exceed the amount of cash or value of property (if any) distributed.

Your allocable Unit of income or loss for tax purposes may differ from your economic income or loss on your Units.

Due to the application of the assumptions and conventions applied by USCI in making allocations for tax purposes and other factors, your allocable Unit of USCI’s income, gain, deduction or loss may be different

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than your economic profit or loss from your Units for a taxable year. This difference could be temporary or permanent and, if permanent, could result in your being taxed on amounts in excess of your economic income.

[Items of income, gain, deduction, loss and credit with respect to Units could be reallocated if the Internal Revenue Service does not accept the assumptions and conventions applied by USCI in allocating those items, with potential adverse consequences for you.

The U.S. tax rules pertaining to trusts generally were not written for, and in some respects are difficult to apply to, trusts whose interests are publicly traded. Moreover, the interaction of those rules and the tax rules applicable to controlled foreign corporations is uncertain. The Trust will apply certain assumptions and conventions in an attempt to comply with the applicable rules and to report taxable income, gains, deductions, losses and credits in a manner that properly reflects Unitholders’ respective interests in USCI. These assumptions and conventions may not fully comply with all aspects of the Internal Revenue Code (the “Code”) and applicable Treasury Regulations, however. The Sponsor intends to seek a ruling from the Internal Revenue Service (“IRS”) regarding the appropriateness of the methods intended to be used by USCI. However, it is uncertain whether the IRS will issue such a ruling. If it declines to rule, these methods could subsequently be challenged by the IRS and the Trust could be required to reallocate items of income, gain, deduction, loss or credit in a manner that adversely affects you. If this occurs, you may be required to file an amended tax return and to pay additional taxes plus deficiency interest.] [NOTE: This risk factor is under consideration.]

PROSPECTIVE INVESTORS ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE POSSIBLE TAX CONSEQUENCES TO THEM OF AN INVESTMENT IN UNITS; SUCH TAX CONSEQUENCES MAY DIFFER IN RESPECT OF DIFFERENT INVESTORS.

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THE OFFERING

What is USCI?

USCI is a series of the Trust, a statutory trust organized under the laws of the State of Delaware on December 21, 2009. USCI is currently the only series of the Trust, although additional series may be offered in the future at the Sponsor’s discretion. USCI maintains its main business office at 1320 Harbor Bay Parkway, Suite 145, Alameda, California 94502. USCI is a commodity pool. It operates pursuant to the terms of the Trust Agreement dated as of April 1, 2010, which grants full management control to the Sponsor. In addition, pursuant to the Trust Agreement in connection with the commencement of the offering of USCI, the Sponsor will receive 20 Sponsor’s Units in exchange for its initial capital contribution of $1,000.

USCI will be publicly traded, and seeks to have the daily changes in percentage terms of the Units’ NAV reflect the daily changes in percentage terms of the Index, less USCI’s expenses. USCI will invest in a mixture of listed Futures Contracts, Other Commodity-Related Investments, short-term Treasury Securities, cash and cash equivalents.

USCI HAS NOT COMMENCED TRADING AND
DOES NOT HAVE ANY PERFORMANCE HISTORY.

Who is the Sponsor?

The Sponsor is United States Commodity Funds LLC (formerly known as Victoria Bay Asset Management, LLC), a single member limited liability company that was formed in the state of Delaware on May 10, 2005. It maintains its main business office at 1320 Harbor Bay Parkway, Suite 145, Alameda, California 94502. The Sponsor is a wholly-owned subsidiary of Wainwright Holdings, Inc., a Delaware corporation (“Wainwright”). Mr. Nicholas Gerber (discussed below) controls Wainwright by virtue of his ownership of Wainwright’s shares. Wainwright is a holding company that previously owned an insurance company organized under Bermuda law, which has been liquidated, and a registered investment advisor firm named Ameristock Corporation, which has been distributed to the Wainwright shareholders. The Sponsor is a member of the NFA and is registered with the CFTC as of December 1, 2005. The Sponsor’s registration as a CPO with the NFA was approved on December 1, 2005.

The Sponsor is also the general partner of the Related Public Funds. USOF is a publicly traded limited partnership which seeks to have the changes in percentage terms of its units’ NAV track the changes in percentage terms of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the changes in the price of the futures contract on light, sweet crude oil traded on the NYMEX, less USOF’s expenses. USOF invests in a mixture of listed crude oil futures contracts, other non-listed oil related investments, Treasuries, cash and cash equivalents. USOF’s units began trading on April 10, 2006. As of February 28, 2010, USOF had total net assets of $1,854,622,764 and had outstanding units of 47.8 million. USOF employs an investment strategy in its operations that is similar to the investment strategy of USBO, except that its benchmark is the near month contract for light, sweet crude oil delivered to Cushing, Oklahoma on a long basis.

USNG is a publicly traded limited partnership which seeks to have the changes in percentage terms of its units’ NAV track the changes in percentage terms of the spot price of natural gas delivered at the Henry Hub, Louisiana, as measured by the changes in the price of the futures contract on natural gas traded on the NYMEX, less USNG’s expenses. USNG invests in a mixture of listed natural gas futures contracts, other non-listed natural gas related investments, Treasuries, cash and cash equivalents. USNG’s units began trading on April 18, 2007. As of February 28, 2010, USNG had total net assets of $3,594,443,718 and had outstanding units of 411.4 million. USNG employs an investment strategy in its operations that is similar to the investment strategy of USBO, except its benchmark is the near month contract for natural gas delivered at the Henry Hub, Louisiana.

US12OF is a publicly traded limited partnership which seeks to have the changes in percentage terms of its units’ NAV track the changes in percentage terms of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the changes in the average of the prices of 12 futures contracts on light, sweet crude oil traded on the NYMEX, less US12OF’s expenses. US12OF invests in a mixture of listed crude oil futures contracts, other non-listed oil related investments, Treasuries, cash and cash equivalents. US12OF’s

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units began trading on December 6, 2007. As of February 28, 2010, US12OF had total net assets of $161,837,281 and had outstanding units of 4.1 million. US12OF employs an investment strategy in its operations that is similar to the investment strategy of USBO, except that its benchmark is the average of the prices of the near month contract to expire and the following eleven months contracts for light, sweet crude oil delivered to Cushing, Oklahoma.

UGA is a publicly traded limited partnership which seeks to have the changes in percentage terms of its units’ NAV track the changes in percentage terms of the spot price of unleaded gasoline delivered to the New York harbor, as measured by the changes in the price of the futures contract on gasoline traded on the NYMEX, less UGA’s expenses. UGA invests in a mixture of listed gasoline futures contracts, other non-listed gasoline related investments, Treasuries, cash and cash equivalents. UGA’s units began trading on February 26, 2008. As of February 28, 2010, UGA had total net assets of $72,327,350 and had outstanding units of 2.0 million. UGA employs an investment strategy in its operations that is similar to the investment strategy of USBO except that its benchmark is the near month contract for unleaded gasoline delivered at the New York harbor.

USHO is a publicly traded limited partnership which seeks to have the changes in percentage terms of its units’ NAV track the changes in percentage terms of the spot price of heating oil for delivery to the New York harbor, as measured by the changes in the price of the futures contract on heating oil traded on the NYMEX, less USHO’s expenses. USHO invests in a mixture of listed heating oil futures contracts, other non-listed heating oil related investments, Treasuries, cash and cash equivalents. USHO’s units began trading on April 8, 2008. As of February 28, 2010, USHO had total net assets of $15,702,463 and had outstanding units of 600,000. USHO employs an investment strategy in its operations that is similar to the investment strategy of USBO except that its benchmark is the near month contract for heating oil (also known as No. 2 fuel) delivered at the New York harbor.

USSO is a commodity pool and issues units traded on the NYSE Arca. The investment objective of USSO is to have the changes in percentage terms of its units’ NAV inversely reflect the changes in percentage terms of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the changes in the price of the futures contract on light, sweet crude oil as traded on the NYMEX, less USSO’s expenses. USSO invests in a mixture of listed crude oil futures contracts, other non-listed crude oil related investments, Treasuries, cash and cash equivalents. USSO’s units began trading on September 18, 2009. As of February 28, 2010, USSO had total net assets of $13,102,818 and had outstanding units of 300,000. USSO employs an investment strategy in its operations that is similar to the investment strategy of USBO, except its benchmark is the inverse of the near month contract for light, sweet crude oil delivered to Cushing, Oklahoma.

U12NG is a commodity pool and issues units traded on the NYSE Arca. The investment objective of US12NG is to have the changes in percentage terms of its units’ NAV reflect the changes in percentage terms of the spot price of natural gas delivered at the Henry Hub, Louisiana, as measured by the changes in the average of the prices of 12 futures contracts on natural gas traded on the NYMEX, consisting of the near month contract to expire and the contracts for the following eleven months, for a total of 12 consecutive months’ contracts, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contracts that are the next month contract to expire and the contracts for the following eleven consecutive months, less US12NG’s expenses. US12NG invests in a mixture of listed natural gas futures contracts, other non-listed natural gas futures contracts, other non-listed natural gas-related investments, Treasuries, cash and cash equivalents. US12NG’s units began trading on November 18, 2009. As of February 28, 2010, US12NG had total net assets of $33,573,229 and had outstanding units of 700,000. US12NG employs an investment strategy in its operations that is similar to the investment strategy of USBO, except its benchmark is the average of the prices of the near month contract to expire and the following eleven months contracts for natural gas delivered at the Henry Hub, Louisiana.

See “Prior Performance of the Sponsor and Affiliates” on page __.

The Sponsor is required to evaluate the credit risk of USCI to the futures commission merchant, oversee the purchase and sale of USCI’s units by certain Authorized Purchasers, review daily positions and margin requirements of USCI, and manage USCI’s investments. The Sponsor also pays the fees of the Marketing Agent, the Administrator, the Custodian, SummerHaven and, in connection with the initial public offering of

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the units, registration fees paid to the SEC, FINRA, or any other regulatory agency, including the legal, printing, accounting and other expenses associated therewith.

The business and affairs of our Sponsor are managed by a board of directors, which is comprised of four management directors some of whom are also its executive officers (the “Management Directors”) and three independent directors who meet the independent director requirements established by the NYSE Arca Equities Rules and the Sarbanes-Oxley Act of 2002. While these independent director requirements apply to the Related Public Funds, all of which are limited partnerships and for which the Sponsor acts as the general partner, they do not apply to USCI. In addition, the Management Directors have the authority to manage the Sponsor pursuant to its Limited Liability Company Agreement.

Mr. Nicholas Gerber and Mr. Howard Mah also serve as executive officers of the Sponsor. USCI has no executive officers. Its affairs are generally managed by the Sponsor. The following individuals serve as Management Directors of the Sponsor.

Nicholas Gerber has been the President and Chief Executive Officer of the Sponsor since June 9, 2005 and a Management Director of the Sponsor since May 10, 2005. He maintains his main business office at 1320 Harbor Bay Parkway, Suite 145, Alameda, California 94502. Mr. Gerber has acted as a portfolio manager for USCI and the Related Public Funds since April 2006. Mr. Gerber will act as a portfolio manager for USBO. He has been listed with the CFTC as a Principal of the Sponsor since November 29, 2005, as a branch office manager of the Sponsor since May 15, 2009, and registered with the CFTC as an Associated Person of the Sponsor on December 1, 2005. Currently, Mr. Gerber manages the Related Public Funds. He will also manage USBO and USCI. Mr. Gerber has also served as Vice President/Chief Investment Officer of Lyon’s Gate Reinsurance Company, Ltd., a company formed to reinsure workmen’s compensation insurance, since June of 2003. Mr. Gerber has an extensive background in securities portfolio management and in developing investment funds that make use of indexing and futures contracts. He is also the founder of Ameristock Corporation, a California-based investment adviser registered under the Investment Advisers Act of 1940, that has been sponsoring and providing portfolio management services to mutual funds since March 1995. Since August 1995, Mr. Gerber has been the portfolio manager of the Ameristock Mutual Fund, Inc. a mutual fund registered under the Investment Company Act of 1940, focused on large cap U.S. equities that as of February 28, 2010, had $208,573,985 in assets. He has also been a Trustee for the Ameristock ETF Trust since June 2006, and served as a portfolio manager for the Ameristock/Ryan 1 Year, 2 Year, 5 Year, 10 Year and 20 Year Treasury ETF from June 2007 to June 2008 when such funds were liquidated. In these roles, Mr. Gerber has gained extensive experience in evaluating and retaining third-party service providers, including custodians, accountants, transfer agents, and distributors. Mr. Gerber has passed the Series 3 examination for associated persons. He holds an MBA in finance from the University of San Francisco and a BA from Skidmore College. Mr. Gerber is 47 years old.

Howard Mah has been a Management Director of the Sponsor since May 10, 2005, Secretary of the Sponsor since June 9, 2005, and Chief Financial Officer of the Sponsor since May 23, 2006. He has been listed with the CFTC as a Principal of the Sponsor since November 29, 2005. Mr. Mah is currently involved in the management of the Related Public Funds. He will also manage USBO and USCI. Mr. Mah also serves as the Sponsor’s Chief Compliance Officer. He received a Bachelor of Education from the University of Alberta, in 1986 and an MBA from the University of San Francisco in 1988. He has been Secretary and Chief Compliance Officer of the Ameristock ETF Trust since February 2007, Chief Compliance Officer of Ameristock Corporation since January 2001; a tax & finance consultant in private practice since January 1995, Secretary of Ameristock Mutual Fund since June 1995 and Ameristock Focused Value Fund from December 2000 to January 2005; Chief Compliance Officer of Ameristock Mutual Fund since August 2004 and the Co-Portfolio Manager of the Ameristock Focused Value Fund from December 2000 to January 2005. Mr. Mah is 45 years old.

Andrew F. Ngim has been a Management Director of the Sponsor since May 10, 2005 and Treasurer of the Sponsor since June 9, 2005. He has been listed with the CFTC as a Principal of the Sponsor since November 29, 2005. As Treasurer of the Sponsor, Mr. Ngim is currently involved in the management of the Related Public Funds and will be involved in the management of USBO and USCI. He received a Bachelor of Arts from the University of California at Berkeley in 1983. Mr. Ngim has been Ameristock Corporation’s

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Managing Director since January 1999 and co-portfolio manager of Ameristock Corporation since January 2000, Trustee of the Ameristock ETF Trust since February 2007, and served as a portfolio manager for the Ameristock/Ryan 1 Year, 2 Year, 5 Year, 10 Year and 20 Year Treasury ETF from June 2007 to June 2008 when such funds were liquidated. Mr. Ngim is 48 years old.

Robert L. Nguyen has been a Management Director of the Sponsor since May 10, 2005. He has been listed with the CFTC as a Principal of the Sponsor since November 29, 2005 and registered with the CFTC as an Associated Person on November 9, 2007. As a Management Director of the Sponsor, Mr. Nguyen is currently involved in the management of the Related Public Funds and will be involved in the management of USBO and USCI. He received a Bachelor of Science from California State University Sacramento in 1981. Mr. Nguyen has been the Managing Principal of Ameristock Corporation since January 2000. Mr. Nguyen is 49 years old.

The following individuals provide significant services to USCI but are employed by the Sponsor.

John Love has acted as a Portfolio Operations Manager for the Related Public Funds since January 2006 and, effective March 1, 2010, is the Senior Portfolio Manager for the Related Public Funds. He is expected to be the Senior Portfolio Manager for USBO and USCI. Mr. Love is also employed by the Sponsor. He has been listed with the CFTC as a Principal of the Sponsor since January 17, 2006. Mr. Love also served as the operations manager of Ameristock Corporation from October 2002 to January 2007, where he was responsible for back office and marketing activities for the Ameristock Mutual Fund and Ameristock Focused Value Fund and for the firm in general. Mr. Love holds a Series 3 license and was registered with the CFTC as an Associated Person of the Sponsor from December 1, 2005 through April 16, 2009. Mr. Love has passed the Level I Chartered Financial Analyst examination and is currently a Level II candidate in the CFA Program. Mr. Love has passed the Level 1 Chartered Financial Analyst examination. He holds a BFA in cinema-television from the University of Southern California. Mr. Love is 38 years old.

John T. Hyland, CFA acts as a Portfolio Manager and as the Chief Investment Officer for the Sponsor. Mr. Hyland is employed by the Sponsor. He registered with the CFTC as an Associated Person of the Sponsor on December 1, 2005, and has been listed with the CFTC as a Principal of the Sponsor since January 17, 2006. Mr. Hyland became the Portfolio Manager for USOF, USNG, US12OF, UGA, USHO, USSO and US12NG in April 2006, April 2007, December 2007, February 2008, March 2008, September, 2009 and November, 2009 respectively, and as Chief Investment Officer of the Sponsor since January 2008, acts in such capacity on behalf of the Related Public Funds and will act in such capacity on behalf of USBO and USCI. As part of his responsibilities for the Related Public Funds, Mr. Hyland oversees day-to-day trading of the Related Public Funds and will coordinate with SummerHaven regarding USCI’s trading activities, helps set investment policies, and oversees USCI and the Related Public Funds’ activities with their futures commission brokers, custodian-administrator, and marketing agent. Mr. Hyland has an extensive background in portfolio management and research with both equity and fixed income securities, as well as in the development of new types of complex investment funds. In July 2001, Mr. Hyland founded Towerhouse Capital Management, LLC, a firm that provides portfolio management and new fund development expertise to non-U.S. institutional investors. Mr. Hyland has been, and remains, a Principal and Portfolio Manager for Towerhouse. Mr. Hyland received his Chartered Financial Analyst (“CFA”) designation in 1994. Mr. Hyland is a member of the CFA Institute (formerly AIMR). He is also a member of the National Association of Petroleum Investment Analysts, a not-for-profit organization of investment professionals focused on the oil industry. He serves as an arbitrator for FINRA, as part of their dispute resolution program. He is a graduate of the University of California, Berkeley. Mr. Hyland is 50 years old.

Ray W. Allen acts as a Portfolio Manager for UGA, USHO, USSO and US12NG. He was hired by the Sponsor in October 2007 and has been employed by the Sponsor since January 14, 2008. He holds a Series 3 license and is registered with the CFTC as an Associated Person of the Sponsor on March 25, 2008. He has been listed with the CFTC as a Principal of the Sponsor since March 18, 2009. Mr. Allen’s responsibilities include daily trading and operations for UGA, USHO, USSO and US12NG. In addition, from February 2002 to October 2007, Mr. Allen was responsible for analyzing and evaluating the creditworthiness of client companies at Marble Bridge Funding Group Inc., in Walnut Creek, CA. Marble Bridge Funding Group Inc. is a commercial finance company providing capital to entrepreneurial companies. Mr. Allen received a BA in Economics from the University of California at Berkeley in 1980. Mr. Allen is 53 years old.

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Margaret Johnson has acted as a Portfolio Manager for the Related Public Funds since February 2009. Ms. Johnson has been employed by the sponsor since January 2007. Ms. Johnson also served as the Director of Product Services of Ameristock Corporation from January 2007 to February 2009, where she was responsible for back office and marketing activities for the Ameristock Mutual Fund and Ameristock/Ryan Treasury ETFs. Ms. Johnson was previously employed by Gap Inc. for 17 years, where she most recently served as the Director of Planning for Gap Japan. Ms. Johnson holds a Series 7 registration. She holds a BS in Communications from Moorhead State University. Ms. Johnson is 48 years old.

The following individuals serve as independent directors of the Sponsor.

Peter M. Robinson has been an Independent Director of the Sponsor since September 30, 2005 and, as such, serves on the board of directors of the Sponsor, which acts on behalf of the Related Public Funds. He has been listed with the CFTC as a Principal of the Sponsor since December 2005. Mr. Robinson has been employed as a Research Fellow writing about business and politics with the Hoover Institution since April 1993. The Hoover Institution is a public policy think tank located on the campus of Stanford University. Mr. Robinson graduated from Dartmouth College in 1979 and Oxford University in 1982. In 1990, Mr. Robinson received an MBA from the Stanford University Graduate School of Business. Mr. Robinson has also written three books and has been published in the New York Times, Red Herring, and Forbes ASAP and he is the editor of Can Congress Be Fixed?: Five Essays on Congressional Reform (Hoover Institution Press, 1995). Mr. Robinson is 52 years old.

Gordon L. Ellis has been an Independent Director of the Sponsor since September 30, 2005 and, as such, serves on the board of directors of the Sponsor, which acts on behalf of the Related Public Funds. He has been listed with the CFTC as a Principal of the Sponsor since November 2005. Mr. Ellis has been Chairman of International Absorbents, Inc., a holding company of Absorption Corp., since July 1988, President and Chief Executive Officer since November 1996 and a Class I Director of the company since July 1985. Mr. Ellis is also a director of Absorption Corp., International Absorbents, Inc.’s wholly-owned subsidiary which is engaged in developing, manufacturing and marketing a wide range of animal care and industrial absorbent products. Mr. Ellis is a director/trustee of Polymer Solutions, Inc., a former publicly-held company that sold all of its assets effective as of February 3, 2004 and is currently winding down its operations and liquidating following such sale. Polymer Solutions previously manufactured paints, coatings, stains and primers for wood furniture manufacturers. Mr. Ellis is a professional engineer with an MBA in international finance. Mr. Ellis is 63 years old.

Malcolm R. Fobes III has been an Independent Director of the Sponsor since September 30, 2005 and, as such, serves on the board of directors of the Sponsor, which acts on behalf of the Related Public Funds. He has been listed with the CFTC as a Principal of the Sponsor since November 2005. Mr. Fobes is the founder, Chairman and Chief Executive Officer of Berkshire Capital Holdings, Inc., a California-based investment adviser registered under the Investment Advisers Act of 1940, that has been sponsoring and providing portfolio management services to mutual funds since June 1997. Since June 1997, Mr. Fobes has been the Chairman and President of The Berkshire Funds, a mutual fund investment company registered under the Investment Company Act of 1940. Mr. Fobes also serves as portfolio manager of the Berkshire Focus Fund, a mutual fund registered under the Investment Company Act of 1940, which concentrates its investments in the electronic technology industry. From April 2000 to July 2006, Mr. Fobes also served as co-portfolio manager of The Wireless Fund, a mutual fund registered under the Investment Company Act of 1940, which concentrates its investments in companies engaged in the development, production, or distribution of wireless-related products or services. In these roles, Mr. Fobes has gained extensive experience in evaluating and retaining third-party service providers, including custodians, accountants, transfer agents, and distributors. Mr. Fobes was also contributing editor of Start a Successful Mutual Fund: The Step-by-Step Reference Guide to Make It Happen (JV Books, 1995). Mr. Fobes holds a B.S. degree in Finance and Economics from San Jose State University in California. Mr. Fobes is 45 years old.

The following are individual Principals, as that term is defined in CFTC Rule 3.1, for the Sponsor: Melinda Gerber, the Gerber Family Trust, the Nicholas and Melinda Gerber Living Trust, Howard Mah, Andrew Ngim, Robert Nguyen, Peter Robinson, Gordon Ellis, Malcolm Fobes, John Love, Ray Allen, John Hyland and Wainwright. These individuals are principals due to their positions, however, Nicholas Gerber and

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Melinda Gerber are also principals due to their controlling stake in Wainwright. None of the principals owns or has any other beneficial interest in USCI. Nicholas Gerber, John Hyland and Ray Allen make trading and investment decisions for USCI. Nicholas Gerber, John Hyland and Margaret Johnson execute trades on behalf of USCI. In addition, Nicholas Gerber, John Hyland, Robert Nguyen and Ray Allen are registered with the CFTC as Associated Persons of the Sponsor and are NFA Associate Members.

Contributions to USCI

The Sponsor contributed $1,000 to USCI representing an initial contribution of capital to the pool. In connection with the commencement of the offering, the Sponsor will receive 20 Sponsor’s Units of USCI to be issued in exchange for the previously received capital contribution, representing a beneficial interest in the pool.

Compensation and Fees to the Sponsor

USCI is contractually obligated to pay the Sponsor a management fee based on daily net assets and paid monthly of 0.95% per annum on average net assets. These fees are calculated on a daily basis (accrued at .1365 of the applicable percentage of NAV on that day).

Prior Performance of the Sponsor and Affiliates

The Sponsor is also currently the general partner of the Related Public Funds. Each of the Sponsor and the Related Public Funds is located in California.

USOF’s units began trading on the American Stock Exchange on April 10, 2006 and are offered on a continuous basis. As a result of the acquisition of the American Stock Exchange by NYSE Euronext, USOF’s units commenced trading on the NYSE Arca on November 25, 2008. As of February 28, 2010, the total amount of money raised by USOF from its authorized purchasers was $24,259,131,469; the total number of authorized purchasers of USOF was 18; the number of baskets purchased by authorized purchasers of USOF was 4,813; and the aggregate amount of units purchased was 481,300,000.

Since the offering of USOF units to the public on April 10, 2006 to February 28, 2010, the simple average daily change in its benchmark oil futures contract was -0.026%, while the simple average daily change in the NAV of USOF over the same time period was -0.021%. The average daily difference was 0.005% (or 0.5 basis points, where 1 basis point equals 1/100 of 1%). As a percentage of the daily movement of the benchmark oil futures contract, the average error in daily tracking by the NAV was 1.532%, meaning that over this time period USOF’s tracking error was within the plus or minus 10% range established as its benchmark tracking goal.

USNG’s units began trading on the American Stock Exchange on April 18, 2007 and are offered on a continuous basis. As a result of the acquisition of the American Stock Exchange by NYSE Euronext, USNG’s units commenced trading on the NYSE Arca on November 25, 2008. As of February 28, 2010 the total amount of money raised by USNG from its authorized purchasers was $10,558,665,387; the total number of authorized purchasers of USNG was 15; the number of baskets purchased by authorized purchasers of USNG was 5,961; and the aggregate amount of units purchased was 596,100,000.

Since the offering of USNG units to the public on April 18, 2007 to February 28, 2010, the simple average daily change in its benchmark futures contract was -0.189%, while the simple average daily change in the NAV of USNG over the same time period was -0.187. The average daily difference was 0.002% (or 0.2 basis points, where 1 basis point equals 1/100 of 1%). As a percentage of the daily movement of the benchmark futures contract, the average error in daily tracking by the NAV was 0.489%, meaning that over this time period USNG’s tracking error was within the plus or minus 10% range established as its benchmark tracking goal.

US12OF’s units began trading on the American Stock Exchange on December 6, 2007 and are offered on a continuous basis. As a result of the acquisition of the American Stock Exchange by NYSE Euronext, US12OF’s units commenced trading on the NYSE Arca on November 25, 2008. As of February 28, 2010, the total amount of money raised by US12OF from its authorized purchasers was $225,180,194; the total number of authorized purchasers of US12OF was 7; the number of baskets purchased by authorized purchasers of US12OF was 75; and the aggregate amount of units purchased was 7,500,000.

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Since the offering of US12OF units to the public on December 6, 2007 to February 28, 2010, the simple average daily change in its benchmark oil futures contracts was -0.006%, while the simple average daily change in the NAV of US12OF over the same time period was -0.005%. The average daily difference was 0.001% (or 0.1 basis points, where 1 basis point equals 1/100 of 1%). As a percentage of the daily movement of the benchmark oil futures contracts, the average error in daily tracking by the NAV was -0.141%, meaning that over this time period US12OF’s tracking error was within the plus or minus 10% range established as its benchmark tracking goal.

UGA’s units began trading on the American Stock Exchange on February 26, 2008 and are offered on a continuous basis. As a result of the acquisition of the American Stock Exchange by NYSE Euronext, UGA’s units commenced trading on the NYSE Arca on November 25, 2008. As of February 28, 2010, the total amount of money raised by UGA from its authorized purchasers was $129,739,781; the total number of authorized purchasers of UGA was 7; the number of baskets purchased by Authorized Purchasers of UGA was 43; and the aggregate amount of units purchased was 4,300,000.

Since the offering of UGA units to the public on February 26, 2008 to February 28, 2010, the simple average daily change in its benchmark futures contract was -0.010%, while the simple average daily change in the NAV of UGA over the same time period was -0.011%. The average daily difference was -0.001% (or 0.1 basis points, where 1 basis point equals 1/100 of 1%). As a percentage of the daily movement of the benchmark futures contract, the average error in daily tracking by the NAV was -0.658%, meaning that over this time period UGA’s tracking error was within the plus or minus 10% range established as its benchmark tracking goal.

USHO’s units began trading on the American Stock Exchange on April 9, 2008 and are offered on a continuous basis. As a result of the acquisition of the American Stock Exchange by NYSE Euronext, USHO’s units commenced trading on the NYSE Arca on November 25, 2008. As of February 28, 2010, the total amount of money raised by USHO from its authorized purchasers was $27,751,399; the total number of authorized purchasers of USHO was 7; the number of baskets purchased by authorized purchasers of USHO was 8; and the aggregate amount of units purchased was 800,000.

Since the offering of USHO units to the public on April 9, 2008 to February 28, 2010, the simple average daily change in its benchmark futures contract was -0.095%, while the simple average daily change in the NAV of USHO over the same time period was -0.095%. The average daily difference was 0%. As a percentage of the daily movement of the Benchmark Futures Contract, the average error in daily tracking by the NAV was -0.700%, meaning that over this time period USHO’s tracking error was within the plus or minus 10% range established as its benchmark tracking goal.

USSO’s units began trading on the NYSE Arca on September 18, 2009 and are offered on a continuous basis. As of February 28, 2010, the total amount of money raised by USSO from its authorized purchasers was $14,290,533; the total number of authorized purchasers was 7; the number of baskets purchased by authorized purchasers was 3; and the aggregate amount of units purchased was 300,000.

Since the offering of USSO units to the public on September 18, 2009 to February 28, 2010, the inverse of the simple average daily change in its benchmark futures contract was -0.105, while the simple average daily change in the NAV of USSO over the same time period was -0.108%. The average daily difference was -0.003% (or 0.3 basis points, where 1 basis point equals 1/100 of 1%). As a percentage of the daily movement of the benchmark futures contract, the average error in daily tracking by the NAV was -0.639%, meaning that over this time period USSO’s tracking error was within the plus or minus 10% range established as its benchmark tracking goal.

US12NG’s units began trading on the NYSE Arca on November 18, 2009 and are offered on a continuous basis. As of February 28, 2010, the total amount of money raised by US12NG from its authorized purchasers was $40,652,357; the total number of authorized purchasers was 3; the number of baskets purchased by authorized purchasers was 8; and the aggregate amount of units purchased was 800,000.

Since the offering of US12NG units to the public on November 18, 2009 to February 28, 2010, the simple average daily change in its benchmark futures contract was -0.025%, while the simple average daily change in the NAV of US12NG over the same time period was -0.028%. The average daily difference

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was -0.003% (or -0.3 basis points, where 1 basis point equals 1/100 of 1%). As a percentage of the daily movement of the benchmark futures contract, the average error in daily tracking by the NAV was -0.024%, meaning that over this time period US12NG’s tracking error was within the plus or minus 10% range established as its benchmark tracking goal.

The table below shows the relationship between the trading prices of the units of each of the Related Public Funds and the daily NAV of such fund, since inception through February 28, 2010. The first row shows the average amount of the variation between the fund’s closing market price and NAV, computed on a daily basis since inception, while the second and third rows depict the maximum daily amount of the end of day premiums and discounts to NAV since inception, on a percentage basis. Management of the General Partner believes that maximum and minimum end of day premiums and discounts typically occur because trading in the units continues on the NYSE Arca until 4:00 p.m. New York time while regular trading in the Benchmark Futures Contract on the NYMEX ceases at 2:30 p.m. New York time and the value of the relevant benchmark futures contract, for purposes of determining its end of day NAV, can be determined at that time. One known exception to this conclusion were the premiums on trading in USNG units that occurred between July 8, 2009 and September 28, 2009, when USNG suspended the issuance of Creation Baskets as a result of regulatory concern relating to the size of USNG’s positions in the natural gas futures and cleared swap markets, and there was continued demand for such units and other similar natural gas futures linked investments in the market.

             
  USOF   USNG   US12OF   UGA   USHO   USSO   US12NG
Average Difference   $ 0.00     $ 0.10       -$0.05     $ 0.01     $ 0.01     $ 0.00       -$0.01  
Max Premium %     4.17 %      21.32 %      10.58 %      7.25 %      3.20 %      1.14 %      0.95 % 
Max Discount %     -4.62 %      -3.51 %      -9.93 %      -3.11 %      -3.07 %      -7.09 %      -0.77 % 

There are significant differences between investing in USCI and the Related Public Funds and investing directly in the futures market. The Sponsor’s results with the Related Public Funds may not be representative of results that may be experienced with a fund directly investing in futures contracts or other managed funds investing in futures contracts. For more information on the performance of the Related Public Funds see the Performance Tables below.

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Performance of the Related Public Funds

USOF:

Experience in Raising and Investing in Funds Through February 28, 2010

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

 
Dollar Amount Offered*   $ 71,257,630,000  
Dollar Amount Raised   $ 24,259,131,469  
Organizational and Offering Expenses:**
     
SEC registration fee   $ 2,480,174  
FINRA registration fee   $ 603,500  
Listing fee   $ 5,000  
Auditor’s fees and expenses   $ 495,850  
Legal fees and expenses   $ 2,066,024  
Printing expenses   $ 285,230  
Length of USOF offering     Continuous  

* Reflects the offering price per unit set forth on the cover page of the registration statement registering such units filed with the SEC.
** Through December 31, 2006, these expenses were paid for by an affiliate of the General Partner in connection with the initial public offering. Following December 31, 2006, USOF has recorded these expenses.

Compensation to the General Partner and Other Compensation USOF:

Expenses Paid by USOF Through February 28, 2010 in Dollar Terms:

 
Expenses   Amount in
Dollar Terms
Amount Paid to General Partner   $ 22,409,847  
Amount Paid in Portfolio Brokerage Commissions   $ 7,674,333  
Other Amounts Paid*   $ 9,124,600  
Total Expenses Paid   $ 39,208,780  

* Includes expenses relating to the registration of units, legal fees, auditing fees, printing expenses, licensing fees, expenses relating to the tax reporting and fees paid to the independent directors.

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Expenses Paid by USOF Through February 28, 2010 as a Percentage of Daily Net Assets:

 
Expenses   Amount As a Percentage of
Average Daily Net Assets
General Partner     0.46% annualized  
Portfolio Brokerage Commissions     0.16% annualized  
Other Amounts Paid     0.19% annualized  
Total Expenses Paid     0.81% annualized  
USOF Performance:
     
Name of Commodity Pool     USOF  
Type of Commodity Pool     Exchange traded security  
Inception of Trading     April 10, 2006  
Aggregate Subscriptions (from inception through February 28, 2010)     $24,259,131,469  
Total Net Assets as of February 28, 2010     $1,854,622,764  
Initial NAV per Unit as of Inception     $67.39  
NAV per Unit as of February 28, 2010     $38.80  
Worst Monthly Percentage Draw-down     Oct 2008 (31.57)%  
Worst Peak-to-Valley Draw-down     Jun 08 – Feb 09 (75.84)%  
Number of Unitholders (as of December 31, 2009)     84,835  

COMPOSITE PERFORMANCE DATA FOR USOF
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

         
  Rates of Return
Month   2006   2007   2008   2009   2010
January           (6.55 )%      (3.98 )%      (14.60 )%      (8.78 )% 
February           5.63 %      11.03 %      (6.55 )%      8.62 % 
March           4.61 %      0.63 %      7.23 %       
April     3.47%*       (4.26 )%      12.38 %      (2.38 )%       
May     (2.91 )%      (4.91 )%      12.80 %      26.69 %       
June     3.16 %      9.06 %      9.90 %      4.16 %       
July     (0.50 )%      10.55 %      (11.72 )%      (2.30 )%       
August     (6.97 )%      (4.93 )%      (6.75 )%      (1.98 )%       
September     (11.71 )%      12.11 %      (12.97 )%      0.25 %       
October     (8.46 )%      16.98 %      (31.57 )%      8.43 %       
November     4.73 %      (4.82 )%      (20.65 )%      (0.51 )%       
December     (5.21 )%      8.66 %      (22.16 )%      (0.03 )%       
Annual Rate of Return     (23.03 )%      46.15 %      (54.75 )%      14.14 %      (0.92)%**  

* Partial from April 10, 2006.
** Through February 28, 2010.

Draw-down:  Losses experienced by the fund over a specified period. Draw-down is measured on the basis of monthly returns only and does not reflect intra-month figures.

Worst Monthly Percentage Draw-down:  The largest single month loss sustained since inception of trading.

Worst Peak-to-Valley Draw-down:  The largest percentage decline in the NAV per unit over the history of the fund. This need not be a continuous decline, but can be a series of positive and negative returns where the negative returns are larger than the positive returns. Worst Peak-to-Valley Draw-down represents the greatest percentage decline from any month-end NAV per unit that occurs without such month-end NAV per unit being equaled or exceeded as of a subsequent month-end. For example, if the NAV per unit declined by

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$1 in each of January and February, increased by $1 in March and declined again by $2 in April, a “peak-to-valley drawdown” analysis conducted as of the end of April would consider that “drawdown” to be still continuing and to be $3 in amount, whereas if the NAV per unit had increased by $2 in March, the January-February drawdown would have ended as of the end of February at the $2 level.

USNG:

Experience in Raising and Investing in Funds Through February 28, 2010

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

 
Dollar Amount Offered*   $ 11,846,500,000  
Dollar Amount Raised   $ 10,558,665,387  
Organizational and Offering Expenses:**
     
SEC registration fee   $ 1,361,084  
FINRA registration fee   $ 377,500  
Listing fee   $ 5,000  
Auditor’s fees and expenses   $ 434,350  
Legal fees and expenses   $ 1,631,179  
Printing expenses   $ 73,270  
Length of USNG offering     Continuous  

* Reflects the offering price per unit set forth on the cover page of the registration statement registering such units filed with the SEC.
** Through April 18, 2007, these expenses were paid for by the General Partner. Following April 18, 2007, USNG has recorded these expenses.

Compensation to the General Partner and Other Compensation USNG

Expenses Paid by USNG Through February 28, 2010 in Dollar Terms:

 
Expenses   Amount in
Dollar Terms
Amount Paid to General Partner   $ 23,398,469  
Amount Paid in Portfolio Brokerage Commissions   $ 13,850,511  
Other Amounts Paid*   $ 11,808,870  
Total Expenses Paid   $ 49,057,850  

* Includes expenses relating to the registration of units, legal fees, auditing fees, printing expenses, licensing fees, expenses relating to the tax reporting and fees paid to the independent directors.

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Expenses Paid by USNG Through February 28, 2010 as a Percentage of Average Daily Net Assets:

 
Expenses   Amount As a Percentage of
Average Daily Net Assets
General Partner     0.55% annualized  
Portfolio Brokerage Commissions     0.33% annualized  
Other Amounts Paid     0.28% annualized  
Total Expense Ratio     1.16% annualized  
USNG Performance:
     
Name of Commodity Pool     USNG  
Type of Commodity Pool     Exchange traded security  
Inception of Trading     April 18, 2007  
Aggregate Subscriptions (from inception through February 28, 2010)     $10,558,665,387  
Total Net Assets as of February 28, 2010     $3,594,443,718  
Initial NAV per Unit as of Inception     $50.00  
NAV per Unit as of February 28, 2010     $8.74  
Worst Monthly Percentage Draw-down     Jul 08 (32.13)%  
Worst Peak-to-Valley Draw-down     Jun 08 – Nov 09 (85.89)%  
Number of Unitholders (as of December 31, 2009)     203,277  

COMPOSITE PERFORMANCE DATA FOR USNG
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

       
  Rates of Return
Month   2007   2008   2009   2010
January           8.87 %      (21.49 )%      (7.65 )% 
February           15.87 %      (5.47 )%      (6.02 )% 
March           6.90 %      (11.81 )%       
April     4.30%*       6.42 %      (13.92 )%       
May     (0.84 )%      6.53 %      10.37 %       
June     (15.90 )%      13.29 %      (4.63 )%       
July     (9.68 )%      (32.13 )%      (8.70 )%       
August     (13.37 )%      (13.92 )%      (27.14 )%       
September     12.28 %      (9.67 )%      26.03 %       
October     12.09 %      (12.34 )%      (13.31 )%       
November     (16.16 )%      (6.31 )%      (11.86 )%       
December     0.75 %      (14.32 )%      13.91 %       
Annual Rate of Return     (27.64 )%      (35.68 )%      (56.73 )      (13.21)%**  

* Partial from April 17, 2007.
** Through February 28, 2010.

For a definition of draw-down, please see text below “Composite Performance Data for USOF.”

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US12OF:

Experience in Raising and Investing in Funds Through February 28, 2010

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

 
Dollar Amount Offered*   $ 3,718,000,000  
Dollar Amount Raised   $ 225,180,194  
Organizational and Offering Expenses:**
     
SEC registration fee   $ 129,248  
FINRA registration fee   $ 151,000  
Listing fee   $ 5,000  
Auditor’s fees and expenses   $ 145,700  
Legal fees and expenses   $ 312,297  
Printing expenses   $ 44,402  
Length of US12OF offering     Continuous  

* Reflects the offering price per unit set forth on the cover page of the registration statement registering such units filed with the SEC.
** Through March 31, 2009, these expenses were paid for by an affiliate of the General Partner in connection with the initial public offering. Following March 31, 2009, US12OF has recorded these expenses.

Compensation to the General Partner and Other Compensation US12OF:

Expenses Paid by US12OF Through February 28, 2010 in Dollar Terms:

 
Expenses   Amount in Dollar Terms
Amount Paid to General Partner   $ 1,077,738  
Amount Paid in Portfolio Brokerage Commissions   $ 57,575  
Other Amounts Paid*   $ 1,078,491  
Total Expenses Paid or Accrued   $ 2,213,804  
Expenses Waived**   $ (262,220 ) 
Total Expenses Paid or Accrued Including Expenses Waived   $ 1,951,584  

* Includes expenses relating to the registration of units, legal fees, auditing fees, printing expenses, licensing fees, expenses relating to the tax reporting and fees paid to the independent directors.
** The General Partner, though under no obligation to do so, agreed to pay certain expenses, to the extent that such expenses exceeded 0.15% (15 basis points) of US12OF’s NAV, on an annualized basis through March 31, 2009, after which date such payments were no longer necessary. The General Partner has no obligation to continue such payment in subsequent periods.

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Expenses Paid by US12OF Through February 28, 2010 as a Percentage of Average Daily Net Assets:

 
Expenses   Amount As a Percentage of
Average Daily Net Assets
General Partner     0.60% annualized  
Portfolio Brokerage Commissions     0.03% annualized  
Other Amounts Paid     0.61% annualized  
Total Expenses Paid or Accrued     1.24% annualized  
Expenses Waived     (0.15)% annualized  
Total Expenses Paid or Accrued Including Expenses Waived     1.09% annualized  
US12OF Performance:
     
Name of Commodity Pool     US12OF  
Type of Commodity Pool     Exchange traded security  
Inception of Trading     December 6, 2007  
Aggregate Subscriptions (from inception through February 28, 2010)     $225,180,194  
Total Net Assets as of February 28, 2010     $161,837,281  
Initial NAV per Unit as of Inception     $50.00  
NAV per Unit as of February 28, 2010     $39.47  
Worst Monthly Percentage Draw-down     Oct 2008 (29.59)%  
Worst Peak-to-Valley Draw-down     Jun 08 – Feb 09 (66.97)%  
Number of Unitholders (as of December 31, 2009)     6,875  

COMPOSITE PERFORMANCE DATA FOR US12OF
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

       
  Rates of Return
Month   2007   2008   2009   2010
January           (2.01 )%      (7.11 )%      (8.40 )% 
February           10.48 %      (4.34 )%      6.73 % 
March           (0.66 )%      9.22 %       
April           11.87 %      (1.06 )%       
May           15.47 %      20.40 %       
June           11.59 %      4.51 %       
July           (11.39 )%      1.22 %       
August           (6.35 )%      (2.85 )%       
September           (13.12 )%      (0.92 )%       
October           (29.59 )%      8.48 %       
November           (16.17 )%      2.31 %       
December     8.44%*       (12.66 )%      (1.10 )%       
Annual Rate of Return     8.44 %      (42.39 )%      29.23 %      (2.23)%**  

* Partial from December 6, 2007.
** Through February 28, 2010.

For a definition of draw-down, please see text below “Composite Performance Data for USOF.”

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UGA:

Experience in Raising and Investing in Funds Through February 28, 2010

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

 
Dollar Amount Offered*   $ 1,500,000,000  
Dollar Amount Raised   $ 129,739,781  
Organizational and Offering Expenses:**
     
SEC registration fee   $ 184,224  
FINRA registration fee   $ 151,000  
Listing fee   $ 5,000  
Auditor’s fees and expenses   $ 27,500  
Legal fees and expenses   $ 223,392  
Printing expenses   $ 162,901  
Length of UGA offering     Continuous  

* Reflects the offering price per unit set forth on the cover page of the registration statement registering such units filed with the SEC.
** Through September 1, 2009, initial offering costs and a portion of ongoing expenses were paid for by the General Partner. Following September 1, 2009, UGA has recorded these expenses.

Compensation to the General Partner and Other Compensation UGA:

Expenses Paid by UGA Through February 28, 2010 in Dollar Terms:

 
Expenses   Amount in
Dollar Terms
Amount Paid to General Partner   $ 542,047  
Amount Paid in Portfolio Brokerage Commissions   $ 101,346  
Other Amounts Paid*   $ 614,130  
Total Expenses Paid or Accrued   $ 1,257,523  
Expenses Waived:**   $ (446,690 ) 
Total Expenses Paid or Accrued Including Expenses Waived   $ 810,833  

* Includes expenses relating to the registration of new units, legal fees, auditing fees, printing expenses, licensing fees, expenses relating to tax reporting and fees paid to the independent directors.
** The General Partner, though under no obligation to do so, agreed to pay certain expenses, to the extent that such expenses exceeded 0.15% (15 basis points) of UGA’s NAV, on an annualized basis. The General Partner has no obligation to continue such payment into subsequent periods.

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Expenses Paid by UGA Through February 28, 2010 as a Percentage of Average Daily Net Assets:

 
Expenses   Amount As a Percentage of
Average Daily Net Assets
General Partner     0.60% annualized  
Portfolio Brokerage Commissions     0.11% annualized  
Other Amounts Paid     0.68% annualized  
Total Expenses Paid or Accrued     1.39% annualized  
Expenses Waived     (0.49)% annualized  
Total Expenses Paid Including Expenses Waived     0.90% annualized  
UGA Performance:
     
Name of Commodity Pool     UGA  
Type of Commodity Pool     Exchange traded security  
Inception of Trading     February 26, 2008  
Aggregate Subscriptions (from inception through February 28, 2010)     $129,739,781  
Total Net Assets as of February 28, 2010     $72,327,350  
Initial NAV per Unit as of Inception     $50.00  
NAV per Unit as of February 28, 2010     $36.16  
Worst Monthly Percentage Draw-down     Oct 2008 (38.48)%  
Worst Peak-to-Valley Draw-down     Jun 08 – Dec 08 (69.02)%  
Number of Unitholders (as of December 31, 2009)     5,131  

COMPOSITE PERFORMANCE DATA FOR UGA
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

     
  Rates of Return
Month   2008   2009   2010
January           16.23 %      (7.47 )% 
February     (0.56)%*       0.26 %      7.33 % 
March     (2.39 )%      2.59 %       
April     10.94 %      2.07 %       
May     15.60 %      30.41 %       
June     4.79 %      1.65 %       
July     (12.79 )%      6.24 %       
August     (3.88 )%      (3.71 )%       
September     (9.36 )%      (3.38 )%       
October     (38.48 )%      10.96 %       
November     (21.35 )%      1.00 %       
December     (15.72 )%      0.55 %       
Annual Rate of Return     (59.58 )%      80.16 %      (0.69)%**  

* Partial from February 26, 2008.
** Through February 28, 2010.

For a definition of draw-down, please see text below “Composite Performance Data for USOF.”

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USHO:

Experience in Raising and Investing in Funds Through February 28, 2010

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

 
Dollar Amount Offered*   $ 500,000,000  
Dollar Amount Raised   $ 27,751,399  
Organizational and Offering Expenses:**
     
SEC registration fee   $ 142,234  
FINRA registration fee   $ 151,000  
Listing fee   $ 5,000  
Auditor’s fees and expenses   $ 27,500  
Legal fees and expenses   $ 130,517  
Printing expenses   $ 106,584  
Length of USHO offering     Continuous  

* Reflects the offering price per unit set forth on the cover page of the registration statement registering such units filed with the SEC.
** Through August 31, 2009, initial offering costs and a portion of ongoing expenses were paid for by the General Partner. Following August 31, 2009, USHO has recorded these expenses.

Compensation to the General Partner and Other Compensation USHO:

Expenses Paid by USHO Through February 28, 2010 in Dollar Terms:

 
Expenses   Amount in
Dollar Terms
Amount Paid to General Partner   $ 124,889  
Amount Paid in Portfolio Brokerage Commissions   $ 20,117  
Other Amounts Paid*   $ 475,234  
Total Expenses Paid or Accrued   $ 620,240  
Expenses Waived**   $ (431,694 ) 
Total Expenses Paid or Accrued Including Expenses Waived   $ 188,546  

* Includes expenses relating to the registration of new units, legal fees, auditing fees, printing expenses, licensing fees, expenses relating to tax reporting and fees paid to the independent directors.
** The General Partner, though under no obligation to do so, agreed to pay certain expenses, to the extent that such expenses exceeded 0.15% (15 basis points) of USHO’s NAV, on an annualized basis. The General Partner has no obligation to continue such payment into subsequent periods.

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Expenses Paid by USHO Through February 28, 2010 as a Percentage of Average Daily Net Assets:

 
Expenses   Amount As a Percentage of
Average Daily Net Assets
General Partner     0.60% annualized  
Portfolio Brokerage Commissions     0.10% annualized  
Other Amounts Paid     2.29% annualized  
Total Expenses Paid or Accrued     2.99% annualized  
Expenses Waived     (2.08)% annualized  
Total Expenses Paid Including Expenses Waived     0.91% annualized  
USHO Performance:
     
Name of Commodity Pool     USHO  
Type of Commodity Pool     Exchange traded security  
Inception of Trading     April 9, 2008  
Aggregate Subscriptions (from inception through February 28, 2010)     $27,751,399  
Total Net Assets as of February 28, 2010     $15,702,463  
Initial NAV per Unit as of Inception     $50.00  
NAV per Unit as of February 28, 2010     $26.17  
Worst Monthly Percentage Draw-down     Oct 08 (28.63)%  
Worst Peak-to-Valley Draw-down     Jun 08 – Feb 09 (69.17)%  
Number of Unitholders (as of December 31, 2009)     1,154  

COMPOSITE PERFORMANCE DATA FOR USHO
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

     
  Rates of Return
Month   2008   2009   2010
January           0.05 %      (10.17 )% 
February           (11.34 )%      5.78 % 
March           6.73 %       
April     2.84%*       (3.85 )%       
May     15.93 %      23.13 %       
June     5.91 %      4.55 %       
July     (12.18 )%      0.39 %       
August     (8.41 )%      (2.71 )%       
September     (9.77 )%      (0.48 )%       
October     (28.63 )%      7.60 %       
November     (18.38 )%      0.19 %       
December     (17.80 )%      2.23 %       
Annual Rate of Return     (56.12 )%      25.52 %      (4.97)%**  

* Partial from April 9, 2008.
** Through February 28, 2010.

For a definition of draw-down, please see text below “Composite Performance Data for USOF.”

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USSO:

Experience in Raising and Investing in Funds Through February 28, 2010

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

 
Dollar Amount Offered*   $ 1,250,000,000  
Dollar Amount Raised   $ 14,290,533  
Organizational and Offering Expenses:**
     
SEC registration fee   $ 49,125  
FINRA registration fee   $ 75,500  
Listing fee   $ 5,000  
Auditor’s fees and expenses   $ 2,500  
Legal fees and expenses   $ 512,460  
Printing expenses   $ 23,945  
Length of USSO offering     Continuous  

* Reflects the offering price per unit set forth on the cover page of the registration statement registering such units filed with the SEC.
** These expenses were paid for by the General Partner.

Compensation to the General Partner and Other Compensation USSO:

Expenses Paid by USSO Through February 28, 2010 in Dollar Terms:

 
Expenses   Amount in
Dollar Terms
Amount Paid to General Partner   $ 33,306  
Amount Paid in Portfolio Brokerage Commissions   $ 7,668  
Other Amounts Paid*   $ 322,824  
Total Expenses Paid or Accrued   $ 363,798  
Expenses Waived**   $ (311,355 ) 
Total Expenses Paid or Accrued Including Expenses Waived   $ 52,443  

* Includes expenses relating to legal fees, auditing fees, printing expenses, licensing fees, expenses relating to tax reporting and fees paid to the independent directors.
** The General Partner, though under no obligation to do so, agreed to pay certain expenses, to the extent that such expenses exceeded 0.15% (15 basis points) of USSO's NAV, on an annualized basis. The General Partner has no obligation to continue such payment into subsequent periods.

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Expenses Paid by USSO Through February 28, 2010 as a Percentage of Average Daily Net Assets:

 
Expenses   Amount As a Percentage of
Average Daily Net Assets
General Partner     0.61% annualized  
Portfolio Brokerage Commissions     0.14% annualized  
Other Amounts Paid     5.89% annualized  
Total Expenses Paid or Accrued     6.64% annualized  
Expenses Waived     (5.68)% annualized  
Total Expenses Paid Including Expenses Waived     0.96% annualized  
USSO Performance:
     
Name of Commodity Pool     USSO  
Type of Commodity Pool     Exchange traded security  
Inception of Trading     September 18, 2009  
Aggregate Subscriptions (from inception through February 28, 2010)     $14,290,533  
Total Net Assets as of February 28, 2010     $13,102,818  
Initial NAV per Unit as of Inception     $50.00  
NAV per Unit as of February 28, 2010     $43.68  
Worst Monthly Percentage Draw-down     Feb 10 (8.94)%  
Worst Peak-to-Valley Draw-down     Sep 09 – Dec 09 (12.02)%  
Number of Unitholders (as of December 31, 2009)     185  

COMPOSITE PERFORMANCE DATA FOR USSO
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

   
  Rates of Return
Month   2009   2010
January           9.05 % 
February           (8.94 )% 
March            
April            
May            
June            
July            
August            
September     (2.90)%*        
October     (8.65 )%       
November     (0.25 )%       
December     (0.57 )%       
Annual Rate of Return     (12.02 )%      (0.70)%**  

* Partial from September 18, 2009.
** Through February 28, 2010.

For a definition of draw-down, please see text below “Composite Performance Data for USOF.”

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US12NG:

Experience in Raising and Investing in Funds Through February 28, 2010

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

 
Dollar Amount Offered*   $ 1,500,000,000  
Dollar Amount Raised   $ 40,652,357  
Organizational and Offering Expenses:**
     
SEC registration fee   $ 82,445  
FINRA registration fee   $ 75,500  
Listing fee   $ 5,000  
Auditor’s fees and expenses   $ 2,500  
Legal fees and expenses   $ 202,252  
Printing expenses   $ 31,558  
Length of US12NG offering     Continuous  

* Reflects the offering price per unit set forth on the cover page of the registration statement registering such units filed with the SEC.
** These expenses were paid for by the General Partner.

Compensation to the General Partner and Other Compensation US12NG:

Expenses Paid by US12NG Through February 28, 2010 in Dollar Terms:

 
Expenses   Amount in
Dollar Terms
Amount Paid to General Partner   $ 52,266  
Amount Paid in Portfolio Brokerage Commissions   $ 7,822  
Other Amounts Paid*   $ 266,432  
Total Expenses Paid or Accrued   $ 326,520  
Expenses Waived**   $ (248,331 ) 
Total Expenses Paid or Accrued Including Expenses Waived   $ 78,189  

* Includes expenses relating to legal fees, auditing fees, printing expenses, licensing fees, expenses relating to tax reporting and fees paid to the independent directors.
** The General Partner, though under no obligation to do so, agreed to pay certain expenses, to the extent that such expenses exceeded 0.15% (15 basis points) of US12NG’s NAV, on an annualized basis. The General Partner has no obligation to continue such payment into subsequent periods.

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Expenses Paid by US12NG Through February 28, 2010 as a Percentage of Average Daily Net Assets:

 
Expenses   Amount As a Percentage of
Average Daily Net Assets
General Partner     0.61% annualized  
Portfolio Brokerage Commissions     0.09% annualized  
Other Amounts Paid     3.09% annualized  
Total Expenses Paid or Accrued     3.79% annualized  
Expenses Waived     (2.88)% annualized  
Total Expenses Paid or Accrued Including Expenses Waived     0.91% annualized  
US12NG Performance:
     
Name of Commodity Pool     US12NG  
Type of Commodity Pool     Exchange traded security  
Inception of Trading     November 18, 2009  
Aggregate Subscriptions (from inception through February 28, 2010)     $40,652,357  
Total Net Assets as of February 28, 2010     $33,573,229  
Initial NAV per Unit as of Inception     $50.00  
NAV per Unit as of February 28, 2010     $47.96  
Worst Monthly Percentage Draw-down     Jan 10 (5.93)%  
Worst Peak-to-Valley Draw-down     Jan 10 – Feb 10 (10.81)%  
Number of Unitholders (as of December 31, 2009)     1,276  

COMPOSITE PERFORMANCE DATA FOR US12NG
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

   
  Rates of Return
Month   2009   2010
January           (5.93 )% 
February           (5.18 )% 
March            
April            
May            
June            
July            
August            
September            
October            
November     (0.02)%*  
December     7.56 %       
Annual Rate of Return     7.54 %      (10.81)%**  

* Partial from November 18, 2009.
** Through February 28, 2010.

For a definition of draw-down, please see text below “Composite Performance Data for USOF.”

Other Related Commodity Trading and Investment Management Experience

Until December 31, 2009, Ameristock Corporation was an affiliate of the General Partner. Ameristock Corporation is a California-based registered investment advisor registered under the Investment Advisors Act of 1940, as amended, that has been sponsoring and providing portfolio management services to mutual funds since 1995. Ameristock Corporation is the investment adviser to the Ameristock Mutual Fund, Inc., a mutual fund registered under the Investment Company Act of 1940 that focuses on large cap U.S. equities that had $208,573,985 in assets as of February 28, 2010. Ameristock Corporation was also the investment advisor to the Ameristock ETF Trust, an open-end management investment company registered under the 1940 Act that consisted of five separate investment portfolios, each of which sought investment results, before fees and expenses, that corresponded generally to the price and yield performance of a particular U.S. Treasury

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securities index owned and compiled by Ryan Holdings LLC and Ryan ALM, Inc. The Ameristock ETF Trust has liquidated each of its investment portfolios and has wound up its affairs.

Who is SummerHaven?

Background of SummerHaven Investment Management, LLC

SummerHaven Investment Management, LLC is a Delaware limited liability company formed on August 11, 2009. Its offices are located at Soundview Plaza, 4th Floor, 1266 East Main Street, Stamford, CT 06902, and its telephone number is (203) 352-2700. SummerHaven Investment Management, LLC has been registered under the Commodity Exchange Act as a commodity pool operator and a commodity trading advisor since October 9, 2009. SummerHaven Investment Management, LLC became an NFA member effective October 9, 2009. SummerHaven Investment Management, LLC also is registered investment advisor under the Investment Advisers Act of 1940. The firm’s management team has over 50 years of combined capital markets experience including commodity research and modeling, trading, investment management and risk management expertise.

Background of SummerHaven Index Management, LLC

SummerHaven Index Management, LLC is the owner, creator and licensor of commodity indices including the SummerHaven Dynamic Commodity Index. SummerHaven Index Management, LLC is a Delaware limited liability company formed on August 11, 2009. It maintains its main business office at Soundview Plaza, Fourth Floor, 1266 East Main Street, Stamford, CT 06902. The firm maintains a website at []. The firm creates innovative commodities indices focused on providing investors with better risk-adjusted returns than traditional commodity index benchmarks. SummerHaven Index Management’s principals and consultants include academics who are the authors of widely cited and acclaimed papers on commodities futures investing including ‘Facts and Fantasies about Commodities’ and ‘Fundamentals of Commodities Futures Returns”. The firm is led by a seasoned management team with over 50 years of collective Wall Street experience with commodities futures, capital markets, investment management, and exchange traded products.

Principals of SummerHaven Investment Management, LLC

Adam W. Dunsby has been employed by SummerHaven Investment Management, LLC since April 2009 as a partner. His duties include quantitative modeling and portfolio construction. From April 1995 to April 2008, Mr. Dunsby was employed by Cornerstone Quantitative Investment Group Inc., a quantitative global macro CTA, as a co-founder and manager. Mr. Dunsby was not employed from April 2008 to April 2009. Mr. Dunsby became listed as a principal of SummerHaven Investment Management, LLC effective October 1, 2009, as an associated person of SummerHaven Investment Management, LLC effective October 9, 2009 and as an associate member of the NFA effective October 9, 2009. Mr. Dunsby graduated summa cum laude from the Wharton School of the University of Pennsylvania in 1990 with a BS in Economics. He earned his PhD in Finance from Wharton in 1995. Mr. Dunsby is 42 years old.

Kurt J. Nelson has been employed by SummerHaven Investment Management, LLC since August 2009 as a partner. His duties include investor relations, product structuring and compliance. From September 2007 to July 2009, Mr. Nelson was employed by UBS Investment Bank as a Managing Director and supervisory committee member of the UBS Bloomberg CMCI Index and Dow-Jones UBS Commodity Index. From March 1998 to January 2007, Mr. Nelson was employed by AIG Financial Products Corp. as a Managing Director. Mr. Nelson was not employed from January 2007 to September 2007. Mr. Nelson became listed as a principal of SummerHaven Investment Management, LLC effective October 1, 2009, as an associated person of SummerHaven Investment Management, LLC effective October 12, 2009 and as an associate member of the NFA effective October 12, 2009. Mr. Nelson is 40 years old.

Ashraf R. Rizvi has been employed by SummerHaven Investment Management, LLC since April 2009 as a partner. His duties include trading and operational management. From October 1994 to February 2008, Mr. Rizvi was employed by UBS Investment Bank as a Managing Director and Global Head of Commodities Trading. Mr. Rizvi was not employed from February 2008 to April 2009. Mr. Rizvi became listed as a principal of SummerHaven Investment Management, LLC effective October 9, 2009. Mr. Rizvi is 47 years old.

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K. Geert Rouwenhorst has been employed by SummerHaven Investment Management, LLC since April 2009 as a partner. His duties include research and investor relations. From July 1990 to present, Mr. Rouwenhorst has been employed by Yale School of Management as a Professor of Finance. Mr. Rouwenhorst became listed as a principal of SummerHaven Investment Management, LLC effective October 8, 2009. Mr. Rouwenhorst is 49 years old.

Prior Performance of SummerHaven

Prior Performance of SummerHaven Commodity Fund LP:

 
Name of Commodity Pool     SummerHaven
Commodity Fund LP
 
Type of Commodity Pool     Privately offered  
Inception of Trading     October 1, 2009  
Aggregate Subscriptions
(from inception through February 28, 2010)
    $2,250,000  
Net Asset Value as of February 28, 2010     $2,585,000  
Worst Monthly Draw-down     Jan 2010 (5.22)%  
Worst Peak-to-Valley Draw-down     Dec 2009 – Jan 2010 (5.22)%  

Composite Performance Data for SummerHaven Commodity Fund LP

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

   
  Rates of Return
Month   2009   2010
January              (5.22 )% 
February              2.54 % 
March                  
April                  
May                  
June                  
July                  
August                  
September                  
October     3.39 %          
November     2.68 %          
December     3.04 %          
Annual Rate of Return     9.39 %      (2.81)%*  

* Through February 28, 2010.

For a definition of draw-down, please see text below “Composite Performance Data for USOF.”

Who is the Trustee?

The sole Trustee of the Trust is Wilmington Trust Company, a Delaware banking corporation. The Trustee’s principal offices are located at 1100 North Market Street, Wilmington, Delaware 19890-0001. The Trustee is unaffiliated with the Sponsor. The Trustee’s duties and liabilities with respect to the offering of Units and the management of the Trust and USCI are limited to its express obligations under the Trust Agreement.

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, the Sponsor or the Unitholders. The Trustee is permitted to resign upon at least sixty (60) days’ notice to the Sponsor. If no successor trustee has been appointed by the Sponsor within such sixty-day period, the Trustee may, at the expense of the Trust, petition a court to appoint a successor. The Trustee is entitled to reasonable

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compensation for its services from the Sponsor or an affiliate of the Sponsor (including the Trust), and is indemnified by the Sponsor against any expenses it incurs relating to or arising out of the formation, operation or termination of the Trust, or any action or inaction of the Trustee under the Trust Agreement, except to the extent that such expenses result from the gross negligence or willful misconduct of the Trustee. The Sponsor has the discretion to replace the Trustee.

The Trustee has not signed the registration statement of which this Prospectus is a part, and is not subject to issuer liability under the federal securities laws for the information contained in this Prospectus and under federal securities laws with respect to the issuance and sale of the Units. Under such laws, neither the Trustee, either in its capacity as Trustee or in its individual capacity, nor any director, officer or controlling person of the Trustee is, or has any liability as, the issuer or a director, officer or controlling person of the issuer of the Units.

Under the Trust Agreement, the Trustee has delegated to the Sponsor the exclusive management and control of all aspects of the business of the Trust and USCI. The Trustee has no duty or liability to supervise or monitor the performance of the Sponsor, nor does the Trustee have any liability for the acts or omissions of the Sponsor.

Because the Trustee has delegated substantially all of its authority over the operation of the Trust to the Sponsor, the Trustee itself is not registered in any capacity with the CFTC.

How Does USCI Operate?

The net assets of USCI will consist primarily of Commodity Interests. USCI will invest in Commodity 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 Commodity Interests. The primary focus of the Sponsor is the investment in Commodity Interests and the management of USCI’s investments in Treasury Securities, cash and/or cash equivalents for margining purposes and as collateral.

The investment objective of USCI is to have daily changes in percentage terms of the Units’ NAV reflect the daily changes in percentage terms of the Index, less USCI’s expenses. The Sponsor does not intend that USCI will be operated in a fashion such that its NAV will equal, in dollar terms, the price of the Index or the price of any particular commodity Futures Contract.

USCI seeks to achieve its investment objective by investing in a mix of Commodity Interests such that the changes in its NAV will closely track the changes in the Index. USCI’s positions in Commodity Interests will be rebalanced on a monthly basis in order to track the changing nature of the Index. The portfolio rebalancing takes place during the last four business days of the month (“Rebalancing Period”). At the end of each of the days in the Rebalancing Period, one fourth of the prior month portfolio positions are replaced by equally-weighted positions reflecting the particular Benchmark Component Futures Contracts determined on the selection date, which is the fifth business day before the end of the month (“Selection Date”). At the end of the Rebalancing Period the Index will have an equal-weight position of approximately 7.14% in each of the selected Benchmark Component Futures Contracts which will be reflected in the rebalanced portfolio. After fulfilling the collateral requirements with respect to its Commodity Interests, USCI will invest the remainder of its proceeds from the sale of baskets in short-term Treasury Securities or cash equivalents, and/or merely hold such assets in cash (generally in interest-bearing accounts).

The Sponsor endeavors to place USCI’s trades in Commodity Interests and otherwise manage USCI’s investments so that A will be within plus/minus 10 percent of B, where:

A is the average daily change in USCI’s NAV for any period of 30 successive valuation days; i.e., any NYSE Arca trading day as of which USCI calculates its NAV, and
B is the average daily change in the price of the Index over the same period.

The Sponsor believes that market arbitrage opportunities cause daily changes in USCI’s Unit price on the NYSE Arca to closely track daily changes in USCI’s NAV per Unit. The Sponsor believes that the net effect of this expected relationship and the expected relationship described above between USCI’s NAV and the Index will be that daily changes in the price of USCI’s Units on the NYSE Arca will closely track daily changes in the Index, less USCI’s expenses. While the Index is composed of Futures Contracts and is

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therefore a measure of the prices of the commodities comprising the Index for future delivery, there is nonetheless expected to be a reasonable degree of correlation between the Index and the cash or spot prices of the commodities underlying Benchmark Component Futures Contracts.

These relationships illustrated in the following diagram:

[GRAPHIC MISSING]

An investment in the Units provides a means for diversifying an investor’s portfolio or hedging exposure to changes in commodities prices. An investment in the Units allows both retail and institutional investors to easily gain this exposure to the commodities market in a transparent, cost-effective manner.

The Sponsor employs a “neutral” investment strategy intended to track changes in the Index regardless of whether the Index goes up or goes down. USCI’s “neutral” investment strategy is designed to permit investors generally to purchase and sell USCI’s Units for the purpose of investing indirectly in the commodities market in a cost-effective manner, and/or to permit participants in the commodities or other industries to hedge the risk of losses in their commodity-related transactions. Accordingly, depending on the investment objective of an individual investor, the risks generally associated with investing in the commodities market and/or the risks involved in hedging may exist. In addition, an investment in USCI involves the risk that the changes in the price of USCI’s Units will not accurately track the changes in the Index, and that changes in the Index will not closely correlate with changes in the prices of the commodities underlying the Benchmark Component Futures Contracts on the spot market. Furthermore, USCI will also hold short-term Treasury Securities, cash and/or cash equivalents to meet its current or potential margin or collateral requirements with respect to its investments in Commodity Interests and to invest cash not required to be used as margin or collateral. USCI does not expect there to be any meaningful correlation between the performance of USCI’s investments in Treasury Securities/cash/cash equivalents and the changes in the prices of commodities or Commodity Interests. While the level of interest earned on or the market price of these investments may in some respect correlate to changes in the prices of commodities, this correlation is not anticipated as part of USCI’s efforts to meet its objective.

USCI’s total portfolio composition is disclosed each business day that the NYSE Arca is open for trading, on USCI’s website at www..com. The website disclosure of portfolio holdings is made daily and includes, as applicable, the name and value of each Futures Contract, the specific types and values of Other Commodity-Related Investments and characteristics of such Other Commodity-Related Investments,

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the name and value of each Treasury security and cash equivalent, and the amount of cash held in USCI’s portfolio. USCI’s website is publicly accessible at no charge.

The Units issued by USCI may only be purchased by Authorized Purchasers and only in blocks of 100,000 Units called Creation Baskets. The amount of the purchase payment for a Creation Basket is equal to the aggregate NAV of Units in the Creation Basket. Similarly, only Authorized Purchasers may redeem Units and only in blocks of 100,000 Units called Redemption Baskets. The amount of the redemption proceeds for a Redemption Basket is equal to the aggregate NAV of Units in the Redemption Basket. The purchase price for Creation Baskets and the redemption price for Redemption Baskets are the actual NAV calculated at the end of the business day when a request for a purchase or redemption is received by USCI. The NYSE Arca will publish an approximate NAV intra-day based on the prior day’s NAV and the current price of the Benchmark Component Futures Contracts, but the price of Creation Baskets and Redemption Baskets is determined based on the actual NAV calculated at the end of each trading day.

While USCI issues Units only in Creation Baskets, Units may also be purchased and sold in much smaller increments on the NYSE Arca. These transactions, however, are effected at the bid and ask prices established by specialist firm(s). Like any listed security, Units can be purchased and sold at any time a secondary market is open.

USCI’s Investment Strategy

Other than to address monthly changes in the Benchmark Component Futures Contacts, in managing USCI’s assets, the Sponsor does not use a technical trading system that automatically issues buy and sell orders. Instead, each time one or more baskets are purchased or redeemed, the Sponsor will purchase or sell Commodity Interests with an aggregate market value that approximates the amount of cash received or paid upon the purchase or redemption of the basket(s).

As an example, assume that a Creation Basket is sold by USCI, and that USCI’s closing NAV per Unit is $50.00. In that case, USCI would receive $5,000,000 in proceeds from the sale of the Creation Basket ($50.00 NAV per Unit multiplied by 100,000 Units, and ignoring the Creation Basket fee of $1,000). If one were to assume further that the Sponsor wants to invest the entire proceeds from the Creation Basket in Benchmark Component Futures Contracts and that the market value of each such Benchmark Component Futures Contract is $16,000, USCI would be unable to buy an exact number of Benchmark Component Futures Contracts with an aggregate market value equal to $5,000,000. Instead, USCI would be able to purchase 103 Benchmark Component Futures Contracts with an aggregate market value of $4,969,750. Assuming a margin requirement equal to 10% of the value of the Benchmark Component Futures Contracts, USCI would be required to deposit $496,975 in Treasury Securities and cash with the futures commission merchant through which the Benchmark Component Futures Contracts were purchased. The remainder of the proceeds from the sale of the Creation Basket, would remain invested in cash, cash equivalents, and Treasury Securities as determined by the Sponsor from time to time based on factors such as potential calls for margin or anticipated redemptions.

The specific Commodity Interests purchased will depend on various factors, including a judgment by the Sponsor as to the appropriate diversification of USCI’s investments. While the Sponsor anticipates significant investments in Futures Contracts on the Futures Exchanges, for various reasons, including the ability to enter into the precise amount of exposure to the commodities market and position limits on Futures Contracts, it will also invest in Other Commodity-Related Investments, such as swaps, in the over-the-counter market to a significant degree.

The Sponsor does not anticipate letting its Futures Contracts expire and taking delivery of any commodities. Instead, the Sponsor will close out existing positions, e.g., in response to ongoing changes in the Index or if it otherwise determines it would be appropriate to do so and reinvest the proceeds in new Commodity Interests. Positions may also be closed out to meet orders for Redemption Baskets, in which case the proceeds from closing the positions will not be reinvested.

What are Futures Contracts?

Futures contracts are agreements between two parties. One party agrees to buy a commodity such as natural gas from the other party at a later date at a price and quantity agreed-upon when the contract is made.

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For example, the futures contracts for natural gas traded on the NYMEX trade in units of 10,000 million British Thermal Units (“mmBtu”). Generally, futures contracts traded on the NYMEX are priced by floor brokers and other exchange members both through an “open outcry” of offers to purchase or sell the contracts and through an electronic, screen-based system that determines the price by matching electronically offers to purchase and sell. Futures contracts may also be based on commodity indices, in that they call for a cash payment based on the change in the value of the specified index during a specified period.

Certain typical and significant characteristics of Futures Contracts are discussed below. Additional risks of investing in Futures Contracts are included in “What are the Risk Factors Involved with an Investment in USCI?”

Impact of Position Limits, Accountability Levels, and Price Fluctuation Limits.

Futures contracts include typical and significant characteristics. Most significantly, the CFTC and U.S. designated contract markets such as the NYMEX, COMEX, CME, and CBOT 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 an investment by USCI is not) may hold, own or control. The net position is the difference between an individual or firm’s open long contracts and open short contracts in any one commodity. In addition, most U.S.-based Futures Exchanges 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 but does not limit the maximum daily price fluctuation, while some other non-U.S. Futures Exchanges have not adopted such limits.

The accountability levels for the commodities comprising the Index and other Futures Contracts traded on U.S.-based Futures Exchanges are not a fixed ceiling, but rather a threshold above which such exchanges may exercise greater scrutiny and control over an investor’s positions. For example, the current accountability level for any one month in natural gas Futures Contracts traded on NYMEX is 6,000 contracts. In addition, the NYMEX imposes an accountability level for all months of 12,000 net futures contracts in natural gas. If USCI and the Related Public Funds exceed these accountability levels for investments in futures contracts for natural gas, the NYMEX will monitor USCI’s exposure and ask for further information on their activities, including the total size of all positions, investment and trading strategy, and the extent of USCI’s liquidity resources. If deemed necessary by the NYMEX, it could also order USCI to reduce its position back to the accountability level.

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. For example, the current position limit for feeder cattle Futures Contracts on the CME is 1,600 futures contracts in any contract month. USCI will not be able to hold, own or control feeder cattle Futures Contracts in excess of this limit.

If a Futures Exchange orders USCI to reduce its position in a particular Futures Contract back to the applicable position limit or accountability level, or to an accountability level that the Futures Exchange deems appropriate for USCI, such a level may impact the mix of investments in Commodity Interests made by USCI. To illustrate, assume that the Brent crude oil Futures Contract traded on ICE Futures and the unit price of USCI are each $100, and that the ICE Futures has determined that USCI may not own more than 20,000 Brent crude oil Futures Contracts. In such case, USCI could invest up to $2 billion of its daily net assets in the Brent crued oil Futures Contract (i.e., $100 per contract multiplied by 1,000 (the standard size of a Brent crude oil Futures Contract is 1,000 barrels) multiplied by 20,000 contracts) before reaching the position level imposed by the ICE Futures. Once the daily net assets of the portfolio exceed $2 billion in the Brent crude oil Futures Contract, the portfolio may not be able to take any further positions in the Brent crude oil Futures Contract, depending on whether the ICE Futures imposes limits. If USCI is limited in its investments in any Futures Contracts, the Sponsor anticipates that it will invest the majority of its assets above that level in a mix of other Futures Contracts or other Commodity Interests on other Futures Exchanges or over-the-counter markets.

In addition to position limits and accountability levels that may apply at any time, the Futures Exchanges may impose position limits on particular contracts held in the last few days of trading in the near month

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contract to expire. It is unlikely that USCI will run up against such position limits because USCI will not hold the near month contract in any of its Benchmark Component Futures Contracts and USCI’s investment strategy is to close out its positions during each Rebalancing Period and purchase new contracts.

U.S.-based Futures Exchanges also limit the amount of price fluctuation for Futures Contracts. For example, the NYMEX imposes a $3.00 per mmBtu ($30,000 per contract) price fluctuation limit for natural gas Futures Contracts. This limit is initially based off the previous trading day’s settlement price. If any natural gas Futures Contract is traded, bid, or offered at the limit for five minutes, trading is halted for five minutes. When trading resumes it begins at the point where the limit was imposed and the limit is reset to be $3.00 per mmBtu in either direction of that point. If another halt were triggered, the market would continue to be expanded by $3.00 per mmBtu in either direction after each successive five-minute trading halt. There is no maximum price fluctuation limit during any one trading session.

USCI anticipates that to the extent it invests in Futures Contracts other than the Benchmark Component Futures Contracts and Other Commodity-Related Investments, it will enter into various non-exchange-traded derivative contracts to hedge the short-term price movements of such Futures Contracts and Other Commodity-Related Investments against the current Benchmark Component Futures Contracts.

Examples of the position and price limits imposed are as follows:

   
Futures Contract   Position Accountability
Levels and Limits
  Maximum Daily Price Fluctuation
ICE-UK Crude Oil (Brent)   There are no position accountability levels or limits for this contract. However, the exchange’s daily position management regime requires that any position greater than 500 lots in the nearest two expiry months must be reported to the exchange on a daily basis.   There is no maximum daily price fluctuation limit.
NYMEX Light, Sweet Crude Oil (WTI)   Accountability Levels: for any one month: 10,000 net futures / all months: 20,000 net futures.
  
Position Limits: 3,000 net futures in the last three days of trading in the spot month.
  $10.00 per barrel ($10,000 per contract) for all months. If any contract is traded, bid, or offered at the limit for five minutes, trading is halted for five minutes. When trading resumes, the limit is expanded by $10.00 per barrel in either direction. If another halt were triggered, the market would continue to be expanded by $10.00 per barrel in either direction after each successive five-minute trading halt. There will be no maximum price fluctuation limits during any one trading session.
ICE-UK Gas Oil   There are no position accountability levels or limits for this contract. However, any position greater than 100 lots in the nearest expiry month must be reported to the exchange on a daily basis.   There is no maximum daily price fluctuation limit.

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Futures Contract   Position Accountability
Levels and Limits
  Maximum Daily Price Fluctuation
NYMEX Heating Oil   Accountability Levels: any one month: 5,000 net futures / all months: 7,000 net futures.
  
Position Limits: 1,000 net futures in the last three days of trading in the spot month.
  $0.25 per gallon ($10,500 per contract) for all months. If any contract is traded, bid, or offered at the limit for five minutes, trading is halted for five minutes. When trading resumes, the limit is expanded by $0.25 per gallon in either direction. If another halt were triggered, the market would continue to be expanded by $0.25 per gallon in either direction after each successive five-minute trading halt. There will be no maximum price fluctuation limits during any one trading session.
NYMEX Henry Hub Natural Gas   Accountability Levels: any one month: 6,000 net futures / all months: 12,000 net futures.
  
Position Limits: 1,000 net futures in the last three days of trading in the spot month.
  $3.00 per mmBtu ($30,000 per contract) for all months. If any contract is traded, bid, or offered at the limit for five minutes, trading is halted for five minutes. When trading resumes, the limit is expanded by $3.00 per mmBtu in either direction. If another halt were triggered, the market would continue to be expanded by $3.00 per mmBtu in either direction after each successive five-minute trading halt. There will be no maximum price fluctuation limits during any one trading session.
NYMEX RBOB Gasoline   Accountability Levels: any one month: 5,000 net futures / all months: 7,000 net futures.
  
Position Limits: 1,000 net futures in the last three days of trading in the spot month.
  $0.25 per gallon ($10,500 per contract) for all months. If any contract is traded, bid, or offered at the limit for five minutes, trading is halted for five minutes. When trading resumes, the limit is expanded by $0.25 per gallon in either direction. If another halt were triggered, the market would continue to be expanded by $0.25 per gallon in either direction after each successive five-minute trading halt. There will be no maximum price fluctuation limits during any one trading session.
CME Feeder Cattle   Accountability Limits: none.
Position Limits: non-spot month: 1,600 net futures / spot month: 300 net futures (during the last 10 days of trading).
  $0.03 per pound above or below the previous day’s settlement price.
CME Lean Hogs   Accountability Levels: none.
  
Position Limits: non-spot month: 4,100 net futures / spot month: 950 net futures (as of the close of business on the fifth business day of the contract month).
  $0.03 per pound above or below previous day’s settlement price, except that there are no limits in the spot month contract during the in last 2 days of trading.

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Futures Contract   Position Accountability
Levels and Limits
  Maximum Daily Price Fluctuation
CME Live Cattle   Accountability Levels: none.
  
Position Limits: non-spot month: 5,400 net futures / spot month: 450 net futures (300 net futures as of the close of business on the business day immediately preceding the last 5 business days of the contract month).
  $0.03 per pound above or below the previous day’s settlement price.
CBOT Bean Oil   Accountability Levels: none.
  
Position Limits: spot month: 540 net futures / any one month: 5,000 net futures / all months: 6,500 net futures.
  $0.025 cents per pound expandable to $0.035 cents per pound and then to $0.055 cents per pound when the market closes at limit bid or limit offer. There shall be no price limits on the current month contract on or after the second business day preceding the first day of the delivery month.
CBOT Corn   Accountability Levels: none.
  
Position Limits: spot month: 600 net futures / any one month: 13,500 net futures / all months: 22,000 net futures.
  $0.30 per bushel expandable to $0.45 and then to $0.70 when the market closes at limit bid or limit offer. There shall be no price limits on the current month contract on or after the second business day preceding the first day of the delivery month.
CBOT Soybeans   Accountability Levels: none.
  
Position Limits: spot month: 600 net futures / any one month: 6,500 net futures / all months: 10,000 net futures.
  $0.70 per bushel expandable to $1.05 and then to $1.60 when the market closes at limit bid or limit offer. There shall be no price limits on the current month contract on or after the second business day preceding the first day of the delivery month.
CBOT Soybean Meal   Accountability Levels: none.
  
Position Limits: spot month: 720 net futures / any one month: 5,000 net futures / all months: 6,500 net futures.
  $20 per short ton expandable to $30 and then to $45 when the market closes at limit bid or limit offer. There shall be no price limits on the current month contract on or after the second business day preceding the first day of the delivery month.
CBOT Wheat   Accountability Levels: none.   $0.60 per bushel expandable to $0.90 and then to $1.35 when the market closes at limit bid or limit offer. There shall be no price limits on the current month contract on or after the second business day preceding the first day of the delivery month.
  Position Limits: spot month: 600 net futures / any one month: 5,000 net futures / all months: 6,500 net futures.
LME High
Grade Primary Aluminum
  Accountability Levels: none.
  
Position Limits: none.
  There is no maximum daily price fluctuation limit.
COMEX Copper          
LME Lead   Accountability Levels: none.
  
Position Limits: none.
  There is no maximum daily price fluctuation limit.

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Futures Contract   Position Accountability
Levels and Limits
  Maximum Daily Price Fluctuation
LME Primary Nickel   Accountability Levels: none.   There is no maximum daily price fluctuation limit.
  Position Limits: none.
LME Tin   Accountability Levels: none.   There is no maximum daily price fluctuation limit.
  Position Limits: none.
LME Special High Grade Zinc   Accountability Levels: none.   There is no maximum daily price fluctuation limit.
  Position Limits: none.
COMEX Gold   Accountability Levels: any one month: 6,000 net futures / all months: 6,000 net futures.   There is no maximum daily price fluctuation limit.
  Position Limits: 3,000 net futures in the expiration month.
NYMEX Platinum   Accountability Levels: any one month: 1,500 net futures / all months: 1,500 net futures.   There is no maximum daily price fluctuation limit.
  Position Limits: 150 net futures in the expiration month.
COMEX Silver   Accountability Levels: any one month: 6,000 net futures / all months: 6,000 net futures.   There is no maximum daily price fluctuation limit.
  Position Limits: 1,500 net futures in the expiration month.
ICE-US Cocoa   Accountability Levels: any one month: 6,000 net futures / all months: 6,000 net futures.   There is no maximum daily price fluctuation limit.
  Position Limits: 1,000 net futures for any month for which delivery notices have or may be issued.
ICE-US Coffee “C”   Accountability Levels: any one month: 5,000 net futures / all months: 5,000 net futures.   There is no maximum daily price fluctuation limit.
  Position Limits: 500 net futures for any month for which delivery notices have or may be issued.
ICE-US Cotton   Accountability Levels: none.
  
Position Limits: spot month: 300 net futures / any one month: 3,500 net futures / all months: 5,000 net futures.
  $0.03 above or below previous day’s settlement price. Limit is subject to expansion in certain circumstances.
ICE-US World Sugar No. 11   Accountability Levels: any one month: 10,000 net futures / all months: 15,000 net futures.
  
Position Limits: 5,000 net futures in the spot month.
  There is no maximum daily price fluctuation limit.

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Price Volatility

Despite daily price limits, the price volatility of futures contracts generally has been historically greater than that for traditional securities such as stocks and bonds. Price volatility often is greater day-to-day as opposed to intra-day. Economic factors that may cause volatility in Futures Contracts include changes in interest rates; governmental, agricultural, trade, fiscal, monetary and exchange control programs and policies; weather and climate conditions; changing supply and demand relationships; changes in balances of payments and trade; U.S. and international rates of inflation; currency devaluations and revaluations; U.S. and international political and economic events; and changes in philosophies and emotions of market participants. Because USCI invests a significant portion of its assets in futures contracts, the assets of USCI, and therefore the price of USCI’s Units, may be subject to greater volatility than traditional securities.

Marking-to-Market Futures Positions

Futures contracts are marked to market at the end of each trading day and the margin required with respect to such contracts is adjusted accordingly. This process of marking-to-market is designed to prevent losses from accumulating in any futures account. Therefore, if USCI’s futures positions have declined in value, USCI may be required to post “variation margin” to cover this decline. Alternatively, if USCI’s futures positions have increased in value, this increase will be credited to USCI’s account.

What is the Index?

The Index was developed based upon academic research by Yale University professors Gary B. Gorton and K. Geert Rouwenhorst, and Hitotsubashi University professor Fumio Hayashi. The Index is designed to reflect the performance of a fully margined or collateralized portfolio of 14 commodity futures contracts with equal weights, selected each month from a universe of 27 eligible commodity futures contracts. The Index is rules-based and rebalanced monthly based on observable price signals. In this context, the term “rules-based” is meant to indicate that the composition of the Index in any given month will be determined by quantitative formulas relating to the prices of the futures contracts that relate to the commodities that are eligible to be included in the Index. Such formulas are not subject to adjustment based on other factors. The overall return on the Index is generated by two components: (i) uncollateralized returns from the commodity futures contracts comprising the Index and (ii) a daily fixed income return reflecting the interest earned on a hypothetical 3-month U.S. Treasury Bill collateral portfolio, calculated using the weekly auction rate for the 3-Month U.S. Treasury Bills published by the U.S Department of the Treasury. SummerHaven Indexing is the owner of the Index.

The Index is composed of physical non-financial commodity futures contracts with active and liquid markets traded upon futures exchanges in major industrialized countries. The futures contracts are denominated in U.S. dollars and weighted equally by notional amount. The Index currently reflects commodities in six commodity sectors: energy (e.g., crude oil, natural gas, heating oil, etc.), precious metals (e.g., gold, silver platinum), industrial metals (e.g., zinc, nickel, aluminum, copper, etc.), grains (e.g., wheat, corn, soybeans, etc.), softs (e.g., sugar, cotton, coffee, cocoa), and livestock (e.g., live cattle, lean hogs, feeder cattle).

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Table 1 below lists the eligible commodities, the relevant futures exchange on which the futures contract is listed and quotation details. Table 2 lists the eligible futures contracts, their sector designation and maximum allowable tenor.

TABLE 1

       
Commodity   Designated Contract   Exchange   Units   Quote
Crude Oil (Brent)   Crude Oil   ICE-UK   1,000 barrels   USD/barrel
Crude Oil (WTI)   Light, Sweet Crude Oil   NYMEX   1,000 barrels   USD/barrel
Gas Oil   Gas Oil   ICE-UK   100 metric tons   USD/metric ton
Heating Oil   Heating Oil   NYMEX   42,000 gallons   U.S. cents/gallon
Natural Gas   Henry Hub Natural Gas   NYMEX   10,000 mmbtu   USD/mmbtu
Unleaded Gasoline   Reformulated Blendstock for Oxygen Blending “RBOB”   NYMEX   42,000 gallons   U.S. cents/gallon
Feeder Cattle   Feeder Cattle   CME   50,000 lbs.   U.S. cents/pound
Lean Hogs   Lean Hogs   CME   40,000 lbs.   U.S. cents/pound
Live Cattle   Live Cattle   CME   40,000 lbs.   U.S. cents/pound
Bean Oil   Bean Oil   CBOT   60,000 lbs.   U.S. cents/pound
Corn