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EX-32.2 - RICI Linked - PAM Advisors Fund, LLCefc10-552_ex322.htm
EX-32.1 - RICI Linked - PAM Advisors Fund, LLCefc10-552_ex321.htm
EX-31.2 - RICI Linked - PAM Advisors Fund, LLCefc10-552_ex312.htm
EX-31.1 - RICI Linked - PAM Advisors Fund, LLCefc10-552_ex311.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2010

OR

[  ]
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                  to                     

Commission File number:     000-53647
 
RICI® Linked – PAM Advisors Fund, LLC
(Exact name of registrant as specified in charter)

Delaware
 
38-3743129
(State or other jurisdiction of incorporation or organization)
 
(IRS Employer Identification No.)
     

c/o Price Asset Management, Inc.
   
141 West Jackson Blvd., Suite 1340A
   
Chicago, IL
 
60604
(Address of Principal Executive Offices)
 
(Zip Code)
 
 
(312) 261-4431
(Registrant’s telephone number, including area code)
 
 
 Not applicable
 (Former name, former address and former fiscal years, if changed since last report)
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
   
Yes [X]    No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

   
Yes [  ]    No [  ]
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [  ]
 
Accelerated filer   [  ]
Non-accelerated filer [  ]  (Do not check if a smaller reporting company)
 
Smaller reporting company   [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
   
Yes [  ]   No [X]
 
 
1

 
 
PART I - FINANCIAL INFORMATION


ITEM 1.
FINANCIAL STATEMENTS

The following unaudited financial statements of RICI® Linked – PAM Total Index Series , a series of  RICI® Linked – PAM Advisors Fund, LLC are included in Item 1:

   
Page
 
Financial Statements
     
       
Statements of Financial Condition as of June 30, 2010 (Unaudited) and December 31, 2009  (Audited)
 
3
 
       
Condensed Schedule of Investments as of June 30, 2010 (Unaudited)
 
4
 
       
Condensed Schedule of Investments as of December 31, 2009 (Audited)
 
5
 
       
Statements of Operations for the Three Months and Six Months Ended June 30,  2010 and 2009 (Unaudited)
 
6
 
       
         Statements of Changes in Members’ Equity (Net Assets) for the Six Months ended June 30, 2010 and 2009 (Unaudited)
 
7
 
       
Notes to Financial Statements
 
8
 

 
2

 
 
 
RICI ® Linked – PAM Total Index Series
A Series of RICI ® Linked – PAM Advisors Fund, LLC

 
Statements of Financial Condition
           
June 30, 2010 (Unaudited) and December 31, 2009 (Audited)
           
             
   
June 30, 2010
   
December 31, 2009
 
Assets
           
             
Equity in broker trading account
           
Cash
  $ 28,786,023     $ 11,862,883  
Net unrealized gain (loss) on open futures contracts
    (3,232,856 )     4,702,842  
      25,553,167       16,565,725  
                 
Cash and cash equivalents
    19,178,215       138,914,951  
Investments
               
Government-sponsored enterprise securities, at fair value
    184,611,230       -  
Mutual funds, at fair value
    10,992,786       26,189,927  
Interest receivable
    1,883       11,548  
Other assets
    -       10,022  
                 
Total assets
  $ 240,337,281     $ 181,692,173  
                 
Liabilities and Members' Equity (Net Assets)
               
                 
Accrued operating expenses
  $ 112,416     $ 114,756  
Management fee payable to Managing Member
    124,170       95,779  
Support services fee payable
    18,722       -  
Servicing fee payable to selling agent
    29,441       27,617  
Withdrawals payable
    4,440,785       5,696,909  
Subscriptions received in advance
    10,937,774       7,702,128  
      15,663,308       13,637,189  
Members' equity (net assets)
    224,673,973       168,054,984  
                 
Total liabilities and members' equity (net assets)
  $ 240,337,281     $ 181,692,173  
                 
The accompanying notes are an integral part of these financial statements.
         

 
 
 
 
 
 
3

 
 
 
RICI ® Linked – PAM Total Index Series
A Series of RICI ® Linked – PAM Advisors Fund, LLC
 
Condensed Schedule of Investments
                 
June 30, 2010 (Unaudited)
                 
                   
         
Net Unrealized
   
 
 
         
Gain (Loss)
   
Percent of
 
         
on Open
   
Members'
 
         
Long Futures
   
Equity
 
         
Contracts
   
(Net Assets)
Futures contracts *
                 
                   
United States
                 
Energy
        $ 104,839       0.05 %
Grains
          430,835       0.19  
Meat
          (88,590 )     (0.04 )
Metals
          (12,395 )     (0.01 )
Softs
          806,170       0.36  
Total futures contracts - United States
          1,240,859       0.55  
Foreign
                     
Energy
          (15,615 )     (0.01 )
Grains
          4,967       **  
Metals
          (4,617,344 )     (2.05 )
Softs
          154,277       0.07  
Total futures contracts- Foreign
          (4,473,715 )     (1.99 )
                       
Total futures contracts
        $ (3,232,856 )     (1.44 ) %
                       
Government-Sponsored enterprise securities
           
Percent of
 
                 
Members'
 
                 
Equity
 
United States
 
Cost
   
Fair Value
   
(Net Assets)
Federal Home Loan Bank
                     
$ 34,000,000 discount note, due 08/06/2010
  $ 33,970,288     $ 33,996,600       15.13 %
$ 15,000,000 discount note, due 09/07/2010
    14,981,692       14,997,000       6.68  
$ 9,700,000 discount note, due 12/21/2010
    9,687,201       9,689,330       4.31  
                         
Federal National Mortgage Association
                       
$ 20,000,000 discount note, due 09/08/2010
    19,976,045       19,996,000       8.90  
$ 10,000,000 discount note, due 10/18/2010
    9,983,833       9,995,000       4.45  
$ 33,000,000 discount note, due 12/01/2010
    32,949,693       32,970,300       14.67  
$ 33,000,000 discount note, due 12/14/2010
    32,964,580       32,967,000       14.67  
                         
U.S.Treasury Bills
                       
$ 30,000,000 Treasury bill due 07/01/2010
    29,997,105       30,000,000       13.35  
                         
Total Government-sponsored enterprise securities
  $ 184,510,437     $ 184,611,230       82.16 %
                         
Mutual Funds
                       
United States
                       
Western Asset Government Money Market
  $ 1,086,150     $ 1,086,150       0.48 %
Fund (1,086,150 Shares)
                       
AIM Agency and Government Portfolio Institutional
    9,906,636       9,906,636       4.41  
Class ( 9,906,636 Shares)
                       
Total Mutual Funds
  $ 10,992,786     $ 10,992,786       4.89 %
                         
* No individual futures contract position constituted greater than 1% of members' equity (net assets).
Accordingly, the number of contracts and expiration dates are not presented.
 
   
** Represents less than 0.00% of members' equity (net assets).
         
           
The accompanying notes are an integral part of these financial statements.
 
 
 
 
 
 
 
 
 
 
 
4

 
 
 
RICI ® Linked – PAM Total Index Series
A Series of RICI ® Linked – PAM Advisors Fund, LLC
 
Condensed Schedule of Investments
                 
December 31, 2009 (Audited)
                 
                   
         
Net Unrealized
   
 
 
         
Gain (Loss)
   
Percent of
 
         
on Open
   
Members'
 
         
Long Futures
   
Equity
 
         
Contracts
   
(Net Assets)
 
Futures contracts *
                 
                   
United States
                 
Energy
        $ 422,382       0.25 %
Grains
          777,940       0.46  
Meat
          1,490       **  
Metals
          219,250       0.13  
Softs
          451,518       0.27  
Total futures contracts - United States
          1,872,580       1.11  
                       
Foreign
                     
Energy
          (87,815 )     (0.05 )
Grains
          2,088       **  
Metals
          2,845,272       1.70  
Softs
          70,717       0.04  
Total futures contracts - Foreign
          2,830,262       1.69  
                       
Total futures contracts
        $ 4,702,842       2.80 %
                       
                 
Percent of
 
                 
Members'
 
                 
Equity
 
   
Cost
   
Fair Value
   
(Net Assets)
 
Mutual funds
                     
                       
United States
                     
Western Asset Institutional Money Market Fund 
 (16,068,182 shares)
  $ 16,068,182     $ 16,068,182       9.56 %
Federated Government Obligations Tax Managed Fund
(10,121,745 shares)
    10,121,745       10,121,745       6.02  
                         
Total mutual funds
  $ 26,189,927     $ 26,189,927       15.58 %
                         
                         
* No individual futures contract position constituted greater than 1% of members' equity (net assets).
 
Accordingly, the number of contracts and expiration dates are not presented.
         
                         
** Represents less than 0.00% of members' equity (net assets).
                 
                         
The accompanying notes are an integral part of these financial statements.
                 
                         
 
 
 
 
 
 
 
5

 
 
 
RICI ® Linked – PAM Total Index Series
A Series of RICI ® Linked – PAM Advisors Fund, LLC
 
Statements of Operations
                       
For the Three Months and Six Months Ended June 30, 2010 and 2009 (Unaudited)
             
                         
   
Three Months Ended
   
Six Months Ended
 
       
June 30,
           
June 30,
     
   
2010
   
2009
   
2010
   
2009
 
Trading gains and losses
                       
Realized gains (losses)
  $ (10,956,591 )   $ 22,361,235     $ (13,812,384 )   $ 13,860,417  
Change in unrealized gains (losses) on open futures contracts
    (7,357,435 )     (5,840,080 )     (7,935,698 )     (1,236,135 )
Change in unrealized gains (losses) on investments
    75,855       -       100,793       -  
Brokerage commissions
    (128,633 )     (74,509 )     (238,864 )     (146,725 )
Net trading gains (losses)
    (18,366,804 )     16,446,646       (21,886,153 )     12,477,557  
                                 
Investment income
                               
Interest income
    32,987       118,088       63,284       199,366  
Other income
    -       -       -       1,235  
      32,987       118,088       63,284       200,601  
                                 
Expenses
                               
Management fees
    357,798       176,415       648,306       312,294  
Operating expenses
    105,374       70,093       212,208       112,788  
Support services fee
    18,722       -       18,722       -  
Servicing fees
    29,441       21,434       57,992       39,635  
      511,335       267,942       937,228       464,717  
                                 
Net investment loss
    (478,348 )     (149,854 )     (873,944 )     (264,116 )
Net income (loss)
  $ (18,845,152 )   $ 16,296,792     $ (22,760,097 )   $ 12,213,441  
                                 
The accompanying notes are an integral part of these financial statements.
                 
 
 
 
 
 
 
 
 
6

 
 
 
 
RICI ® Linked – PAM Total Index Series
A Series of RICI ® Linked – PAM Advisors Fund, LLC
 
 
 
Statement of Changes in Members' Equity (Net Assets)
                 
For the Six Months Ended June 30, 2010 and 2009 (Unaudited)
             
                   
                   
   
Managing
 Member
   
Non-Managing
 Members
   
Total
 
Members' equity (net assets) December 31, 2009
  $ 34,479     $ 168,020,505     $ 168,054,984  
     Contributions
    -       88,946,462       88,946,462  
     Withdrawals
    -       (9,567,376 )     (9,567,376 )
     Net loss for the six months ended June 30, 2010
    (3,497 )     (22,756,600 )     (22,760,097 )
                         
Members' equity (net assets) June 30, 2010
  $ 30,982     $ 224,642,991     $ 224,673,973  
                         
Members' equity (net assets) December 31, 2008
  $ 17,430     $ 86,004,045     $ 86,021,475  
      Contributions
    10,000       22,924,043       22,934,043  
      Withdrawals
    -       (4,059,232 )     (4,059,232 )
     Net income for the six months ended June 30, 2009
    3,249       12,210,192       12,213,441  
                         
Members' equity (net assets) June 30, 2009
  $ 30,679     $ 117,079,048     $ 117,109,727  
                         
The accompanying notes are an integral part of these financial statements.
                 
 
 
 
 
 
7

 
 
RICI ® Linked – PAM Total Index Series
A Series of RICI ® Linked – PAM Advisors Fund, LLC
 

 
Note 1.  
Nature of Operations and Significant Accounting Policies
 
The RICI® Linked - PAM Total Index Series (the Fund) is a series of the RICI® Linked - PAM Advisors Fund, LLC (the Company) a limited liability company organized under the Delaware Limited Liability Company Act.  The Fund and the Company engage in the speculative trading of commodity futures, options on futures, forward contracts and other derivatives on exchanges and markets located in the United States and abroad.  These financial statements incorporate the financial condition, results of operations and changes in members' equity (net assets) of the Fund only, and not those of the other series of the Company or the Company as a whole.

Series of membership interests:  The Company is currently offering four series (each, a Series) of limited liability company interests (Interests): the RICI® Linked - PAM Total Index Series, the RICI® Linked - PAM Energy Sector Series, the RICI® Linked - PAM Agricultural Sector Series, and the RICI® Linked - PAM Metals Sector Series.  Each Series invests substantially all of its assets in derivative contracts representing the commodity positions contained in the Rogers International Commodity Index® (Index), or a sub-index thereof.  Each Series is designed to be a portfolio diversification option - not a complete investment program - for sophisticated investors seeking exposure to commodities.  Currently, three Series have commenced trading, the RICI® Linked Total Index Series which began trading May 8, 2007, the RICI® Linked – PAM Agricultural Sector Series which began trading February 1, 2008 and the RICI® Linked – PAM Energy Sector Series which began trading January 1, 2010 but then ceased traded July 31, 2010.

The Company has been granted a license to use the Index pursuant to a sub-licensing arrangement.  If the sub-license arrangement were to terminate and the Company lost use of the Index, the Company will have to terminate the offering of its Interests in the Fund.

The Fund operated under exemption pursuant to Regulation 4.7 under the Commodity Exchange Act (CEAct).  Effective August 1, 2009 the Fund no longer claims exemption and operates pursuant to Regulation 4.22 under the CEAct.

RICI Linked - PAM Total Index Series:  The Fund’s trading is comprised of four commodity product sectors encompassing 37 markets worldwide.

Use of estimates:  The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires the Fund to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Cash and cash equivalents:  Cash and cash equivalents include highly liquid instruments with original maturities of three months or less at the date of acquisition.

Net asset value:  "Net Asset Value" or "Net Assets" associated with the Fund is the sum of all cash plus investments, at fair value, plus the liquidating value of all open commodity positions maintained by the Fund, plus interest receivable and other assets, less all liabilities of the Fund determined in accordance with GAAP.
 
 
 
 
8

 
 
RICI ® Linked – PAM Total Index Series
A Series of RICI ® Linked – PAM Advisors Fund, LLC
 
Note 1.
Nature of Operations and Significant Accounting Policies (Continued)
 
Securities and derivative financial instruments:  Investments in securities and derivative financial instruments and related expenses are recorded on trade date and at fair value.  Gains and losses are realized when contracts are liquidated.  Unrealized gains or losses on open contracts (the difference between contract purchase price and market price) at the date of the statements of financial condition are included in equity in broker trading accounts as a net unrealized gain or loss, as there exists a right to offset.  Any change in net unrealized gain or loss from the preceding period is reported in the statements of operations.  Brokerage commissions include clearing and exchange fees and are separately reported in the statements of operations.

Translation of foreign currencies:  The Fund's functional currency is the U.S. dollar; however, it transacts business in foreign currencies.  Investments denominated in foreign currencies are translated into U.S. dollars at the rates in effect at the date of the statements of financial condition.  Income and expense items denominated in foreign currencies are translated into U.S. dollars at the rates in effect during the period.  Gains and losses resulting from the translation to U.S. dollars are reported as part of realized gains and losses in the statements of operations.

Subscriptions:  Non-managing member subscriptions are presented in the statement of changes in members’ equity (net assets), net of sales fees, if any.

Withdrawals payable:  Withdrawals approved by the Managing Member prior to month end with a fixed effective date and fixed amount are recorded as withdrawals payable as of month end.

Ongoing offering expenses:  Ongoing offering expenses are charged to expense as incurred.

Income taxes:  No provision for income taxes has been made in these financial statements because members are individually responsible for reporting income or loss based on their respective shares in the Fund’s income and expenses as reported for income tax purposes.

The Financial Accounting Standards Board (FASB) provides guidance for how uncertain tax positions should be recognized, measured, disclosed and presented in the financial statements.  The guidance requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained “when challenged” or “when examined” by the applicable tax authority.  Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense and liability in the current year.  For the period ended June 30, 2010 management has determined that there are no material uncertain income tax positions.

All of the Fund’s income tax returns remain subject to federal, state or local income tax examination.

Statement of cash flows:  The Fund has elected not to provide statements of cash flows as permitted by GAAP as all of the following conditions have been met:

a.  
During the year, substantially all of the Fund’s investments were highly liquid;

b.  
Substantially all of the Fund’s investments are carried at fair value;

c.  
The Fund had little or no debt during the year; and

d.  
The Fund’s financial statements include a statement of changes in members’ equity (net assets).
 
 
 
 
9

 
 
RICI ® Linked – PAM Total Index Series
A Series of RICI ® Linked – PAM Advisors Fund, LLC
 
Note 2.  
Fair Value of Financial Instruments
 
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund utilizes valuation techniques to maximize the use of observable inputs and minimize the use of unobservable inputs.  Assets and liabilities recorded at fair value are categorized within the fair value hierarchy based upon the level of judgment associated with the inputs used to measure their value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. The three levels of the fair value hierarchy are described below:

Level 1.  Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2.  Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly; and fair value is determined through the use of models or other valuation methodologies.  A significant adjustment to a Level 2 input could result in the Level 2 measurement becoming a Level 3 measurement.

Level 3.  Inputs are unobservable for the asset or liability and include situations where there is little if any, market activity for the asset or liability.  The inputs into the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.  In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.  The Fund’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.  The following section describes the valuation techniques used by the Fund to measure different financial instruments at fair value and includes the level within the fair value hierarchy in which the financial instrument is categorized.

The fair values of exchange traded futures contracts are based upon exchange settlement prices.  Shares of mutual funds, which include money market funds, are valued at the net asset value based on quoted market prices.  Government-sponsored enterprise securities are stated at cost plus accrued interest, which approximates fair value based on quoted market prices for identical assets in an active market.  These financial instruments are classified as Level 1 of the fair value hierarchy.

The following table summarizes the Fund’s assets measured at fair value on a recurring basis within the fair value hierarchy as of:
 
   
June 30, 2010
   
December 31, 2009
 
Description
 
Level 1
   
Level 1
 
             
Equity in broker trading account
           
      Futures contracts
  $ (3,232,856 )   $ 4,702,842  
Cash and cash equivalents
               
      Money market funds
    3,150,546       129,115,708  
Investments
               
     Government-sponsored enterprise securities
    184,611,230       -  
     Mutual funds
    10,992,786       26,189,927  
    $ 195,521,706     $ 160,008,477  

 
 
 
 
 
 
10

 
 
 
RICI ® Linked – PAM Total Index Series
A Series of RICI ® Linked – PAM Advisors Fund, LLC
 
Note 2.
Fair Value of Financial Instruments (Continued)
 
At June 30, 2010 and December 31, 2009 the Fund had no Level 2 or Level 3 assets or liabilities.

In addition, substantially all of the Fund's other assets and liabilities are considered financial instruments and are reflected at fair value, or at carrying amounts that approximate fair value because of the short maturity of the instruments.
 
Note 3.  
Derivative Instruments
 
Expanded disclosure is presented, in accordance with recent FASB guidance, to provide the users of the financial statements with an enhanced understanding of the use of derivative instruments, and how derivative and hedging activities affect financial position and operations.

The Fund’s derivative contracts are comprised of futures contracts. These derivative contracts are recorded on the statements of financial condition as assets measured at fair value and the related realized and unrealized gain (loss) associated with these derivatives is recorded in the statements of operations. The Fund has considered the counterparty credit risk related to all its futures contracts and does not deem any counterparty credit risk material at this time.  The Fund does not consider any derivative instruments to be hedging instruments, as this term is generally understood under FASB guidance.

As of June 30, 2010 and December 31, 2009 the Fund’s derivative contracts had the following impact on the statement of financial condition:
 
 
 
Contract Risk
Location
 
Asset Derivatives June 30, 2010
   
Liability Derivatives
 June 30, 2010
   
Net
 
                       
Futures:
Commodity price
Equity in broker trading account
             
Energy
      $ 490,575     $ (401,351 )   $ 89,224  
Grains
        651,058       (215,255 )     435,802  
Meats
        23,650       (112,240 )     (88,590 )
Metals
        322,035       (4,951,774 )     (4,629,739 )
Softs
        1,579,066       (618,620 )     960,447  
                             
        $ 3,066,384     $ (6,299,240 )   $ (3,232,856 )
 
 
 
                       
       
Asset Derivatives
   
Liability Derivatives
       
 
Contract risk
Location
 
December 31, 2009
   
December 31, 2009
   
Net
 
                       
Futures:
Commodity price
Equity in broker trading account
             
Energy
      $ 480,097     $ (145,530 )   $ 334,567  
Grains
        921,448       (141,420 )     780,028  
Meats
        24,830       (23,340 )     1,490  
Metals
        4,662,243       (1,597,721 )     3,064,522  
Softs
        864,713       (342,478 )     522,235  
                             
        $ 6,953,331     $ (2,250,489 )   $ 4,702,842  
 
 
 
 
11

 
 
 
RICI ® Linked – PAM Total Index Series
A Series of RICI ® Linked – PAM Advisors Fund, LLC
 
Note 3.  
Derivative Instruments (Continued)
 
For the three and six months ended June 30, 2010 and 2009 the Fund’s derivative contracts had the following impact on the statement of operations:
 
 
     
Six months ended June 30, 2010
       
 
Contract Risk
 
Realized gains (losses)
   
Change in unrealized gains (losses) on open futures contracts
   
Net trading gains (losses)
 
Futures:
Commodity price
                 
Energy
    $ (9,684,033 )   $ (245,343 )   $ (9,929,376 )
Grains
      (5,534,565 )     (360,083 )     (5,894,648 )
Meats
      207,755       (90,080 )     117,675  
Metals
      3,834,378       (7,694,261 )     (3,859,883 )
Softs
      (2,666,338 )     454,069       (2,212,269 )
                           
  **   $ (13,842,803 )   $ (7,935,698 )   $ (21,778,501 )
** Net of $30,419 from non derivative transactions
                       
 
 
     
Six months ended June 30, 2009
       
 
Contract Risk
 
Realized gains (losses)
   
Change in unrealized gains (losses) on open futures contracts
   
Net trading gains (losses)
 
Futures
Commodity price
                 
Energy
    $ 9,841,362     $ (1,004,917 )   $ 8,836,445  
Grains
      2,721,429       (4,495,946 )     (1,774,517 )
Meats
      (376,860 )     27,220       (349,640 )
Metals
      361,982       4,600,926       4,962,908  
Softs
      1,312,504       (363,418 )     949,086  
 
                         
      $ 13,860,417     $ (1,236,135 )   $ 12,624,282  
                           
 
     
Three months ended June 30, 2010
       
 
Contract Risk
 
Realized gains (losses)
   
Change in unrealized gains (losses) on open futures contracts
   
Net trading gains (losses)
 
Futures
Commodity price
                 
Energy
    $ (9,726,755 )   $ (1,729,510 )   $ (11,456,265 )
Grains
      (1,990,062 )     1,499,485       (490,577 )
Meats
      62,605       (253,730 )     (191,125 )
Metals
      2,757,705       (8,057,065 )     (5,299,360 )
Softs
      (2,090,503 )     1,183,386       (907,117 )
 
                         
  **   $ (10,987,010 )   $ (7,357,435 )   $ (18,344,444 )
** Net of $30,419 from non derivative transactions
                       
 
 
 
 
12

 

 
RICI ® Linked – PAM Total Index Series
A Series of RICI ® Linked – PAM Advisors Fund, LLC
 
 
Note 3.  
Derivative Instruments (Continued)
 
     
Three months ended June 30, 2009
       
 
Contract Risk
 
Realized gains (losses)
   
Change in unrealized gains (losses) on open futures contracts
   
Net trading gains (losses)
 
Futures
Commodity price
                 
Energy
    $ 14,395,058     $ (1,855,857 )   $ 12,539,201  
Grains
      3,374,393       (3,823,981 )     (449,588 )
Meats
      (152,300 )     12,150       (140,150 )
Metals
      2,980,691       444,626       3,425,317  
Softs
      1,763,393       (617,018 )     1,146,375  
 
                         
      $ 22,361,235     $ (5,840,080 )   $ 16,521,155  
                           
 
For the six months ended June 30, 2010 and 2009, the monthly average number of futures contracts bought and sold was approximately 3,902 and 6,932 respectively.
 
Note 4.  
Equity in Broker Trading Account
 
Cash and financial instruments held at the Fund's clearing broker collateralize amounts due to the clearing broker, if any, and may serve to satisfy regulatory or clearing broker margin requirements.  The Fund earns interest on its assets deposited with the broker.  At June 30, 2010 and December 31, 2009, cash held at the clearing broker satisfied margin requirements of  $16,854,912 and $11,694,321, respectively.
 
Note 5.  
 Subscriptions, Withdrawals, and Distributions
 
The minimum initial subscription for the Fund for new investors is $25,000.  For existing investors in the Fund, the minimum additional subscription amount is $10,000.  Subscriptions will be effective at the opening of business on the first day of trading of the next calendar month.  The Managing Member may, in its absolute discretion, accept or reject subscriptions, in whole or in part, and waive the minimum investment amounts.

Non-managing members may withdraw some or all of their interest in the Fund as of the end of any calendar month upon five business days' prior written notice.  Withdrawals from the Fund made prior to the end of the sixth full calendar month following a non-managing member's initial investment in the Fund are subject to a withdrawal charge, payable to the Fund, equal to 1 percent of the amount withdrawn, provided that such charge will not apply if the withdrawal is resulting from a request to exchange Interests in an existing fund to a new fund, or to another series of the Company.  The Managing Member may defer or suspend withdrawal rights under certain circumstances.

Distributions may be made at the discretion of the Managing Member.  Distributions need not be made pro rata to all non-managing members of the Fund based on the balance of their capital accounts.  However, given the monthly liquidity of the Fund, no distributions are anticipated.
 
Note 6.  
The Managing Member
 
Price Asset Management, Inc., an Illinois corporation, is the Managing Member, commodity pool operator and commodity trading advisor of the Fund.

The Managing Member will maintain a capital account balance in each Series sufficient for such Series to be treated as a partnership for federal income tax purposes (which may be $0) and may make withdrawals from its capital accounts without notice to the non-managing members.  The Managing Member is not subject to the Managing Member's management fee, but will otherwise bear its proportionate share of the Fund's expenses.
 
 
 
 
13

 
 
 
 
RICI ® Linked – PAM Total Index Series
A Series of RICI ® Linked – PAM Advisors Fund, LLC
 
 
Note 7.  
Fees and Expenses
 
The Fund pays the Managing Member a monthly management fee of 0.054167 percent of the month-end Net Asset Value of each non-managing member's capital account in the Fund (0.65 percent per annum).  The Managing Member may waive or reduce its management fee in respect of any non-managing member without entitling any other non-managing member to a similar waiver or reduction.  There were no waived fees for the three and six months ended June 30, 2010 and 2009.  The management fee for the three months ended June 30, 2010 and 2009 and six months ended June 30, 2010 and 2009 were $357,798, $176,415, $648,306 and $312,294, respectively, and is reflected in the statements of operations.

Non-managing members in the Fund who are introduced to the Fund by their respective selling agents may be charged a monthly service fee of 0.0833 percent (1 percent per annum) payable to the selling agent.  They may also be charged an upfront sales fee of up to 1% of the subscriptions amount that is deducted from the subscription proceeds and paid to the applicable selling agent, if any. For the three months ended June 30, 2010 and 2009 and six months ended June 30, 2010 and 2009 subscriptions are net of $3,250, $5,150, $16,750 and $6,150, respectively, in sales fees that were charged to applicable non-managing members.

Non-managing members introduced through qualified advisors, including the marketing representative, Uhlmann Price Securities, LLC, will not be charged a service fee.  Uhlmann Price Securities, LLC, an affiliate of the Managing Member and a related party, will be paid its introducing fee by the Managing Member without reimbursement from the Fund.  The Fund incurred $29,441, $21,434, $57,992 and $39,635 of servicing fees to the selling agents during the three months ended June 30, 2010 and 2009 and six months ended June 30, 2010 and 2009, respectively.

The Fund pays the Managing Member a monthly support services fee of 0.0083 percent of the month-end Net Asset Value of each non-managing member's capital account in the Fund (0.10 percent per annum).  The Managing Member anticipates that a substantial majority of the support services fee will be used to pay broker-dealers for distribution related services to the Fund such as hosting distribution platforms or providing custody solutions and thus will not be retained by the Managing Member  The Fund first charged the support services fee in June 2010, but was not actually paid until July 2010.  The support services fee for the three months and six months ended June 30, 2010 was $18,722 and is reflected in the statements of operations.

The Fund pays all of its own legal, accounting, auditing, reporting, administrative and initial offering expenses.

Any expenses of the Company as a whole, and not specific to any series of the Company, will be allocated ratably among the series, including the Total Index Series, in the ratio that the Net Asset Value of each series bears to the aggregate Net Asset Value of all series.  The Managing Member believes this allocation method to be reasonable.

The Price Futures Group, Inc. (PFG), a related party to the Fund through common management, acts as the introducing broker for the Fund, whereby certain accounts of the Fund are introduced to the Fund’s clearing broker.  A portion of the brokerage fee paid by the Fund for clearing transactions is paid to PFG, by the clearing broker.
 
Note 8.  
Trading Activities and Related Risks
 
The Fund is exposed to both market risk, the risk arising from changes in the market value of the financial instruments, and credit risk, the risk of failure by another party to perform according to the terms of a contract.

Market risk:  The Fund engages in the speculative trading of derivative financial instruments that involve varying degrees of off balance sheet market risk whereby changes in the market values of the underlying commodities may result in changes in the value of the derivative financial instruments in excess of the amounts reflected in the statements of financial condition.  Theoretically, the Fund is exposed to a market risk equal to the notional value of futures and forward contracts purchased.
 
 
 
14

 
 
 
RICI ® Linked – PAM Total Index Series
A Series of RICI ® Linked – PAM Advisors Fund, LLC
 
 
Note 8.  
Trading Activities and Related Risks (Continued)
 
Credit risk and concentration of credit risk:  Credit risk arises primarily from the potential inability of counterparties, such as clearing brokers, banks or other financial institutions, to perform in accordance with the terms of a contract.  The Fund's exposure to credit risk associated with counterparty nonperformance is limited to the current cost to replace all contracts in which the Fund has a gain.  Exchange traded financial instruments, such as financial futures, generally do not give rise to significant counterparty exposure due to daily cash settlement procedures for daily gains and losses and the margin requirements of the individual exchanges.  The Fund clears all of its trades through MF Global, Inc.  In the event this broker does not fulfill its obligations, the Fund may be exposed to risk.

The Fund maintains deposits with financial institutions in amounts that are in excess of federally insured limits; however, the Fund does not believe it is exposed to any significant credit risk.

The Managing Member has established procedures to actively monitor the creditworthiness of the counterparties with which it conducts business in order to minimize market and credit risks.  The non-managing members bear the risk of loss only to the extent of the value of their respective investments and, in certain, circumstances, distributions and withdrawals received.
 
Note 9.  
Financial Highlights
 
Financial highlights for non-managing members of the Fund for the three and six months ended June 30, 2010 and 2009 are as follows:

   
Three months ended June 30,
   
Six months ended June 30,
 
   
2010
 (Unaudited)
   
2009
(Unaudited)
   
2010
 (Unaudited)
   
2009
(Unaudited)
 
                         
Total Return
    (8.05 ) %     17.06 %     (10.47 ) %     11.44 %
                                 
Ratios to average members' equity (net assets)
                               
Total expenses (1) (3)
    0.90 %     1.05 %     0.92 %     0.99 %
Net investment income (loss) (2) (3)
    (0.85 ) %     (0.59 ) %     (0.86 ) %     (0.56 ) %
 
 
Each ratio is calculated for the non-managing members taken as a whole.  Total return is based on the change in value during the period of a theoretical investment made at the beginning of each calendar month during the year.  The computation of an individual non-managing member's ratios may vary from the ratios calculated above based on any fee waivers and the timing of capital transactions.

The total returns and ratios exclude the effects of any 1% sales fees charged by the selling agents.

(1) The ratio of operating expenses to average members' equity (net asset) values does not include brokerage commissions.
 
(2) Net investment income (loss) does not include net realized and unrealized gains and losses and the related brokerage commissions of the Fund.
 
(3) Annualized.
 
 
 

 
 
15

 

 
RICI ® Linked – PAM Total Index Series
A Series of RICI ® Linked – PAM Advisors Fund, LLC
 
Note 10.  
Indemnifications
 
In the normal course of business, the Fund enters into contracts and agreements that contain a variety of representations and warranties that provide indemnifications under certain circumstances.  The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred.  The Managing Member expects the risk of any future obligations under these indemnifications to be remote.
 
Note 11.  
Interim Financial Statements
 
The statements of financial condition, including the condensed schedule of investments, as of June 30, 2010, the statements of operations for the three and six months ended June 30, 2010 and 2009 and changes in members’ equity (net asset value) for the three and six months ended June 30, 2010 and 2009 and the accompanying notes to the financial statements are unaudited.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP may be omitted pursuant to such rules and regulations.  In the opinion of the Managing Member, such financial statements and accompanying disclosures reflect all adjustments, which were of a normal and recurring nature, necessary for a fair presentation of the financial position as of June 30, 2010, results of operations for the three and six months ended June 30, 2010 and 2009 and changes in members’ equity (Net Asset Value) for the three and six months ended June 30, 2010 and 2009.  The results of operations for the three and six months ended June 30, 2010 and 2009 are not necessarily indicative of the results to be expected for the full year or any other period.  These financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Fund’s Form 10-K as filed with the SEC.
 
Note 12.  
Subsequent Events
 
The Fund’s management evaluated subsequent events for potential recognition and/or disclosure through the date that these financial statements were issued.

Subsequent to June 30, 2010, subscriptions and withdrawals of interests were $23,241,654 and $2,575,092, respectively.
 
 
 
 
16

 
 
 
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY

RICI® Linked - PAM Total Index Series (the “Total Index Series”) holds approximately 90% of its assets as cash, cash equivalents with maturities of three months or less, U.S. government-sponsored enterprise securities or securities issued by federal agencies (or, to a limited extent, foreign government securities in connection with trading on non-U.S. exchanges), other CFTC-authorized investments, shares of mutual funds and certain other money market investments (e.g., bankers acceptances and Eurodollar or other time deposits) through one or more federally chartered U.S. banking institutions.  The aforementioned positions are withdrawn, as necessary, to pay withdrawals and expenses.  Price Asset Management, Inc. (the “Managing Member”) will commit the remaining assets of the Total Index Series to margin the Total Index Series’ futures, forward and swap positions such that the total market exposure of the Total Index Series is approximately equal to its net assets.  Other than potential market-imposed limitations on liquidity, due, for example, to limited open interest in certain futures markets or to daily price fluctuation limits, which are inherent in the Total Index Series’ futures trading, the Total Index Series’ assets are highly liquid and are expected to remain so.  During its operations through June 30, 2010, the Total Index Series experienced no meaningful periods of illiquidity in any of the markets traded by the Managing Member on behalf of the Total Index Series.

CAPITAL RESOURCES

The Total Index Series raises additional capital only through the sale of interests (“Interests”) and capital is increased through trading profits (if any) and through interest income.  The Total Index Series does not engage in borrowing.

The amount of capital raised for the Total Index Series should not have a significant impact on its operations, as the Total Index Series has no significant capital expenditure or working capital requirements other than for monies to pay trading losses, brokerage commissions and expenses.  Within broad ranges of capitalization, the Managing Member’s trading positions should increase or decrease in approximate proportion to the size of the Total Index Series.

Due to the nature of the Total Index Series’ business, approximately 90% of its assets are represented by cash, cash equivalents with maturities of three months or less, U.S. government-sponsored enterprise securities or securities issued by federal agencies (or, to a limited extent, foreign government securities in connection with trading on non-U.S. exchanges), other CFTC-authorized investments, shares of mutual funds and certain other money market investments (e.g., bankers acceptances and Eurodollar or other time deposits) through one or more federally chartered U.S. banking institutions, while the Total Index Series currently maintains its market exposure through open futures contract positions.

The Total Index Series trades futures contracts on U.S. and non-U.S. markets, substantially all of which are subject to margin requirements.  The minimum amount of margin required for each contract is set from time to time in response to various market factors by the respective exchanges.  Further, the Total Index Series’ counterparties or brokers may require margin in excess of minimum exchange requirements.  Risk arises from changes in the value of these instruments (market risk) and the potential inability of counterparties or brokers to perform under the terms of their contracts (credit risk).  Market risk is generally to be measured by the notional value, or face amount, of the futures positions acquired and the volatility of the markets traded.  The credit risk from counterparty non-performance associated with these instruments is the net unrealized gain, if any, on these positions plus the value of the margin or collateral held by the counterparty.  The counterparty for futures contracts traded in the U.S. is the clearinghouse associated with the relevant exchange.  Clearinghouse arrangements are generally perceived to reduce credit risk because, in general, clearinghouses are backed by the corporate members of the clearinghouses, which are required to share any financial burden resulting from the non-performance of any one of the members of the clearinghouse.

All of the contracts currently traded by the Managing Member on behalf of the Total Index Series are exchange-traded, although the Managing Member is authorized to, and may in the future, trade over-the-counter forward and swap contracts.  The risks associated with exchange-traded contracts are generally perceived to be less than those associated with over-the-counter transactions since, in over-the-counter transactions, the Total Index Series must rely solely on the credit of its respective trading counterparties, whereas exchange-traded contracts are generally, but
 
 
 
 
17

 
 
not universally, backed by the collective credit of the members of the clearinghouse.  In the future, the Total Index Series may enter into non-exchange traded contracts and be subject to the credit risk associated with counterparty non-performance.  The Managing Member attempts to control credit risk associated with off-exchange transactions, if any, by dealing exclusively with large, well capitalized banks and dealers.

Critical Accounting Estimates
 
The Total Index Series’ securities and derivative financial instruments are recorded at fair value.  The fair values of exchange-traded futures contracts are based upon exchange settlement prices.  Fair value of non-exchange traded futures contracts is based on third-party quoted dealer values on the Interbank market.  Shares of mutual funds, which include money market funds, are valued at the net asset value based on quoted market prices.  Government-sponsored enterprise securities are stated at cost plus accrued interest, which approximates fair value based on quoted market prices for identical assets in an active market.
 
The Total Index Series accounts for subscriptions, allocations and withdrawals on a per member (“Member”) capital account basis.  Income or loss is allocated pro rata to the capital accounts of all Members.
 
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires the Managing Member to make estimates and assumptions, such as accrual of expenses, that affect the amounts and disclosures reported in the financial statements.  Based on the nature of the business and operations of the Total Index Series, the Managing Member believes that the estimates utilized in preparing the Total Index Series’ financial statements are appropriate and reasonable; however, actual results could differ from these estimates.
 
The estimates used do not provide a range of possible results that would require the exercise of subjective judgment.  The Managing Member further believes that, based on the nature of the business and operations of the Total Index Series, no other reasonable assumptions relating to the application of the Total Index Series’ critical accounting estimates other than those currently used would likely result in materially different amounts from those reported.

RESULTS OF OPERATIONS

The rules the Managing Member follows in replicating the Rogers International Commodity Index® (the “Index”) on behalf of the Total Index Series do not predict price movements, nor do they rely on fundamental economic supply or demand analysis or on macroeconomic assessments of the relative strengths of different national economies or economic sectors.  Instead, the rules are designed to follow passively, on an essentially unleveraged basis, changes in an index of raw materials traded in the world markets and, unlike with operating companies, operational or micro-economic trends have no relevance to the Total Index Series’ results.  Generally, if prices of commodities rise, then the value of an investment in the Total Index Series should appreciate. Correspondingly, if commodity prices decline, then the value of an investment in the Total Index Series should go down.
 
The performance summary set forth below is an outline description of how the Total Index Series has performed in the past.  The Total Index Series portfolio is marked-to-market every trading day and its trading accounts are credited or debited with its daily gains or losses. The Total Index Series’ past performance is not necessarily indicative of how it will perform in the future.
 
Three Months ended June 30, 2010

During the second quarter of 2010, the Fund achieved a net realized and unrealized loss of $18,366,804 from its trading operations, which is net of brokerage commissions of $128,633.  The Fund incurred total expenses of $511,335, including $357,798 in Management Fees (paid to the Managing Member), $29,441 in Servicing Fees (paid to Selling Agents) and $105,374 in operating expenses.  The Fund also accrued $18,722 in Support Services Fees in June (accrued to the Managing Member; the Managing Member anticipates that a substantial majority of the Support Services Fees will be used to pay broker-dealers for distribution related services to the Fund such as hosting distribution platforms or providing custody solutions and thus will not be retained by the Managing Member).  The Fund earned $32,987 in interest income.  An analysis of trading gains and losses (net of all trading fees and expenses) by market sector is as follows:
 
 
 
 
18

 
 
 

 
 Sector   %  Gain (Loss)
 Agricultural    (0.70)%
 Energy (5.06)%
 Metals    (2.34)%
   
 Total Portfolio   (8.10)%
                                                                                                          

The Fund posted a net gain of 2.8% in April.  The agricultural, energy and metals sectors posted moderate gains of 1.10%, 1.51% and 0.15%, respectively.  Highest grossing commodities for the Fund’s performance in April were palladium, soybean, hard red winter wheat, soft red winter wheat and cocoa.

The Fund posted a net loss of (10.3)% in May. The agricultural, energy and metals sectors posted losses of (2.09)%, (1.72)% and (6.53)%, respectively.  Highest grossing commodities for the Fund’s performance in May were natural gas, orange juice, gold, rapeseed and greasy wool.
 
The Fund posted a net gain of 0.02% in June. The agricultural and energy sectors posted modest gains of 0.42% and 0.29%, respectively, while the metals sector posted a loss of (0.69)%.  Highest grossing commodities for the Fund’s performance in June were oats, coffee, canola, sugar and rapeseed.

Three Months ended March 31, 2010

During the first quarter of 2010, the Total Index Series achieved a net realized and unrealized  loss of $3,519,350  from its trading operations, which is net of brokerage commissions of $110,231.  The Total Index Series incurred total expenses of $ 425,893, including $290,508 in Management Fees (paid to the Managing Member), $28,550 in Servicing Fees (paid to selling agents) and $106,835 in operating expenses.  The Total Index Series earned $30,297 in interest income.  An analysis of trading gains and losses (net of all trading fees and expenses) by market sector is as follows:
 
 
 Sector %  Gain (Loss)
 Agricultural    (3.50)%
 Energy   0.83%
 Metals      0.84%
   
 Total Portfolio   (1.83)%
                                                                                         
 
The Total Index Series posted a net loss of (7.9)% in January. The agricultural, energy and metals sectors posted losses of (2.62)%, (3.79)% and (1.44)%, respectively.  Highest grossing commodities for the Total Index Series’ performance in January were sugar, orange juice, lumber, azuki beans and greasy wool.

The Total Index Series posted a net gain of 5.3% in February. The agricultural, energy and metals sectors all posted gains of 1.39%, 3.07% and 0.86%, respectively.  Highest grossing commodities for the Total Index Series’ performance in February were cotton, nickel, crude oil, soybean oil and RBOB gasoline.

The Total Index Series posted a net gain of 0.7% in March. The energy and metals sectors posted a net gain of 1.63% and 1.38%, respectively, while the agricultural sector posted a loss of (2.31)%.  Highest grossing commodities for the Total Index Series’ performance in March were lumber, rapeseed, rubber, coffee and live cattle.

Three Months ended June 30, 2009

During the second quarter of 2009, the Fund achieved a net realized and unrealized gain of $16,446,646 from its trading operations, which is net of brokerage commissions of $74,509.  The Fund incurred total expenses of $267,942, including $176,415 in Management Fees (paid to the Managing Member), $21,434 in Servicing Fees (paid to Selling Agents) and $70,093 in operating expenses.  The Fund earned $118,088 in interest income.  An analysis of trading gains and losses (net of all trading fees and expenses) by market sector is as follows:
 
 
 
19

 
 
 
 
 Sector %  Gain
 Agricultural      0.9%
 Energy 11.2%
 Metals        3.3%    
   
 Total Portfolio   15.4%
                                                                                          

The Fund posted a net gain of 1.7% in April.  The agricultural and metals sectors posted moderate gains of 1.15% and 1.03%, respectively, while the energy sector posted a loss of (0.51)%.  Highest grossing commodities for the Fund’s performance in April were tin, nickel, cotton, soybean meal and soybeans.

The Fund posted a net gain of 15.0% in May. The agricultural, metals and energy sectors posted gains of 3.18%, 1.88% and 9.96%, respectively. Highest grossing commodities for the Fund’s performance in May were crude oil, brent crude, RBOB gasoline, silver and heating oil.
 
The Fund posted a net loss of (1.3)% in June. The energy and metals sectors posted gains of 1.68% and 0.04%, respectively, while the agricultural sector posted a loss of (3.37)%.  Highest grossing commodities for the Fund’s performance in June were aluminum, sugar, nickel, barley and azuki beans.

Three Months ended March 31, 2009

During the first quarter of 2009, the Total Index Series achieved a net realized and unrealized loss of $3,969,089 from its trading operations, which is net of brokerage commissions of $72,216.  The Total Index Series incurred total expenses of $196,776, including $135,879 in Management Fees (paid to the Managing Member), $18,201 in Servicing Fees (paid to selling agents) and $42,696 in operating expenses.  The Total Index Series earned $82,514 in interest income and other investment income.  An analysis of trading gains and losses (net of all trading fees and expenses) by market sector is as follows:
 
 
 Sector %  Gain (Loss)
 Agricultural    (1.8)%
 Energy (4.0)%
 Metals     1.9%
   
 Total Portfolio   (3.9)%
                                                                                      
 
The Total Index Series posted a net loss of (5.1)% in January. The energy and agricultural sectors posted losses of (4.24)% and (0.94)%, respectively, while the metals sector posted a moderate gain of 0.01%.  Highest grossing commodities for the Total Index Series’ performance in January were RBOB gasoline, lead, silver, sugar and orange juice.

The Total Index Series posted a net loss of (3.8)% in February. The agricultural and energy sectors posted losses of (2.65)% and (1.61)%, respectively, while the metals sector posted a moderate gain of 0.42%. Highest grossing commodities for the Total Index Series’ performance in February were platinum, copper, sugar, rice, silver and gold.

The Total Index Series posted a net gain of 5.0% in March. The agricultural, energy, and metals sectors posted gains of 1.76%, 1.72% and 1.42%, respectively.  Highest grossing commodities for the Total Index Series’ performance in March were crude oil, copper, corn, brent oil and lead.

OFF-BALANCE SHEET RISK

The term “off-balance sheet risk” refers to an unrecorded potential liability that, even though it does not appear on the balance sheet, may result in a future obligation or loss. The Total Index Series trades in futures, and may trade in forward and swap, contracts and is therefore a party to financial instruments with elements of off-balance sheet market and credit risk. In entering into these contracts, there exists a market risk that such contracts may be significantly influenced by conditions, such as interest rate volatility, resulting in such contracts being less valuable. If the markets should move against all of the futures interests positions of the Total Index Series at the same time,
 
 
 
 
20

 
 
the Total Index Series could experience substantial losses.  Because the Total Index Series is designed to replicate the Index, the Managing Member adjusts the Total Index Series’ portfolio only as necessary to accommodate expirations in particular commodity futures contracts and to adjust overall position size for changes resulting from subscriptions and withdrawals to the Total Index Series.  The Managing Member does not exercise discretion over the positions the Total Index Series maintains.  Consequently, the Managing Member does not apply risk management techniques in its trading decisions.  The Total Index Series  initiates positions only on the “long” side of the market and does not employ “stop-loss” techniques.  The Total Index Series maintains approximately 90% of the Total Index Series’ assets in cash, cash equivalents with maturities of three months or less, U.S. government-sponsored enterprise securities or securities issued by federal agencies (or, to a limited extent, foreign government securities in connection with trading on non-U.S. exchanges), other CFTC-authorized investments,  shares of mutual funds and certain money market instruments (e.g., bankers acceptances and Eurodollar or other time deposits) through one or more federally chartered U.S. banking institutions, for which the Managing Member believes the market-risk to be minimal.

In addition to market risk, in entering into futures, and potentially forward and swap, contracts there is a credit risk that a counterparty will not be able to meet its obligations to the Total Index Series. The counterparty for futures contracts traded in the United States and on most foreign exchanges is the clearinghouse associated with such exchange. In general, clearinghouses are backed by the corporate members of the clearinghouse who are required to share any financial burden resulting from the non-performance by one of their members and, as such, should significantly reduce this credit risk. In cases where the clearinghouse is not backed by the clearing members, like some foreign exchanges, it is normally backed by a consortium of banks or other financial institutions.

OFF-BALANCE SHEET ARRANGEMENTS

The Total Index Series does not enter into off-balance sheet arrangements with other entities.

CONTRACTUAL OBLIGATIONS

The Total Index Series does not enter into any contractual obligations or commercial commitments to make future payments of a type that would be typical for an operating company or that would affect its liquidity or capital resources.  The Total Index Series’ sole business is trading long (contracts to buy) futures, and potentially forward and swap, contracts.  All such contracts are settled by offset, not delivery.  The Financial Statements of the Total Index Series present a Condensed Schedule of Investments setting forth net unrealized appreciation (depreciation) of the Total Index Series’ open futures and other contracts at June 30, 2010 and December 31, 2009.
 
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Not required.
 
ITEM 4T.
 CONTROLS AND PROCEDURES
 
The Managing Member with the participation of its principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of its disclosure controls and procedures with respect to the Total Index Series as of the end of the period covered by this quarterly report, and, based on their evaluation, have concluded that these disclosure controls and procedures are effective.  There were no changes in the Managing Member’s internal controls over financial reporting during the quarter ended June 30, 2010 that have materially affected, or are reasonably likely to materially affect, the Managing Member’s internal control over financial reporting with respect to the Total Index Series.
 
 
 
 
21

 
 
 
PART II - OTHER INFORMATION

 
ITEM 1.
LEGAL PROCEEDINGS

None.
 
ITEM 1A.
RISK FACTORS
 
Not required.
 
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
During the second fiscal quarter of 2010, the Total Index Series issued Interests, to both new and existing Members, in the following dollar amounts: April: $22,461,037, May: $16,581,100 and June: $19,985,492.

Each of the foregoing Interests was privately offered and sold only to “accredited investors,” as defined in Rule 501(a) under the Securities Act of 1933, as amended (the “1933 Act”), in reliance on the exemption from registration provided by Rule 506 under the 1933 Act, and are persons with whom the Managing Member, Uhlmann Price Securities, LLC, the Company’s marketing representative, or a selling agent have a pre-existing substantive relationship and with respect to whom it has been determined that the Interests are a suitable investment.

Pursuant to the Company’s Limited Liability Company Agreement, Members may withdraw capital from their capital accounts in the Total Index Series as of the end of each calendar month.  The withdrawal of capital by Members has no impact on the value of the capital accounts of other Members.
 
The following table summarizes the withdrawals by Members during the three months ended June 30, 2010:

 
Date of Closing
Total Amount of Withdrawals
April 30, 2010
$1,815,897
May 31, 2010
$1,435,729
June 30, 2010
$4,440,785
 
 
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
 
Not applicable.
 
ITEM 4.
(REMOVED AND RESERVED)
 
ITEM 5.
OTHER INFORMATION
 
None.
 
ITEM 6.
EXHIBITS
 
The following exhibits are included herewith:

31.1 
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
31.2 
Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
32.1 
Section 1350 Certification of Principal Executive Officer
32.2 
Section 1350 Certification of Principal Financial Officer
 
 
 
 
22

 

 
SIGNATURES

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

 
Date: August 16, 2010       RICI® Linked – PAM Advisors Fund, LLC
(Registrant)
 
       
  By: Price Asset Management, Inc.  
  Managing Member  
       
 
By: /s/ Walter Thomas Price III  
  Walter Thomas Price III  
  Principal Executive Officer  
       

 

 
23

 


 

EXHIBIT INDEX

     
Exhibit Number
Description of Document
Page Number
     
     
31.1
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
E-2
 
   
31.2
Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
E-3
     
32.1
Section 1350 Certification of Principal Executive Officer
E-4
     
32.2
Section 1350 Certification of Principal Financial Officer
E-5
 
 
 
 
 
 
 
 
 
 
E-1