10-K: Teucrium Commodity Trust 2024 10-K Filing: Cybersecurity Measures and Financial Overview

Teucrium Commodity Trust's 2024 10-K filing highlights its cybersecurity program, financial performance, and investment strategies across its various commodity funds.

Summary

• Teucrium Commodity Trust's 10-K filing for the fiscal year ended December 31, 2024, provides an overview of the Trust's operations, including its cybersecurity measures and the performance of its commodity funds.
• The Trust consists of several series, including the Teucrium Corn Fund (CORN), Teucrium Sugar Fund (CANE), Teucrium Soybean Fund (SOYB), Teucrium Wheat Fund (WEAT), and Teucrium Agricultural Fund (TAGS).
• The Hashdex Bitcoin Futures ETF (DEFI) was a series of the Trust until its merger with Tidal Commodities Trust I on January 3, 2024.
• The Sponsor, Teucrium Trading, LLC, manages the Trust and its series, overseeing investments and ensuring compliance with regulatory requirements.
• The filing details the investment strategies of each fund, focusing on tracking specific commodity futures contracts and managing risks associated with contango and backwardation.
• The document also includes financial statements, risk factors, and information about the Trusts service providers, such as the Custodian (U.S. Bank, N.A.) and Marketing Agent (PINE Distributors, LLC).
• The filing also includes a discussion of the market outlook for corn, soybeans, sugar, and wheat, including factors influencing prices and demand.

Sentiment

Score: 6

Explanation: The document is neutral in tone, providing factual information about the Trust's operations and financial performance. While it highlights both positive and negative aspects, it does not express a strong positive or negative sentiment.

Positives

• The Sponsor has an information security program and policy in place, as mandated by New Regulation S-K Item 106.
• The Sponsor engages Align to provide fully outsourced IT services, including 24x7x365 support, cybersecurity monitoring, and disaster recovery.
• The Sponsor evaluates whether any cybersecurity threats, including those resulting from previous incidents, have materially affected or are reasonably likely to materially affect the Trust and the Funds.

Negatives

• The performance of each Fund may not correlate with the applicable benchmark.
• Shareholders may experience losses on their investments in the Fund as a result of changes to investment objectives, benchmarks or investment strategies.
• The Funds may terminate at any time, regardless of whether the Funds have incurred losses, subject to the terms of the Trust Agreement.
• The Funds Shares may trade at a discount to NAV and possibly face trading halts and/or delisting.
• The Funds are treated as partnerships for U.S. federal income tax purposes which means that there may be a lack of certainty as to tax treatment for an investor's gains and losses.

Risks

• Cybersecurity breaches could disrupt operations and lead to financial losses.
• Geopolitical events, such as the Russia-Ukraine conflict, may cause volatility in commodity prices.
• Position limits imposed by the CFTC and exchanges may restrict the Funds ability to implement its investment strategies.
• Contango in the futures markets may negatively impact the Funds total return.
• The Funds are subject to the credit risk of counterparties and clearing brokers.

Future Outlook

The document includes forward-looking statements related to future events, market movements, and the operations of the Funds, which are subject to risks and uncertainties.

Management Comments

• Management provides oversight of cybersecurity risks, ensuring alignment with regulatory requirements and industry best practices.
• Management also plays a crucial role in overseeing the implementation and effectiveness of cybersecurity measures.

Industry Context

The announcement relates to the commodity ETF industry, where funds track specific commodity futures contracts and are subject to regulatory oversight by the CFTC and SEC.

Comparison to Industry Standards

• The document does not contain specific comparisons to industry standards.
• However, it mentions compliance with SEC and FINRA regulations, aligning with standard practices for registered investment products.
• The cybersecurity measures described are consistent with the NIST Cybersecurity Framework, a widely recognized industry standard.
• The document does not list specific comparible companies, projects, and results.

Legal Proceedings

• A settlement agreement (Agreement), by and among the Teucrium Trading, LLC, Salvatore Gilbertie, Carl Miller III, Cory Mullen-Rusin, Steve Kahler, and Dale and Barbara Riker, was entered into as of April 26, 2024 and became effective on May 10, 2024.
• The Agreement resolves all of the claims raised in the actions captioned Dale Riker v. Sal Gilbertie et al., C.A. 656794/2020 (N.Y. Supreme Court), Sal Gilbertie, et. al. v. Dale Riker, et al., C.A. 2020-1018-LWW (Del. Ch.) and Dale Riker, et al. v. Teucrium Trading, LLC, C.A. 2022-1030-LWW (Del. Ch.).

Related Party Transactions

• The Funds pay the Sponsor a management fee of 1.00% of assets under management per annum.
• The Funds reimburse the Sponsor for expenses related to the operation of the Funds.

Stakeholder Impact

• Shareholders are subject to the risks associated with commodity investments, including price volatility and regulatory changes.
• Authorized Purchasers are responsible for creating and redeeming shares and may be affected by changes in the Funds operations.
• Service providers, such as the Custodian and Marketing Agent, are subject to contractual obligations and may be impacted by changes in the Funds operations.

Next Steps

• The Sponsor will continue to manage the Funds in accordance with their investment objectives.
• The Sponsor will continue to monitor and manage its existing relationships with each FCM and will continue to seek additional relationships with FCMs as needed.
• The Sponsor will continue to monitor and manage its existing relationships with each FCM and will continue to seek additional relationships with FCMs as needed.

Key Dates