8-K: USCF Reports Financials Amidst Ongoing Legal Battles

United States Commodity Funds LLC, general partner for UNL, reports a decrease in cash and member's equity for 2025, alongside updates on significant legal proceedings.

Summary

• United States Commodity Funds LLC (USCF), the general partner for the United States 12 Month Natural Gas Fund, LP (UNL) and other commodity funds, filed its audited Statements of Financial Condition as of December 31, 2025 and 2024.
• Cash and cash equivalents decreased to $1,540,906 in 2025 from $2,267,648 in 2024.
• Total assets declined to $6,712,164 in 2025 from $7,128,612 in 2024.
• Member's equity decreased to $5,075,965 in 2025 from $5,278,930 in 2024.
• The company's investments at fair value increased to $2,432,322 in 2025 from $2,332,471 in 2024.
• Management fees receivable from related parties slightly decreased to $1,185,761 in 2025 from $1,227,784 in 2024.
• Other receivables from related parties significantly increased to $543,006 in 2025 from $203,660 in 2024.
• Income taxes payable decreased to $0 in 2025 from $630,771 in 2024, while accounts payable and accrued liabilities increased to $1,230,583 from $708,134.
• USCF continues to be involved in several legal proceedings, including the In re: United States Oil Fund, LP Securities Litigation (Lucas Class Action) and derivative actions, with no accrual for potential losses as of December 31, 2025.
• The Optimum Strategies Action against USO and USCF was dismissed with prejudice on March 15, 2023.
• USCF and USO resolved SEC and CFTC investigations in November 2021, paying $2,500,000 in civil monetary penalties and agreeing to cease-and-desist orders.
• Subsequent to year-end, USCF approved and paid dividends totaling $850,000 to USCF Investments in February and March 2026.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this filing with a moderately negative sentiment due to the decline in key financial metrics like cash and member's equity, coupled with the persistence of significant, unquantified legal risks, despite some positive resolutions.

Positives

• The Optimum Strategies Action, a significant legal proceeding against USO and USCF, was dismissed with prejudice by the court on March 15, 2023, with no notice of appeal filed.
• The Wang Class Action was voluntarily dismissed on August 4, 2020, resolving another legal challenge.
• Income taxes payable decreased to $0 as of December 31, 2025, from $630,771 in 2024.
• Investments at fair value increased to $2,432,322 in 2025 from $2,332,471 in 2024.

Negatives

• Cash and cash equivalents decreased by approximately 32% from $2,267,648 in 2024 to $1,540,906 in 2025.
• Total assets decreased by approximately 5.8% from $7,128,612 in 2024 to $6,712,164 in 2025.
• Member's equity decreased by approximately 3.8% from $5,278,930 in 2024 to $5,075,965 in 2025.
• Accounts payable and accrued liabilities increased significantly by approximately 73.8% from $708,134 in 2024 to $1,230,583 in 2025.
• Other receivables from related parties increased substantially from $203,660 in 2024 to $543,006 in 2025, indicating more cash transferred to or payments made on behalf of the Parent or related parties.
• USCF and USO were subject to SEC and CFTC cease-and-desist orders and paid civil monetary penalties totaling $2,500,000 in November 2021 for violations related to the 1933 Act and CEA.
• Several significant legal proceedings, including the Lucas Class Action and derivative actions, remain ongoing, with the company unable to predict their timing, outcome, or reasonably estimate potential losses.

Risks

• The company is party to various ongoing legal proceedings and regulatory inquiries, including the In re: United States Oil Fund, LP Securities Litigation and derivative actions, for which it is currently unable to predict the timing or outcome, or reasonably estimate the losses or range of possible losses.
• An adverse outcome regarding these legal matters could materially adversely affect the Company's financial condition, results of operations, and cash flows.
• The company maintains cash deposits in excess of FDIC coverage of $250,000, posing a concentration of credit risk, although no losses are expected.
• Realization of deferred tax assets is dependent upon future taxable income, the amount and timing of which is uncertain, though management believes they are fully realizable.
• The company's tax years 2020 through 2025 remain open for examination by federal and state authorities, which could lead to future tax adjustments.

Future Outlook

The company is currently unable to predict the timing or outcome of, or reasonably estimate the possible losses or range of, possible losses resulting from its ongoing legal matters. It is reasonably possible that this estimate will change in the near term. An adverse outcome regarding these matters could materially adversely affect the Company's financial condition, results of operations, and cash flows.

Management Comments

• Management closely monitors receivables and records an allowance for credit losses for any balances that are determined to be uncollectible.
• Management believes it is more likely than not that the net deferred tax assets will be fully realizable.

Industry Context

StockSavvy.ai notes that the commodity fund industry, particularly those focused on volatile assets like natural gas and oil, often faces scrutiny regarding disclosures and risk management, especially during periods of extreme market conditions. The ongoing legal challenges faced by USCF, particularly those stemming from the 2020 oil market volatility, highlight the inherent risks and regulatory complexities in managing such funds. The reduction in management fees for UNL, effective May 2024, could reflect competitive pressures or a strategic adjustment to retain assets in a dynamic market.

Comparison to Industry Standards

• NA

Legal Proceedings

• Optimum Strategies Action: Dismissed with prejudice on March 15, 2023, with no appeal filed. This action asserted claims under the Securities Exchange Act of 1934, Rule 10b-5, and the Connecticut Uniform Securities Act related to statements made during extraordinary market conditions in 2020.
• Settlement of SEC and CFTC Investigations: Resolved on November 8, 2021. USCF and USO consented to cease-and-desist orders and paid civil monetary penalties totaling $2,500,000 ($1,250,000 to each agency) for violations of the Securities Act of 1933 and the Commodity Exchange Act related to disclosures during April-June 2020.
• In re: United States Oil Fund, LP Securities Litigation (Lucas Class Action): Ongoing putative class action. The court granted defendants' motion to dismiss without prejudice on September 29, 2025, but granted plaintiff leave to file an amended complaint. Plaintiff filed a motion to amend on November 26, 2025, which defendants oppose.
• Mehan Action: Ongoing derivative action filed on August 10, 2020, alleging breach of fiduciary duties and failure to act in good faith related to disclosures during 2020 market conditions. All proceedings are stayed pending disposition of motions to dismiss in the Lucas Class Action.
• In re United States Oil Fund, LP Derivative Litigation (Cantrell and AML Actions): Ongoing consolidated derivative actions filed on August 27, 2020, alleging violations of the 1934 Act and common law claims (breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets) related to 2020 market conditions. All proceedings are stayed pending final disposition of motions to dismiss in the Lucas Class Action.

Related Party Transactions

• Management fees receivable of $1,185,761 (2025) and $1,227,784 (2024) were owed from the Funds (e.g., UNL), which are considered related parties.
• Other receivables of $543,006 (2025) and $203,660 (2024) were owed from USCF's Parent (The Marygold Companies, Inc.) and other related party entities.
• USCF files a federal consolidated income tax return with entities not included on these financial statements.
• The company approved and paid dividends totaling $850,000 to USCF Investments (a wholly-owned subsidiary of the Parent) in February and March 2026.

Stakeholder Impact

• Shareholders of The Marygold Companies, Inc. (the Parent) are impacted by the financial health of USCF, its wholly-owned subsidiary, and the dividends paid.
• Investors in the various commodity funds managed by USCF (including UNL) are indirectly impacted by the stability and operational integrity of their General Partner/Sponsor, particularly concerning ongoing legal and regulatory risks.
• Creditors of USCF may face increased risk due to declining cash and equity, and rising accounts payable, alongside unquantified legal liabilities.
• Employees of USCF are impacted by the company's financial performance and stability.

Next Steps

• Defendants in the In re: United States Oil Fund, LP Securities Litigation will continue to oppose the plaintiff's motion for leave to file a proposed second consolidated amended complaint.
• All proceedings in the Mehan Action and In re United States Oil Fund, LP Derivative Litigation are stayed pending final disposition of the motion(s) to dismiss in In re: United States Oil Fund, LP Securities Litigation.

Key Dates

Recommendation

The filing presents a mixed financial picture for USCF, the general partner, with declines in cash and equity but also some positive resolutions in legal matters. However, significant legal proceedings remain ongoing with unquantified potential losses, creating uncertainty. The financial performance of USCF directly impacts its ability to manage the funds effectively. Given the existing legal overhang and the slight deterioration in financial health, a 'hold' recommendation is appropriate for investors in UNL or the parent company, MGLD, as they await clearer outcomes on the legal front and a more robust financial trend for the general partner.

Keywords

Commodity Funds, Natural Gas Fund, SEC Filing, Financial Condition, Legal Proceedings, USCF, UNL, Audited Financials, Risk Management, Investment Management, Regulatory Compliance