8-K: USCF Reports 2025 Financials Amidst Ongoing Legal Battles

United States Commodity Funds LLC, general partner of UGA, reports a decline in assets and equity for 2025 while facing unresolved class action lawsuits.

Summary

• USCF's total assets decreased from $7,128,612 in 2024 to $6,712,164 in 2025.
• Member's equity declined from $5,278,930 in 2024 to $5,075,965 in 2025.
• Cash and cash equivalents decreased by approximately 32% from $2,267,648 in 2024 to $1,540,906 in 2025.
• Investments at fair value increased from $2,332,471 in 2024 to $2,432,322 in 2025.
• Management fees receivable from related parties decreased from $1,227,784 in 2024 to $1,185,761 in 2025.
• Other receivables from related parties significantly increased from $203,660 in 2024 to $543,006 in 2025.
• USCF is involved in several ongoing legal proceedings, including the "In re: United States Oil Fund, LP Securities Litigation" (Lucas Class Action), "Mehan Action," and "In re United States Oil Fund, LP Derivative Litigation," with uncertain outcomes.
• The company paid dividends totaling $850,000 to USCF Investments in February and March 2026.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a moderately negative filing due to the decline in key financial metrics for USCF and the significant, unresolved legal contingencies that pose a material risk to the company's financial health.

Positives

• The "Optimum Strategies Action" lawsuit was dismissed with prejudice on March 15, 2023, and no appeal was filed.
• The "Wang Class Action" was voluntarily dismissed on August 4, 2020.
• Income taxes payable decreased from $630,771 in 2024 to $0 in 2025.
• Investments at fair value increased by approximately 4.3% from $2,332,471 in 2024 to $2,432,322 in 2025.

Negatives

• Total assets for USCF decreased by approximately 5.8% from $7,128,612 in 2024 to $6,712,164 in 2025.
• Member's equity for USCF decreased by approximately 3.8% from $5,278,930 in 2024 to $5,075,965 in 2025.
• Cash and cash equivalents for USCF decreased significantly by approximately 32% from $2,267,648 in 2024 to $1,540,906 in 2025.
• Accounts payable and accrued liabilities for USCF increased by approximately 73.8% from $708,134 in 2024 to $1,230,583 in 2025.
• USCF is unable to predict the timing or outcome of, or reasonably estimate the possible losses from, several ongoing legal matters, which could materially adversely affect its financial condition.
• USCF and USO previously settled SEC and CFTC investigations on November 8, 2021, resulting in $2.5 million in civil monetary penalties and cease-and-desist orders for violations related to the 1933 Act and CEA.

Risks

• USCF is party to various legal proceedings and regulatory inquiries, and an adverse outcome could materially adversely affect the Company's financial condition, results of operations, and cash flows.
• The Company is currently unable to predict the timing or outcome of, or reasonably estimate the losses or range of possible losses resulting from these legal matters.
• It is reasonably possible that the estimate of potential losses from legal matters will change in the near term.
• The Company maintains cash deposits in excess of FDIC coverage, though it does not expect losses.
• Realization of deferred tax assets is dependent upon future taxable income, the amount and timing of which is uncertain.

Future Outlook

USCF management intends to vigorously contest the ongoing legal claims in the 'In re: United States Oil Fund, LP Securities Litigation' and derivative actions. The company is unable to predict the timing or outcome of these matters or reasonably estimate potential losses, which could materially affect its financial condition.

Management Comments

• USCF, USO, and the individual defendants in In re: United States Oil Fund, LP Securities Litigation intend to continue to vigorously contest such claims and have moved for their dismissal.
• USCF, USO, and the other defendants intend to vigorously contest the claims in In re United States Oil Fund, LP Derivative Litigation.
• No accrual has been recorded with respect to the above legal matters as of December 31, 2025 and December 31, 2024. We are currently unable to predict the timing or outcome of, or reasonably estimate the possible losses or range of, possible losses resulting from these 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.

Industry Context

StockSavvy.ai notes that USCF operates as a key player in the commodity-backed ETF market, managing funds like USO and UGA. The ongoing legal challenges, particularly those stemming from the volatile oil market conditions of 2020, highlight the inherent risks and regulatory scrutiny faced by sponsors of commodity pools. The decline in USCF's assets and equity could reflect broader market dynamics or specific operational challenges within its fund management business, potentially impacting its competitive standing against other commodity ETF providers.

Comparison to Industry Standards

• The decline in USCF's cash and overall assets, alongside an increase in accounts payable, suggests a tightening liquidity position compared to industry peers who might be experiencing growth in assets under management (AUM) in a recovering commodity market. For example, larger asset managers like BlackRock or Vanguard typically demonstrate more stable or growing asset bases in their ETF divisions.
• The continued inability to estimate potential losses from significant legal proceedings, such as the 'In re: United States Oil Fund, LP Securities Litigation,' places USCF at a disadvantage compared to firms with clearer legal horizons, potentially impacting investor confidence and capital allocation decisions. This contrasts with firms that have successfully resolved major litigation without ongoing material uncertainty.
• The payment of substantial dividends ($850,000 in early 2026) by USCF to its parent, despite declining cash and equity, could be viewed as aggressive capital distribution compared to industry standards where capital might be retained for strengthening the balance sheet or mitigating legal risks, especially given the explicit warning of potential material adverse effects from litigation.

Legal Proceedings

• "Optimum Strategies Action": Filed April 6, 2022, in U.S. District Court for the District of Connecticut, asserting claims under the Securities Exchange Act of 1934, Rule 10b-5, and CUSA. Dismissed with prejudice on March 15, 2023, for federal claims; state claim dismissed without prejudice. No appeal filed.
• "Settlement of SEC and CFTC Investigations": Resolved November 8, 2021. USCF and USO received cease-and-desist orders and paid $2,500,000 in civil monetary penalties ($1,250,000 to SEC, $1,250,000 to CFTC) for violations of the 1933 Act and CEA related to disclosures during 2020 oil market volatility.
• "In re: United States Oil Fund, LP Securities Litigation" (Lucas Class Action): Consolidated putative class action filed June 19, 2020, in U.S. District Court for the Southern District of New York. Alleges violations of the 1933 Act, Exchange Act, and Rule 10b-5 concerning disclosures during 2020 oil market conditions. Court granted defendants' motion to dismiss without prejudice on September 29, 2025; plaintiff filed a motion to amend on November 26, 2025, which is pending.
• "Wang Class Action": Putative class action filed July 10, 2020, in U.S. District Court for the Northern District of California, asserting federal securities claims under the 1933 Act. Voluntarily dismissed on August 4, 2020.
• "Mehan Action": Derivative action filed August 10, 2020, in Superior Court of California, County of Alameda. Alleges breach of fiduciary duties and failure to act in good faith. 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): Consolidated derivative actions filed August 27, 2020, in U.S. District Court for the Southern District of New York. Allege violations of Sections 10(b), 20(a), and 21D of the 1934 Act, Rule 10b-5, and common law claims. All proceedings are stayed pending final disposition of motions to dismiss in the Lucas Class Action.

Related Party Transactions

• Management fees receivable from the Funds (USO, UNG, UGA, USL, UNL, BNO, USCI, CPER) totaling $1,185,761 as of December 31, 2025, and $1,227,784 as of December 31, 2024.
• Other receivables from USCF's Parent (The Marygold Companies, Inc.) and other related party entities totaling $543,006 as of December 31, 2025, and $203,660 as of December 31, 2024.
• USCF files a federal consolidated income tax return with entities not included in these financial statements, meaning the tax benefit of utilizing tax losses generated by the consolidated group is not reflected on USCF's statements of financial condition.
• USCF approved and paid a $450,000 dividend to USCF Investments (a wholly-owned subsidiary of the Parent) on February 9, 2026.
• USCF approved and paid a $400,000 dividend to USCF Investments on March 10, 2026.

Stakeholder Impact

• Shareholders (of UGA/Funds): The financial health of USCF, as the General Partner/Sponsor, directly impacts the stability and operational continuity of the funds. Ongoing legal proceedings introduce uncertainty and potential future costs that could indirectly affect fund performance or management fees.
• Shareholders (of The Marygold Companies, Inc.): USCF is a wholly-owned subsidiary, so its financial performance and legal liabilities directly affect the parent company's consolidated results. The dividends paid by USCF to USCF Investments benefit the parent.
• Employees: The company's financial condition and legal challenges could impact job security, compensation, or future growth opportunities.
• Customers (Fund Investors): The legal issues, particularly those alleging inadequate disclosures, could erode trust and confidence in USCF's management of the commodity funds.
• Regulatory Authorities: The past SEC and CFTC settlements indicate a history of regulatory scrutiny, and ongoing litigation will keep USCF under watch.

Next Steps

• Defendants will continue to vigorously contest claims in the "In re: United States Oil Fund, LP Securities Litigation" and derivative actions.
• The court will rule on the plaintiff's motion for leave to file a proposed second consolidated amended complaint in the Lucas Class Action.
• Proceedings in the "Mehan Action" and "In re United States Oil Fund, LP Derivative Litigation" remain stayed pending final disposition of motions to dismiss in the Lucas Class Action.

Key Dates

Recommendation

The filing presents a mixed picture for USCF, the general partner of UGA. While some past legal actions have been resolved, the decline in USCF's cash, total assets, and member's equity for 2025 is concerning. More critically, the company faces significant ongoing class action and derivative lawsuits with uncertain outcomes, explicitly stating that an adverse outcome could materially affect its financial condition. The inability to estimate potential losses from these matters adds a layer of significant risk. However, the company continues to operate its funds and has paid dividends to its parent. Given the unresolved legal risks and declining financial metrics, a 'hold' recommendation is appropriate, advising investors to monitor the progress of the litigation and USCF's financial stability closely before making further investment decisions.

Keywords

USCF, United States Gasoline Fund, UGA, 8-K, Financial Statements, Commodity Funds, SEC Filing, Legal Proceedings, Class Action, Derivative Litigation, Financial Condition, Assets, Equity, Cash Flow, Management Fees, Related Party Transactions, NYSE Arca