ETF Managers Group Commodity Trust: Audited Financial Statements Of Etf Managers Capital Llc As Of And For The Years Ended December 31, 2020 And 2019 And The Notes Related Thereto Exhibit 99.1 ETF MAN

The following excerpt is from the company's SEC filing.
DECEMBER
31, 2020 and 2019
ETF
MANAGERS CAPITAL, LLC
Table
of Contents
December
31, 2020
Independent
Auditor’s Report
Statements
of Financial Condition
Statements
of Operations and Comprehensive Income
Statements
of Changes in Member’s Capital
Statements
of Cash Flows
Notes
to the Financial Statements
Independent
Auditors’ Report
To the Management
and Member of

ETFMG Financial LLC
Opinion
on the Financial Statements
We have audited
the accompanying statement of financial condition of ETF Managers Capital, L LC (the “Company”), as of December 31, 2020 and
2019, the related statements of income and comprehensive income, changes in member’s capital and cash flows for the years then
ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements
present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of
its operations and its cash flows for the years ended December 31, 2020 and 2019, in conformity with accounting principles generally
accepted in the United States of America.
Legal
Matters
As described
in Note 1, the Parent of the Company is a party to two legal matters, the outcomes of which may have an adverse effect on the Company’s
ability to continue as a going concern. Our opinion is not modified with respect to this matter.
Basis
for Opinion
These financial
statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements
based on our audit. We are a public accounting firm and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission.
We conducted
our audit in accordance with the auditing standards generally accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures including examining,
on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audit provides a reasonable basis for our opinion.
We have served
as the Company’s auditor since 2015.
/s/ Connolly
& Company, P.C.
Warren, New
Jersey
April 27,
2021
Statements
of Financial Condition
December
31,
ASSETS
Current
Assets
28,923
Investment
in Sit Rising Rate ETF
Investment
in Breakwave Dry Bulk Shipping ETF
Due
from Exchange Traded Managers Group  LLC
645,748
696,942
Due
from Breakwave Advisors LLC
18,169
Due
from SIT Rising Rate ETF
94,204
Due
from Breakwave Dry Bulk Shipping ETF
125,454
65,308
Total
Current Assets
800,433
880,477
LIABILITIES
AND MEMBER’S CAPITAL
Current
Liabilities
Service
Fee Payable to Exchange Traded  Managers Group LLC
550,000
430,000
Accounts
Payable on behalf of Sit Rising Rate ETF and Breakwave Dry Bulk Shipping ETF
82,767
Due
to ETFMG Financial LLC
Due
to Breakwave Advisors LLC
20,380
Due
to ETF Managers Group LLC
40,808
Accrued
Expenses
136,906
66,603
Total
Current Liabilities
753,877
582,194
Member’s
Capital
46,556
298,283
Total
Liabilities and Members’ Capital
The
accompanying notes are an integral part of these financial statements.
Statements
of Operations
For
the Year Ended

December 31,
REVENUES
Management
fees
536,556
576,593
EXPENSES
Parent
Company Service Fee
120,000
Expenses
paid on behalf on Sit Rising Rate ETF and Breakwave Dry Bulk Shipping ETF
291,545
70,977
Sit
Rising Rate ETF Operating Loss
362,696
298,003
Professional
Fees
10,000
Other
Expenses
Total
expenses
787,851
493,774
NET
INCOME/ (LOSS)
(251,295
82,819
COMPREHENSIVE
INCOME /(LOSS):
Net
income/ (loss)
Other
Comprehensive Gain (Loss)
Unrealized
Loss on Investment in Breakwave Dry Bulk Shipping ETF
Unrealized
Loss on Investment in Sit Rising Rate ETF
Realized
Loss on Investment in Sit Rising Rate ETF
Other
comprehensive income/(loss)
(251,727
82,658
Statements
of Changes in Members’ Equity/(Deficit)
For
the Year Ended December 31, 2020 and 2019
Accumulated
Other
Income (Loss)
BALANCE
DECEMBER 31, 2018
215,889
215,625
Net
Income (Loss)
Other
Comprehensive Income:
Unrealized
Holding Loss Arising During the Period
MEMBER’S
CAPITAL, DECEMBER 31, 2019
298,708
Unrealized
Holding Loss Arising During the Period:
Realized
Holding Loss Arising During the Period:
MEMBER’S
CAPITAL, DECEMBER 31, 2020
47,413
Statements
of Cash Flows
CASH
FLOWS PROVIDE BY/ USED IN  OPERATING ACTIVITIES
Net
income/(loss)
Adjustments
to reconcile net income/(loss) to net cash provided by/used in operating activities:
Due
from Exchange Traded Managers Group LLC
51,194
(141,524
(33,680
(18,169
(60,146
(56,517
Service
Fee payable to Exchange Traded Managers Group LLC
(1,550
(78,258
Deposit
- Breakwave Advisors LLC
(5,680
70,303
18,825
Due
to ETF Managers Group, LLC
Net
cash provided by (used in) operating activities
23,809
(34,588
CASH
FLOWS FROM INVESTING ACTIVITIES
Net
cash provided by (used in) investment activities
NET
CHANGE IN CASH AND CASH EQUIVALENTS
25,038
(34,427
Effect
of unrealized gain (loss) on Investment in Sit Rising Rate ETF
Effect
of unrealized gain (loss) on Investment in Breakwave Dry Bulk Shipping ETF
Realized
gain (loss) on investment in Sit Rising Rate ETF
CASH
BEGINNING
38,905
CASH
ENDING DECEMBER 31
NOTES
TO FINANCIAL STATEMENTS
December
31, 2020 and 2019
(See
Independent Auditor’s Report)
Note 1 –

Organization and nature of business
ETF Managers
Capital, LLC (the “Company”), a Delaware limited liability company, was formed June 14, 2014 and is a wholly-owned subsidiary
of Exchange Traded Managers Group LLC (“ETFMG”). The Company is registered with the Commodity Futures Trading Commission
as a commodity pool operator (“CPO”) and is a member of the National Futures Association (“NFA”). The Company
serves as the Sponsor and managing Owner of ETF Managers Group Commodity Trust I (the “Trust”), a Delaware series trust,
of which “BDRY” or the “Fund” is currently the sole series of the Trust. BDRY commenced operations with the listing
and commencement of trading of BDRY shares on the NYSE Arca on March 22, 2018.
Breakwave
Advisors LLC (“Breakwave”) is registered as a “commodity trading advisor” (“CTA” and acts as such
for BDRY.
The operations
of the Company began on February 19, 2015.
RISE
Closure
On October
16, 2020, the Sponsor announced that it would close and liquidate the SIT RISING RATE ETF (“RISE”) because of current market
conditions and the Fund’s asset size. The last day the liquidated fund accepted creation orders was on October 30, 2020. Trading
in RISE was suspended after the close of the NYSE Arca on October 30, 2020. Proceeds of the liquidation were sent to shareholders on
November 18, 2020 (the “Distribution Date”). From October 30, 2020 through the distribution date, shares of RISE did not
trade on the NYSE Arca nor was there a secondary market for the shares. Any shareholders that remained in RISE on the Distribution Date
automatically had their shares redeemed for cash at the current net asset value on November 18, 2020.
The Parent,
and certain other affiliates of the Company, including ETF Managers Group, LLC (the “Adviser”) were defendants in an action
filed May 2, 2017 in the Superior Court of New Jersey captioned PureShares, LLC d/b/a PureFunds et al. v. ETF Managers Group, LLC et
al., Docket No. C-63-17 (the “NJ Litigation”). The PureShares action alleged claims based on disputes arising out of contractual
relationships with the Adviser. The action sought damages in unspecified amounts and injunctive relief based on breach of contract, wrongful
termination, and several other claims.
NOTES
TO FINANCIAL STATEMENTS (CONTINUED)
Note
1 –
Organization and nature of business (continued)
Legal
Matters (continued)
The Adviser
and Parent, were also defendants in a case filed on October 26, 2017 in the United States District Court for the Southern District of
New York by NASDAQ, Inc. (“Nasdaq”) captioned Nasdaq, Inc. v. Exchange Traded Managers Group, LLC et al., Case 1:17-cv-08252.
This action arose out of the same facts and circumstances, as the NJ litigation and asserted claims for breach of contract, conversion
and certain other claims. The matter was the subject of a bench trial in May 2019, and on December 20, 2019, the Court issued an Opinion
and Order awarding compensatory damages to Plaintiff in the amount of $78,403,172.36, plus prejudgment interest. The Court also denied
Plaintiff’s requests for punitive damages and equitable relief.
On May 1,
2020, Nasdaq, PureShares LLC (“PureShares”), and Parent announced a global settlement that resolves all claims in both the
PureShares action and the Nasdaq action. The settlement is subject to ongoing negotiations and approvals among independent third parties.
As part of the settlement, Nasdaq and Parent have agreed to certain cash payments from Parent to Nasdaq and PureShares, and have executed
an asset purchase agreement to transfer certain Parent intellectual property and related assets, to a Nasdaq affiliate. The transaction
is expected to close in the third quarter of 2021. If the events set forth in the settlement agreement do not occur, and a subsequent
settlement is not reached, the resulting conditions may adversely affect the Parent’s future operations.
Note 2 –

Summary of Significant Accounting Policies
Basis
of Accounting
The
accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States
of America.
Use
of Estimates
The
preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenues and expenses and
disclosure of contingent assets and liabilities during the reporting periods of the financial statements. Actual results could differ
from those estimates.
Cash
and Cash Equivalents
The
Company defines cash and cash equivalents to be highly liquid investments, with original maturities of three months or less.
Note
2 –
Summary of Significant Accounting Policies (continued)
Income
Taxes
ETF
Managers Capital, LLC is not a tax paying entity for federal income tax purposes, and thus no income tax expense has been recorded in
the financial statements. The Company is a single member limited liability company.
Note 3 –

Related Party Transactions
BDRY pays
the Company an annual Sponsor Fee, monthly in arrears, in an amount calculated as the greater of 0.15% of its average daily net assets,
or $125,000. BDRY also paid an annual fee to Breakwave, monthly in arrears, in an amount equal to 1.45% of BDRY’s average daily
net assets. Breakwave has agreed to waive its CTA fee to the extent necessary, and the Company has voluntarily agreed to correspondingly
assume the remaining expenses of BDRY such that Fund expenses do not exceed an annual rate of 3.50%, excluding brokerage commissions
and interest expense, of the value of BDRY’s average daily net assets (the “BDRY Expense Cap”). The assumption of expenses
by the Sponsor and waiver of BDRY’s CTA fee are contractual on the part of the Sponsor and Breakwave, respectively through February
28, 2022.
In addition
to the Sponsor fee, the Company receives additional fees from the Fund for providing necessary services for its operations. For the years
ended December 31, 2020 and December 31, 2019, the Company received the following fees:
Sponsor
Fees
187,536
200,214
Legal
Fees
70,000
Tax
return and Form K-1 preparation
49,692
Regulatory
Reporting Fees
45,822
49,931
Chief
Compliance Officer Fees
Principal
Officer Fees
Insurance
Fees
Website
and Marketing Fees
27,500
Wholesale
Support Fees
84,054
76,894
Total
Fee Income
(See
Independent Auditors’ Report)
Related Party Transactions (continued)
Breakwave
had agreed to deposit with the Company such amounts as are necessary to enable the Company to assume the expenses of the Fund pursuant
to the Expense Cap. At December 31, 2020 and 2019, the Company held $-0- and $-0- respectively, in an expense reimbursement account representing
the balance of such deposit account for the payment of assumed expenses of the Fund. In addition, the Company waived reimbursement of
assumed expenses by Breakwave in the amount of $73,301 and $69,192 for the years ended December 31, 2020 and 2019, respectively.
The waiver
of BDRY’s CTA fees, pursuant to the undertaking, amounted to $62,988 and $38,174 for the year ended December 31, 2020 and 2019,
respectively.
BDRY currently
accrues its daily expenses up to the Expense Cap. At the end of each month, the accrued amount is remitted to the Company as the Company
has assumed, and is responsible for the payment of, the routine operational, administrative and other ordinary expenses of the Fund in
excess of the Fund’s Expense Cap, which in the case of RISE through November 18, 2020, the date of liquidation, aggregated $328,467
and $333,758 for the year ended December 31, 2020 and 2019, respectively, and in the case of BDRY, aggregated $67,532 and $438,364 for
the year ended December 31, 2020 and 2019, respectively.
The routine
operational, administrative and other ordinary expenses of RISE, through November 18, 2020, the date of liquidation, aggregated $414,131
and $529,332 for the year ended December 31, 2020 and 2019, respectively, of which $205,693 and $234,684, respectively, were for services
provided by the Company and its affiliate.
The routine
operational, administrative and other ordinary expenses of BDRY aggregated $1,217,380 and $603,699 for the year ended December 31, 2020
and 2019, respectively, of which $329,029 and $293,908, respectively, were for services provided by the Company and its affiliate.
The Fund
pays ETFMG Financial LLC. (“Distributor”), an affiliate of the Company, an annual fee for statutory and wholesaling distribution
services and related administrative services equal to the greater of $15,000 or 0.02% of the Fund’s average daily net assets, payable
monthly. Pursuant to the Marketing Agent Agreement between the Company, the Fund and the Distributor, the Distributor assists the Company
and the Fund with certain functions and duties relating to distribution and marketing services to the Fund, including reviewing
and approving marketing materials and certain regulatory compliance matters. The Distributor also assists with the processing of creation
and redemption orders.
For the years
ended December 31, 2020 and 2019, the Company paid the Distributor, on behalf of the Fund and RISE, through November 18, 2020, the date
of liquidation, $28,628 and $32,623, respectively, in distribution and related administrative services.
BDRY pays
the Sponsor an annual fee for wholesale support services of $25,000 plus 0.12% of BDRY’s average daily net assets, payable monthly.
RISE paid
the Company $4,162 through November 18, 2020, the date of liquidation, and $17,629 in wholesale support fees for the years ended December
31, 2020 and 2019, respectively. BDRY paid $23,234 and $28,125 in wholesale support fees for the year ended December 31, 2020 and 2019,
respectively.
The Company
paid ETFMG a parent company service fee at the rate of $10,000 per month effective January 1, 2019 per month for providing it with the
office space and personnel necessary to fulfill its responsibilities as Sponsor of the Fund. For the years ended December 31, 2020 and
2019, the parent service fee aggregated $120,000 and $120,000, respectively.
The Company
owns 40 Shares of BDRY.
These Shares
were issued to the Company in exchange for its initial capital contribution to the Fund and represent units of beneficial interest in
and ownership of the Fund.
Expenses
incurred in connection with organizing the Fund and the offering of the Shares upon the commencement of its operations were paid by ETFMG,
the parent and sole owner of the Company.
Expenses
incurred in connection with the continuous offering of Shares of the Fund are the responsibility of the Fund.
Note 4 –

Subsequent Events
In preparing
these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date
the financial statements were issued. See Note 1 – Legal matters.

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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