x
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Quarterly report pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 for the
quarterly period ended April 30,
2009.
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¨
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Transition report pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 for the
transition period from
to .
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Delaware
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61-6339929
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer ¨
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Accelerated filer ¨
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Non-accelerated filer ¨
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Smaller reporting company x
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(Do not check if a smaller reporting company)
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Page
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Part I. FINANCIAL INFORMATION | |
Item
1. Condensed Financial Statements.
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1
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Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations.
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15
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Item
3. Quantitative and Qualitative Disclosures About Market
Risk.
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19
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Item
4. Controls and Procedures.
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20
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Part
II. OTHER INFORMATION
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Item
1. Legal Proceedings.
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21
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Item
1A. Risk Factors.
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21
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Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds.
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21
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Item
3. Defaults Upon Senior Securities.
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21
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Item
4. Submission of Matters to a Vote of Security Holders.
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21
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Item
5. Other Information.
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21
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Item
6. Exhibits.
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21
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Part I.
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FINANCIAL
INFORMATION
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Item 1.
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Condensed Financial
Statements.
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Documents
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Page
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|||
Condensed
Statements of Financial Condition at April 30, 2009 (Unaudited) and July
31, 2008
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2
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|||
Condensed
Schedule of Investments (Unaudited) at April 30, 2009
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3
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|||
Condensed
Statements of Operations (Unaudited) for the three months ended April 30,
2009 and 2008, the period from December 11, 2008 (commencement of
operations) to April 30, 2009 and the period from August 13, 2007
(inception) to July 31, 2008
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4
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|||
Condensed
Statements of Changes in Shareholders’ Equity (Unaudited) for the period
from December 11, 2008 (commencement of operations) to April 30, 2009 and
the period from August 13, 2007 (inception) to July 31,
2008
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5
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|||
Condensed
Statements of Cash Flows (Unaudited) for the period from December 11, 2008
(commencement of operations) to April 30, 2009 and the period from August
13, 2007 (inception) to July 31, 2008
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6
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|||
Notes
to Condensed Financial Statements for the three months ended April
30, 2009 (Unaudited)
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7
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April 30, 2009
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July 31, 2008
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|||||||
Assets
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||||||||
Cash
and cash equivalents
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$ | 3,731,981 | $ | 1,000 | ||||
Equity
in NewEdge USA, LLC trading accounts:
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||||||||
Cash
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1,251,375 | - | ||||||
Unrealized
loss on open commodity futures contracts
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(405,838 | ) | - | |||||
Total
assets
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$ | 4,577,518 | $ | 1,000 | ||||
Liabilities
and Shareholders’ Equity
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||||||||
Management
fees payable (Note 3)
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$ | 2,977 | $ | - | ||||
Total
liabilities
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2,977 | - | ||||||
Commitments and Contingencies
(Notes 3, 4 and 5)
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||||||||
Shareholders’
Equity
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||||||||
Shares
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4,573,541 | - | ||||||
Sponsor
Contribution
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1,000 | 1,000 | ||||||
Total
shareholders’ equity
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4,574,541 | 1,000 | ||||||
Total
liabilities and shareholders’ equity
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$ | 4,577,518 | $ | 1,000 | ||||
Shares
of beneficial interest outstanding
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200,000 | - | ||||||
Net
asset value per unit
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$ | 22.87 | $ | - | ||||
Market
value per unit
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$ | 22.98 | $ | - |
Loss on
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||||||||||||
Number of
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Open Commodity
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% of
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||||||||||
Contracts
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Contracts
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Net Assets
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||||||||||
Foreign
Contracts
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||||||||||||
ECX
Carbon Financial Instrument Futures contracts, expire December
2009
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141 | $ | (245,170 | ) | (5.36 | ) | ||||||
ECX
Carbon Financial Instrument Futures contracts, expire December
2010
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33 | (52,924 | ) | (1.16 | ) | |||||||
ECX
Carbon Financial Instrument Futures contracts, expire December
2011
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26 | (44,841 | ) | (0.98 | ) | |||||||
ECX
Carbon Financial Instrument Futures contracts, expire December
2012
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38 | (62,903 | ) | (1.37 | ) | |||||||
238 | (405,838 | ) | (8.87 | ) | ||||||||
Market Value
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||||||||||||
Cash
and cash equivalents
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3,731,981 | 81.58 | ||||||||||
Total
cash and cash equivalents
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3,731,981 | 81.58 | ||||||||||
Cash
on deposit with broker
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1,251,375 | 27.36 | ||||||||||
Liabilities
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(2,977 | ) | (0.07 | ) | ||||||||
Total
Net Assets
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$ | 4,574,541 | 100.00 |
For the three
months ended
April 30, 2009
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For the three
months ended
April 30, 2008
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For the
period from
December 11,
2008 to
April 30, 2009
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For the
period from
August 13,
2007 to
July 31, 2008
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|||||||||||||
Income
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||||||||||||||||
Income (loss)
on trading of commodity futures contracts:
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||||||||||||||||
Realized
loss on closed positions
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$ | - | $ | - | $ | (3 | ) | $ | - | |||||||
Change
in unrealized gain (loss) on open positions
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793,838 | - | (405,838 | ) | - | |||||||||||
Unrealized
loss on foreign currency translations
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(213 | ) | - | (149 | ) | - | ||||||||||
Interest
income
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814 | - | 1,132 | - | ||||||||||||
Other
income
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- | - | 1,000 | - | ||||||||||||
Total
income (loss)
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794,439 | - | (403,858 | ) | - | |||||||||||
Expenses
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||||||||||||||||
Management
fees (Note 3)
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7,698 | - | 13,254 | - | ||||||||||||
Interest
expense
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7,268 | - | 7,268 | - | ||||||||||||
Brokerage
commissions
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- | - | 2,079 | - | ||||||||||||
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||||||||||||||||
Total
expenses
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14,966 | - | 22,601 | - | ||||||||||||
Net
income (loss)
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$ | 779,473 | $ | - | $ | (426,459 | ) | $ | - | |||||||
Net
income (loss) per share outstanding
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$ | 3.90 | $ | - | $ | (2.13 | ) | $ | - | |||||||
Net
income (loss) per weighted average share outstanding
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$ | 3.90 | $ | - | $ | (2.13 | ) | $ | - | |||||||
Weighted
average shares outstanding
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200,000 | - | 200,000 | - |
Sponsor Contribution
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Shares
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Total
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||||||||||
Balances,
at August 13, 2007 (inception)
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$ | - | $ | - | $ | - | ||||||
Initial
contribution of capital
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1,000 | - | 1,000 | |||||||||
Balances,
at July 31, 2008
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1,000 | - | 1,000 | |||||||||
Addition
of 200,000 shares
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- | 5,000,000 | 5,000,000 | |||||||||
Net
loss
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- | (426,459 | ) | (426,459 | ) | |||||||
Balances,
at April 30, 2009
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$ | 1,000 | $ | 4,573,541 | $ | 4,574,541 | ||||||
Shares
Outstanding
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||||||||||||
At
July 31, 2008
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- | - | - | |||||||||
At
April 30, 2009
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- | 200,000 | 200,000 | |||||||||
Net
Asset Value Per Unit
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||||||||||||
At
August 13, 2007 (inception)
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$ | - | ||||||||||
At
December 11, 2008 (commencement of operations)
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$ | 25.00 | ||||||||||
At
April 30, 2009
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$ | 22.87 |
For the period from
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For the period from
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|||||||
December 11, 2008
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August 13, 2007
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|||||||
to April 30, 2009
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to July 31, 2008
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|||||||
Cash
Flows from Operating Activities:
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||||||||
Net
loss
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$ | (426,459 | ) | $ | - | |||
Adjustments
to reconcile net loss to net cash used in operating
activities:
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||||||||
Increase
in commodity futures trading account - cash
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(1,251,375 | ) | - | |||||
Unrealized
loss on futures contracts
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405,838 | - | ||||||
Increase
in management fees payable
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2,977 | - | ||||||
Net
cash used in operating activities
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(1,269,019 | ) | - | |||||
Cash
Flows from Financing Activities:
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||||||||
Issuance
of shares
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5,000,000 | 1,000 | ||||||
Net
cash provided by financing activities
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5,000,000 | 1,000 | ||||||
Net
Increase in Cash and Cash Equivalents
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3,730,981 | 1,000 | ||||||
Cash and Cash
Equivalents, beginning of period
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1,000 | - | ||||||
Cash and Cash
Equivalents, end of period
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$ | 3,731,981 | $ | 1,000 | ||||
Supplemental
Disclosure of Cash Flow Information:
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||||||||
Cash
paid for interest
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$ | 7,268 | $ | - |
At April 30, 2009
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Level I
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Level II
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Level III
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Total
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||||||||||||
Futures
Contracts
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$ | (405,838 | ) | $ | - | $ | - | $ | (405,838 | ) |
Fair Value of Derivative Instruments
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|||||||||||
Asset Derivatives
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|||||||||||
As of April 30, 2009
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As of July 31, 2008
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||||||||||
Derivatives not
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Condensed
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Condensed
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|||||||||
Accounted for as
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Statement of
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Statement of
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|||||||||
for as Hedging
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Financial
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Unrealized
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Financial
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Unrealized
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|||||||
Instruments under
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Condition
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Appreciation/
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Condition
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Appreciation/
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|||||||
Statement No. 133
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Location
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(Depreciation)
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Location
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(Depreciation)
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|||||||
Commodity
Contracts
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Assets
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$
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(405,838
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)*
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Assets
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$
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-
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Change in
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Change in
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|||||||||||||
Realized
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Unrealized
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Realized
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Unrealized
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|||||||||||
Derivatives not
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Location of
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Gain or (Loss)
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Appreciation or
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Gain or (Loss)
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Appreciation or
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|||||||||
Accounted for as
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Gain or (Loss)
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on Derivatives
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(Depreciation)
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on Derivatives
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(Depreciation)
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|||||||||
for as Hedging
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on Derivatives
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Recognized
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Recognized
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Recognized
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Recognized
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|||||||||
Instruments under
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Recognized
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in Income
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in Income
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in Income
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in Income
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|||||||||
Statement No. 133
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in Income
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2009
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2009
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2008
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2008
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|||||||||
Commodity
Contracts
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Change
in unrealized gains (losses) on open positions
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$ |
-
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$ |
793,838
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$ |
-
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$ |
-
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For the three
months ended
April 30, 2009
(Unaudited)
|
||||
Per Share Operating
Performance:
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||||
Net
asset value, beginning of period
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$
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18.97
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||
Total
income
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3.97
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|||
Total
expenses
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(0.07)
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|||
Net
increase in net asset value
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3.90
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|||
Net
asset value, end of period
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$
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22.87
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||
Total
Return
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20.56
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%
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||
Ratios
to Average Net Assets
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||||
Total
income
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21.39
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%
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||
Expenses
excluding management fees*
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0.80
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%
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||
Management
fees*
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0.85
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%
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Net
income
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20.99
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%
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||
*Annualized
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●
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An
equal value of each of the included contracts will be purchased by the
Fund upon creation of a Basket if either of the following two (2)
conditions are met:
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●
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Each
of the included annual contracts has a 60-day average daily value (“ADV”)
traded that exceeds $100,000,000;
or
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●
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At
the time the order to create a Basket is received, the amount that the
Fund would need to invest in each annual contract in order to equally
weight the basket does not exceed 5% of that contract’s 60-day
ADV.
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●
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If
neither of the above conditions is met, the allocation will be made among
the included annual contracts pro rata in accordance with their respective
60-day ADV.
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Contract
Expiration Date
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Allocation
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|||
December
2009
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75.83 | % | ||
December
2010
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9.41 | % | ||
December
2011
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4.36 | % | ||
December
2012
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10.40 | % |
Exhibit
|
||
Number
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Description of Document
|
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31.1*
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Certification
by Principal Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
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31.2*
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Certification
by Principal Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
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32.1**
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Certification
by Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
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32.2**
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Certification
by Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
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*
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Filed
herewith
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**
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Furnished
herewith
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By:
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XShares
Advisors LLC,
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Sponsor
of the
Registrant
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By:
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/s/
Jeffrey L. Feldman
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Jeffrey
L. Feldman
|
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Chief
Executive Officer
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/s/
David W. Jaffin
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David
W. Jaffin
|
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Chief
Financial Officer
|