• To the extent the Staking Condition is not satisfied, the lack of ability to participate in any different form of Staking could have adverse consequences for the Trust; • Staking introduces a risk of loss of AVAX, which could adversely affect the value of the Shares; • Staked AVAX tokens will be inaccessible for a variable period of time, determined by a range of factors, which could result in certain liquidity risk to the Trust; • The Trust will be dependent on third parties to effectively execute the Trust’s Staking Arrangements; • The regulatory landscape surrounding Staking is uncertain; • Beneficial owners of Shares could incur tax liabilities without receiving corresponding distributions from the Trust; • The Trust relies on third-party service providers to perform certain functions essential to the affairs of the Trust and the replacement of such service providers could pose a challenge to the safekeeping of the Trust’s AVAX and to the operations of the Trust; and • There is no guarantee that an active trading market for the Shares will develop. Emerging Growth Company Status The Trust is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”). For as long as the Trust is an emerging growth company, unlike other public companies that are not emerging growth companies under the JOBS Act, it will not be required to: • provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; • provide more than two years of audited financial statements and related management’s discussion and analysis of financial condition and results of operations; • comply with any new requirements that may be adopted by the Public Company Accounting Oversight Board (the “PCAOB”) requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer; • provide certain disclosure regarding executive compensation required of larger public companies; or • obtain shareholder approval of any golden parachute payments not previously approved. The Trust will cease to be an emerging growth company upon the earliest of: • the last day of the fiscal year in which the Trust has $1.235 billion or more in annual revenues; • the date on which the Trust becomes a “large accelerated filer” under Rule 12b-2 promulgated under the Exchange Act; • the date on which the Trust issues more than $1.0 billion of non-convertible debt over a three-year period; or • the last day of the fiscal year following the fifth anniversary of the Trust’s initial public offering. In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. The Trust intends to take advantage of these reporting exemptions until it is no longer an
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