GRAYSCALE AVALANCHE TRUST (AVAX) NOTES TO FINANCIAL STATEMENTS
Segment Reporting The Chief Executive Officer and Chief Financial Officer of the Sponsor act as the Trust’s chief operating decision maker (“CODM”). The Trust represents a single operating segment, as the CODM monitors the operating results of the Trust as a whole and the Trust’s passive investment objective is pre-determined in accordance with the terms of the Trust Agreement. The financial information in the form of the Trust’s total returns, expense ratios and changes in net assets (i.e., changes in net assets resulting from operations and capital share transactions), which are used by the CODM to assess the segment’s performance, are consistent with that presented within the Trust’s financial statements. Segment assets are reflected on the accompanying Statements of Assets and Liabilities as Total assets and the only significant segment expense, the Sponsor’s fee, related party, is included in the accompanying Statements of Operations. 3. Fair Value of AVAX AVAX is held by the Custodian on behalf of the Trust and is carried at fair value. As of December 31, 2025 and 2024, the Trust held 575,012.34055965 and 74,668.54471653 AVAX, respectively. The Trust determined the fair value per AVAX to be $12.33 and $35.81 on December 31, 2025 and 2024, respectively, using the price provided at 4:00 p.m., New York time, by the Digital Asset Trading Platform Market considered to be the Trust’s principal market (Coinbase). The following represents the changes in quantity of AVAX and the respective fair value: (Amounts in thousands, except AVAX amounts) Quantity Fair Value Balance at August 20, 2024 (the Commencement of the Trust’s Operations) - $ - AVAX contributed 75,166.69442126 1,940 AVAX distributed for Sponsor’s Fee, related party (498.14970473 ) (17 ) Net change in unrealized appreciation/depreciation on investment in AVAX - 746 Net realized gain on investment in AVAX - 5 Balance at December 31, 2024 74,668.54471653 $ 2,674 AVAX contributed 510,233.33135612 12,840 AVAX distributed for Sponsor’s Fee, related party (9,889.53551300 ) (210 ) Net change in unrealized appreciation/depreciation on investment in AVAX - (8,174 ) Net realized loss on investment in AVAX - (40 ) Balance at December 31, 2025 575,012.34055965 $ 7,090 4. Creations and Redemptions of Shares At December 31, 2025 and 2024, there were an unlimited number of Shares authorized by the Trust. The Trust creates (and, should the Trust commence a redemption program, redeems) Shares from time to time, but only in one or more Baskets. The creation and redemption of Baskets on behalf of investors are made by the Authorized Participant in exchange for the delivery of AVAX to the Trust or the distribution of AVAX by the Trust. The amount of AVAX required for each creation Basket or redemption Basket is determined by dividing (x) the amount of AVAX owned by the Trust at 4:00 p.m., New York time, on such trade date of a creation or redemption order, after deducting the amount of AVAX representing the U.S. dollar value of accrued but unpaid fees and expenses of the Trust, by (y) the number of Shares outstanding at such time and multiplying the quotient obtained by 100. Each Share represented approximately 2.4162 and 2.4774 AVAX at December 31, 2025 and 2024, respectively. The decrease in the amount of AVAX represented by each Share is primarily a result of the periodic withdrawal of AVAX to pay the Sponsor’s Fee. The cost basis of investments in AVAX recorded by the Trust is the fair value of AVAX, as determined by the Trust, at 4:00 p.m., New York time, on the date of transfer to the Trust by the Authorized Participant, or Liquidity Provider, based on the creation Baskets. The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of each Share to investors. The Authorized Participant, or Liquidity Provider, may realize significant profits buying, selling, creating, and, if permitted, redeeming Shares as a result of changes in the value of Shares or AVAX. At this time, the Trust is not operating a redemption program and is not accepting redemption requests. On August 25, 2025, the Sponsor filed with the SEC a registration statement on Form S-1, as amended by Amendments No. 1, No. 2 and No. 3 thereto and as the same may be further amended from time to time, to register the Shares of the Trust under the Securities Act of 1933. Subject to receipt of regulatory approval and approval by the Sponsor in its sole discretion, the Trust may in the future operate a redemption program.
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