August 20, 2024 (the Commencement of the Trust’s Operations) to December 31, 2024
Year Ended December 31, 2025
Net realized and unrealized (loss) gain on investment Net (decrease) increase in net assets resulting from operations
$
(8,214) $
751
$ $
(8,424) $ 7,090 $
734
Net assets (1) 2,674 (1) Net assets in the above table and subsequent paragraphs are calculated in accordance with U.S. GAAP based on the Digital Asset Market price of AVAX on the Digital Asset Trading Platform that the Trust considered its principal market, as of 4:00 p.m., New York time, on the valuation date. Net realized and unrealized loss on investment in AVAX for the year ended December 31, 2025 was ($8,214), which includes a realized loss of ($40) on the transfer of AVAX to pay the Sponsor’s Fee, and net change in unrealized appreciation/depreciation on investment in AVAX of ($8,174). Net realized and unrealized loss on investment in AVAX for the period was driven by AVAX price depreciation from $35.81 per AVAX as of December 31, 2024, to $12.33 per AVAX as of December 31, 2025. Net decrease in net assets resulting from operations was ($8,424) for the year ended December 31, 2025, which consisted of the net realized and unrealized loss on investment in AVAX, plus the Sponsor’s Fee of $210. Net assets increased to $7,090 at December 31, 2025, a 165% increase for the year. The increase in net assets resulted from the contribution of approximately 510,233 AVAX with a value of $12,840 to the Trust in connection with Share creations during the period, partially offset by the aforementioned AVAX price depreciation and the withdrawal of approximately 9,890 AVAX to pay the foregoing Sponsor’s Fee. Net realized and unrealized gain on investment in AVAX for the period from August 20, 2024 (the commencement of the Trust’s operations) to December 31, 2024 was $751, which includes a realized gain of $5 on the transfer of AVAX to pay the Sponsor’s Fee, and net change in unrealized appreciation on investment in AVAX of $746. Net realized and unrealized gain on investment in AVAX for the period was driven by AVAX price appreciation from $22.57 per AVAX as of August 20, 2024, to $35.81 per AVAX as of December 31, 2024. Net increase in net assets resulting from operations was $734 for the period ended December 31, 2024, which consisted of the net realized and unrealized gain on investment in AVAX, less the Sponsor’s Fee of $17. Net assets increased to $2,674 at December 31, 2024. The increase in net assets resulted from the aforementioned AVAX price appreciation and the contribution of approximately 75,167 AVAX with a value of $1,940 to the Trust in connection with Share creations during the period, partially offset by the withdrawal of approximately 498 AVAX to pay the foregoing Sponsor’s Fee. Cash Resources and Liquidity The Trust only receives and holds cash in order to facilitate creations and redemptions pursuant to Cash Orders, and does not otherwise have or maintain a cash balance at any time. When selling AVAX and, subject to obtaining regulatory approval from the SEC, Incidental Rights and/or IR Virtual Currency in the Digital Asset Market to pay Additional Trust Expenses on behalf of the Trust, the Sponsor endeavors to sell the exact amount of AVAX, Incidental Rights and/or IR Virtual Currency needed to pay expenses in order to minimize the Trust’s holdings of assets other than AVAX. In addition, upon the consummation or deemed failure of a Cash Order to create or redeem Baskets, the Trust will promptly return any excess cash it continues to hold with respect to such Cash Order to the applicable counterparty. As a consequence, the Sponsor expects that the Trust will not record any cash flow from its operations and that its cash balance will be zero at the end of each reporting period. Furthermore, the Trust is not a party to any off-balance sheet arrangements. Generally, the Trust does not intend to hold cash, except in connection with Cash Orders for creations or redemptions of Baskets. Cash includes non-interest bearing non-restricted cash with one institution. Cash in a bank deposit account, at times, may exceed U.S. federally insured limits. The Trust has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on such bank deposits. In exchange for the Sponsor’s Fee, the Sponsor has agreed to assume most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust expected to be incurred is the Sponsor’s Fee and, if
77
Made with FlippingBook - professional solution for displaying marketing and sales documents online