GRAYSCALE FUNDS TRUST NOTES TO FINANCIAL STATEMENTS December 31, 2025 (Continued)
G. Share Valuation. The NAV per share of each Fund is calculated by dividing the sum of the value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding of the Fund, rounded to the nearest cent. The Funds’ shares will not be priced on the days on which the New York Stock Exchange (“NYSE”) is closed for trading. The offering and redemption price per share of each Fund is equal to the Fund’s NAV per share. H. G uarantees and Indemnifications. In the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be against the Funds that have not yet occurred. However, based on experience, the Funds expects the risk of loss to be remote. I. Reclassification of Capital Accounts. U.S. GAAP requires that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or NAV per share. J. Consolidation of Subsidiaries. The Grayscale Bitcoin Covered Call Subsidiary, the Grayscale Bitcoin Premium Income Subsidiary and the Grayscale Ethereum Covered Call Subsidiary (together, the “Cayman Subsidiaries”), which are organized under the laws of the Cayman Islands, are wholly owned, and controlled by each of the Grayscale Bitcoin Premium Income ETF, the Grayscale Bitcoin Covered Call ETF and the Grayscale Ethereum Covered Call ETF, respectively (the “Options Funds”). The Cayman Subsidiaries act as an investment vehicle to facilitate entering into certain investments for the Options Funds, consistent with each Option Fund's investment objectives and policies specified in its prospectus and statement of additional information and within the limitation of the U.S. federal tax requirements applicable to regulated investment companies. As of December 31, 2025, the net assets of the Bitcoin Covered Call ETF were $23,939,018, of which $4,028,082, or approximately 16.83%, represented the Bitcoin Covered Call ETF’s ownership of the shares of the Bitcoin Covered Call Subsidiary. As of December 31, 2025, the net assets of the Bitcoin Premium Income ETF were $3,926,394, of which $440,322, or approximately 11.21%, represented the Bitcoin Premium Income ETF’s ownership of the shares of the Bitcoin Premium Income Subsidiary. As of December 31, 2025, the net assets of the Ethereum Covered Call ETF were $6,273,646, of which $1,137,600, or approximately 18.13%, represented the Ethereum Covered Call ETF’s ownership of the shares of the Ethereum Covered Call Subsidiary. K. Segment Reporting. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, allowing financial statement users to better understand the components of a segment’s profit or loss and assess potential future cash flows for each reportable segment and the entity as a whole. The amendments expand a public entity’s segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker, clarifying when an entity may report one or more additional measures to assess segment performance, requiring enhanced interim disclosures and providing new disclosure requirements for entities with a single reportable segment, among other new disclosure requirements. Each Fund operates as a single segment entity. Each Fund’s income, expenses, assets, and performance are regularly monitored and assessed by the Chief Financial Officer, who serves as the chief operating decision maker, using the information presented in the financial statements and financial highlights. L. Derivatives. The Options Funds may buy and write (sell) options on securities and other assets for the purpose of realizing its investment objectives. Options may settle in cash or settle by a delivery of securities or other assets underlying the options. By buying a call option, the Fund has the right, in return for a premium paid during the term of the option, to buy the asset underlying the option at the exercise price. By writing (selling) a call option the Fund becomes obligated during the term of the option to sell the asset underlying the option at the exercise price if the option is exercised; conversely, by buying a put option, the Fund has the right, in return for a premium paid during the term of the option, to sell the asset underlying the option at the exercise price. By writing a put option, the Fund becomes obligated during the term of the option to purchase the asset underlying the option at the exercise price if the option is exercised.
22
Made with FlippingBook - professional solution for displaying marketing and sales documents online