shareholders may not be able to sell their Shares until after the “gap” down has been fully realized, resulting in an inability to rapidly mitigate losses in a negative market. Even during periods when NYSE Arca is open, large Digital Asset Trading Platforms (or a substantial number of smaller Digital Asset Trading Platforms) may be lightly traded or closed for any number of reasons, which could increase trading spreads and widen any premium or discount on the Shares. Shareholders may suffer a loss on their investment if the Shares trade above or below the Trust’s NAV per Share. Historically, the Shares have traded at both a premium and discount to the NAV per Share, which at times have been substantial. If the Shares trade on NYSE Arca in the future at a premium, investors who purchase Shares on NYSE Arca will pay more for their Shares than investors who purchase Shares directly from Authorized Participants. In contrast, if the Shares trade on NYSE Arca in the future at a discount, investors who purchase Shares directly from Authorized Participants will pay more for their Shares than investors who purchase Shares on NYSE Arca. The premium at which the Shares have traded has fluctuated over time. From November 24, 2025 to December 31, 2025, the maximum premium of the closing price of the Shares quoted on OTCQB over the value of the Trust’s NAV per Share was 38%, the average premium was 29%, the maximum discount of the closing price of the Shares quoted on OTCQB below the value of the Trust’s NAV per Share was 30%, and the average discount was 11%. The closing price of the Shares, as quoted on OTCQB at 4:00 p.m., New York time, on each business day between November 24, 2025 and December 31, 2025, has been quoted at a discount on 20 days. As of December 31, 2025, the Trust’s Shares were quoted on OTCQB at a discount of 3% to the Trust’s NAV per Share. As a result, shareholders who purchase Shares on NYSE Arca at a premium may suffer a loss on their investment if they sell their Shares at a time when the premium has decreased from the premium at which they purchased the Shares even if the NAV per Share remains the same. Likewise, shareholders that purchase Shares directly from the Trust may suffer a loss on their investment if they sell their Shares at a time when the Shares are trading at a discount on NYSE Arca. Furthermore, shareholders may suffer a loss on their investment even if the NAV per Share increases because the decrease in any premium or increase in any discount may offset any increase in the NAV per Share. The inability of Authorized Participants and market makers to hedge their SUI exposure may adversely affect the liquidity of Shares and the value of an investment in the Shares. Authorized Participants and market makers will generally want to hedge their exposure in connection with Basket purchase and redemption orders. To the extent Authorized Participants and market makers are unable to hedge their exposure due to market conditions (e.g., insufficient SUI liquidity in the market, inability to locate an appropriate hedge counterparty, extreme volatility in the price of SUI, wide spreads between prices quoted on different Digital Asset Trading Platforms, the closing of Digital Asset Trading Platforms due to fraud, failures, security breaches or otherwise etc.), such conditions may make it difficult to purchase or redeem Baskets or cause them to not create or redeem Baskets. In addition, the hedging mechanisms employed by Authorized Participants and market makers to hedge their exposure to SUI may not function as intended, which may make it more difficult for them to enter into such transactions. Such events could negatively impact the market price of the Shares and the spread at which the Shares trade on the open market. Arbitrage transactions intended to keep the price of the Shares closely linked to the price of SUI may be problematic if the process for the purchase and redemption of Baskets encounters difficulties, which may adversely affect an investment in the Shares. If the processes of creation and redemption of Shares (which depend on timely transfers of SUI to and by the Custodian) encounter any unanticipated difficulties due to, for example, the price volatility of SUI, the insolvency, business failure or interruption, default, failure to perform, security breach, or other problems affecting the Custodian, the closing of Digital Asset Trading Platforms to fraud, failures, security breaches or otherwise, or network outages or congestion, spikes in transaction fees demanded by validators, or other problems or disruptions affecting the Blockchain, then potential market participants, such as the Authorized Participants and their customers, who would otherwise be willing to purchase or redeem Baskets to take advantage of any arbitrage opportunity arising from discrepancies between the price of the Shares and the price of the underlying SUI may not take the risk that, as a result of those difficulties, they may not be able to realize the profit they expect. Alternatively, in the case of a network outage or other problems affecting the Sui Network, the processing of transactions on the Sui Network may be disrupted, which in turn may prevent Liquidity Providers from depositing or withdrawing SUI from their custody accounts, which in turn could affect the creation or redemption of Baskets. If this is the case, the liquidity of the Shares may decline and the price of the Shares may fluctuate independently of the price of SUI and may fall or otherwise diverge from NAV. Furthermore, in the event that the market for SUI should become relatively illiquid and thereby materially restrict opportunities for arbitraging by delivering SUI in return for Baskets, the price of the Shares may diverge from the price of SUI.
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