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Item 2. Management’s Discussion and Analysis

2026-08-07 compared with 2026-05-08 · 43 added, 33 removed, 109 unchanged (41% of the section changed)

59 unchanged sentences

Review of Financial Results (unaudited)

Financial Highlights for the Three Months Ended March 31, 2026 and 2025

Financial Highlights for the Three and Six Months Ended June 30, 2026 and 2025

(All amounts in the following table and the subsequent paragraphs, except Share, AVAX and price of AVAX amounts, are in thousands)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Net realized and unrealized loss on investment in AVAX

1 unchanged sentence

Net assets (1)

(1) Net assets is calculated in accordance with U.S.

(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 three months ended March 31, 2026 was ($2,005), which includes a realized loss of ($43) on the transfer of AVAX to pay expenses and net change in unrealized appreciation/depreciation on investment in AVAX of ($1,962).

Net realized and unrealized loss on investment in AVAX for the period was driven by AVAX price depreciation from $12.33 per AVAX as of December 31, 2025 to $8.89 per AVAX as of March 31, 2026.

Net decrease in net assets resulting from operations was ($2,028) for the three months ended March 31, 2026, which consisted of the net realized and unrealized loss on investment in AVAX, plus the net investment loss of $(23).

Net assets decreased to $5,309 at March 31, 2026, a 25% decrease for the three-month period.

The decrease in net assets resulted from the aforementioned AVAX price depreciation, the withdrawal of 2,750 AVAX to pay the foregoing Sponsor’s Fee and the withdrawal of 232 AVAX to pay the foregoing Sponsor’s Staking Fee, partially offset by and the contribution of approximately 24,047 AVAX with a value of $247 to the Trust in connection with Share creations during the period and the contribution of approximately 1,124 AVAX in connection with Staking Rewards,

Net realized and unrealized loss on investment in AVAX for the three months ended March 31, 2025 was ($1,303), which includes a realized gain of $1 on the sale of AVAX to pay expenses and net change in unrealized appreciation/depreciation on investment in AVAX of ($1,304).

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 $18.64 per AVAX as of March 31, 2025.

Net decrease in net assets resulting from operations was ($1,316) for the three months ended March 31, 2025, which consisted of the net realized and unrealized loss on investment in AVAX.

Net assets decrease to $1,489 at March 31, 2025, a 44% decrease for the three-month period.

The decrease in net assets resulted the aforementioned AVAX price depreciation and the $131 AVAX to pay the foregoing Sponsor’s Staking Fee, partially offset by the contribution of 5,677 AVAX with a value of $131 to the trust in connection with Share creations during the period.

Net realized and unrealized loss on investment in AVAX for the three months ended June 30, 2026 was ($1,453), which includes a realized loss of ($2) on the transfer of AVAX to pay Sponsor’s Fee, net realized loss on investment in AVAX sold to pay Sponsor’s Staking Fee of ($18) and net change in unrealized appreciation/depreciation on investment in AVAX of ($1,433).

Net realized and unrealized loss on investment in AVAX for the period was driven by AVAX price depreciation from $8.89 per AVAX as of March 31, 2026 to $6.57 per AVAX as of June 30, 2026.

Net decrease in net assets resulting from operations was ($1,416) for the three months ended June 30, 2026, which consisted of the net realized and unrealized loss on investment in AVAX, and the net investment gain of $37.

Net assets decreased to $4,270 at June 30, 2026, a 20% decrease for the three-month period.

The decrease in net assets resulted from the aforementioned AVAX price depreciation, the withdrawal of approximately 112 AVAX to pay the foregoing Sponsor’s Fee and the withdrawal of approximately 1,167 AVAX to pay the foregoing Sponsor’s Staking Fee, partially offset by the contribution of approximately 48,309 AVAX with a value of $377 to the Trust in connection with Share creations during the period and the contribution of approximately 5,660 AVAX in connection with Staking Rewards.

Net realized and unrealized loss on investment in AVAX for the three months ended June 30, 2025 was ($3,558), which includes a realized loss of ($10) on the sale of AVAX to pay Sponsor’s Fee and net change in unrealized appreciation/depreciation on investment in AVAX of ($3,548).

Net realized and unrealized loss on investment in AVAX for the period was driven by AVAX price depreciation from $18.64 per AVAX as of March 31, 2025, to $18.21 per AVAX as of June 30, 2025.

Net decrease in net assets resulting from operations was ($3,602) for the three months ended June 30, 2025, which consisted of the net realized and unrealized loss on investment in AVAX, plus the Sponsor’s Fee of $44.

Net assets increased to $10,571 at June 30, 2025, a 610% increase for the three-month period.

The increase in net assets resulted from the contribution of approximately 502,763 AVAX with a value of $12,684 to the Trust in connection with Share creations during the period, partially offset by the aforementioned AVAX price depreciation and the withdrawal of approximately 2,141 AVAX to pay the foregoing Sponsor’s Fee.

Net realized and unrealized loss on investment in AVAX for the six months ended June 30, 2026 was ($3,458), which includes a realized loss of ($41) on the transfer of AVAX to pay Sponsor’s Fee, net realized loss on investment in AVAX sold to pay Sponsor's Staking Fee of ($22) and net change in unrealized appreciation/depreciation on investment in AVAX of ($3,395).

Net realized and unrealized loss on investment in AVAX for the period was driven by AVAX price depreciation from $12.33 per AVAX as of December 31, 2025 to $6.57 per AVAX as of June 30, 2026.

Net decrease in net assets resulting from operations was ($3,444) for the six months ended June 30, 2026, which consisted of the net realized and unrealized loss on investment in AVAX, and the net investment gain of $14.

Net assets decreased to $4,270 at June 30, 2026, a 40% decrease for the six-month period.

The decrease in net assets resulted from the aforementioned AVAX price depreciation, the withdrawal of approximately 2,862 AVAX to pay the foregoing Sponsor’s Fee and the withdrawal of approximately 1,399 AVAX to pay the foregoing Sponsor’s Staking Fee, partially offset by the contribution of approximately 72,355 AVAX with a value of $624 to the Trust in connection with Share creations during the period and the contribution of approximately 6,784 AVAX in connection with Staking Rewards.

Net realized and unrealized loss on investment in AVAX for the six months ended June 30, 2025 was ($4,861), which includes a realized loss of ($9) on the sale of AVAX to pay Sponsor’s Fee and net change in unrealized appreciation/depreciation on investment in AVAX of ($4,852).

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 $18.21 per AVAX as of June 30, 2025.

Net decrease in net assets resulting from operations was ($4,918) for the six months ended June 30, 2025, which consisted of the net realized and unrealized loss on investment in AVAX, plus the Sponsor’s Fee of $57.

Net assets increased to $10,571 at June 30, 2025, a 295% increase for the six-month period.

The increase in net assets resulted from the contribution of approximately 508,440 AVAX with a value of $12,815 to the Trust in connection with Share creations during the period, partially offset by the aforementioned AVAX price depreciation and the withdrawal of approximately 2,614 AVAX to pay the foregoing Sponsor’s Fee.

Cash Resources and Liquidity

12 unchanged sentences

The Sponsor, from time to time, may temporarily waive all or a portion of the Sponsor’s Fee of the Trust in its discretion for stated periods of time.

Effective March 12, 2026, the Sponsor has determined to waive a portion of the Sponsor’s Fee until the earlier of (x) June 12, 2026 and (y) the first date on which the NAV of the Trust exceeds $1.0 billion (such period, the “Fee Waiver Period”).

If the Trust’s NAV exceeds $1.0 billion prior to June 12, 2026, the Sponsor’s Fee charged on assets over $1.0 billion will be 0.35%.

After the Fee Waiver Period is over, the Sponsor’s Fee will be 0.35%.

From March 12, 2026 to March 31, 2026, the Trust’s assets did not exceed $1.0 billion and no Sponsor’s Fee had been incurred.

Effective March 12, 2026, the Sponsor determined to waive a portion of the Sponsor’s Fee until the earlier of (x) June 12, 2026 and (y) the first date on which the NAV of the Trust exceeds $1.0 billion (such period, the “Fee Waiver Period”).

Following the expiration date of the three-month waiver period on June 12, 2026 (the “Sponsor’s Fee Waiver Expiration Date”), the Sponsor’s Fee is 0.35%.

The Trust is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its liquidity needs.

Selected Operating Data

As of March 31,

As of June 30,

Price of AVAX on principal market

6 unchanged sentences

The Trust’s NAV per Share is calculated using a non-GAAP methodology where the price is derived from multiple Digital Asset Trading Platforms.

The Digital Asset Trading Platforms included in the Index (the “Constituent Trading Platforms”) as of March 31, 2026 were Binance, Bitstamp by Robinhood, Bullish, Bybit, Crypto.com, GATE, Gemini, Hashkey, Kraken and OKX.

The Digital Asset Trading Platforms included in the Index as of March 31, 2025 were Coinbase, Kraken, and Crypto.com.

The Digital Asset Trading Platforms included in the Index (the “Constituent Trading Platforms”) as of June 30, 2026 were Binance, Bitstamp by Robinhood, Bullish, Bybit, Crypto.com, Gate, Gemini, HashKey, Kraken and OKX.

The Digital Asset Trading Platforms included in the Index as of June 30, 2025 were Coinbase, Kraken, and Crypto.com.

See “Business—Overview of the Avalanche Industry and Market—The Index and the Index Price” in our Registration Statement on Form S-1 for a description of the Index and the Index Price.

The Trust reflects creations and redemptions and the AVAX for proceeds receivable or payable with respect to such creations and redemptions, respectively, on the trade date, which is the business day an accepted creation or redemption order is placed by an Authorized Participant.

Creation and redemption orders are settled on T+1 or T+2, as established at the time of order placement, and therefore the AVAX for proceeds receivable or payable with respect to such creations and redemptions, respectively, are recorded as a receivable or payable until the AVAX are delivered or removed from the Trust for settlement.

Creation and redemption orders are settled on T+1 or T+2, as established at the time of order placement, and

therefore the AVAX for proceeds receivable or payable with respect to such creations and redemptions, respectively, are recorded as a receivable or payable until the AVAX are delivered or removed from the Trust for settlement.

Historical NAV and AVAX Prices

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Movements may be influenced by various factors, including, but not limited to, government regulation, security breaches experienced by service providers, as well as political and economic uncertainties around the world.

The following chart illustrates the movement in the Trust’s NAV per Share (as adjusted for the Reverse Share Split for periods prior to March 6, 2026) versus the Index Price and the Trust’s Principal Market NAV per Share (as adjusted for the Reverse Share Split for periods prior to March 6, 2026) from August 20, 2024 (the commencement of the Trust’s operations) to March 31, 2026.

For more information on the determination of the Trust’s NAV, see “Business—Overview of the Avalanche Industry and Market—The Index and the Index Price” in our Registration Statement on Form S-1.

The following table illustrates the movements in the Index Price from August 20, 2024 (the commencement of the Trust’s operations) to March 31, 2026.

The Sponsor has not observed a material difference between the Index Price and average prices from the Constituent Trading Platforms as of March 31, 2026, individually or as a group.

The following table illustrates the movements in the Index Price from August 20, 2024 (the commencement of the Trust’s operations) to June 30, 2026.

The Sponsor has not observed a material difference between the Index Price and average prices from the Constituent Trading Platforms as of June 30, 2026, individually or as a group.

End of period

Last business day

August 20, 2024 (the commencement of the Trust’s operations) to March 31, 2025

Twelve months ended March 31, 2026

August 20, 2024 (the commencement of the Trust’s operations) to March 31, 2026

The following table illustrates the movements in the Digital Asset Market price of AVAX, as reported on the Trust’s principal market, from August 20, 2024 (the commencement of the Trust’s operations) to March 31, 2026.

August 20, 2024 (the commencement of the Trust’s operations) to June 30, 2025

Twelve months ended June 30, 2026

August 20, 2024 (the commencement of the Trust’s operations) to June 30, 2026

Digital Asset Market Price

2 unchanged sentences

Last business day

August 20, 2024 (the commencement of the Trust’s operations) to March 31, 2025

Twelve months ended March 31, 2026

August 20, 2024 (the commencement of the Trust’s operations) to March 31, 2026

August 20, 2024 (the commencement of the Trust’s operations) to June 30, 2025

Twelve months ended June 30, 2026

August 20, 2024 (the commencement of the Trust’s operations) to June 30, 2026

Effective March 12, 2026, the Trust established an ongoing share creation and redemption program and the Shares of the Trust were listed to NASDAQ.

The following chart sets out the historical closing prices for the Shares as reported by NASDAQ and the Trust’s NAV per Share from March 12, 2026 to March 31, 2026.

The following chart sets out the historical closing prices for the Shares as reported by NASDAQ and the Trust’s NAV per Share from March 12, 2026 to June 30, 2026.

GAVA Premium/(Discount):

1 unchanged sentence

NAV per Share (Non-GAAP) ($)

The following chart sets out the historical premium and discount for the Shares calculated as a percentage of the historical closing prices for the Shares as reported by NASDAQ divided by the Trust’s NAV per Share from March 12, 2026 to March 31, 2026.

GAVA Premium/(Discount):

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis