What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-13 compared with 2026-01-26 · 154 added, 145 removed, 38 unchanged (89% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

information should be read in conjunction with the financial statements and notes included in Item 1 of Part I of this Form 10-Q.

Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and such forward-looking statements involve risks and uncertainties.

All statements (other than

statements of historical fact) included in this Form 10-Q that address activities, events or developments that may occur in the future,

the Trust’s operations, the Sponsor’s plans and references to the Trust’s future success and other similar matters

are forward-looking statements.

Words such as “could,” “would,” “may,” “expect,” “intend,”

“estimate,” “predict,” and variations on such words or negatives thereof, and similar expressions that reflect

our current views with respect to future events and Trust performance, are intended to identify such forward-looking statements.

forward-looking statements are only predictions, subject to risks and uncertainties that are difficult to predict and many of which are

outside of our control, and actual results could differ materially from those discussed.

Forward-looking statements involve risks and

uncertainties that could cause actual results or outcomes to differ materially from those expressed therein.

We express our estimates,

expectations, beliefs, and projections in good faith and believe them to have a reasonable basis.

However, we make no assurances that

management’s estimates, expectations, beliefs, or projections will be achieved or accomplished.

These forward-looking statements

are based on assumptions about many important factors that could cause actual results to differ materially from those in the forward-looking

We do not intend to update any forward-looking statements even if new information becomes available or other events occur

in the future, except as required by the federal securities laws.

and Trust Overview

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

This information should

be read in conjunction with the financial statements and notes included in Item 1 of Part I of this Form 10-Q.

This Form 10-Q contains

“forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act,

and such forward-looking statements involve risks and uncertainties.

All statements (other than statements of historical fact) included

in this Form 10-Q that address activities, events or developments that may occur in the future, the Trust’s operations, the Sponsor’s

plans and references to the Trust’s future success and other similar matters are forward-looking statements.

Words such as “could,”

“would,” “may,” “expect,” “intend,” “estimate,” “predict,” and

variations on such words or negatives thereof, and similar expressions that reflect our current views with respect to future events and

Trust performance, are intended to identify such forward-looking statements.

These forward-looking statements are only predictions, subject

to risks and uncertainties that are difficult to predict and many of which are outside of our control, and actual results could differ

materially from those discussed.

Forward-looking statements involve risks and uncertainties that could cause actual results or outcomes

to differ materially from those expressed therein.

We express our estimates, expectations, beliefs, and projections in good faith and

believe them to have a reasonable basis.

However, we make no assurances that management’s estimates, expectations, beliefs, or projections

will be achieved or accomplished.

These forward-looking statements are based on assumptions about many important factors that could cause

actual results to differ materially from those in the forward-looking statements.

We do not intend to update any forward-looking statements

even if new information becomes available or other events occur in the future, except as required by the federal securities laws.

Organization and Trust Overview

The Trust is a Delaware statutory

trust, formed on June 3, 2024 pursuant to the DSTA.

The Trust operates pursuant to the Third Amended and Restated Trust Agreement (the

“Trust Agreement”).

The Trust is not registered as an investment company under the Investment Company Act of 1940, as amended

(the “1940 Act”) and is not a commodity pool for purposes of the Commodity Exchange Act (“CEA”).

managed and controlled by the Sponsor.

The Sponsor is a limited liability company formed in the state of Delaware on June 16, 2021, and

is a wholly owned subsidiary of Jura Pentium Inc., whose ultimate parent company is FalconX Holdings Limited.

The Trust operates pursuant to the Trust Agreement.

The Trust is not registered as

an investment company under the 1940 Act and is not a commodity pool for purposes of the Commodity Exchange Act.

The Trust is managed

and controlled by the Sponsor.

The Sponsor is a limited liability company formed in the state of Delaware on June 16, 2021, and is a wholly

owned subsidiary of 21co Holdings Limited.

The ultimate parent company of 21co Holdings Limited is FalconX.

The Sponsor is not subject

to regulation by the Commodity Futures Trading Commission (“CFTC”) as a commodity pool operator with respect to the Trust,

or a commodity trading advisor with respect to the Trust.

The Trust is an exchange-traded fund that issues units of beneficial interest

representing fractional undivided beneficial interests in its net assets that trade on the Cboe BZX Exchange, Inc.

(the “Exchange”).

The Shares are listed for trading on the Exchange under the ticker symbol “TOXR”.

to regulation by the Commodity Futures Trading Commission as a commodity pool operator with respect to the Trust, or a commodity trading

advisor with respect to the Trust.

The Trust is an exchange-traded fund that issues common shares of beneficial interest representing

fractional undivided beneficial interests in its net assets that trade on the Exchange.

The Shares are listed for trading on the Exchange

under the ticker symbol “TOXR”.

The Trust’s investment

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performance of XRP in U.S.

In seeking to achieve its investment objective, the Trust holds XRP at Coinbase Custody Trust Company,

LLC (“Coinbase”), Anchorage Digital Bank N.A.

(“Anchorage”), and BitGo Bank & Trust N.A.

and together with Coinbase and Anchorage, as the context may require, the “Custodian”, “Custodians” and each a

“Custodian”) and values its Shares daily based on the Pricing Benchmark.

The Trust is a passive investment vehicle and is

not a leveraged product.

The Sponsor does not actively manage the XRP held by the Trust.

As of September 30, 2025,

the Constituent Exchanges included in the Pricing Benchmark that is utilized by the Trust are Coinbase, Kraken, LMAX Digital, Bitstamp

and Crypto.com.

Coinbase operates as a remote-first company and has no physical headquarters, and is registered as a money services business

with FinCEN, and holds licenses to engage in money transmission, or the state equivalent, in the majority of U.S.

headquarters are located in San Francisco, California, and is registered as a money services business with FinCEN and holds licenses to

engage in money transmission, or the state equivalent, in the majority of U.S.

LMAX Digital is a Gibraltar based exchange regulated

by the GFSC as a DLT provider for execution and custody services.

LMAX Digital does not hold a BitLicense and is part of LMAX Group, a

U.K.-based operator of a FCA regulated Multilateral Trading Facility and Broker-Dealer.

Bitstamp is a U.K.-based exchange registered as

an MSB with FinCEN and licensed as a virtual currency business under the NYDFS BitLicense as well as money transmitter in various U.S.

Crypto.com is a Singapore-based trading platform with a Digital Token License from the Monetary Authority of Singapore.

is also registered as a Money Services Business with FinCEN.

The Trust issues Shares only

in blocks of 10,000 Shares (a “Basket”) or multiples thereof.

Baskets are issued and redeemed in exchange for cash.

Shares will not be redeemed by the Trust but are listed and traded on the Exchange under the ticker symbol “TOXR”.

issues Shares in Baskets on a continuous basis at the applicable net asset value (“NAV”) per Share on the creation order date.

The Trust pays the unitary Sponsor fee of 2.5% of the Trust’s

XRP holdings.

The Sponsor fee is paid by the Trust to the Sponsor as compensation for services performed under the Trust Agreement.

Sponsor fee accrues daily and is payable in XRP weekly in arrears.

The administrator for the Trust (the “Administrator”) calculates

the Sponsor fee on a daily basis by applying an annualized rate to the Trust’s total XRP holdings, and the amount of XRP payable

in respect of each daily accrual is determined by reference to the Benchmark Provider.

The Sponsor has agreed to pay all operating expenses

(except for litigation expenses and other extraordinary expenses) out of the Sponsor fee.

The Trust incurred Sponsor fees for the nine-month period ended September

30, 2025 and for the three months ended September 30, 2025 of $4,753,883 and $1,829,200, respectively.

Trust is an “emerging growth company” as that term is used in the Securities Act, and, as such, the Trust may elect to comply

with certain reduced public company reporting requirements.

of Net Asset Value

In seeking to achieve its investment objective, the Trust holds XRP at its Custodians and values its

Shares daily based on the Pricing Benchmark.

The Trust is a passive investment vehicle and is not a leveraged product.

The Sponsor does

not actively manage the XRP held by the Trust.

The Trust issues Shares

only in Creation Baskets of 10,000 or multiples thereof.

Creation Baskets are issued and redeemed in exchange for cash.

Individual Shares

will not be redeemed by the Trust but are listed and traded on the Exchange under the ticker symbol “TOXR”.

The Trust issues

Shares in Creation Baskets on a continuous basis at the applicable NAV per Share on the creation order date

The Trust pays the

unitary Sponsor Fee of 0.30% of the Trust’s NAV.

Prior to December 11, 2025, the Sponsor Fee was 2.50%.

The Sponsor Fee is

paid by the Trust to the Sponsor as compensation for services performed under the Trust Agreement.

The Sponsor Fee accrues daily and

is payable in XRP weekly in arrears.

The Administrator calculates the Sponsor Fee on a daily basis by applying a 0.30% annualized

rate to the Trust’s NAV, and the amount of XRP payable in respect of each daily accrual is determined by reference to the

Pricing Benchmark.

The Sponsor has agreed to pay all operating expenses (except for litigation expenses and other extraordinary

expenses) out of the Sponsor Fee.

The Trust is an “emerging

growth company” as that term is used in the Securities Act, and, as such, the Trust may elect to comply with certain reduced public

company reporting requirements.

Calculation of NAV and NAV per Share

The NAV of the Trust is used

1 unchanged sentence

The NAV is calculated on each day other

than when the Exchange is closed for regular trading (a “Business Day”) and is equal to the aggregate value of the Trust’s

assets less its liabilities based on the Benchmark Provider price.

than a day when the Exchange is closed for regular trading (a “Business Day”) and is equal to the aggregate value of the Trust’s

assets less its liabilities based on the Pricing Benchmark.

In determining the NAV of the Trust on any Business Day, the Administrator

4 unchanged sentences

In addition to calculating

NAV and NAV per Share, for purposes of the Trust’s financial statements, the Trust determines the NAV of the XRP market that the

Trust considers its “principal market” as of 4:00 p.m.

ET on the valuation date (the “Principal Market NAV”) and

Principal Market NAV per Share on each valuation date for such financial statements.

The determination of the Principal Market NAV and

Principal Market NAV per Share is identical to the calculation of NAV and NAV per Share, respectively, except that the value of XRP is

determined using the fair value of XRP based on the price in the XRP market that the Trust considers its “principal market”

as of 4:00 p.m.

ET on the valuation date, rather than using the Benchmark Provider.

NAV and NAV per Share are not measures calculated in accordance with GAAP and are not intended as substitutes for Principal Market and

Principal Market NAV per Share, respectively.

NAV and NAV per Share, for purposes of the Trust’s financial statements, the Trust determines the net asset value of the XRP market

that the Trust considers its “principal market” as of 4:00 p.m.

ET on the valuation date (the “Principal Market NAV”)

and the NAV per Share of the XRP market that the Trust considers its “principal market” as of 4:00 p.m.

ET on the valuation

date (the “Principal Market NAV per Share”) on each valuation date for such financial statements.

The determination of the

Principal Market NAV and Principal Market NAV per Share is identical to the calculation of NAV and NAV per Share, respectively, except

that the value of XRP is determined using the fair value of XRP based on the price in the XRP market that the Trust considers its “principal

market” as of 4:00 p.m.

ET on the valuation date, rather than using the Pricing Benchmark.

NAV and NAV per Share are

not measures calculated in accordance with GAAP and are not intended as substitutes for Principal Market and Principal Market NAV per

Share, respectively.

Critical Accounting Estimates

financial statements and accompanying notes are prepared in accordance with GAAP.

The preparation of these financial statements relies

on estimates and assumptions that impact the Trust’s financial position and results of operations.

These estimates and assumptions

affect the Trust’s application of accounting policies.

The financial statements and

accompanying notes are prepared in accordance with GAAP.

The preparation of these financial statements relies on estimates and assumptions

that impact the Trust’s financial position and results of operations.

These estimates and assumptions affect the Trust’s application

of accounting policies.

Below is a summary of accounting policies on cash and investment valuation.

There were no material estimates involving a significant level of estimation uncertainty that had or are reasonably likely to have had

a material impact on the Trust’s financial condition used in the preparation of the financial statements.

In addition, please refer

to Note 2 to the Financial Statements included in this report for further discussion of the Trust’s accounting policies.

There were no material estimates involving

a significant level of estimation uncertainty that had or are reasonably likely to have had a material impact on the Trust’s financial

condition used in the preparation of the financial statements.

In addition, please refer to Note 2 to the Financial Statements included

in this report for further discussion of the Trust’s accounting policies.

Cash includes non-interest

13 unchanged sentences

traded price from the Trust’s principal market for XRP as of 4:00 p.m.

ET on the Trust’s financial statement measurement

ET on the Trust’s financial statement measurement date.

Results of Operations

of September 30, 2025, the Trust had a net closing balance of 98,120,000 XRP with a value of $280,028,593, based on the Index price of

$2.8539 on September 30, 2025 based on the price of XRP in the principal market.

For the Three

Months ended on September 30, 2025

Trust’s NAV increased from $225,184,821 on June 30, 2025 to $279,895,631 on September 30, 2025.

The increase in the Trust’s

NAV resulted primarily from an increase in the price of XRP of 25.08% (from $2.2816 per XRP on June 30, 2025 to $2.8539 per XRP on September

Trust’s net increase in net assets resulting from operations for the three months ended September 30, 2025 was $54,710,810.

was the result of a change in unrealized appreciation on investment in XRP of $56,103,429, a net realized gain of $533,848 on the sale

of XRP for purposes of distributing to the Sponsor as the Sponsor’s fee, and net change in unrealized loss on Sponsor fee payable

The Trust’s expenses for the three-month period were $1,829,200, relating to the Sponsor’s fees.

Months ended on September 30, 2025

The Trust’s NAV increased from $209,352,190 on December 31, 2024 to $279,895,631 on September 30, 2025.

The increase in the Trust’s

NAV resulted primarily from an increase in the price of XRP of 36.22% (from $2.0951 per XRP on December 31, 2024 to $2.8539 per

XRP on September 30, 2025).

Trust’s net increase in net assets resulting from operations for the nine months ended September 30, 2025 was $70,543,441.

was the result of a change in unrealized appreciation on investment in XRP of $74,667,302, a net realized gain of $677,164 on the sale

of XRP for purposes of distributing to the Sponsor as the Sponsor’s fee, and net change in unrealized loss on Sponsor fee payable

The Trust expenses for the nine-month period were $4,753,883, relating to the Sponsor’s fees.

and Capital Resources

Trust is not aware of any trends, demands, commitments, events, or uncertainties that are reasonably likely to result in material changes

to its liquidity needs.

The Trust’s only ordinary recurring expense is expected to be the fee paid to the Sponsor at an annual

rate of 0.30% of the Trust’s total XRP holdings.

In exchange for the Sponsor’s fee, the Sponsor has agreed to assume the

ordinary fees and expenses incurred by the Trust, including but not limited to the following:

fees charged by Administrator, the Custodians,

transfer agent and the trustee, fees payable to the marketing agent for services it provides to the Trust, the Exchange’s listing

fees, typical maintenance and transaction fees of the DTC, SEC registration fees, printing and mailing costs, website fees, tax reporting

fees, audit fees, license fees and expenses, up to $100,000 per annum in ordinary legal fees and expenses.

The Sponsor bears expenses

in connection with the Trust’s organization and initial offering costs.

Sponsor is not required to pay any extraordinary or non-routine expenses.

Extraordinary expenses are fees and expenses which are unexpected

or unusual in nature, such as legal claims and liabilities and litigation costs or indemnification or other unanticipated expenses.

Extraordinary

fees and expenses also include material expenses which are not currently anticipated obligations of the Trust.

The Trust will be responsible

for the payment of such expenses to the extent any such expenses are incurred.

Routine operational, administrative, and other ordinary

expenses are not deemed extraordinary expenses.

For the Three Months Ended March 31, 2026

The Trust’s NAV decreased

from $247,658,271 on December 31, 2025 to $142,148,631 on March 31, 2026, a 42.60% decrease.

The decrease in the Trust’s NAV resulted

primarily from a 26.47% decrease in the price of XRP, which fell from $1.83 on December 31, 2025 to $1.34 on March 31, 2026.

in the Trust’s NAV was further amplified by a net decrease in outstanding Shares, which fell from 13,890,000 on December 31, 2025

to 10,850,000 on March 31, 2026, a result of 990,000 Shares (99 Baskets) being created and 4,030,000 Shares (403 Baskets) being redeemed

during the quarter.

Net decrease in net assets

resulting from operations for the three months ended March 31, 2026 was $(52,307,128), resulting from a net change in unrealized depreciation

on investment in XRP of $(40,434,409), a net realized loss of $(11,683,909) from XRP sold for redemptions, a net realized loss of $(63,157)

from XRP sold to pay the Sponsor Fee, and a net investment loss of $(142,862), partially offset by a net realized gain of $16,471 on in-kind

liabilities paid and a net change in unrealized appreciation on Sponsor Fee payable of $738.

Other than the Sponsor Fee of $142,862, the

Trust had no expenses during the quarter.

For the Three Months ended on March 31, 2025

The Trust’s NAV increased

from $209,352,190 on December 31, 2024 to $209,384,354 on March 31, 2025, a 0.02% increase.

The increase in the Trust’s NAV resulted

primarily from a 0.74% increase in the price of XRP, which rose from $2.10 on December 31, 2024 to $2.11 on March 31, 2025.

were created or redeemed during the quarter.

Net increase in net assets

resulting from operations for the three months ended March 31, 2025 was $32,164, resulting from a net change in unrealized appreciation

on investment in XRP of $1,375,222, a net change in unrealized appreciation on Sponsor Fee payable of $84,129, and a net realized gain

of $131,491 from XRP sold to pay the Sponsor Fee, partially offset by a net investment loss of $(1,558,678).

The Trust’s only expense

during the quarter was the Sponsor Fee of $1,558,678.

Liquidity and Capital Resources

The Trust is not aware of

any trends, demands, commitments, events, or uncertainties that are reasonably likely to result in material changes to its liquidity needs.

The Trust’s only ordinary recurring expense is the fee paid to the Sponsor at an annual rate of 0.30% of the Trust’s total

In exchange for the Sponsor Fee, the Sponsor has agreed to assume the ordinary fees and expenses incurred by the Trust, including

but not limited to the following:

fees charged by the Administrator, the Custodians, the Transfer Agent and the Trustee, the Marketing

Fee, the Exchange’s listing fees, typical maintenance and transaction fees of the Depository Trust Company (“DTC”),

SEC registration fees, printing and mailing costs, website fees, tax reporting fees, audit fees, license fees and expenses, up to $100,000

per annum in ordinary legal fees and expenses.

The Sponsor bears expenses in connection with the Trust’s organization and initial

offering costs.

The Sponsor is not required

to pay any extraordinary or non-routine expenses.

Extraordinary expenses are fees and expenses which are unexpected or unusual in nature,

such as legal claims and liabilities and litigation costs or indemnification or other unanticipated expenses.

Extraordinary fees and expenses

also include material expenses which are not currently anticipated obligations of the Trust.

The Trust will be responsible for the payment

of such expenses to the extent any such expenses are incurred.

Routine operational, administrative, and other ordinary expenses are not

deemed extraordinary expenses.

The Trust will sell XRP on an as-needed basis to pay the Sponsor’s fee.

Sheet Arrangements

Trust does not have any off-balance sheet arrangements.

Off-Balance Sheet Arrangements

The Trust does not have any

off-balance sheet arrangements.

Quantitative and Qualitative Disclosures

about Market Risks

The Trust is a smaller reporting

company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information otherwise required under this

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