Annual Transition Report (Form 10-KT)

Management's Discussion and Analysis ofFinancial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read together with, and is qualified in its entirety by reference to, our audited financial statements and related notes included elsewhere in this Transition Report, which have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). The following discussion may contain forward-looking statements based on assumptions we believe to be reasonable. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this Transition Report, particularly in "Item 1A. Risk Factors" and "Forward-Looking Statements."

Trust Overview

The Trust is a passive entity that is managed and administered by the Sponsor and does not have any officers, directors or employees. The Trust holds ZEN and, from time to time on a periodic basis, issues Creation Baskets in exchange for deposits of ZEN. As a passive investment vehicle, the Trust's investment objective is for the value of the Shares (based on ZEN per Share) to reflect the value of the ZEN held by the Trust, determined by reference to the Reference Rate Price, less the Trust's expenses and other liabilities. While an investment in the Shares is not a direct investment in ZEN, the Shares are designed to provide investors with a cost-effective and convenient way to gain investment exposure to ZEN. To date, the Trust has not met its investment objective and the Shares quoted on OTCQX have not reflected the value of the ZEN held by the Trust, less the Trust's expenses and other liabilities, but instead have traded at both premiums and discounts to such value, which at times have been substantial. The Trust is not managed like a business corporation or an active investment vehicle. The Trust will not utilize leverage, derivatives or any similar arrangements in seeking to meet its investment objective.

Change in Fiscal Year

The Trust historically reported on a fiscal year basis ending September 30. On December 23, 2025, the Sponsor amended the Trust Agreement to change the Trust's fiscal year-end for financial reporting purposes from September 30 to December 31, effective beginning with the fiscal year commencing January 1, 2025 and ending December 31, 2025. As a result of this change, the Trust is filing this Transition Report on Form 10-KT for the three-month transition period from October 1, 2025 to December 31, 2025. Beginning with the fiscal year ending December 31, 2026, the Trust intends to file annual reports on Form 10-K for the twelve-month period ending December 31 of each year.

Critical Accounting Policies and Estimates

Investment Transactions and Revenue Recognition

The Trust considers investment transactions to be the receipt of ZEN by the Trust in connection with Share creations and the delivery of ZEN by the Trust in connection with Share redemptions or for payment of expenses in ZEN. At this time, the Trust is not accepting redemption requests from shareholders. The Trust records its investment transactions on a trade date basis and changes in fair value are reflected as net change in unrealized appreciation or depreciation on investments. Realized gains and losses are calculated using the specific identification method. Realized gains and losses are recognized in connection with transactions including settling obligations for the Sponsor's Fee in ZEN.

Principal Market and Fair Value Determination

To determine which market is the Trust's principal market (or in the absence of a principal market, the most advantageous market) for purposes of calculating the Trust's net asset value in accordance with U.S. GAAP ("Principal Market NAV"), the Trust follows Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 820-10, Fair Value Measurement, which outlines the application of fair value accounting. ASC 820-10 determines fair value to be the price that would be received for ZEN in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires the Trust to assume that ZEN is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact.

The Trust only receives ZEN in connection with a creation order from the Authorized Participant (or a Liquidity Provider) and does not itself transact on any Digital Asset Markets. Therefore, the Trust looks to market-based volume and level of activity for Digital Asset Markets. The Authorized Participant(s), or a Liquidity Provider, may transact in a Brokered Market, a Dealer Market, Principal-to-Principal Markets and Exchange Markets (referred to as "Trading Platform Markets" in this Transition Report), each as defined in the FASB ASC Master Glossary (collectively, "Digital Asset Markets").

In determining which of the eligible Digital Asset Markets is the Trust's principal market, the Trust reviews these criteria in the following order:

The Trust determines its principal market (or in the absence of a principal market the most advantageous market) annually and conducts a quarterly analysis to determine (i) if there have been recent changes to each Digital Asset Market's trading volume and level of activity in the trailing twelve months, (ii) if any Digital Asset Markets have developed that the Trust has access to, or (iii) if recent changes to each Digital Asset Market's price stability have occurred that would materially impact the selection of the principal market and necessitate a change in the Trust's determination of its principal market.

The cost basis of the ZEN received by the Trust in connection with a creation order is recorded by the Trust at the fair value of ZEN at 4:00 p.m., New York time, on the creation date for financial reporting purposes. The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors.

Investment Company Considerations

The Trust is an investment company for U.S. GAAP purposes and follows accounting and reporting guidance in accordance with the FASB ASC Topic 946, Financial Services -Investment Companies. The Trust uses fair value as its method of accounting for ZEN in accordance with its classification as an investment company for accounting purposes. The Trust is not a registered investment company under the Investment Company Act. U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates and these differences could be material.

Review of Financial Results

Financial Highlights for the Three Months ended December 31, 2025 and 2024, and Years ended September 30, 2025, 2024 and 2023

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

Net realized and unrealized gain on investment in ZEN for the three months ended December 31, 2025 was $1,261 which includes a realized loss of ($45) on the transfer of ZEN to pay the Sponsor's Fee and net change in unrealized appreciation/depreciation on investment in ZEN of $1,306. Net realized and unrealized gain on investment in ZEN for the period was driven by ZEN price appreciation from $7.83 per ZEN as of September 30, 2025, to $9.14 per ZEN as of December 31, 2025. Net increase in net assets resulting from operations was $1,192 for the three months ended December 31, 2025, which consisted of the net realized and unrealized gain on investment in ZEN, less the Sponsor's Fee of $69. Net assets increased to $8,673 at December 31, 2025, a 16% increase for the

period. The increase in net assets was due to the aforementioned ZEN price appreciation, partially offset by the withdrawal of approximately 6,002 ZEN to pay the foregoing Sponsor's Fee.

Net realized and unrealized gain on investment in ZEN for the three months ended December 31, 2024 was $15,433, which includes a realized loss of ($24) on the transfer of ZEN to pay the Sponsor's Fee and net change in unrealized appreciation on investment in ZEN of $15,457. Net realized and unrealized gain on investment in ZEN for the period was driven by ZEN price appreciation from $8.13 per ZEN as of September 30, 2024, to $28.91 per ZEN as of December 31, 2024. Net increase in net assets resulting from operations was $15,377 for the three months ended December 31, 2024, which consisted of the net realized and unrealized gain on investment in ZEN, less the Sponsor's Fee of $56. Net assets increased to $25,713 at December 31, 2024, a 439% increase for the three-month period. The increase in net assets resulted from the aforementioned ZEN price appreciation and the contribution of approximately 307,060 ZEN with a value of $5,569 to the Trust in connection with Share creations during the period, partially offset by the withdrawal of approximately 3,945 ZEN to pay the foregoing Sponsor's Fee.

Net realized and unrealized loss on investment in ZEN for the year ended September 30, 2025 was ($3,639), which includes a realized loss of ($173) on the transfer of ZEN to pay the Sponsor's Fee and net change in unrealized appreciation/depreciation on investment in ZEN of ($3,466). Net realized and unrealized loss on investment in ZEN for the year was driven by ZEN price depreciation from $8.13 per ZEN as of September 30, 2024, to $7.83 per ZEN as of September 30, 2025. Net decrease in net assets resulting from operations was ($3,885) for the year ended September 30, 2025, which consisted of the net realized and unrealized loss on investment in ZEN, plus the Sponsor's Fee of $246. Net assets increased to $7,481 at September 30, 2025, a 57% increase for the year. The increase in net assets resulted from the contribution of approximately 390,780 ZEN with a value of $6,599 to the Trust in connection with Share creations during the year, partially offset by the aforementioned ZEN price depreciation and the withdrawal of approximately 21,655 ZEN to pay the foregoing Sponsor's Fee.

Net realized and unrealized gain on investment in ZEN for the year ended September 30, 2024 was $236, which includes a realized loss of ($164) on the transfer of ZEN to pay the Sponsor's Fee and net change in unrealized appreciation/depreciation on investment in ZEN of $400. Net realized and unrealized gain on investment in ZEN for the year was driven by ZEN price appreciation from $7.77 per ZEN as of September 30, 2023, to $8.13 per ZEN as of September 30, 2024. Net increase in net assets resulting from operations was $96 for the year ended September 30, 2024, which consisted of the net realized and unrealized gain on investment in ZEN, less the Sponsor's Fee of $140. Net assets increased to $4,767 at September 30, 2024, a 2% increase for the year. The increase in net assets resulted from the aforementioned ZEN price appreciation, partially offset by the withdrawal of approximately 14,853 ZEN to pay the foregoing Sponsor's Fee.

Net realized and unrealized loss on investment in ZEN for the year ended September 30, 2023 was ($3,873), which includes a realized loss of ($164) on the transfer of ZEN to pay the Sponsor's Fee and net change in unrealized appreciation/depreciation on investment in ZEN of ($3,709). Net realized and unrealized loss on investment in ZEN for the year was driven by ZEN price depreciation from $14.10 per ZEN as of September 30, 2022, to $7.77 per ZEN as of September 30, 2023. Net decrease in net assets resulting from operations was ($4,020) for the year ended September 30, 2023, which consisted of the net realized and unrealized loss on investment in ZEN, plus the Sponsor's Fee of $147. Net assets decreased to $4,671 at September 30, 2023, a 46% decrease for the year. The decrease in net assets resulted from the aforementioned ZEN price depreciation and the withdrawal of approximately 15,218 ZEN to pay the foregoing Sponsor's Fee.

Cash Resources and Liquidity

The Trust has not had a cash balance at any time since inception. When selling ZEN, 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 ZEN, Incidental Rights and/or IR Virtual Currency needed to pay expenses in order to minimize the Trust's holdings of assets other than ZEN. 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.

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 during the periods covered by this Transition Report was the Sponsor's Fee. 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

For accounting purposes, the Trust reflects creations and the ZEN receivable with respect to such creations on the date of receipt of a notification of a creation but does not issue Shares until the requisite amount of ZEN is received. At this time, the Trust is not accepting redemption requests from shareholders. Subject to receipt of regulatory approval from the SEC and approval by the Sponsor in its sole discretion, the Trust may in the future operate a redemption program.

Historical NAV and ZEN Prices

As movements in the price of ZEN will directly affect the price of the Shares, investors should understand recent movements in the price of ZEN. Investors, however, should also be aware that past movements in the ZEN price are not indicators of future movements. 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 versus the Reference Rate Price and the Trust's Principal Market NAV per Share from August 6, 2018 (the inception of the Trust's operations) to December 31, 2025. For more information on the determination of the Trust's NAV, see "Item 1. Business-Overview of the ZEN Industry and Market-ZEN Value-The Reference Rate and the Reference Rate Price."

The following table illustrates the movements in the Reference Rate Price from January 1, 2021 to December 31, 2025. As described above, effective June 20, 2023, any references to the "Reference Rate Price" in this Transition Report refers to the Secondary Reference Rate Price set by the Secondary Reference Rate selected by the Secondary Reference Rate Provider. The Sponsor has not observed a material difference between the Reference Rate Price and average prices from the Constituent Trading Platforms individually or as a group.

The following table illustrates the movements in the Digital Asset Market price of ZEN, as reported on the Trust's principal market, from January 1, 2021 to December 31, 2025.

The following chart sets out the historical closing prices for the Shares as reported by OTCQX and the Trust's NAV per Share from October 19, 2021 to December 31, 2025.

HZEN Premium/(Discount): HZEN Share Price vs. 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 price for the Shares as reported by OTCQX and the Trust's NAV per Share from October 19, 2021 to December 31, 2025.

HZEN Premium/(Discount): HZEN Share Price vs. NAV per Share (Non-GAAP) (%)