ZCSH 10-K & 10-Q changes, risk factors and insider trading

The following risks, some of which have occurred and any of which may occur in the future, can have a material adverse effect on our business or financial performance, which in turn can affect the price of the Shares. These are not the only risks we face. There may be other risks we are not currently aware of or that we currently deem not to be material but may become material in the future. The risk factors below should be read in conjunction with the other information included in this Annual Report on Form 10-K, including the Trust’s financial statements and related notes thereto, and our other filings with the SEC.

The trading prices of many digital assets, including ZEC, have experienced extreme volatility in recent periods and may continue to do so. Extreme volatility in the future, including declines in the trading prices of ZEC, could have a material adverse effect on the value of the Shares and the Shares could lose all or substantially all of their value.

The trading prices of many digital assets, including ZEC, have experienced extreme volatility throughout their existence, including in recent periodsexistence and may continue to do so. For instance, following significant increases throughout the majority of 2020, digital asset prices, including ZEC, experienced significant volatility throughout 2021 and 2022. This volatility became extreme in November 2022 when FTX, then a major Digital AssetFTX Trading Platform,Ltd. (“FTX”), halted customer withdrawals. Additionally, on October 10, 2025, it was reported that a sharp decline in digital asset market prices triggered the liquidation of approximately $20 billion in leveraged positions across the digital asset industry. Any similar halting of withdrawals or liquidations across leveraged positions in the digital asset industry in the future could further impact trading prices. See “—Recent developments in the digital asset economy have led to extreme volatility and disruption in digital asset markets, a loss of confidence in participants of the digital asset ecosystem, significant negative publicity surrounding digital assets broadly and market-wide declines in liquidity.” Digital asset prices, including ZEC, have continued to fluctuate widely through the date of this Annual Report.

Digital assets such as ZEC were only introduced within the past two decades, and the medium-to-long term value of the Shares is subject to a number of factors relating to the capabilities and development of blockchain technologies, such as the recentnessrecency of their development, their dependence on the internet and other technologies, their dependence on the role played by users, developers and miners and the potential for malicious activity. For example, the realization of one or more of the following risks could materially adversely affect the value of the Shares:

The open-source structure of many digital asset network protocols, such as the protocol for the Zcash Network, means that developers and other contributors are generallyoften not directly compensated for their contributions in maintaining and developing such protocols. As a result, the developers and other contributors of a particular digital asset may lack a financial incentive to maintain or develop the network or may lack the resources to adequately address emerging issues. Alternatively, some developers may be funded by companies whose interests are at odds with other participants in a particular digital asset network. A failure to properly monitor and upgrade the protocol of the Zcash Network could damage that network.

Moreover, in the past, flaws in the source code for digital asset networks and related protocols have been exposed and exploited, including flaws that disabled some functionality for users, exposed users’ personal information and/or resulted in the theft of users’ digital assets. The cryptography underlying ZECthe Zcash Network could prove to be flawed or ineffective, or developments in mathematics and/or technology, including advances in digital computing, algebraic geometry and quantum computing, could result in such cryptography becoming ineffective. Quantum computing technology is an emerging phenomenon which, because it is still developing, makes it difficult to predict its ultimate effect on the future value of Zcash and other digital assets. However, if quantum computing technology is able to advance and significantly increase its capacity relative to the capacity of today’s leading quantum computers, it could potentially undermine the viability of many of the cryptographic algorithms used across the world’s information technology infrastructure, including the cryptographic algorithms used for digital assets like Zcash. If quantum computing is able to advance in that way, there is a risk that quantum computing could materially reduce the security assumptions underlying Zcash’s protocol and result in the cryptography underlying the Zcash Network becoming ineffective. If such is realized,it could compromise the security of the Zcash Network or allow a malicious actor to compromise the wallets holding Zcash owned by the Trust or others on the Zcash Network, which would result in losses to Shareholders. For example, if sufficiently powerful quantum computers are developed, they could use known quantum algorithms to derive private keys from publicly available public keys, potentially allowing malicious actors to forge transaction signatures and misappropriate Zcash. There is no guarantee that new quantum-proof architectures will be built and appropriate transitions will be implemented across the network at scale in a timely manner; any such changes could require the achievement of broad consensus within the Zcash Network community and may result in a fork (or multiple forks), and there can be no assurance that such consensus would be achieved or the changes implemented successfully. In such a scenario, the Zcash Network may not be able to transition to quantum-resistant cryptography in a timely or effective manner. In any of these circumstances, a malicious actor may be able to take the Trust’s ZEC, which would adversely affect the value of the Shares. Moreover, functionality of the Zcash Network may be negatively affected by such an exploit such that it is no longer attractive to users, thereby dampening demand for ZEC. Even if another digital asset other than ZEC were affected by similar circumstances, any reduction in confidence in the source code or cryptography underlying digital asset networks and related protocols generally could negatively affect the demand for digital assets and therefore adversely affect the value of the Shares.

Moreover, because digital assets, including ZEC, have existed for a short period of time and are continuing to be developed, there may be additional risks to the digital asset networks and related protocols that are impossible to predict as of the date of this Annual Report.

Digital assets represent a relatively new and rapidly evolving industry, and the value of the Shares depends on the acceptance of ZEC.

The first digital asset, Bitcoin, was launched in 2009. ZEC launched in 2016. In general, digital asset networks, including the Zcash Network and related protocols represent a relatively new and rapidly evolving industry that is subject to a variety of factors that are difficult to evaluate. For example, the realization of one or more of the following risks could materially adversely affect the value of the Shares:

As of December 31, 2024,2025, the Zcash Network was capable of handling approximately 5 transactions per second, or approximately 40% of the daily transaction volume of the Bitcoin network.Network. In an effort to increase the volume of transactions that can be processed on a given digital asset network, many digital assetsasset networks are being upgraded with various features to increase the speed and throughput of digital asset transactions. For example, in August 2017, the Bitcoin Network was upgraded with a technical feature known as “Segregated Witness” that potentially doubles the transactions per second that can be handled on-chain. More importantly, Segregated Witness also enables so-called second layer solutions, such as the Lightning Network, or payment channels that greatly increase transaction throughput (i.e., millions of transactions per second). Wallets and “intermediaries,” or connecting nodes that facilitate payment channels, that support Segregated Witness or Lightning Network-like technologies have not seen wide-scale use as of December 31, 2024. Additionally, questions remain regarding Lightning Network services, such as its cost and who will serve as intermediaries.

As corresponding increases in throughput lag behind growth in the use of digital asset networks, average transaction fees and settlement times may increase considerably. For example, the Bitcoin networkNetwork has been, at times, at capacity, which has led to increased transaction fees. Since January 1, 2022,2023, Bitcoin average daily transaction fees have ranged from $0.38$0.31 per transaction on SeptemberDecember 8,7, 2024,2025, to as high as $124.17 per transaction, on April 20, 2024. As of December 31, 2024,2025, Bitcoin average daily transaction fees stood at $1.79$0.65 per transaction. Since January 1, 2021,2023, Zcash Network average daily transaction fees have ranged from $0.001 per transaction on February 26, 2023, to as high as $0.29$29.15 per transaction, on MarchSeptember 6,14, 2024.2025. As of December 31, 2024,2025, Zcash Network average daily transaction fees stood at $0.05$0.31 per transaction. Notwithstanding the increase in throughput on the Zcash Network as compared to the Bitcoin network,Network, settlement speeds on the Zcash Network have remained relatively constant since December 2019, when a network upgrade halved the target block interval to 1.3 minutes, although they can vary depending on the size of the number of pending transactions waiting to be included in a block. Increased transaction fees and decreased settlement speeds could preclude certain uses for ZEC (e.g., micropayments), and could reduce demand for, and the price of,of ZEC, which could adversely impact the value of the Shares.

If the digital asset awardrewards for mining blocks and transaction fees for recording transactions on the Zcash Network are not sufficiently high to incentivize miners, or if certain jurisdictions continue to limit or otherwise regulate mining activities, miners may cease expanding processing power or demand high transaction fees, which could negatively impact the value of ZEC and the value of the Shares.

If the digital asset awardsrewards for mining blocks or the transaction fees for recording transactions on the Zcash Network are not sufficiently high to incentivize miners, or if certain jurisdictions continue to limit or otherwise regulate mining activities, miners may cease expending processing power to mine blocks and the security of the Zcash Blockchain could be compromised. For example, the realization of one or more of the following risks could materially adversely affect the value of the Shares:

Alternatively, miners could collude in an anti-competitive manner to reject low transaction fees on the Zcash Network and force users to pay higher fees, thus reducing the attractiveness of the Zcash Network. Higher transaction confirmation fees resulting throughfrom collusion or otherwise may adversely affect the attractiveness of the Zcash Network, the value of ZEC and the value of the Shares.

Digital asset mining operations can consume significant amounts of electricity, which may have a negative environmental impact and give rise to public opinion against allowing, or government regulations restricting, the use of electricity for mining operations. Additionally, miners may be forced to cease operations during an electricity shortage or power outage, or when the cost of electricity as compared to mining, validating, or transaction fees make conducting operations uneconomical.outage.

Moreover, because of the Zcash Network’s privacy-preserving features, it is possible that certain pools have exceeded in the past, or may exceed now or in Zcash’s future, the 50% threshold on the Zcash Network. As of the date of this Annual Report, there are no known reports of malicious activity on, or control of, the Zcash Network, and while historically there have been mining pools that reportedly exceeded the 50% hashrate threshold, no mining pools on the Zcash Network are currently believed to have exceeded the 50% hashrate threshold. However,Further, because of Zcash’s privacy-preserving features, it is possible that certain mining pools have exceeded in the past, or may exceed now or in the future, the 50% threshold on the Zcash Network. The possible crossing of the 50% threshold indicates a greater risk that a single mining pool or small group of mining pools, for example, could exert authority over the validation of ZEC transactions, and this risk is heightened if over 50% of the processing power on the network falls within the jurisdiction of a single governmental authority. If network participants, including the core developers and the administrators of mining pools, do not act to ensure greater decentralization of ZEC mining processing power, the feasibility of a malicious actor obtaining control of the processing power on the Zcash Network will increase, which may adversely affect the value of the Shares.

For example, in August 2020, the Ethereum Classic Network was the target of two double-spend attacks by an unknown actor or actors that gained more than 50% of the processing power of the Ethereum Classic Network. The attacks resulted in reorganizations of the Ethereum Classic Blockchain that allowed the attacker or attackers to reverse previously recorded transactions in excess of $5.0 million and $1.0 million. Furthermore, on June 2, 2018, the Horizen Network,network, another zk-SNARKs-based protocol, was the target of a double-spend attack by an unknown actor that gained more than 50% of the processing power of the Horizen Network.network. The attack was the result of delayed submission of blocks to the Horizen Network.network. Any similar attacks on the Zcash Network could negatively impact the value of ZEC and the value of the Shares.

The Zcash Network operates using open-source protocols, meaning that any user can download the software, modify it and then propose that the users and miners of ZEC adopt the modification. When a modification is introduced and a substantial majority of users and miners’ consent to the modification, the change is implemented and the network remains uninterrupted. However, if less than a substantial majority of users and miners’ consent to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a “hard fork” of the Zcash Network, with one group running the pre-modified software and the other running the modified software. The effect of such a fork would be the existence of two versions of Bitcointhe Zcash Network running in parallel, yet lacking interchangeability. For example, in August 2017, Bitcoin “forked” into Bitcoin and a new digital asset, Bitcoin Cash, as a result of a several-year dispute over how to increase the rate of transactions that the Bitcoin networkNetwork can process. Some users of the original network may harbor ill will toward the Bitcoin Cashnew network, and vice versa. These users may attempt to negatively impact the use or adoption of the Bitcoin Cashnew network. A fork may also occur as a result of an unintentional or unanticipated software flaw in the various versions of otherwise compatible software that users run. Such a fork could lead to users and miners abandoning the digital asset with the flawed software. It is possible, however, that a substantial number of users and miners could adopt an incompatible version of the digital asset while resisting community-led efforts to merge the two chains. This could result in a permanent fork.

From time to time, digital assets may undergo name changes and associated rebranding initiatives. For example, Bitcoin Cash may sometimes be referred to as Bitcoin ABC in an effort to differentiate itself from any Bitcoin Cash hard forks, such as Bitcoin Satoshi’s Vision, and in the third quarter of 2018, the team behind ZEN rebranded and changed the name of ZenCash to “Horizen.” We cannot predict the impact of any name change and any associated rebranding initiative on the Zcash Network or ZEC. After a name change and an associated rebranding initiative, a digital asset may not be able to achieve or maintain brand name recognition or status that is comparable to the recognition and status previously enjoyed by such digital asset. The failure of any name change and any associated rebranding initiative by a digital asset may result in such digital asset not realizing some or all of the anticipated benefits contemplated by the name change and associated rebranding initiative, and could negatively impact the value of ZEC and the value of the Shares.

The cryptography used to enhance the privacy of transactions on the Zcash Network is new and could ultimately fail, or could be used to facilitate illicit activities, and businesses that facilitate transactions in ZEC maycould be at increased risk of criminal or civil lawsuits, or of having services cut off, which could negatively affect the price of ZEC and the value of the Shares.

When the Trust and the Sponsor, acting on behalf of the Trust, sell or deliver, as applicable, ZEC, Incidental Rights and/or IR Virtual Currency, they generally do not transact directly with counterparties other than the Authorized Participant, a Liquidity Provider or other similarly eligible financial institutions that are subject to federal and state licensing requirements and maintain practices and policies designed to comply with AML and KYC regulations. When an Authorized Participant or a Liquidity Provider sources ZEC in connection with the creation of the Shares or facilitates transactions in ZEC at the direction of the Trust or the Sponsor, it directly faces its counterparty and, in all instances, the Authorized Participant or the Liquidity Provider, as applicable, follow policies and procedures designed to ensure that it knows the identity of its counterparty. The Authorized Participant is a registered broker-dealer and therefore subject to AML and countering the financing of terrorism obligations under the Bank Secrecy Act as administered by FinCEN and further overseen by the SEC and FINRA.

In accordance with its regulatory obligations, the Authorized Participant, or the Liquidity Provider, conducts customer due diligence and enhanced due diligence on its counterparties, which enables it to determine each counterparty’s AML and other risks and assign an appropriate risk rating.

As part of its counterparty onboarding process, each of the Authorized Participant and the Liquidity Provider uses third-party services to screen prospective counterparties against various watch lists, including the Specially Designated Nationals List of the Treasury Department Office of Foreign Assets Control (“OFAC”) and countries and territories identified as non-cooperative by the Financial Action Task Force. If the Sponsor, the Trust, the Authorized Participant or the Liquidity Provider were nevertheless to transact with such a sanctioned entity, the Sponsor, the Trust, the Authorized Participant and the Liquidity Provider would be at increased risk of potential criminal or civil lawsuits.

SinceIn the fourthpast quarterand through the date of 2021this andAnnual to date,Report, digital asset prices have fluctuatedexperienced widely.significant Thisfluctuations, has ledleading to volatility and disruption in the digital asset markets and financial difficulties for several prominent industry participants, including Digital Asset Trading Platforms, hedge funds and lending platforms. For example, in the first half of 2022, digital asset lenders Celsius Network LLC and Voyager Digital Ltd. and digital asset hedge fund Three Arrows Capital each entered into insolvency proceedings. This resulted in a loss of confidence in participants in the digital asset ecosystem, negative publicity surrounding digital assets more broadly and market-wide declines in digital asset trading prices and liquidity.

Thereafter, in November 2022, FTX, the third largest Digital Asset Trading Platform by volume at the time, halted customer withdrawals amid rumors of the company’s liquidity issues and likely insolvency. Shortly thereafter, FTX’s CEO resigned and FTX and several affiliates of FTX filed for bankruptcy. The U.S. Department of Justice subsequently brought criminal charges, including charges of fraud, violations of federal securities laws, money laundering, and campaign finance offenses, against FTX’s former CEO and others. In November 2023, FTX’s former CEO was convicted of fraud and money laundering. Similar charges related to violations of anti-money laundering laws were brought in November 2023 against Binance and its former CEO. FTX is also under investigation by the SEC, the Justice Department, and the Commodity Futures Trading Commission, as well as by various regulatory authorities in the Bahamas, Europe and other jurisdictions. In response to these events, the digital asset markets have experienced extreme price volatility and declines in liquidity. In addition, several other entities in the digital asset industry filed for bankruptcy following FTX’s bankruptcy filing, such as BlockFi Inc. and Genesis Global Capital, LLC (“Genesis Capital”), a subsidiary of Genesis Global Holdco, LLC (“Genesis Holdco”). The SEC also brought charges against Genesis Capital and Gemini Trust Company, LLC (“Gemini”) in January 2023 for their alleged unregistered offer and sale of securities to retail investors. In October 2023, the New York Attorney General (“NYAG”) brought charges against Gemini, Genesis Capital, Genesis Asia Pacific PTE. LTD. (“Genesis Asia Pacific”), Genesis Holdco (together with Genesis Capital and Genesis Asia Pacific, the “Genesis Entities”), Genesis Capital’s former CEO, DCG, and DCG’s CEO alleging violations of the New York Penal Law, the New York General Business Law and the New York Executive Law. In February 2024, the NYAG amended its complaint to expand the charges against Gemini, the Genesis Entities, Genesis Capital’s former CEO, DCG, and DCG’s CEO to include harm to additional investors. Also in February 2024, the Genesis Entities entered into a settlement agreement with the NYAG to resolve the NYAG’s allegations against the Genesis Entities, which settlement was subsequently approved by the Bankruptcy Court of the Southern District of New York.

These events have also led to significant negative publicity around digital asset market participants including DCG, Genesis and DCG’s other affiliated entities. This publicity could negatively impact the reputation of the Sponsor and have an adverse effect on the trading price and/or the value of the Shares. Moreover, sales of a significant number of Shares of the Trust as a result of these events could have a negative impact on the trading price of the Shares.

Anan increase in the global ZEC supply that is publicly available for trading;

Feesfees associated with processing a ZEC transaction and the speed at which ZEC transactions are settled on the Zcash Network;

While smaller Digital Asset Trading Platforms are less likely to have the infrastructure and capitalization that make larger Digital Asset Trading Platforms more stable, larger Digital Asset Trading Platforms are more likely to be appealing targets for hackers and malwaremalware. andFor theirexample, shortcomingsin February 2025, hackers reportedly compromised a transaction from Bybit’s multisignature cold wallets, enabling the hackers to steal over $1.5 billion of Ether from Bybit. Shortcomings or ultimate failures of larger Digital Asset Trading Platforms are more likely to have contagion effects on the digital asset ecosystem, including on the price of ZEC, and therefore may also be more likely to be targets of regulatory enforcement action. For example, in November 2022, FTX, another of the world’s largest Digital Asset Trading Platforms, filed for bankruptcy protection and subsequently halted customer withdrawals as well as trading on its FTX.US platform. Fraud, security failures and operational problems all played a role in FTX’s issues and downfall. Moreover, Digital Asset Trading Platforms have been a subject of enhanced regulatory and enforcement scrutiny, and Digital Asset Markets have experienced continued instability, following the failure of FTX. In particular, in June 2023, the SEC brought the Binance Complaint and Coinbase Complaint, alleging that Binance and Coinbase operated unregistered securities exchanges, brokerages and clearing agencies. In addition, in November 2023, the SEC brought the Kraken Complaint, alleging that Kraken operated as an unregistered securities exchange, brokerage and clearing agency. Between February 2025 and May 2025, the SEC entered into court-approved joint stipulations to dismiss each of the Binance Complaint, Coinbase Complaint and the Kraken Complaint. The SEC has terminated its investigation or enforcement action into many other digital asset market participants including the Zcash Foundation in January 2026.

The Index has a limited history and the Index Price is a composite reference rate calculated using trading price data from various Digital Asset Trading Platforms chosen by the Index Provider. The Digital Asset Trading Platforms chosen by the Index Provider have also changed over time. For example, on July 28, 2024, the Index Provider added Bitfinex to the Index due to the trading platform meeting the Index Provider’s minimum liquidity requirement as part of its scheduled quarterly review, and removed Gemini from the Index due to the trading platform failing to meet the Index Provider’s minimum liquidity requirement. On December 22, 2024, the Index Provider added back Gemini to the Index due to the trading platform meeting the Index Provider’s minimum liquidity requirement, and did not remove any Constituent Trading Platforms as part of its scheduled quarterly review. The Index Provider may remove or add Digital Asset Trading Platforms to the Index in the future at its discretion. For more information on the inclusion criteria for Digital Asset Trading Platforms in the Index, see “Item 1. Business—Overview of the ZEC Industry and Market—ZEC Value—The Index and the Index Price.”

As of December 31, 2024,2025, ZEC was the 10415th largest digital asset by market capitalization as tracked by CoinMarketCap.com. As of December 31, 2024,2025, the alternative digital assets tracked by CoinMarketCap.com, had a total market capitalization of approximately $3,291.9$2,678.0 billion (including the approximately $916.4$8.4 million market cap of ZEC), as calculated using market prices and total available supply of each digital asset, excluding stablecoins and tokens pegged to other assets. ZEC faces competition from a wide range of digital assets. For example, Monero,XMR, DashDASH, and Oasis NetworkROSE are all focused on enhancing privacy. Many consortiums and financial institutions are also researching and investing resources into private or permissioned blockchain platforms rather than open platforms like the Zcash Network. In addition, ZEC is currently supported by fewer trading platforms than more established digital assets, such as Bitcoin and Ether, which could impact its liquidity. Competition from the emergence or growth of alternative digital assets could have a negative impact on the demand for, and price of, ZEC and thereby adversely affect the value of the Shares. Moreover, the growth of tokenized assets and other on-chain financial products that offer yield, stability, or regulatory clarity may also divert capital and user engagement away from the Zcash Network, which could negatively impact Zcash’s market demand and the value of the Shares.

The Trust considers investment transactions to be the receipt of ZEC forby the Trust in connection with Share creations and the delivery of ZEC forby the Trust in connection with Share redemptions or for payment of expenses in ZEC. 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 ZEC.

Financial Highlights for the Years ended December 31, 2024,2025, 20232024 and 20222023 (All amounts in the following table and the subsequent paragraphs, except Share, per Share, ZEC and price of ZEC amounts, are in thousands)

Net realized and unrealized gain on investment in ZEC for the year ended December 31, 20242025 was $11,248,$179,067, which includes a realized lossgain of ($906)$97 on the transfer of ZEC to pay the Sponsor’s Fee, and $12,154$178,970 net change in unrealized appreciation/depreciation on investment in ZEC. Net realized and unrealized gain on investment in ZEC for the year was driven by ZEC price appreciation from $27.69 per ZEC as of December 31, 2023, to $56.12 per ZEC as of December 31, 2024.2024, to $509.35 per ZEC as of December 31, 2025. Net increase in net assets resulting from operations was $10,952$177,767 for the year ended December 31, 2024,2025, which consisted of the net realized and unrealized gain on investment in ZEC, less the Sponsor’s Fee of $296.$1,300. Net assets increased to $22,040$200,441 at December 31, 2024,2025, aan 146%809% increase for the year. The increase in net assets resulted from the aforementioned ZEC price appreciation and the contribution of approximately 78,19210,637 ZEC with a value of $2,127$634 to the Trust in connection with Share creations during the period, partially offset by the withdrawal of approximately 9,0839,839 ZEC to pay the foregoing Sponsor’s Fee.

The Principal Market NAV and Principal Market NAV per Share are calculated using the fair value of ZEC based on the price provided by 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, in accordance with U.S. GAAP (2) The Trust’s NAV per Share is derived from the Index Price as represented by the Index as of 4:00 p.m., New York time, on the valuation date. The Trust’s NAV per Share is calculated using a non-GAAP methodology where the price is derived from multiple Digital Asset Trading Platforms. Prior to February 23, 2024, NAV was referred to as Digital Asset Holdings and NAV per Share was referred to as Digital Asset Holdings per Share. See “Item 1. Business—Overview of the ZEC Industry and Market—ZEC Value—The Index and the Index Price” for a description of the Index and the Index Price. The Digital Asset Trading Platforms included in the Index as of December 31, 2024 were Coinbase, Kraken, Bitfinex and Gemini. The Digital Asset Trading Platforms included in the Index as of December 31, 2023 were Coinbase, Kraken and Gemini. The Digital Asset Trading Platforms included in the Index as of December 31, 2022 were Coinbase, Kraken, and Binance.US.

For accounting purposes, the Trust reflects creations and the ZEC 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 ZEC 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. The Trust currently has no intention of seeking regulatory approval to operate an ongoing redemption program.

The following table illustrates the movements in the Index Price from January 1, 20202021 to December 31, 2024. During such period, the Index Price has ranged from $18.14 to $365.90, with the straight average being $72.09 through December 31, 2024.2025. The Sponsor has not observed a material difference between the Index 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 ZEC, as reported on the Trust’s principal market, from January 1, 20202021 to December 31, 2024. During such period, the price of ZEC has ranged from $18.13 to $365.90, with the straight average being $72.10 through December 31, 2024:2025.

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 ZEC and, from time to time on a periodic basis, issues Creation Baskets in exchange for deposits of ZEC. As a passive investment vehicle, the Trust’s investment objective is for the value of the Shares (based on ZEC per Share) to reflect the value of the ZEC held by the Trust, determined by reference to the Index Price, less the Trust’s expenses and other liabilities. While an investment in the Shares is not a direct investment in ZEC, the Shares are designed to provide investors with a cost-effective and convenient way to gain investment exposure to ZEC. To date, the Trust has not met its investment objective and the Shares quoted on OTCQXOTC Markets have not reflected the value of the ZEC 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.

Financial Highlights for the Three and Six Months Ended MarchJune 31,30, 2026 and 2025 (All amounts in the following table and the subsequent paragraphs, except Share, ZEC and price of ZEC amounts, are in thousands)

Net realized and unrealized lossgain on investment in ZEC for the three months ended MarchJune 31,30, 2026 was ($100,275),$56,869, which includes a realized gain of $425$767 on the transfer of ZEC to pay the Sponsor’s Fee and net change in unrealized appreciation/depreciation on investment in ZEC of ($100,700).$56,102. Net realized and unrealized lossgain on investment in ZEC for the period was driven by ZEC price depreciationappreciation from $509.35 per ZEC as of December 31, 2025, to $254.27 per ZEC as of March 31, 2026, to $399.44 per ZEC as of June 30, 2026. Net decreaseincrease in net assets resulting from operations was ($100,995)$55,806 for the three months ended MarchJune 31,30, 2026, which consisted of the net realized and unrealized lossgain on investment in ZEC, plusless the Sponsor’s Fee of $720.$1,063. Net assets decreasedincreased to $99,446$155,252 at MarchJune 31,30, 2026, a 50%56% decreaseincrease for the three-month period. The decreaseincrease in net assets resulted from the aforementioned ZEC price depreciationappreciation, andpartially offset by the withdrawal of approximately 2,4182,430 ZEC to pay the foregoing Sponsor’s Fee.

Net realized and unrealized lossgain on investment in ZEC for the three months ended MarchJune 31,30, 2025 was ($7,086),$376, which includes a realized loss of ($202$200) on the transfer of ZEC to pay the Sponsor’s Fee and net change in unrealized appreciation/depreciation on investment in ZEC of ($6,884).$576. Net realized and unrealized lossgain on investment in ZEC for the period was driven by ZEC price depreciationappreciation from $56.12 per ZEC as of December 31, 2024, to $38.08 per ZEC as of March 31, 2025 to $39.02 per ZEC as of June 30, 2025. Net decreaseincrease in net assets resulting from operations was ($7,182)$275 for the three months ended MarchJune 31,30, 2025, which consisted of the net realized and unrealized lossgain on investment in ZEC, plusless the Sponsor’s Fee of $96.$101. Net assets decreasedincreased to $15,049$15,324 at MarchJune 31,30, 2025, a 32%2% decreaseincrease for the three-month period. The decreaseincrease in net assets resulted from the aforementioned ZEC price depreciationappreciation, andpartially offset by the withdrawal of approximately 2,4282,455 ZEC to pay the foregoing Sponsor’s Fee, partially offset by the contribution of approximately 4,888 ZEC with a value of $191 to the Trust in connection with Share creations during the period.Fee.

The Trust’s NAV and NAV per Share are derived from the Index Price, as represented by the Index as of 4:00 p.m., New York time, on the valuation date. 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 MarchJune 31,30, 2026 were Coinbase,Binance, Kraken,Gemini, Kraken and Gemini.OKX. The Digital Asset Trading Platforms included in the Index as of MarchJune 31,30, 2025 were Coinbase, Kraken, Gemini, and Bitfinex. The Digital Asset Trading Platforms included in the Index as of MayJuly 4,30, 2026 were Binance, Bitstamp by Robinhood, Gemini, Kraken and OKX. See “Item 1. Business—Overview of the ZEC Industry and Market—ZEC Value—The Index and the Index Price” in our Annual Report for a description of the Index and the Index Price.

The following chart illustrates the movement in the Trust’s NAV per Share versus the Index Price and the Trust’s Principal Market NAV per Share from October 24, 2017 (the inception of the Trust’s operations) to MarchJune 31,30, 2026. For more information on the determination of the Trust’s NAV, see “Item 1. Business—Overview of the ZEC Industry and Market—ZEC Value—The Index and the Index Price” in our Annual Report.

The following table illustrates the movements in the Index Price from AprilJuly 1, 2021 to MarchJune 31,30, 2026. The Sponsor has not observed a material difference between the Index 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 ZEC, as reported on the Trust’s principal market, from AprilJuly 1, 2021 to MarchJune 31,30, 2026.

The following chart sets out the historical closing prices for the Shares as reported by OTCQXOTC Markets and the Trust’s NAV per Share from October 18, 2021 to MarchJune 31,30, 2026.

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 OTCQXOTC Markets divided by the Trust’s NAV per Share from October 18, 2021 to MarchJune 31,30, 2026.