Company: SVIX
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001013762-25-004207
Chunk: 548

Company: VS Trust
Filing Date: 2025-03-28
Form: 10-K
Item: Item 3
Chunk 548
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 sheet arrangements of any kind other than agreements entered into in the normal course of
business, which may include indemnification provisions related to certain risks service providers undertake in performing services which
are in the best interests of the Funds. While each Fund’s exposure under such indemnification provisions cannot be estimated, these
general business indemnifications are not expected to have a material impact on a Fund’s financial position.

Management fee payments made to the Sponsor are
calculated as a fixed percentage of each Fund’s NAV. As such, the Sponsor cannot anticipate the payment amounts that will be required
under these arrangements for future periods as NAVs are not known until a future date. The agreement with the Sponsor may be terminated
by either party upon 30 days written notice to the other party.

22

Critical Accounting Policies

Preparation of the financial statements and related
disclosures in compliance with accounting principles generally accepted in the United States of America requires the application of appropriate
accounting rules and guidance, as well as the use of estimates. The Trust’s and the Funds’ application of these policies
involves judgments and actual results may differ from the estimates used.

Each Fund has significant exposure to Financial
Instruments. The Funds hold a significant portion of their assets in swaps, futures, forward contracts or foreign currency forward contracts,
all of which are recorded on a trade date basis and at fair value in the financial statements, with changes in fair value reported in
the Statements of Operations.

The use of fair value to measure Financial Instruments,
with related unrealized gains or losses recognized in earnings in each period, is fundamental to the Trust’s and the Funds’
financial statements. The fair value of a Financial Instrument is the amount that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date (the exit price).

For financial reporting purposes, the Funds value
investments based upon the closing price in their primary markets. Accordingly, the investment valuations in these financial statements
may differ from those used in the calculation of certain Funds’ final creation/redemption NAV for the year ended December 31, 2024.

Short-term investments are valued at amortized
cost which approximates fair value for daily NAV purposes. For financial reporting purposes, short- term investments are valued at their
market price using information provided by a third-party pricing service or market quotations.

Derivatives (e.g., futures contracts, options,
swap agreements, forward agreements and foreign currency forward contracts) are generally valued