SEC Filing Document

Company: Canary Staked TRX ETF
Ticker: 
CIK: 2064768
Filing Type: S-1
Document Type: S-1
Date Filed: 2025-04-18
Accession Number: 0001999371-25-004423
Exchange: 
SIC Code: 6221
SIC Description: Commodity Contracts Brokers & Dealers
URL: https://www.sec.gov/Archives/edgar/data/2064768/000199937125004423/canary-s1_041825.htm

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purposes of the Trust’s periodic financial statements. The Sponsor has the exclusive authority to determine the NAV of the Trust. The Sponsor has delegated to the Administrator the responsibility to calculate the NAV of the Trust and the NAV, based on a pricing source selected by the Sponsor (the Pricing Benchmark). The Administrator will determine the NAV of the Trust each business day. In determining the NAV of the Trust, the Administrator values the TRX held by the Trust based on the Pricing Benchmark, unless otherwise determined by the Sponsor in its sole discretion. If the Pricing Benchmark is not available or the Sponsor in its sole discretion determines that the Pricing Benchmark should not be used, the Trust’s holdings may be fair valued in accordance with the policy approved by the Sponsor. The Sponsor does not anticipate that the need to “fair value” TRX will be a common occurrence.

The
Sponsor reserves the right to adjust the Share price of the Trust in the future to maintain convenient trading ranges for investors. Any
adjustments would be accomplished through stock splits or reverse stock splits. Such splits would decrease (in the case of a split) or
increase (in the case of a reverse split) the proportionate NAV per Share, but would have no effect on the net assets of the Trust or
the proportionate voting rights of Shareholders or the value of any Shareholder’s investment.

The
Trust’s periodic financial statements may not utilize the NAV of the Trust determined by reference to the Pricing Benchmark to the
extent the methodology used to calculate the Pricing Benchmark is deemed not to be consistent with GAAP. The Trust’s periodic financial
statements will be prepared in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
Topic 820, “Fair Value Measurements and Disclosures” (“ASC Topic 820”) and utilize an exchange-traded price from
the Trust’s principal market for TRX on the Trust’s financial statement measurement date. The Sponsor will determine in its
sole discretion the valuation sources and policies used to prepare the Trust’s financial statements in accordance with GAAP. The
Trust intends to engage a third-party vendor to obtain a price from a principal market for TRX, which will be determined and designated
by such third-party vendor daily based on its consideration of several exchange characteristics, including oversight, and the volume and
frequency of trades. Under GAAP, such a price is expected to be deemed a Level 1 input in accordance with the ASC Topic 820 because it
is expected to be a quoted price in active markets for identical assets or liabilities.

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 financial statements, the Trust follows ASC 820-10, which outlines the application of
fair value accounting. ASC 820-10 determines fair value to be the price that would be received for TRX 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 TRX
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 may transact through TRX Trading Counterparties, in multiple markets, and
its application of ASC 820-10 reflects this fact. The Trust anticipates that, while multiple venues and types of markets will be
available to the TRX Trading Counterparties from whom the Sponsor acquires or disposes of the Trust’s TRX, the principal
market in each scenario is determined by looking at the market-based level of volume and TRX trading activity. TRX Trading
Counterparties may transact in a Brokered Market, a Dealer Market, Principal-to-Principal Markets and Exchange Markets, each as
defined in the FASB ASC Master Glossary. Based on information reasonably available to the Trust, Exchange Markets have the greatest
volume and level of activity for the asset. The Trust therefore looks to accessible Exchange Markets as opposed to the Brokered
Market, Dealer Market and Principal-to-Principal Markets to determine its principal market. As a result of the aforementioned
analysis, an Exchange Market has been selected as the Trust’s principal market. The Trust determines its principal market (or
in the absence of a principal market the most advantageous market) on a quarterly basis to determine which market is its Principal
Market for the purpose of calculating fair value for the creation of quarterly and annual financial statements.

The
process that the Sponsor has developed for identifying a principal market, as prescribed in ASC 820-10, which outlines the application
of fair value accounting. The process begins by identifying publicly available, well established and reputable TRX trading venues (Exchange
Markets, as defined in the FASB ASC Master Glossary), which are selected by the Sponsor and its affiliates in their sole discretion. Those
markets include Binance, Bitfinex, Bitflyer, Bitstamp, Coinbase Pro, Crypto.com, Gemini, HitBTC, Huobi, Kraken, KuCoin, OKEx, Poloniex.
The Sponsor then, through a service provider, calculates on each valuation period, the highest volume venue during the 60-minute period
prior to 4:00 ET for TRX. The Sponsor then identifies that market as the principal market for TRX during that period, and uses the price
for TRX from that venue at 4:00 ET as the principal market price.

ADDITIONAL
INFORMATION ABOUT THE TRUST

The
Trust

The
Trust is a Delaware statutory trust, formed on April 8, 2025, pursuant to the Delaware Statutory Trust Act. The Trust continuously issues
shares representing fractional undivided beneficial interest in and ownership of the Trust that may be purchased and sold on the Exchange.
The Trust will operate pursuant to Trust Agreement, as amended and/or restated from time to time. CSC Delaware Trust Company, a Delaware
trust company, is the Delaware trustee of the Trust. The Trust is managed and controlled by the Sponsor. The Sponsor is a limited liability
company formed in the state of Delaware on September 12, 2024.

The
number of outstanding Shares is expected to increase and decrease from time to time as a result of the creation and redemption of Baskets.
The creation and redemption of Baskets requires the delivery to the Trust or the distribution by the Trust of the amount of cash represented
by the NAV of the Baskets being created or redeemed. The total amount of cash required for the creation of Baskets will be based on the
combined net assets represented by the number of Baskets being created or redeemed. The Sponsor recognizes that the size of the Baskets
may impact the effectiveness of the arbitrage mechanism of the Trust’s creation and redemption process, and accordingly may adjust
the size of the Baskets to enhance the activities of the Authorized Participants in the secondary market for the Trust’s Shares.

The Trust
has no fixed termination date.

The Trust’s Fees and
Expenses

The
Trust will pay the Sponsor an annual unified fee of ____% of the Trust’s TRX Holdings (the “Sponsor Fee”). The
Trust’s “TRX Holdings” is the quantity of the Trust’s TRX plus any cash or other assets held by the Trust
represented in TRX as calculated using the Pricing Benchmark price, less its liabilities (which include estimated accrued but unpaid
fees and expenses) represented in TRX as calculated using the Pricing Benchmark price. The Sponsor Fee is paid by the Trust to the
Sponsor as compensation for services performed under the Trust Agreement. The Administrator will calculate the Sponsor Fee in
respect of each day by reference to the prior day’s TRX Holdings. Except for periods during which all or a portion of the
Sponsor Fee is being waived, the Sponsor Fee will accrue daily in TRX and be payable monthly in TRX or cash. To the extent there are
any on-chain transaction fees incurred in connection with the transfers of TRX to pay the Sponsor Fee, the Sponsor, and not the
Trust, shall bear such fees. The Sponsor may, at its sole discretion and from time to time, waive all or a portion of the Sponsor
Fee for stated periods of time. The Sponsor is under no obligation to waive any portion of its fees and any such waiver shall create
no obligation to waive any such fees during any period not covered by the waiver.