Grayscale Horizen Trust (ZEN) Files Transition Report on Form 10-KT: Key Investor Insights

Overview and Context

Grayscale Horizen Trust (ZEN) has filed a Transition Report on Form 10-KT, marking a significant change in its financial reporting calendar. Effective December 23, 2025, the Trust amended its fiscal year-end from September 30 to December 31. This transition report covers the three-month period from October 1, 2025 to December 31, 2025. Moving forward, annual reports will be filed for twelve-month periods ending December 31 each year.

Key Points for Investors

• Fiscal Year Change: The change in fiscal year-end could affect the timing and comparability of financial results, impacting investor expectations and trading patterns.
• Investment Objective: The Trust aims for the value of its Shares (based on ZEN per Share) to reflect the value of ZEN held, as determined by the Reference Rate Price, less expenses and liabilities. However, the report confirms that historically, Shares have traded at substantial premiums or discounts to the underlying NAV, and the Trust has not met its investment objective.
• Shares Outstanding and Market Value: As of March 6, 2026, 11,425,100 Shares were outstanding. As of June 30, 2025, the aggregate market value of Shares held by non-affiliates was \$4,766,586. The Shares trade on OTCQX under the ticker HZEN.
• Risk Factors:
  • Extreme Volatility: ZEN and other digital assets have experienced extreme price volatility, which could materially impact Share values. Shares could lose all or substantially all of their value.
  • Market Premium/Discount: Due to the lack of an arbitrage mechanism, limited redemption program, and different trading hours between OTCQX and digital asset trading platforms, Shares may trade at prices above or below NAV. This exposes investors to potential losses if market prices diverge from NAV.
  • Regulatory Risks: Regulatory changes, both in the US and abroad, could restrict the use or trading of ZEN and other digital assets, potentially leading to extraordinary expenses or termination of the Trust. A determination that ZEN is a “security” may have material effects.
  • Service Provider and Liquidity Risks: The Trust relies on third-party service providers and Authorized Participants. Replacement or failure of these could disrupt operations and safekeeping of assets, affecting liquidity and Share value.
  • Digital Asset Trading Platforms: Lack of regulation and transparency, as well as susceptibility to front-running and wash trading, may impact the value of digital assets and Shares.
  • Competition: Emergence or growth of other digital assets could negatively impact ZEN prices and Share values.
  • Tax and Accounting Risks: Uncertainties in tax treatment and potential corrections or restatements of financials may affect Shareholder returns and regulatory compliance.
  • Potential Conflicts of Interest: The Sponsor or its affiliates may have conflicts of interest with the Trust, and Shareholders cannot be assured of the Sponsor’s continued services.
• Industry and Market Data: The Trust relies on third-party market data and industry assumptions. These involve risks and uncertainties and are subject to change, potentially affecting forecasts and investor expectations.
• Access and Cost Efficiency: Shares are intended to provide investors with easier access to digital assets compared to direct ownership, with potentially lower transaction costs.
• Sponsor’s Fee: The Sponsor’s Fee is a competitive factor and directly influences Share value.
• Activities of the Trust: The Trust’s activities are limited to issuing Shares, managing ZEN, covering expenses, and handling Incidental Rights and IR Virtual Currency resulting from forks, airdrops, or similar events.
• Digital Asset Trading Platform Concentration: The report lists Binance as a key trading platform for ZEN, indicating market concentration and possible liquidity risks.

Potential Price Sensitive Information

• Shares Trade at Premium/Discount: The persistent divergence between OTCQX prices and NAV is a material concern. Investors may suffer losses if the market price is not closely linked to the underlying ZEN value.
• Regulatory Uncertainty: Any regulatory determination that ZEN is a “security,” or changes in US or foreign regulations, could be highly disruptive and potentially terminate the Trust or lead to extraordinary expenses.
• Extreme Market Volatility: The current digital asset market environment is characterized by disruption, negative publicity, and liquidity declines, which could materially affect Share values.
• Service Provider Dependence: Disruption or replacement of key service providers could impact operations and safekeeping of assets, materially affecting the Trust and Shareholders.
• Tax and Financial Reporting Risks: Uncertainty in tax treatment and the possibility of financial statement corrections or restatements may cause price swings and affect investor confidence.

Important Information for Shareholders

• Current Reporting Status: The Trust is not a well-known seasoned issuer and is not a shell company. It is required to file reports and has complied with all reporting obligations in the past 12 months.
• Emerging Growth Company: The Trust qualifies as an emerging growth company and has elected not to use extended transition periods for new or revised accounting standards.
• Documents Incorporated by Reference: None.
• Website Disclosure: Annual, quarterly, and current reports, as well as amendments, are available on the Sponsor’s website and on the SEC’s EDGAR system. Website contents are not incorporated into SEC filings.

Summary

Investors should be aware of the persistent risk that Shares may trade at a substantial premium or discount to NAV, and the lack of an arbitrage mechanism means this risk is ongoing. Regulatory uncertainty, extreme volatility in digital asset markets, and reliance on third-party service providers are key risks that could materially impact Share values and investor returns. These factors, combined with the Trust’s fiscal year change and evolving digital asset landscape, make this report highly relevant for current and prospective shareholders.

Disclaimer

This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell securities. Investors should conduct their own due diligence and consult with professional advisors before making investment decisions. The information is based on the Transition Report filed by Grayscale Horizen Trust (ZEN) and is subject to change.

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