Overview and Fiscal Year Change

Grayscale Stellar Lumens Trust (the “Trust”) has released its Transition Report on Form 10-KT, marking a significant change in its financial reporting. Notably, the Trust has amended its fiscal year-end from September 30 to December 31, effective with the fiscal year commencing January 1, 2025. As a result, this filing covers a three-month transition period from October 1, 2025 to December 31, 2025. Going forward, annual reports will cover the twelve-month period ending December 31 each year.

Key Point for Investors: The transition in fiscal year reporting will affect the timing of future financial disclosures and may impact the comparability of historical and future results. Investors should pay attention to this new reporting cycle when evaluating the Trust’s financial performance.

Summary of Principal Risk Factors

The report provides a comprehensive summary of principal risk factors that may materially impact the Trust and the value of its Shares. These include:

• Extreme Volatility in Digital Assets: XLM and other digital assets have experienced severe price swings, which could result in the Shares losing all or substantially all value.
• Development and Acceptance of Blockchain Technologies: The medium-to-long term value of the Shares is heavily tied to the market perception, technological advancement, and acceptance of XLM and blockchain technologies in general.
• Concentrated Ownership Risks: Large holders of XLM could impact market prices if they choose to sell or distribute significant amounts of the asset.
• Forks and Clones: Blockchain forks or the creation of clone networks could adversely affect the value of XLM and, subsequently, the Shares.
• Regulatory Uncertainty: The regulatory status of XLM and similar digital assets remains uncertain. A determination that XLM is a ‘security’ could result in extraordinary expenses, possible termination of the Trust, or other significant impacts.
• Tax Risks: Evolving interpretations of U.S. federal, state, and local tax laws could adversely affect the value of the Shares.
• Market Risks: Recent volatility and disruptions in the digital asset market, including loss of market confidence and negative media coverage, could impact liquidity and pricing.
• Operational Risks: Issues with Digital Asset Trading Platforms, including lack of transparency, front-running, wash-trading, and non-concurrent trading hours, may impact the value and liquidity of Shares.
• Trust-Specific Risks: The Trust relies on third parties for key functions. There is no ongoing redemption program, and the Shares have at times traded at substantial premiums or discounts to net asset value (NAV).
• Potential Conflicts of Interest: Conflicts may arise between the Sponsor, its affiliates, and the Trust, which could affect Trust operations and share value.

Important Note: The Trust has not always met its investment objective. Shares have traded at both significant premiums and discounts to the value of XLM held by the Trust, less expenses and liabilities. This deviation is a critical risk for investors.

Trust Structure and Investment Objective

The Trust’s objective is for the value of its Shares (based on XLM per Share) to reflect the value of XLM held by the Trust, as determined by the Index Price, less the Trust’s expenses and liabilities. As of December 31, 2025, each Share represents approximately 83.7958 XLM.

Noteworthy Characteristics:

• Shares offer investors an opportunity to gain exposure to XLM via a security, with logistical and safekeeping services managed by the Sponsor and Custodian.
• Investors can access digital asset markets more efficiently, potentially lowering transaction costs compared to direct XLM holdings.
• Shares are subject to restrictions: private placements are limited to accredited investors, and resale is subject to Rule 144 restrictions.

Potentially Price-Sensitive Information: The lack of an ongoing redemption program, restrictions on transfer, and the Trust’s ability to halt new share creations can lead to large discrepancies between Share market price and NAV, which could result in investor losses.

Regulatory and Legal Considerations

Key Regulatory Risks:

• Determination that XLM is a security could result in costly compliance, regulatory actions, or forced dissolution of the Trust.
• U.S. or foreign regulatory changes could restrict the use, trading, or custody of XLM and adversely affect Share value.
• The Trust, Sponsor, or Authorized Participant could be classified as money transmitters, leading to increased expenses and reduced liquidity.

Disclosure: No documents are incorporated by reference in this filing. All financial statements are included within the report.

Market and Trading for Investors

Trading Details:

• Shares are quoted on the OTCQX market. However, the Trust notes that non-concurrent trading hours between OTCQX and digital asset platforms can lead to price discrepancies.
• The Trust may trade at a premium or discount to NAV, and there is no arbitrage mechanism due to the lack of ongoing redemption and Rule 144 restrictions. This could lead to losses for investors who buy or sell at prices disconnected from the underlying value of XLM held by the Trust.

Important for Shareholders: Investors must be aware that market price movements of the Shares may not always track the value of XLM held by the Trust. The Trust has historically traded at both significant premiums and discounts to NAV.

Operational and Governance Highlights

Trust Operations:

• The Trust’s assets will not be loaned or pledged for any margin, loan, or other similar activities by the Sponsor or affiliates.
• The Trust can only be dissolved under specific circumstances, including at the discretion of the Sponsor.

Conflicts of Interest: The Sponsor and its affiliates may have conflicts with the Trust. The Sponsor’s continued service is not guaranteed and its discontinuance may be detrimental.

Access to Information: The Trust’s filings, including this and future reports, are available at grayscale.com/funds/grayscale-stellar-lumens-trust/ and the SEC’s EDGAR database. However, the content of these websites is not incorporated into the SEC filings.

Conclusion: What Investors Should Watch

Potential Market Movers:

• The fiscal year change may affect the timing of future results and reporting comparability.
• Persistent and notable deviations between Share market price and NAV are a material risk, especially due to the lack of an arbitrage mechanism and transfer restrictions.
• Any regulatory changes or enforcement tear at the heart of digital asset investing remain a key risk and could materially impact the Trust.
• Operational risks related to digital asset markets, including volatility, platform security, and transparency, remain highly relevant and could affect both value and liquidity.

Shareholders and prospective investors should closely monitor:

• Regulatory developments regarding XLM and digital assets
• Premium/discount trends relative to NAV
• Updates on the Trust’s redemption and trading policies
• Market and liquidity conditions for XLM and digital assets more broadly

In summary: This Transition Report highlights several material risks and operational changes that may affect the value of Grayscale Stellar Lumens Trust (XLM) Shares. The regulatory landscape, lack of redemption, historical deviation from NAV, and operational risks in digital assets are key factors that can move the share price and should be closely watched by all investors.