Notice of Adjourned Meeting - -3x South Korea

Leverage Shares plc has announced an adjourned meeting for the holders of its -3x Short South Korea ETP Securities, scheduled for April 10, 2026. This meeting follows a Threshold Event Date on February 25, 2026, when the ETP Security Value fell below 2% of the Principal Amount. The proposed consolidation aims to increase the ETP Security Value to approximately US$30 per security, which is expected to enhance liquidity for secondary market investors. While the economic interest of securityholders is intended to remain unchanged, the consolidation will reduce the aggregate Principal Amount and Principal Protection Amount of the ETP Securities. Notably, two holders representing 2,000 ETP Securities have expressed their support for this proposal, indicating a degree of backing from the existing securityholders.

The context of this announcement is critical, as it reflects the ongoing challenges faced by the -3x Short South Korea ETP Securities. The Threshold Event Date signifies a significant decline in the value of these securities, which may be indicative of broader market trends or specific issues affecting the South Korean market. The proposed consolidation is a strategic move aimed at stabilizing the ETP's value and improving its attractiveness to investors. By targeting a higher ETP Security Value, Leverage Shares plc is attempting to mitigate the effects of the recent decline and restore confidence among securityholders. The adjourned meeting, initially convened on March 25, 2026, was postponed due to a lack of quorum, underscoring the importance of securing adequate participation for the proposed changes to be approved.

Financially, the announcement raises questions about the current capital structure and funding sufficiency of the ETP. While the consolidation is designed to improve liquidity, it also implies a reduction in the total Principal Amount, which could affect the perceived value of the ETP Securities. The consolidation process will involve a calculation of the Consolidation Ratio, which will determine how many ETP Securities each holder will possess post-consolidation. This ratio will be based on the ETP Security Value at a specified Valuation Date, which has yet to be announced. The potential impact on funding runway is uncertain at this stage, as the announcement does not provide specific details regarding cash reserves or ongoing operational costs. However, the consolidation could be seen as a necessary step to avoid further declines in value and maintain investor interest.

In terms of valuation, the announcement does not provide specific market capitalisation figures for Leverage Shares plc or its ETP Securities. However, the proposed consolidation to achieve a Target ETP Security Value of approximately US$30 suggests an attempt to align the securities with more stable and higher-value benchmarks. Without precise figures, it is challenging to conduct a direct peer comparison. However, it is essential to note that the consolidation is intended to enhance liquidity, which is a critical factor for investors in exchange-traded products. The success of this initiative will depend on the market's reception and the ability of the ETP to attract new investment following the consolidation.

The execution record of Leverage Shares plc in managing its ETPs will be crucial in assessing the potential success of this consolidation. The fact that the original meeting was adjourned due to a lack of quorum may raise concerns about shareholder engagement and support for management's proposals. If the company has a history of meeting timelines and effectively communicating with securityholders, it may bolster confidence in the proposed changes. Conversely, repeated failures to secure necessary approvals could signal deeper issues within the company's governance or market strategy.

One specific risk arising from this announcement is the potential for further declines in the ETP Security Value if the consolidation does not yield the desired liquidity improvements. If the market perceives the consolidation as a desperate measure rather than a strategic enhancement, it could lead to increased selling pressure on the ETP Securities. Additionally, the lack of clarity regarding the timing of the Valuation Date and the resulting Consolidation Ratio could create uncertainty among investors, further complicating the outlook for the ETP.

Looking ahead, the next measurable catalyst will be the adjourned meeting on April 10, 2026, where securityholders will vote on the proposed consolidation. The outcome of this meeting will be pivotal in determining the future trajectory of the -3x Short South Korea ETP Securities. If the proposal is approved, it could lead to a stabilization of the ETP's value and potentially attract new investors. Conversely, a rejection could exacerbate existing challenges and lead to further declines in value.

In conclusion, the announcement of the adjourned meeting and proposed consolidation represents a moderate strategic response to the recent decline in the ETP Security Value. While the intention is to improve liquidity and stabilize the ETP, the execution of this plan will be critical in determining its success. The potential risks associated with further declines in value and the need for shareholder support underscore the importance of the upcoming meeting. As such, this announcement can be classified as moderate in terms of its materiality, as it seeks to address immediate concerns while laying the groundwork for future stability.

Key insights

• ●Consolidation aims for US$30 per security to enhance liquidity.
• ●Two holders support the consolidation proposal.
• ●Next catalyst is the adjourned meeting on April 10, 2026.

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