What changed in this filing

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Item 1. Financial Statements

2024-11-07 compared with 2024-08-08 · 140 added, 47 removed, 221 unchanged (46% of the section changed)

2 unchanged sentences

Statement of Assets and Liabilities (Unaudited)

At June 30, 2024

At September 30, 2024

September 30,

Investment in ether, at fair value (a)

$ 1,019,423,341

1,019,426,601

Sponsor’s fees payable

1 unchanged sentence

Commitments and contingent liabilities (Note 6)

$ 1,019,342,543

Shares issued and outstanding (b)

Net asset value per Share (Note 2C)

Cost of investment in ether is $10,000,000.

Cost of investment in ether:

$1,157,342,168.

No par value, unlimited amount authorized.

1 unchanged sentence

iShares ® Ethereum Trust ETF

Statement of Operations (Unaudited)

For the Period from May 21, 2024 (Date of Seeding) to June 30, 2024

Statements of Operations (Unaudited)

For the three months ended September 30, 2024 and the Period from May 21, 2024 (Date of Seeding) to September 30, 2024

September 30,

For the Period

from May 21, 2024

(Date of Seeding)

2024 (Date of

September 30,

Sponsor’s fees

$ 358,491 $ 358,911

Sponsor’s fees waiver

( 186,634 ) ( 186,634 )

Total expenses

171,857 172,277

Net investment loss

( 171,857 ) ( 172,277 )

Net Realized and Unrealized Gain (Loss)

Net realized gain

Net realized loss from:

Ether sold to pay expenses

( 21,660 ) ( 21,660 )

Net change in unrealized appreciation/depreciation

Net realized and unrealized gain

Net increase in net assets resulting from operations

Net increase in net assets per Share (a)

Net increase in net assets per Share based on average shares outstanding during the period.

( 138,509,122 ) ( 137,918,827 )

Net realized and unrealized loss

( 138,530,782 ) ( 137,940,487 )

Net (decrease) in net assets resulting from operations

$ ( 138,702,639 ) $ ( 138,112,764 )

Net (decrease) in net assets per Share (a)

$ ( 4.67 ) $ ( 6.69 )

Net decrease in net assets per Share based on average shares outstanding during the period.

See notes to financial statements.

iShares ® Ethereum Trust ETF

Statement of Changes in Net Assets (Unaudited)

For the Period from May 21, 2024 (Date of Seeding) to June 30, 2024

Statements of Changes in Net Assets (Unaudited)

For the three months ended September 30, 2024 and the period from May 21, 2024 (Date of Seeding) to September 30, 2024

For the Period

1 unchanged sentence

(Date of Seeding)

to September 30,

Net Assets at May 21, 2024

Net investment loss

Net realized gain

Net change in unrealized appreciation/depreciation

2 unchanged sentences

Contributions for Shares issued

Distributions for Shares redeemed

Net increase in net assets from capital share transactions

1 unchanged sentence

Net Assets at June 30, 2024

Net investment loss ( 171,857 )

Net realized loss ( 21,660 )

Net change in unrealized appreciation/depreciation ( 138,509,122 )

Net decrease in net assets resulting from operations ( 138,702,639 )

Capital Share Transactions:

Contributions for Shares issued 1,147,455,307

Net increase in net assets from capital share transactions 1,147,455,307

Increase in net assets 1,008,752,668

Net Assets at September 30, 2024 $ 1,019,342,543

Shares issued and redeemed

5 unchanged sentences

Statement of Cash Flows (Unaudited)

For the Period from May 21, 2024 (Date of Seeding) to June 30, 2024

For the Period from May 21, 2024 (Date of Seeding) to September 30, 2024

For the Period

1 unchanged sentence

(Date of Seeding)

to September 30,

Cash Flows from Operating Activities

Net increase in net assets resulting from operations

Net decrease in net assets resulting from operations

$ ( 138,112,764 )

Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:

Purchases of ether

( 1,157,427,156 )

Proceeds from ether sold to pay expenses

4 unchanged sentences

Net cash used in operating activities

$ ( 1,157,452,047 )

Cash Provided by Financing Activities

Proceeds from issuance of Shares

1,157,455,307

Net cash provided by financing activities

$ 1,157,455,307

Net increase in cash

4 unchanged sentences

Schedule of Investments (Unaudited)

At June 30, 2024

June 30, 2024

At September 30, 2024

September 30, 2024

387,843 $ 1,157,342,168 $ 1,019,423,341

Total Investments — 100.01 %

Less Liabilities — 0.00 %

1,019,423,341

Other Assets less Liabilities — (0.01) %

Net Assets — 100.00 %

$ 1,019,342,543

See notes to financial statements.

1 unchanged sentence

Notes to Financial Statements (Unaudited)

June 30, 2024

September 30, 2024

1 - Organization

4 unchanged sentences

The Trust issues units of beneficial interest (“Shares”) representing fractional undivided beneficial interests in its net assets.

On August 8, 2024, the Trust’s name was changed from iShares Ethereum Trust to iShares Ethereum Trust ETF.

On May 21, 2024, BlackRock Financial Management, Inc.

4 unchanged sentences

The costs incurred in connection with the purchase of ether with the proceeds of the Seed Creation Baskets were borne by the Trust.

Sponsor’s fee started accruing daily at an annualized rate equal to 0.25 % of the net asset value of the Trust on June 24, 2024.

The Trust’s registration statement on Form S- 1 relating to its continuous public offering of Shares was declared effective by the Securities and Exchange Commission (“SEC”) on July 22, 2024 and the Shares were listed on The Nasdaq Stock Market LLC (“NASDAQ”) on July 23, 2024.

The Sponsor’s fee started accruing daily at an annualized rate equal to 0.25 % of the net asset value of the Trust on June 24, 2024.

The Trust’s registration statement on Form S- 1 relating to its continuous public offering of Shares was declared effective by the Securities and Exchange Commission (“SEC”) on July 22, 2024 ( Effective Date) and the Shares were listed on The Nasdaq Stock Market LLC (“NASDAQ”) on July 23, 2024.

The Trust seeks to reflect generally the performance of the price of ether.

28 unchanged sentences

If the CF Benchmarks Index is not used, the Trust will notify Shareholders in a prospectus supplement, in its periodic Exchange Act reports and/or on the Trust’s website.

The Trust Administrator calculates the NAV of the Trust once on each day other than a Saturday or a Sunday, or a day on which NASDAQ is closed for regular trading (a “Business Day”).

The Trust Administrator calculates the net asset value of the Trust and the NAV once on each day other than a Saturday or a Sunday, or a day on which NASDAQ is closed for regular trading (a “Business Day”).

The NAV for a normal trading day will be released after 4:00 p.m.

9 unchanged sentences

Gain or loss on sales of ether is calculated on a trade date basis using the average cost method.

The following table summarizes activity in ether for the period from May 21, 2024 ( Date of Seeding) to June 30, 2024:

Period from May 21, 2024 (Date of Seeding) to June 30, 2024

The following table summarizes activity in ether for the three months ended September 30, 2024:

Three Months Ended September 30, 2024

Beginning balance

2 unchanged sentences

384,840 1,147,427,156 1,147,427,156 —

Ether sold for the redemption of shares

Ether sold to pay expenses

Net realized gain

( 28 ) ( 84,988 ) ( 63,328 ) ( 21,660 )

Net realized loss

— — ( 21,660 ) —

Net change in unrealized appreciation/depreciation

2 unchanged sentences

387,843 $ 1,157,342,168 $ 1,019,423,341 $ ( 21,660 )

The following table summarizes activity in ether for the period from May 21, 2024 ( Date of Seeding) to September 30, 2024:

Period from May 21, 2024 (Date of

Seeding) to September 30, 2024

Beginning balance

— $ — $ — $ —

Ether purchased

387,871 1,157,427,156 1,157,427,156 —

Ether sold to pay expenses

( 28 ) ( 84,988 ) ( 63,328 ) ( 21,660 )

Net realized loss

— — ( 21,660 ) —

Net change in unrealized appreciation/depreciation

— — ( 137,918,827 ) —

Ending balance

387,843 $ 1,157,342,168 $ 1,019,423,341 $ ( 21,660 )

Calculation of Net Asset Value

1 unchanged sentence

ET, the net asset value of the Trust is obtained by subtracting all accrued fees, expenses and other liabilities of the Trust from the total assets held by the Trust.

The Trustee computes the NAV by dividing the net asset value of the Trust by the number of Shares outstanding on the date the computation is made.

The Trust Administrator computes the NAV by dividing the net asset value of the Trust by the number of Shares outstanding on the date the computation is made.

Cash and Cash Equivalents

1 unchanged sentence

federally insured limits.

Offering of the Shares

Shares are issued and redeemed continuously in aggregations of 40,000 Shares (a “Basket”) or integral multiples thereof, based on the quantity of ether attributable to each Share (net of accrued but unpaid Sponsor’s fee and any accrued but unpaid expenses or liabilities).

Individual investors cannot purchase or redeem Shares in direct transactions with the Trust.

Only registered broker-dealers that are eligible to settle securities transactions through the book entry facilities of the Depository Trust Company and that have entered into a contractual arrangement with the Sponsor governing, among other matters, the creation and redemption of Shares (such broker-dealers, the “Authorized Participants”), can place orders to receive Baskets in exchange for cash.

Baskets may be redeemed by the Trust in exchange for the cash proceeds from selling the amount of ether corresponding to their redemption value.

The Trust engages in ether transactions for converting cash into ether (in association with purchase orders) and ether into cash (in association with redemption orders) by choosing, in its sole discretion, to trade directly with third parties (each, a “Ether Trading Counterparty”), who are not registered broker-dealers pursuant to written agreements between such Ether Trading Counterparties and the Trust, or choosing to trade through Coinbase, Inc.

(the “Prime Execution Agent”) acting in an agency capacity with third parties through its Coinbase Prime service pursuant to the Prime Execution Agent Agreement.

Federal Income Taxes

1 unchanged sentence

Any interest, expenses, gains and losses are passed through to the holders of Shares of the Trust.

The Sponsor has analyzed applicable tax laws and regulations and their application to the Trust as of June 30, 2024 and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

The Sponsor has analyzed applicable tax laws and regulations and their application to the Trust as of September 30, 2024 and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

3 - Trust Expenses

1 unchanged sentence

dollars or in-kind or any combination thereof.

For the period ended June 30, 2024, the Sponsor's fee was $ 420 .

For the period ended September 30, 2024, the Sponsor’s fee was $ 358,911 .

The Sponsor may, at its sole discretion and from time to time, waive all or a portion of the Sponsor’s fee for stated periods of time.

2 unchanged sentences

In the future, if the Sponsor decides to waive all or a portion of the Sponsor’s fee, Shareholders will be notified in a prospectus supplement, in its periodic Exchange Act reports and/or on the Trust’s website.

For the period ended September 30, 2024, the amount waived was $ 186,634 .

The Sponsor has agreed to assume the marketing and the following administrative expenses of the Trust:

7 unchanged sentences

The Trustee’s fee is paid by the Sponsor and is not a separate expense of the Trust.

As of June 30, 2024, BlackRock Financial Management, Inc., an affiliate of the Sponsor, owned 400,000 Shares of the Trust, or 100 %, of the Trust.

As of September 30, 2024, BlackRock Financial Management, Inc., an affiliate of the Sponsor, owned 400,000 Shares of the Trust, or 0.78 %, of the Trust.

5 - Indemnification

The Trust Agreement provides that the Sponsor shall indemnify the Trustee, its directors, employees, delegees and agents against, and hold each of them harmless from, any loss, liability, claim, cost, expense or judgment of any kind whatsoever (including the reasonable fees and expenses of counsel) that is incurred by any of them and that arises out of or is related to ( 1 ) any offer or sale by the Trust of blocks of 40,000 Shares (a “Basket”) ( 2 ) acts performed or omitted pursuant to the provisions of the Trust Agreement, (A) by the Trustee, its directors, employees, delegees and agents or (B) by the Sponsor or ( 3 ) any filings with or submissions to the SEC in connection with or with respect to the Shares, except that the Sponsor shall not have any obligations to pay any indemnification amounts incurred as a result of and attributable to ( x ) the willful misconduct, gross negligence or bad faith of, or material breach of the terms of the Trust Agreement by, the Trustee, (y) information furnished in writing by the Trustee to the Sponsor expressly for use in the registration statement, or any amendment thereto, filed with the SEC relating to the Shares that is not materially altered by the Sponsor or (z) any misrepresentations or omissions made by an authorized participant (other than the Sponsor) in connection with such authorized participant’s offer and sale of Shares.

The Trust Agreement provides that the Sponsor shall indemnify the Trustee, its directors, employees, delegees and agents against, and hold each of them harmless from, any loss, liability, claim, cost, expense or judgment of any kind whatsoever (including the reasonable fees and expenses of counsel) that is incurred by any of them and that arises out of or is related to ( 1 ) any offer or sale by the Trust of Baskets, ( 2 ) acts performed or omitted pursuant to the provisions of the Trust Agreement, (A) by the Trustee, its directors, employees, delegees and agents or (B) by the Sponsor or ( 3 ) any filings with or submissions to the SEC in connection with or with respect to the Shares, except that the Sponsor shall not have any obligations to pay any indemnification amounts incurred as a result of and attributable to ( x ) the willful misconduct, gross negligence or bad faith of, or material breach of the terms of the Trust Agreement by, the Trustee, (y) information furnished in writing by the Trustee to the Sponsor expressly for use in the registration statement, or any amendment thereto, filed with the SEC relating to the Shares that is not materially altered by the Sponsor or (z) any misrepresentations or omissions made by an authorized participant (other than the Sponsor) in connection with such authorized participant’s offer and sale of Shares.

The Trust Agreement provides that the Trustee shall indemnify the Sponsor, its directors, employees, delegees and agents against, and hold each of them harmless from, any loss, liability, claim, cost, expense or judgment of any kind whatsoever (including the reasonable fees and expenses of counsel) ( 1 ) caused by the willful misconduct, gross negligence or bad faith of the Trustee or ( 2 ) arising out of any information furnished in writing to the Sponsor by the Trustee expressly for use in the registration statement, or any amendment thereto or periodic report, filed with the SEC relating to the Shares that is not materially altered by the Sponsor.

6 unchanged sentences

7 - Concentration Risk

Substantially all of the Trust’s assets are holdings of ether, which creates a concentration risk associated with fluctuations in the value of ether.

Accordingly, a decline in the value of ether will have an adverse effect on the value of the Shares of the Trust.

Factors that may have the effect of causing a decline in the value of ether include negative perception of digital assets; a lack of stability and standardized regulation in the digital asset markets; the closure or temporary shutdown of digital asset platforms due to fraud, business failure, security breaches or government mandated regulation; and a loss of investor confidence.

Substantially all of the Trust’s assets are holdings of ether, which creates a concentration risk associated with fluctuations in the price of ether.

Accordingly, a decline in the price of ether will have an adverse effect on the value of the Shares of the Trust.

Factors that may have the effect of causing a decline in the price of ether include a negative perception of digital assets; a lack of stability and standardized regulation in the digital asset markets; the closure or temporary shutdown of digital asset platforms due to fraud, business failure, security breaches or government mandated regulation; and a loss of investor confidence.

8 - Financial Highlights

The following financial highlights relate to investment performance and operations for a Share outstanding for the three months ended September 30, 2024 and the period from May 21, 2024 ( Date of Seeding) to September 30, 2024.

September 30,

May 21, 2024 (Date

of Seeding) to

September 30,

Net asset value per Share, beginning of period

$ 26.47 $ 25.00

Net investment loss (a)

( 0.01 ) ( 0.01 )

Net realized and unrealized loss (b)

( 6.55 ) ( 5.08 )

Net decrease in net assets from operations

( 6.56 ) ( 5.09 )

Net asset value per Share, end of period

$ 19.91 $ 19.91

Total return, at net asset value (c)(d)

( 24.78 )% ( 20.20

Ratio to average net assets:

Net investment loss (g)

( 0.12 )% ( 0.12 )%

Total Expenses (g)

0.24 % 0.24 %

Total expenses after fees waived (g) 0.12 0.12 %

Based on average Shares outstanding during the period.

The amounts reported for a Share outstanding may not accord with the change in aggregate gains and losses on investment for the period due to the timing of Share transactions in relation to the fluctuating fair values of the Trust’s underlying investment.

Based on the change in net asset value of a Share during the period.

Percentage is not annualized.

For the period June 24, 2024 ( Effective Date) to September 30, 2024.

For the period May 21, 2024 to September 30, 2024, the Trust’s total return was ( 20.36 )%.

Percentage is annualized.

9 - Investment Valuation

9 unchanged sentences

Unobservable inputs that are unobservable for the asset or liability, including the Trust’s assumptions used in determining the fair value of investments.

At June 30, 2024, the value of the ether held by the Trust is categorized as Level 1.

9 - Subsequent Event

The Trust’s registration statement on Form S- 1 relating to its continuous public offering of Shares was declared effective by the SEC on July 22, 2024 and the Shares were listed on NASDAQ on July 23, 2024.

For a twelve month period, starting July 23, 2024, the Sponsor will waive a portion of the Sponsor’s fee so that the Sponsor’s fee after the fee waiver will be equal to 0.12 % of the net asset value of the Trust for the first $ 2.5 billion of the Trust’s assets.

Other than the items noted above there were no subsequent events requiring adjustment or additional disclosure in the financial statements.

At September 30, 2024, the value of the ether held by the Trust is categorized as Level 1.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.

40 unchanged sentences

Results of Operations

The Period from May 21, 2024 (Date of Seeding) to June 30, 2024

The Quarter Ended September 30, 2024

The Trust’s net asset value increased from $10,589,875 at June 30, 2024 to $1,019,342,543 at September 30, 2024.

The increase in the Trust’s net asset value resulted primarily from an increase in the number of outstanding Shares, which rose from 400,000 Shares at June 30, 2024 to 51,200,000 Shares at September 30, 2024, a consequence of 50,800,000 Shares (1,270 Baskets) being created.

The increase in the Trust’s net asset value was partially offset by a decrease in the price of ether, which fell 24.78% from $3,494.31 at June 30, 2024 to $2,628.44 at September 30, 2024.

The 24.78% decrease in the NAV for purposes of the Trust’s periodic financial statements (the “Financial Statement NAV”) from $26.47 at June 30, 2024 to $19.91 at September 30, 2024 is directly related to the 24.78% decrease in the price of ether.

The NAV of $26.70 on July 19, 2024 was the highest during the quarter, compared with a low during the quarter of $16.85 on September 6, 2024.

Net decrease in net assets resulting from operations for the quarter ended September 30, 2024 was $138,702,639, resulting from an unrealized loss on investment in ether of $138,509,122, a net investment loss of $171,857, and a net realized loss of $21,660 from ether sold to pay expenses.

Other than the net Sponsor’s fee of $171,857, the Trust had no expenses during the quarter.

The Period from May 21, 2024 (Date of Seeding) to September 30, 2024

On May 21, 2024, the Seed Capital Investor, an affiliate of the Sponsor, subject to conditions, purchased the Seed Creation Baskets, comprising 400,000 Shares at a per-Share price equal to $25.00.

2 unchanged sentences

With the above transaction on June 24, 2024, the Trust commenced operations and the Sponsor’s fee started accruing daily at an annualized rate equal to 0.25% of the net asset value of the Trust.

The Trust’s net asset value grew from $10,000,000 at May 21, 2024 to $10,589,875 at June 30, 2024.

The increase in the Trust’s net asset value resulted from an increase in the price of ether, which rose 5.90% from the Trust’s first ether purchase of $3,299.54 on June 24, 2024 to $3,494.31 at June 30, 2024.

The 5.88% increase in the NAV for purposes of the Trust’s periodic financial statements (the “Financial Statement NAV”) from $25.00 at May 21, 2024 to $26.47 at June 30, 2024 is directly related to the 5.90% increase in the price of ether.

Net increase in net assets resulting from operations for the period from May 21, 2024 to June 30, 2024 was $589,875, resulting from an unrealized gain on investment in ether of $589,875.

Other than the Sponsor’s fee of $420, the Trust had no expenses during the period.

The 20.36% decrease in the NAV for purposes of the Financial Statement NAV from $25.00 at May 21, 2024 (Date of Seeding) to $19.91 at September 30, 2024 is directly related to the 20.34% decrease in the price of ether.

The Financial Statement NAV decreased slightly more than the price of ether on a percentage basis due to the Sponsor’s fee, which was $172,277 for the period, or 0.04% of the Trust’s average weighted assets of $405,270,976 during the period.

The NAV of $26.70 on July 19, 2024 was the highest during the period, compared with a low during the period of $16.85 on September 6, 2024.

Net decrease in net assets resulting from operations for the period from May 21, 2024 to September 30, 2024 was $138,112,764, resulting from an unrealized loss on investment in ether of $137,918,827, a net realized loss of $21,660 from ether sold to pay expenses, and a net investment loss of $172,277.

Other than the net Sponsor’s fee of $172,277, the Trust had no expenses during the quarter.

Quantitative and Qualitative Disclosures About Market Risk.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements