iShares Staked Ethereum Trust ETF 10-Q

Item 1. Financial Statements iShares ® Staked Ethereum Trust ETF Statement of Assets and Liabilities (Unaudited) At June 30, 2026 June 30, 2026 Assets Investment in ether, at fair value (a)(b) $ 459,450,831 Cash 32,539,052 Receivable for investments sold 2,106 Receivable for capital shares sold 1,041 Staking income receivable 2,531 Total Assets 491,995,561 Liabilities Sponsor’s fee, inclusive of Sponsor’s Staking Portion payable 51,369 Payable for capital shares redeemed 32,542,444 Total Liabilities 32,593,813 Commitments and contingent liabilities (Note 6) — Net Assets $ 459,401,748 Shares issued and outstanding (c) 22,400,000 Net asset value per Share (Note 2C) $ 20.51 (a) Cost of investment in ether is $609,675,401. (b) As of June 30, 2026, 250,585 ether (representing 86.9% of the position) are staked with third party counterparties. (c) No par value, unlimited amount authorized. See notes to financial statements. 1 Table of Contents iShares ® Staked Ethereum Trust ETF Statements of Operations (Unaudited) For the three months ended June 30, 2026 and the Period from January 14, 2026 (Date of Seeding) to June 30, 2026 Three Months Ended June 30, 2026 For the Period from January 14, 2026 (Date of Seeding) to June 30, 2026 Investment Income Staking income $ 1,194,785 $ 1,194,785 Expenses Sponsor’s fee, inclusive of Sponsor’s Staking Portion 419,914 467,379 Sponsor’s fee waived ( 179,522 ) ( 196,572 ) Total expenses 240,392 270,807 Net investment income 954,393 923,978 Net Realized and Unrealized loss Net realized loss from: Ether sold to pay expenses ( 13,274 ) ( 13,274 ) Ether sold for the redemption of Shares ( 11,321,036 ) (b) ( 11,350,107 ) (c) Ether sold for distributions ( 87,095 ) ( 87,095 ) Net realized loss ( 11,421,405 ) (d) ( 11,450,476 ) (e) Net change in unrealized appreciation/depreciation ( 154,226,015 ) ( 150,224,570 ) Net realized and unrealized loss ( 165,647,420 ) ( 161,675,046 ) Net decrease in net assets resulting from operations $ ( 164,693,027 ) $ ( 160,751,068 ) Net decrease in net assets per Share (a) $ ( 7.73 ) $ ( 12.19 ) (a) Net decrease in net assets per Share based on average shares outstanding during the period. (b) Includes $(2,770,669) of ether paid for the in-kind redemption of Shares. (c) Includes $(2,799,740) of ether paid for the in-kind redemption of Shares. (d) Includes $358,351 of realized gains and $(11,779,756) of realized losses. (e) Includes $358,351 of realized gains and $(11,808,827) of realized losses. See notes to financial statements. 2 Table of Contents iShares ® Staked Ethereum Trust ETF Statements of Changes in Net Assets (Unaudited) For the three months ended June 30, 2026 and the Period from January 14, 2026 (Date of Seeding) to June 30, 2026 For the Period from January 14, 2026 (Date of Seeding) to June 30, 2026 Net Assets at January 14, 2026 $ — Operations: Net investment loss ( 30,415 ) Net realized loss ( 29,071 ) Net change in unrealized appreciation/depreciation 4,001,445 Net increase in net assets resulting from operations 3,941,959 Capital Share Transactions: Contributions for Shares issued 406,907,383 Distributions for Shares redeemed ( 1,038,678 ) Net increase in net assets from capital share transactions 405,868,705 Increase in net assets 409,810,664 Net Assets at March 31, 2026 $ 409,810,664 Operations: Net investment income 954,393 Net realized loss ( 11,421,405 ) Net change in unrealized appreciation/depreciation ( 154,226,015 ) Net decrease in net assets resulting from operations ( 164,693,027 ) Distributions to Shareholders: Decrease in net assets resulting from distributions to shareholders ( 351,670 ) Capital Share Transactions: Contributions for Shares issued 272,279,496 Distributions for Shares redeemed ( 57,643,715 ) Net increase in net assets from capital share transactions 214,635,781 Increase in net assets 49,591,084 Net Assets at June 30, 2026 $ 459,401,748 Shares issued and redeemed Shares issued 25,000,000 Shares redeemed ( 2,600,000 ) Net increase in Shares issued and outstanding 22,400,000 See notes to financial statements. 3 Table of Contents iShares ® Staked Ethereum Trust ETF Statement of Cash Flows (Unaudited) For the Period from January 14, 2026 (Date of Seeding) to June 30, 2026 For the Period from January 14, 2026 (Date of Seeding) to June 30, 2026 Cash Flows from Operating Activities Net decrease in net assets resulting from operations $ ( 160,751,068 ) Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: Purchases of ether ( 545,957,162 ) Ether received for staking income ( 1,120,104 ) Proceeds from ether sold 36,607,897 Net realized loss 11,450,476 Net change in unrealized appreciation/depreciation 150,224,570 Change in operating assets and liabilities: Staking income receivable ( 2,531 ) Sponsor’s fee payable 51,369 Net cash used in operating activities $ ( 509,496,553 ) Cash Provided by Financing Activities Proceeds from issuance of Shares $ 545,970,826 Payments for Shares redeemed ( 3,583,551 ) Cash dividends paid to shareholders ( 351,670 ) Net cash provided by financing activities $ 542,035,605 Cash Net increase in cash $ 32,539,052 Cash, beginning of period — Cash, end of period $ 32,539,052 Supplemental disclosure of non-cash information: Ether purchased for Shares issued $ 133,215,012 Ether paid for Shares redeemed $ ( 22,556,398 ) See notes to financial statements. 4 Table of Contents iShares ® Staked Ethereum Trust ETF Schedule of Investments (Unaudited) At June 30, 2026 June 30, 2026 Description Quantity Cost Fair Value Ether (a) 288,417 $ 609,675,401 $ 459,450,831 Total Investments – 100.01% 459,450,831 Liabilities in Excess of Other Assets – (0.01)% ( 49,083 ) Net Assets – 100.00% $ 459,401,748 (a) As of June 30, 2026, 250,585 ether (representing 86.9 % of the position) are staked with third party counterparties. See notes to financial statements. 5 Table of Contents iShares ® Staked Ethereum Trust ETF Notes to Financial Statements (Unaudited) June 30, 2026 1 - Organization The iShares Staked Ethereum Trust ETF (the “Trust”) was organized on November 19, 2025 as a Delaware statutory trust. The trustee is BlackRock Fund Advisors (the “Trustee”), which is responsible for the day-to-day administration of the Trust. The Trust’s sponsor is iShares Delaware Trust Sponsor LLC, a Delaware limited liability company (the “Sponsor”). The Bank of New York Mellon serves as the “Trust Administrator.” The Trust is governed by the provisions of the Amended and Restated Trust Agreement (the “Trust Agreement”) executed by the Sponsor, the Trustee and Wilmington Trust, National Association, a national association (“Delaware Trustee”), as of February 5, 2026. The Trust issues units of beneficial interest (“Shares”) representing fractional undivided beneficial interests in its net assets. On January 14, 2026, BlackRock Financial Management, Inc. (the “Seed Capital Investor”) purchased 4,000 Shares for $ 100,000 at a per-Share price of $ 25.00 (the “Seed Creation Baskets”). The Seed Capital Investor did not receive from the Trust, the Sponsor or any of their affiliates any fee or other compensation in connection with the purchase of Seed Creation Baskets. On February 18, 2026, the Trust purchased approximately 51,455 ether with the proceeds of the Seed Creation Baskets using Coinbase Inc. (the “Prime Execution Agent”). The costs incurred in connection with the purchase of ether with the proceeds of the Seed Creation Baskets were borne by the Trust. The Sponsor’s fee started accruing daily at an annualized rate equal to 0.25 % of the net asset value of the Trust on February 18, 2026. 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 March 11, 2026 ( Effective Date) and the Shares were listed on The Nasdaq Stock Market LLC (“NASDAQ”) on March 12, 2026. The Trust seeks to reflect generally the performance of the price of ether and rewards from staking a portion of the Trust’s ether, to the extent the Sponsor in its sole discretion determines that the Trust may do so without incurring undue legal or regulatory risk, including, without limitation, any risk to the Trust’s qualification as a grantor trust for U.S. federal income tax purposes. The Trust seeks to reflect such performance before payment of the Trust’s expenses and liabilities. The Shares are intended to constitute a simple means for an investor to make an investment similar to an investment in ether. To effectuate the staking of the Trust’s ether (“Staking Activities”), the Sponsor has directed, and may from time to time direct, Coinbase Custody Trust Company, LLC (the “Ether Custodian”) to enter into written agreements with one or more third -party staking services providers (each, a “Staking Services Provider”), which may be either affiliates of the Ether Custodian or other approved third -party validators, to stake the Trust’s ether to a Staking Services Provider’s operating validator software and associated hardware. The Trust’s staking program seeks to maximize the portion of the Trust’s ether available for staking while controlling for liquidity and redemption risks. To manage the liquidity and redemption risks associated with staking, the Sponsor intends to maintain a reserve of unstaked ether designed to accommodate anticipated redemption activity. The accompanying unaudited financial statements were prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and with the instructions for Form 10 -Q and the rules and regulations of the SEC. In the opinion of management, all material adjustments, consisting only of normal recurring adjustments considered necessary for a fair statement of the interim period financial statements, have been made. Interim period results are not necessarily indicative of results for a full-year period. The Trust qualifies as an investment company solely for accounting purposes and not for any other purpose and follows the accounting and reporting guidance under the Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services - Investment Companies, but is not registered, and is not required to be registered, as an investment company under the Investment Company Act of 1940, as amended. 2 - Significant Accounting Policies A. Basis of Accounting The following significant accounting policies are consistently followed by the Trust in the preparation of its financial statements in conformity with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. B. Ether The Ether Custodian is responsible for safekeeping the ether owned by the Trust. Anchorage Digital Bank N.A. is the “Additional Ether Custodian” for the Trust. At the current time, the Sponsor has no plans to move any of the Trust’s ether to the Additional Ether Custodian. The Ether Custodian and the Additional Ether Custodian are appointed by the Trustee. The net asset value of the Trust equals the total assets of the Trust, which consists solely of ether and cash, less total liabilities of the Trust, each determined by the Trustee pursuant to policies established from time to time by the Trustee or its affiliates or otherwise described herein. The Trust’s periodic financial statements are prepared in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 820, “Fair Value Measurement” (“ASC Topic 820” ) and utilize an exchange-traded price from the Trust’s principal market for ether as of 11:59 p.m. Eastern 6 Table of Contents Time (“ET”) on the Trust’s financial statement measurement date. The Sponsor determines in its sole discretion the valuation sources and policies used to prepare the Trust’s financial statements in accordance with U.S. GAAP. The Trust engages a third -party vendor to obtain a price from a principal market for ether, which is 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. The Sponsor has the exclusive authority to determine the Trust’s net asset value, which it has delegated to the Trustee under the Trust Agreement. The Trustee has delegated to the Trust Administrator the responsibility to calculate the net asset value of the Trust and the net asset value per Share (“NAV”), based on a pricing source selected by the Trustee. In determining the Trust’s net asset value, the Trust Administrator values the ether held by the Trust based on an index (the “Index”), unless the Sponsor in its sole discretion determines that the Index is unreliable. The methodology used to calculate the Index price to value ether in determining the net asset value of the Trust may not be deemed consistent with U.S. GAAP. The CME CF Ether–Dollar Reference Rate – New York Variant for the ether – U.S. Dollar trading pair (the “CF Benchmarks Index”) shall constitute the Index, unless the CF Benchmarks Index is not available or the Sponsor in its sole discretion determines the CF Benchmarks Index is unreliable as the Index and therefore determines not to use the CF Benchmarks Index as the Index. If the CF Benchmarks Index is not available or the Sponsor determines, in its sole discretion, that the CF Benchmarks Index is unreliable (together a “Fair Value Event”), the Trust’s holdings may be fair valued on a temporary basis in accordance with the fair value policies approved by the Trustee. Additionally, the Trust Administrator monitors for unusual prices and escalates to the Trustee if detected. 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 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. ET. Trading during the core trading session on NASDAQ typically closes at 4:00 p.m. ET. However, NAVs are not officially released until after the completion of a comprehensive review of the NAV and prices utilized to determine the NAV of the Trust by the Trust Administrator. Upon the completion of the end of day reviews by the Trust Administrator the NAV is released to the public typically by 5:30 p.m. ET and generally no later than 8:00 p.m. ET. The period between 4:00 p.m. ET and the NAV release after 5:30 p.m. ET (or later) provides an opportunity for the Trust Administrator and the Trustee to detect, flag, investigate, and correct unusual pricing should it occur and implement a Fair Value Event, if necessary. Any such correction could adversely affect the value of the Shares. The Trust engages in Staking Activities with respect to a portion of its ether holdings in order to earn staking rewards. As of June 30, 2026, the Trust earned $ 1,194,785 in staking rewards. Under the Trust’s staking program, the Sponsor instructs the Ether Custodian to stake the Trust’s ether. The Trust retains control of its ether throughout the staking process. The delegation of ether for staking purposes does not constitute a sale, transfer, or other derecognition event, as control of the ether is not transferred to the validator or staking provider. The Trust receives staking rewards of ether from Staking Activities, which is treated as giving rise to taxable income for U.S. federal income tax purposes under current Internal Revenue Service guidance. The Trust recognizes staking rewards as revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606” ). Under the staking arrangements, the validator (e.g., the Ether Custodian or other staking provider) is considered the customer, as it receives access to the Trust’s staking capacity (i.e., the delegation of ether), which represents the Trust’s performance obligation. In exchange, the Trust is entitled to staking rewards generated by the Ethereum protocol, net of validator and staking provider fees. Staking rewards represent variable consideration, as the amount of rewards is not known until the applicable validation activities are completed, and the Trust receives rewards in its custodial account. The contract term is the length of each staking epoch. Staking rewards are recognized as revenue when the Trust satisfies its performance obligations (i.e., successfully validates blocks or transactions as determined by the protocol). Staking rewards are received in ether, which represents non-cash consideration. Because the Trust is not the principal to the block validation service, it does not control the full output of the reward-generating activity, and instead receives net staking rewards, after validator and staking provider fees are deducted. As such, the Trust presents staking revenue net of validator and staking provider fees, reflecting only the portion of protocol rewards to which it is entitled. Staking revenue is recorded as staking income on the Statements of Operations. The Trust’s periodic financial statements may not utilize the net asset value of the Trust to the extent the methodology used to calculate the Index is deemed not to be consistent with U.S. GAAP. 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 three months ended June 30, 2026: Three Months Ended June 30, 2026 Quantity Cost Fair Value Realized Gain (Loss) Beginning balance 194,989 $ 405,833,590 $ 409,835,035 $ — Ether purchased (a) 126,711 273,515,403 273,515,403 — Ether sold for the redemption of shares (b) ( 33,018 ) ( 69,087,258 ) ( 57,766,222 ) ( 11,321,036 ) Ether sold to pay expenses ( 67 ) ( 147,564 ) ( 134,290 ) ( 13,274 ) Ether sold for distributions ( 198 ) ( 438,770 ) ( 351,675 ) ( 87,095 ) Net realized loss — — ( 11,421,405 ) — Net change in unrealized appreciation/depreciation — — ( 154,226,015 ) — Ending balance 288,417 $ 609,675,401 $ 459,450,831 $ ( 11,421,405 ) (a) Includes ether purchased in-kind for shares issued of $ 75,351,373 . (b) Includes ether paid in-kind for shares redeemed of $ 21,517,719 (Cost of ether paid was $ 24,288,388 and realized loss of ether paid was $ 2,770,669 ). 7 Table of Contents The following tables summarize activity in ether for the period from January 14, 2026 ( Date of Seeding) to June 30, 2026: Period from January 14, 2026 (Date of Seeding) to June 30, 2026 Quantity Cost Fair Value Realized Gain (Loss) Beginning balance — $ — $ — $ — Ether purchased (a) 322,214 680,416,742 680,416,742 — Ether sold for the redemption of shares (b) ( 33,532 ) ( 70,155,007 ) ( 58,804,900 ) ( 11,350,107 ) Ether sold to pay expenses ( 67 ) ( 147,564 ) ( 134,290 ) ( 13,274 ) Ether sold for distributions ( 198 ) ( 438,770 ) ( 351,675 ) ( 87,095 ) Net realized loss — — ( 11,450,476 ) — Net change in unrealized appreciation/depreciation — — ( 150,224,570 ) — Ending balance 288,417 $ 609,675,401 $ 459,450,831 $ ( 11,450,476 ) (a) Includes ether purchased in-kind for Shares issued of $ 133,215,012 . (b) Includes ether paid in-kind for Shares redeemed of $ 22,556,398 (Cost of ether paid was $ 25,356,138 and realized loss of ether paid was $ 2,799,740 ). C. Calculation of Net Asset Value On each Business Day, as soon as practicable after 4:00 p.m. 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 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. D. Cash and Cash Equivalents Cash includes non-interest bearing, non-restricted cash maintained with one banking institution. Cash in a bank deposit account, at times, may exceed U.S. federally insured limits. E. 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 or ether. Baskets may be redeemed by the Trust in exchange for an amount of ether corresponding to their redemption value or for the cash proceeds from selling the amount of ether corresponding to their redemption value. In connection with cash creations and redemptions, 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, an “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 the Prime Execution Agent acting in an agency capacity with third parties through its Coinbase Prime service pursuant to the Prime Execution Agent Agreement. F. Distributions Staking Consideration received by the Trust from staking, net of the Staking fee, is intended to be distributed monthly but no less frequently than quarterly by the Trust. Distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Trust. G. Federal Income Taxes The Trust is treated as a grantor trust for federal income tax purposes and, therefore, no provision for federal income taxes is required. 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, 2026 and does not believe that there are any uncertain tax positions that require recognition of a tax liability. H. Segment Reporting The Chief Financial Officer of the Sponsor acts as the Trust’s Chief Operating Decision Maker (“CODM”) and is responsible for assessing performance and allocating resources with respect to the Trust. The CODM has concluded that the Trust operates as a single operating segment since the Trust has a single investment strategy as disclosed in its prospectus, against which the CODM assesses performance. The financial information provided to and reviewed by the CODM is presented within the Trust’s financial statements. 3 - Trust Expenses The aggregate fees payable by the Trust to the Sponsor consist of (i) the Sponsor’s fee, which accrues daily at an annualized rate equal to 0.25 % of the Trust’s net asset value and is subject to any applicable waiver, and (ii) the Sponsor’s Staking Portion of the Staking fee payable in connection with the Trust’s Staking Activities. The Sponsor’s fee is payable at least quarterly in arrears in U.S. dollars or in-kind or any combination thereof. 8 Table of Contents 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. 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. For a twelve -month period, starting March 12, 2026, the Sponsor waived a portion of the Sponsor’s fee so that the Sponsor’s fee after the fee waiver would be equal to 0.12 % of the net asset value of the Trust for the first $ 2.5 billion of the Trust’s assets. 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. The Sponsor has agreed to assume the marketing and the following administrative expenses of the Trust: the fees of the Trustee, the Delaware Trustee, the Trust Administrator, the Ether Custodian, the Additional Ether Custodian, and The Bank of New York Mellon (the “Cash Custodian”), NASDAQ listing fees, SEC registration fees, printing and mailing costs, tax reporting fees, audit fees, license fees and expenses and up to $ 500,000 per annum in ordinary legal fees and expenses. The Sponsor may determine in its sole discretion to assume legal fees and expenses of the Trust in excess of the $ 500,000 per annum required under the Trust Agreement. To the extent that the Sponsor does not voluntarily assume such fees and expenses, they will be the responsibility of the Trust. The Trust will pay a Staking fee to the Sponsor, which will include remuneration for the Sponsor’s facilitation of Staking Activities pursuant to the Trust Agreement (the “Sponsor’s Staking Portion”). The Trust also pays a Staking fee for the Prime Execution Agent’s share of Staking Consideration (including any amounts payable by the Prime Execution Agent to Staking Services Providers for their respective shares of the Trust’s Staking Consideration), in accordance with the Staking Services Agreement. For the period from January 14, 2026 ( Date of Seeding) to June 30, 2026, the aggregate Sponsor fee, including the Sponsor’s Staking Portion, was $ 467,379 and the amount waived was $196,572. 4 - Related Parties The Sponsor and the Trustee are considered to be related parties to the Trust. The Trustee’s fee is paid by the Sponsor and is not a separate expense of the Trust. On January 14, 2026, the Seed Capital Investor purchased 4,000 Shares of the Trust. On February 18, 2026, the Seed Capital Investor purchased an additional 3,996,000 Shares. As of June 30, 2026, affiliates of BlackRock, Inc., including the Seed Capital Investor, beneficially owned 4,000,000 Shares of the Trust, representing approximately 17.9 % of the Shares outstanding. 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 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. The Trust Agreement provides that the Sponsor and its shareholders, directors, officers, employees, affiliates (as such term is defined under the Securities Act of 1933, as amended) and subsidiaries and agents shall be indemnified from the Trust and held harmless against any loss, liability, claim, cost, expense or judgment of any kind whatsoever (including the reasonable fees and expenses of counsel) arising out of or in connection with the performance of their obligations under the Trust Agreement or any actions taken in accordance with the provisions of the Trust Agreement and incurred without their ( 1 ) willful misconduct, gross negligence or bad faith or ( 2 ) reckless disregard of their obligations and duties under the Trust Agreement. Pursuant to the applicable agreements with the Trust’s third -party service providers, the Trust has agreed to indemnify such service providers against certain claims, losses, liabilities and expenses, subject to the terms, conditions and limitations set forth therein. The Trust’s maximum exposure under these arrangements is unknown because it involves future potential claims against the Trust, which cannot be predicted with any certainty. 6 - Commitments and Contingent Liabilities In the normal course of business, the Trust may enter into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust. 9 Table of Contents 7 - Concentration Risk 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 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 June 30, 2026 and the Period from January 14, 2026 ( Date of Seeding) to June 30, 2026. Three Months Ended June 30, 2026 For the Period from January 14, 2026 (Date of Seeding) to June 30, 2026 Net asset value per Share, beginning of period $ 27.03 $ 25.00 Net investment income (a) 0.04 0.06 Net realized and unrealized loss (b) ( 6.54 ) ( 4.53 ) Net decrease in net assets from operations ( 6.50 ) ( 4.47 ) Distributions per share ( 0.02 ) ( 0.02 ) Net asset value per Share, end of period $ 20.51 $ 20.51 Total return, at net asset value (c)(d)(h) ( 24.07 )% ( 23.07 )% (e)(f) Ratio to average net assets: Net investment income (g) 0.69 % 0.59 % Total expenses (g) 0.30 % 0.30 % Total expenses after fees waived (g) 0.17 % 0.17 % (a) Based on average Shares outstanding during the period. (b) 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. (c) Based on the change in net asset value of a Share during the period. (d) (e) Percentage is not annualized. For the period March 11, 2026 ( Effective Date) to June 30, 2026. (f) For the period January 14, 2026 to June 30, 2026, the Trust’s total return was ( 17.90 )%. (g) Percentage is annualized. (h) Where applicable, assumes the reinvestment of distributions. 9 - Investment Valuation U.S. GAAP defines fair value as the price the Trust would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Trust’s policy is to value its investment at fair value. Various inputs are used in determining the fair value of assets and liabilities. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are as follows: Level 1 −  Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 −  Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means; and Level 3 −  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, 2026, the value of the ether held by the Trust is categorized as Level 1. 10 Table of Contents