iShares Staked Ethereum Trust ETF 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. This information should be read in conjunction with the financial statements and notes to financial statements included in Item 1 of Part I of this Form 10‑Q. The discussion and analysis that follows may contain statements that relate to future events or future performance. In some cases, such forward-looking statements can be identified by terminology such as “ may, ” “ should, ” “ could, ” “ expect, ” “ plan, ” “ anticipate, ” “ believe, ” “ estimate, ” “ predict, ” “ potential ” or the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. These statements are based upon certain assumptions and analyses made by the Sponsor on the basis of its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. Whether or not actual results and developments will conform to the Sponsor ’ s expectations and predictions, however, is subject to a number of risks and uncertainties, including the special considerations discussed below, general economic, market and business conditions, changes in laws or regulations, including those concerning taxes, made by governmental authorities or regulatory bodies, and other world economic and political developments. Although the Sponsor does not make forward-looking statements unless it believes it has a reasonable basis for doing so, the Sponsor cannot guarantee their accuracy. Except as required by applicable disclosure laws, neither the Trust nor the Sponsor is under a duty to update any of the forward-looking statements to conform such statements to actual results or to a change in the Sponsor ’ s expectations or predictions. Introduction The iShares Staked Ethereum Trust ETF (the “Trust”) is a Delaware statutory trust. The Trust does not have any officers, directors, or employees, and is administered by the Trust Agreement dated as of February 5, 2026, among iShares Delaware Trust Sponsor LLC (the “Sponsor”), BlackRock Fund Advisors (the “Trustee”) and Wilmington Trust, National Association, a national association (the “Delaware Trustee”). The Trust issues shares (“Shares”) representing fractional undivided beneficial interests in its net assets. The assets of the Trust consist primarily of ether held by a custodian on behalf of the Trust. The Trust is a passive investment vehicle and seeks to reflect generally the performance of the price of ether and rewards from staking a portion of the Trust’s ether. The Trust seeks to reflect such performance before payment of the Trust’s expenses and liabilities. The Trust does not engage in any activities designed to obtain a profit from, or ameliorate losses caused by, changes in the price of ether. The Trust issues and redeems Shares only 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). Only registered broker-dealers that have previously entered into an agreement with the Sponsor governing the terms and conditions of such issuance (such broker-dealer, 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 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. Shares of the Trust trade on The Nasdaq Stock Market LLC (“NASDAQ”) under the ticker symbol ETHB. Staking The Trust engages in Staking Activities with respect to a portion of its ether holdings in order to earn staking rewards (“Staking Consideration”). 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. Staking Consideration received by the Trust from staking, after payment of the Staking Fee (as defined in the Trust Agreement), is intended to be distributed monthly but no less frequently than quarterly by the Trust. Valuation of Ether ; The CF Benchmarks Index On each day other than a Saturday or a Sunday, or a day on which NASDAQ is closed for regular trading (a “Business Day”), as soon as practicable after 4:00 p.m. Eastern Time (“ET”), the Trust evaluates the ether held by the Trust as reflected by the CME CF Ether–Dollar Reference Rate – New York Variant for the ether – U.S. Dollar trading pair (the “CF Benchmarks Index”) and determines the net asset value of the Trust and the net asset value per Share (“NAV”). The CF Benchmarks Index is calculated as of 4:00 p.m. ET. The CF Benchmarks Index is designed based on the IOSCO Principles for Financial Benchmarks and is a Registered Benchmark under the UK Benchmark Regulations (“BMR”). The administrator of the CF Benchmarks Index is CF Benchmarks Ltd., a UK incorporated company, authorized and regulated by the Financial Conduct Authority of the UK as a Benchmark Administrator under the UK BMR. 11 Table of Contents Liquidity The Trust is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its liquidity needs. In exchange for a fee, the Sponsor has agreed to assume most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust during the period covered by this report was the Sponsor’s fee. The Trust’s only source of liquidity is its sales of ether. 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 to accommodate anticipated redemption activity. Critical Accounting Policies The financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements relies on estimates and assumptions that impact the Trust’s financial position and results of operations. These estimates and assumptions affect the Trust’s application of accounting policies. A description of the valuation of ether, a critical accounting policy that the Trust believes is important to understanding its results of operations and financial position, is provided in the section entitled “Valuation of Ether; The CF Benchmarks Index,” above. In addition, please refer to Note 2 to the financial statements included in this report for further discussion of the Trust’s accounting policies. Results of Operations The Quarter Ended June 30, 2026 The Trust’s net asset value increased from $409,810,664 at March 31, 2026 to $459,401,748 at June 30, 2026, a 12.10% increase in the Trust’s net asset value resulted primarily from an increase in the number of outstanding Shares, which rose from 15,160,000 Shares at March 31, 2026 to 22,400,000 Shares at June 30, 2026, a consequence of 9,800,000 Shares (245 Baskets) being created and 2,560,000 Shares (64 Baskets) being redeemed during the quarter. The increase in the Trust’s net asset value was partially offset by distributions paid by the Trust in the amount of $351,670 and a decrease in the price of ether, which fell 24.21% from $2,101.84 on March 31, 2026 to $1,593.01 at June 30, 2026. The 24.12% decrease in the NAV for purposes of the Trust’s periodic financial statements (“Financial Statement NAV”) from $27.03 at March 31, 2026 to $20.51 at June 30, 2026 is directly related to the 24.21% decrease in the price of ether. The Financial Statement NAV decreased slightly less than the price of ether on a percentage basis due to net investment income, which was $954,393 for the quarter, or 0.17% of the Trust’s average weighted assets of $553,391,885 during the quarter. The NAV of $31.22 on April 17, 2026 was the highest during the quarter, compared with a low during the quarter of $20.03 on June 5, 2026. The net decrease in net assets resulting from operations for the quarter ended June 30, 2026 was $164,693,027, resulting from a net realized loss of $13,274 from ether sold to pay expenses, a net realized loss of $8,550,367 from ether sold for the redemption of Shares, a net realized loss of $2,770,669 from ether paid for the in-kind redemptions of Shares, a net realized loss of $87,095 from ether sold for Trust distributions and an unrealized loss on investment in ether of $154,226,015, partially offset by a net investment income of $954,393. Other than the net Sponsor’s fee of $240,392 the Trust had no expenses during the quarter. The Period from January 14, 2026 (Date of Seeding) to June 30, 2026 On January 14, 2026, the Seed Capital Investor, an affiliate of the Sponsor, subject to conditions, purchased the Seed Creation Baskets, comprising 4,000 Shares at a per-Share price equal to $25.00. Total proceeds to the Trust from the sale of the Seed Creation Baskets were $100,000. On February 18, 2026, the Seed Capital Investor purchased the Seed Creation Baskets, comprising 3,996,000 Shares at a per-Share price equal to $25.00. Total proceeds to the Trust from the sale of the Seed Creation Baskets were $99,900,000. On February 18, 2026, the Trust purchased approximately 51,455 ether with the proceeds of the Seed Creation Baskets using the Prime Execution Agent. With the above transaction on February 18, 2026, 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 increased from $100,000 at January 14, 2026 to $459,401,748 at June 30, 2026. The increase in the Trust’s net asset value resulted primarily from an increase in the number of outstanding Shares, which rose from 4,000 Shares at January 14, 2026 to 22,400,000 Shares at June 30, 2026, a consequence of 25,000,000 Shares (625 Baskets) being created and 2,600,000 Shares (65 Baskets) being redeemed during the period. The increase in the Trust’s net asset value was partially offset by distributions paid by the Trust in the amount of $351,670 and a decrease in the price of ether, which fell 18.03% from the Trust’s first ether purchase at a price of $1,943.44 on February 18, 2026 to $1,593.01 at June 30, 2026. The 17.96% decrease in the NAV for purposes of the Financial Statement NAV from $25.00 at January 14, 2026 to $20.51 at June 30, 2026 is directly related to the 18.03% decrease in the price of ether. The Financial Statement NAV decreased slightly less than the price of ether on a percentage basis due to net investment income, which was $923,978 for the period, or 0.27% of the Trust’s average weighted assets of $341,146,070 during the period. The NAV of $31.22 on April 17, 2026 was the highest during the period, compared with a low during the period of $20.03 on June 5, 2026. The net decrease in net assets resulting from operations for the period ended June 30, 2026 was $160,751,068, resulting from a net realized loss of $13,274 from ether sold to pay expenses, a net realized loss of $8,550,367 from ether sold for the redemption of Shares, a net realized loss of $2,799,740 from ether paid for the in-kind redemptions of Shares, a net realized loss of $87,095 from ether sold for Trust distributions and an unrealized loss on investment in ether of $150,224,570, partially offset by a net investment income of $923,978. Other than the net Sponsor’s fee of $270,807 the Trust had no expenses during the period. 12 Table of Contents Item 3. Quantitative and Qualitative Disclosures About Market Risk. Not applicable.