What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-31 compared with 2025-03-26 · 116 added, 97 removed, 91 unchanged (70% of the section changed)

5 unchanged sentences

This Form 10-K contains “forward-looking statements” within the meaning of Section 27A of the Securities

Act of 1933, as amended, and Section 21E of the Exchange Act, and such forward-looking statements involve risks and uncertainties.

statements (other than statements of historical fact) included in this Form 10-K that address activities, events or developments that

may occur in the future, the Trust’s operations, the Sponsor’s plans and references to the Trust’s future success and

other similar matters are forward-looking statements.

Words such as “could,” “would,” “may,” “expect,”

“intend,” “estimate,” “predict,” and variations on such words or negatives thereof, and similar expressions

that reflect our current views with respect to future events and Trust performance, are intended to identify such forward-looking statements.

These forward-looking statements are only predictions, subject to risks and uncertainties that are difficult to predict and many of which

are outside of our control, and actual results could differ materially from those discussed.

Forward-looking statements involve risks

and uncertainties that could cause actual results or outcomes to differ materially from those expressed therein.

Act, and Section 21E of the Exchange Act, and such forward-looking statements involve risks and uncertainties.

All statements (other than

statements of historical fact) included in this Form 10-K that address activities, events or developments that may occur in the future,

the Trust’s operations, the Sponsor’s plans and references to the Trust’s future success and other similar matters are

forward-looking statements.

Words such as “could,” “would,” “may,” “expect,” “intend,”

“estimate,” “predict,” and variations on such words or negatives thereof, and similar expressions that reflect

our current views with respect to future events and Trust performance, are intended to identify such forward-looking statements.

forward-looking statements are only predictions, subject to risks and uncertainties that are difficult to predict and many of which are

outside of our control, and actual results could differ materially from those discussed.

Forward-looking statements involve risks and

uncertainties that could cause actual results or outcomes to differ materially from those expressed therein.

We express our estimates,

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trust, formed on September 5, 2023, pursuant to the DSTA.

The Trust operates pursuant to an Amended and Restated Trust Agreement (the

“Trust Agreement”).

The Trust is not registered as an investment company under the 1940 Act and is not a commodity pool for

purposes of the CEA.

The Trust is managed and controlled by the Sponsor.

The Sponsor is a limited liability company formed in the state

of Delaware on June 16, 2021, and is a wholly owned subsidiary of Jura Pentium Inc., whose ultimate parent company is 21co Holdings Limited

(formerly known as Amun Holdings Limited).

The Sponsor is not subject to regulation by the CFTC as a commodity pool operator with respect

to the Trust, or a commodity trading advisor with respect to the Trust.

The Trust is an exchange-traded fund that issues units of beneficial

interest representing fractional undivided beneficial interests in its net assets that trade on the Exchange.

The Shares are listed for

trading on the Exchange under a ticker symbol “CETH”.

The Trust operates pursuant to the Trust Agreement.

The Trust is not registered

as an investment company under the 1940 Act, and is not a commodity pool for purposes of the CEA.

The Trust is managed and controlled

by the Sponsor.

The Sponsor is a limited liability company formed in the state of Delaware on June 16, 2021, and is a wholly owned subsidiary

of 21co Holdings Limited (formerly known as Amun Holdings Limited).

The ultimate parent company of 21co Holdings Limited is FalconX, a

leading institutional digital asset prime brokerage.

The Sponsor is not subject to regulation by the CFTC as a commodity pool operator

with respect to the Trust, or a commodity trading advisor with respect to the Trust.

The Trust is an exchange-traded fund that issues

common shares of beneficial interest representing fractional undivided beneficial interests in its net assets that trade on the Exchange.

The Shares are listed for trading on the Exchange under the ticker symbol “TETH”.

The Sponsor served as the

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On May 1, 2024, the Sponsor, in its capacity as Seed Capital Investor, subject to certain

conditions, purchased 2 Shares at a per-Share price of $50.00 (the “Seed Creation Baskets”).

conditions, purchased two Shares at a per-Share price of $50.00 (the “Initial Seed Shares”).

Total proceeds to the Trust from

the sale of these Seed Creation Baskets were $100.

Delivery of the Seed Creation Baskets was made on May 1, 2024.

On June 18, 2024 (the “Seed

Capital Purchase Date”), 21Shares US LLC, in its capacity as Seed Capital Investor, purchased the initial Seed Creation Baskets

comprising 20,000 Shares (the “Initial Seed Creation Baskets”).

In its capacity as the Seed Capital Investor, 21Shares US

LLC has acted as a statutory underwriter in connection with this purchase.

The total proceeds to the Trust from the sale of the Initial

Seed Creation Baskets were $340,739.

On June 18, 2024, the Trust purchased ether with the proceeds of the Initial Seed Creation Baskets

by transacting with an Ether Counterparty to acquire ether on behalf of the Trust in exchange for cash provided by 21Shares US LLC in

its capacity as Seed Capital Investor.

All ether acquired in connection with the Initial Seed Creation Baskets is held by the ether Custodians.

the sale of the Initial Seed Shares were $100.

Delivery of the Initial Seed Shares was made on May 1, 2024.

On June 18, 2024 (the “Seed Capital Purchase Date”),

the Sponsor, in its capacity as Seed Capital Investor, purchased the initial Seed Creation Baskets comprising 20,000 Shares (the

“Initial Seed Creation Baskets”).

In its capacity as the Seed Capital Investor, the Sponsor has acted as a statutory underwriter

in connection with this purchase.

The total proceeds to the Trust from the sale of the Initial Seed Creation Baskets were $340,739.

June 18, 2024, the Trust purchased ether with the proceeds of the Initial Seed Creation Baskets by transacting with an ether Trading

Counterparty to acquire ether on behalf of the Trust in exchange for cash provided by the Sponsor in its capacity as Seed Capital Investor.

On July 22, 2025, the Sponsor redeemed its Initial Seed Creation Basket of 20,000 Shares.

All ether acquired in connection with the Initial

Seed Creation Baskets is held by the Custodians.

The Trust’s investment

objective is to seek to track the performance of ether, as measured by the performance of the CME CF Ether-Dollar Reference Rate—New

York Variant, adjusted for the Trust’s expenses and other liabilities.

objective is to seek to track the performance of ether, as measured by the performance of the Index, adjusted for the Trust’s expenses

and other liabilities, and to reflect 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 undue legal or regulatory risk, such as, without limitation, the risk of jeopardizing

the Trust’s ability to qualify as a grantor trust for U.S.

Federal income tax purposes.

CF Benchmarks Ltd.

is the administrator for the Index (the

“Index Provider”).

is the Index Provider.

The Index is designed to reflect the performance of ether in U.S.

In seeking to achieve its investment

objective, the Trust holds ether at its Custodians and values its Shares daily based on the Index.

The Trust is a passive investment vehicle

and is not a leveraged product.

In seeking to achieve its investment objective, the Trust holds

ether at its Custodians and values its Shares daily based on the Index.

The Trust is a passive investment vehicle and is not a leveraged

The Sponsor does not actively manage the ether held by the Trust.

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in Creation Baskets of 10,000 or multiples thereof.

Creation Baskets are issued and redeemed in exchange for cash.

Individual Shares will

not be redeemed by the Trust but are listed and traded on the Exchange under the ticker symbol “CETH”.

The Trust issues Shares

in Creation Baskets on a continuous basis at the applicable NAV per Share on the creation order date.

Creation Baskets are issued and redeemed in exchange for cash or for ether.

Shares will not be redeemed by the Trust but are listed and traded on the Exchange under the ticker symbol “TETH”.

issues Shares in Creation Baskets on a continuous basis at the applicable NAV per Share on the creation order date.

The Trust pays the unitary

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performed under the Trust Agreement.

The Sponsor is waiving the entire Sponsor Fee for (i) a six-month period which commenced on July

23, 2024 (the day the Trust’s Shares were initially listed on the Exchange), or (ii) the first $500 million of Trust assets, whichever

Except for during periods during which the Sponsor Fee is being waived, the Sponsor Fee accrues daily and is payable in ether

weekly in arrears.

The Administrator calculates the Sponsor Fee on a daily basis by applying a 0.21% annualized rate to the Trust’s

total ether holdings, and the amount of ether payable in respect of each daily accrual is determined by reference to the Index.

The Sponsor agreed to waive the entire Sponsor Fee for (i) a six-month period which commenced on

July 23, 2024 (the day the Trust’s Shares were initially listed on the Exchange), or (ii) the first $500 million of Trust assets,

whichever came first.

The six-month waiver period ended on January 23, 2025, at which time the Sponsor began collecting the Sponsor Fee.

On October 8, 2025, the Sponsor agreed to voluntarily waive the fee it receives from the Trust as compensation for the Sponsor’s

services rendered to the Trust for a period of one year beginning on October 9, 2025, and ending on October 8, 2026.

Except for during

periods during which the Sponsor Fee is being waived, the Sponsor Fee accrues daily and is payable in ether weekly in arrears.

The Administrator

calculates the Sponsor Fee on a daily basis by applying a 0.21% annualized rate to the Trust’s total ether holdings, and the amount

of ether payable in respect of each daily accrual is determined by reference to the Index.

The Trust also pays 25% of the gross staking rewards generated by the Trust’s staking activities to the Sponsor and retains the

remainder of the gross Staking Consideration.

The Trust is an “emerging

growth company” as that term is used in the Securities Act of 1933, as amended (the “Securities Act”), and, as such,

the Trust may elect to comply with certain reduced public company reporting requirements.

growth company” as that term is used in the Securities Act, and, as such, the Trust may elect to comply with certain reduced public

company reporting requirements.

The NAV of the Trust is used

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NAV and NAV per Share are

not measures calculated in accordance with GAAP and are not intended as substitute for Principal Market and Principal Market NAV per Share,

respectively.

not measures calculated in accordance with GAAP and are not intended as substitutes for Principal Market and Principal Market NAV per

Share, respectively.

Critical Accounting Estimates

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in this report for further discussion of the Trust’s accounting policies.

Cash includes non-interest bearing, non-restricted

cash maintained with one financial institution that does not exceed U.S.

Cash includes non-interest

bearing, non-restricted cash maintained with one financial institution that does not exceed U.S.

federally insured limits.

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Results of Operations

For the period May 1, 2024

(initial seed creation) through December 31, 2024*

The Trust’s net

asset value increased to $16,869,879 on December 31, 2024, primarily from an increase in price of ether and a net increase in the number

of shares outstanding of 1,010,000 from May 1, 2024 (date of initial seeding) to December 31, 2024.

For the Year Ended December

The Trust’s net asset value increased to $31,298,450 on December

31, 2025, primarily from a net increase in the number of shares outstanding of 2,110,000 from January 1, 2025 to December 31, 2025.

Net realized and change in unrealized gain on investment in ether for

the year ended December 31, 2025, was $1,415,539 which includes a net change in unrealized depreciation on investment in ether of ($8,579,019)

and realized gain of $9,994,558 on ether sold.

Net change in unrealized loss on investment in ether for the period was driven by ether

price depreciation from $3,340.57 per ether on December 31, 2024, to $2,971.02 per ether on December 31, 2025.

Net increase in net assets

resulting from operations was $1,375,723 for the year ended December 31, 2025, which consisted of a net increase in the number of shares

outstanding and by the aforementioned net realized gain and change in unrealized depreciation on investment in ether.

For the period May 1, 2024 (date of initial seeding ) through December

The Trust’s net asset

value increased to $16,869,879 on December 31, 2024, primarily from an increase in price of ether and a net increase in the number of

shares outstanding of 1,010,000 from May 1, 2024 (date of initial seeding) to December 31, 2024.

Net realized and change in

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in the number of shares outstanding and by the aforementioned net realized and change in unrealized gain on investment in ether.

* No prior year comparative period has been provided as this is

the first year of the Trust’s operations.

Liquidity and Capital Resources

The Trust is not aware of

any trends, demands, commitments, events, or uncertainties that are reasonably likely to result in material changes to its liquidity needs.

The Trust’s only ordinary recurring expense is the fee paid to the Sponsor at an annual rate of 0.21% of the Trust’s total

ether holdings.

The Sponsor agreed to waive the entire Sponsor Fee for (i) a six-month period which commenced on July 23, 2024 (the day

the Trust’s Shares were initially listed on the Exchange), or (ii) the first $500 million of Trust assets, whichever came first.

The six-month waiver period ended on January 23, 2025, at which time the Sponsor began collecting the Sponsor Fee.

In exchange for the

Sponsor’s fee, the Sponsor has agreed to assume the ordinary fees and expenses incurred by the Trust, including but not limited

to the following:

fees charged by Administrator, the Custodians, Transfer Agent and the Trustee, the Marketing Fee, the Exchange’s

listing fees, typical maintenance and transaction fees of the DTC, SEC registration fees, printing and mailing costs, website fees, tax

reporting fees, audit fees, license fees and expenses, up to $100,000 per annum in ordinary legal fees and expenses.

The Sponsor bears

expenses in connection with the Trust’s organization and initial offering costs.

The Sponsor is not required

to pay any extraordinary or non-routine expenses.

Extraordinary expenses are fees and expenses which are unexpected or unusual in nature,

such as legal claims and liabilities and litigation costs or indemnification or other unanticipated expenses.

Extraordinary fees and expenses

also include material expenses which are not currently anticipated obligations of the Trust.

The Trust will be responsible for the payment

of such expenses to the extent any such expenses are incurred.

Routine operational, administrative, and other ordinary expenses are not

deemed extraordinary expenses.

The Trust will sell ether on an as-needed basis to pay the Sponsor’s fee.

The Trust is not aware

of any trends, demands, commitments, events, or uncertainties that are reasonably likely to result in material changes to its

liquidity needs.

The Trust’s only ordinary recurring expense is the fee paid to the Sponsor at an annual rate of 0.21% of the

Trust’s total ether holdings and 25% of the gross staking rewards generated by the Trust’s staking activities and

retains the remainder of the gross Staking Consideration.

The Sponsor agreed to waive the entire Sponsor Fee for (i) a six-month

period which commenced on July 23, 2024 (the day the Trust’s Shares were initially listed on the Exchange), or (ii) the first

$500 million of Trust assets, whichever came first.

The six-month waiver period ended on January 23, 2025, at which time the Sponsor

began collecting the Sponsor Fee.

On October 8, 2025, the Sponsor agreed to voluntarily waive the fee it receives from the Trust as

compensation for the Sponsor’s services rendered to the Trust for a period of one year beginning on October 9, 2025 and ending

on October 8, 2026.

In exchange for the Sponsor Fee, the Sponsor has agreed to assume the ordinary fees and expenses incurred by the

Trust, including but not limited to the following:

fees charged by Administrator, the Custodians, Transfer Agent and the Trustee,

the Marketing Fee, the Exchange’s listing fees, typical maintenance and transaction fees of the DTC, SEC registration fees,

printing and mailing costs, website fees, tax reporting fees, audit fees, license fees and expenses, up to $100,000 per annum in

ordinary legal fees and expenses.

The Sponsor bears expenses in connection with the Trust’s organization and initial offering

The Sponsor is not required to pay any extraordinary or non-routine expenses.

Extraordinary expenses are fees and expenses which are unexpected or unusual in nature, such as legal claims and liabilities and litigation

costs or indemnification or other unanticipated expenses.

Extraordinary fees and expenses also include material expenses which are not

currently anticipated obligations of the Trust.

The Trust will be responsible for the payment of such expenses to the extent any such

expenses are incurred.

Routine operational, administrative, and other ordinary expenses are not deemed extraordinary expenses.

will sell ether on an as-needed basis to pay the Sponsor Fee.

Off-Balance Sheet Arrangements

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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-K

Item 7. Management’s Discussion and Analysis