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Item 1. Financial Statements

2026-05-15 compared with 2025-11-14 · 261 added, 420 removed, 79 unchanged (90% of the section changed)

Financial Statements (Unaudited)

21Shares Ethereum ETF

STATEMENTS OF ASSETS AND LIABILITIES

September 30,

OF ASSETS AND LIABILITIES

Investment in ether, at fair value (cost $ 24,357,798 , and $ 38,559,102 , respectively) $ 18,191,793 $ 31,298,450

Sponsor fee payable

Staking Rewards receivable 360 –

Capital shares receivable 2,617,219 –

Total assets 20,809,372 31,298,450

Ether purchased payable 2,617,489 –

Staking Fee payable 90

Total liabilities 2,617,579 –

Commitments and contingent liabilities (Note 8)

Net assets consists of

Net assets $ 18,191,793 $ 31,298,450

Net assets consist of

Paid-in-capital $ 20,465,321 $ 25,536,620

Accumulated earnings

Accumulated earnings (loss) ( 2,273,528 ) 5,761,830

$ 18,191,793 $ 31,298,450

Shares issued and outstanding, no par value, unlimited amount authorized 1,740,000 2,110,000

Net asset value per share $ 10.46 $ 14.83

The accompanying notes are an integral part of the financial

21Shares Ethereum ETF

SCHEDULES OF INVESTMENT

September 30, 2025 (Unaudited)

The accompanying

notes are an integral part of the financial statements.

OF INVESTMENT

March 31, 2026 (Unaudited)

% of Net Assets

2 unchanged sentences

Liabilities in excess of other assets – 0.00 %

Net assets $ 18,191,793 100.00 %

December 31, 2025

3 unchanged sentences

Liabilities in excess of other assets – 0.00 %

The accompanying notes are an integral part

of the financial statements.

21Shares Ethereum ETF

STATEMENTS OF OPERATIONS

For the three

September 30,

For the three

September 30,

For the period

(initial seed creation date) to

September 30,

Net assets $ 31,298,450 100.00 %

* 23.02% of ether held was staked as of March 31, 2026 – See Note 2.

** 23.73% of ether held was staked as of December 31, 2025 – See Note 2.

accompanying notes are an integral part of the financial statements.

OF OPERATIONS

Investment income

Staking Rewards 62,288 –

Total income 62,288 –

Sponsor Fee 12,125 8,076

Staking Fee 15,555 –

Total expenses 27,680 8,076

Less waiver and reimbursement ( 12,125 ) ( 2,169 )

Net investment loss

Net expenses 15,555 5,907

Net investment income (loss) 46,733 ( 5,907 )

Realized and change in unrealized gain (loss)

Net realized gain (loss) on investment in ether sold for redemptions

Net realized gain (loss) on investment in ether sold to pay Sponsor fee

Net realized loss on investment in ether sold for income distribution ( 12,410 ) -

Net realized loss on investment in ether sold for redemptions ( 9,122,723 ) ( 3,476,102 )

Net change in unrealized appreciation (depreciation) on investment in ether 1,094,647 ( 6,380,524 )

( 3,223,608 )

( 3,222,047 )

Net realized and change in unrealized gain (loss)

( 3,223,608 )

( 3,222,047 )

Net increase (decrease) in net assets resulting from operations

$ ( 3,223,608 )

$ ( 3,222,047 )

The accompanying notes are an integral part of the financial statements.

21Shares Ethereum ETF

STATEMENTS OF CHANGES IN NET ASSETS

For the three

September 30,

For the three

September 30,

For the period from May 1,

(initial seed creation date) to

September 30,

Net change in unrealized gain on Sponsor Fee payable – 1,523

Net realized and change in unrealized loss ( 8,040,486 ) ( 9,855,103 )

Net decrease in net assets resulting from operations $ ( 7,993,753 ) $ ( 9,861,010 )

accompanying notes are an integral part of the financial statements.

OF CHANGES IN NET ASSETS

Net assets, beginning of period $ 31,298,450 $ 16,869,879

1 unchanged sentence

Distributions for Shares redeemed ( 24,642,679 ) ( 5,676,037 )

( 47,704,815 )

( 53,380,852 )

Net investment loss

Income distribution ( 41,605 ) –

Net investment income 46,733 ( 5,907 )

Net realized loss on investment in ether sold for income distribution ( 12,410 ) -

Net realized gain (loss) on investment in ether sold for redemptions ( 9,122,723 ) ( 3,476,102 )

Net realized gain (loss) on investment in ether sold to pay Sponsor fee

Net change in unrealized appreciation (depreciation) on investment in ether 1,094,647 ( 6,380,524 )

( 3,223,608 )

( 3,222,047 )

Net change in unrealized gain on Sponsor Fee payable – 1,523

Net assets, end of period $ 18,191,793 $ 8,403,421

2 unchanged sentences

Shares redeemed ( 2,060,000 ) ( 610,000 )

( 2,280,000 )

( 2,890,000 )

Net increase in Shares issued and outstanding

The accompanying notes are an integral part

of the financial statements.

Net decrease in Shares issued ( 370,000 ) ( 90,000 )

accompanying notes are an integral part of the financial statements.

to Financial Statements (UNAUDITED)

The 21Shares Ethereum ETF

(the “Trust”) is a Delaware statutory trust, formed on September 5, 2023, pursuant to the Delaware Statutory Trust Act (“DSTA”).

The Trust operates pursuant to a Second Amended and Restated Trust Agreement (the “Trust Agreement”).

CSC Delaware Trust

Company, a Delaware trust company, is the trustee of the Trust (the “Trustee”).

On August 27, 2025, 21Shares Ethereum ETF

(the “Trust”)’s sponsor, 21Shares US LLC (the “Sponsor”), caused a Certificate of Amendment to the Trust’s

Certificate of Trust to be filed with the Secretary of State of the State of Delaware in order to change the name of the Trust from “21Shares

Core Ethereum ETF” to “21Shares Ethereum ETF”.

The 21Shares Ethereum ETF (the “Trust”) is a Delaware statutory trust, formed on September 5, 2023, pursuant to the Delaware Statutory Trust Act (“DSTA”).

The Trust operates pursuant to a Third Amended and Restated Trust Agreement (the “Trust Agreement”).

CSC Delaware Trust Company, a Delaware trust company, is the trustee of the Trust (the “Trustee”).

On August 27, 2025, the Trust’s sponsor, 21Shares US LLC (the “Sponsor”), caused a Certificate of Amendment to the Trust’s Certificate of Trust to be filed with the Secretary of State of the State of Delaware in order to change the name of the Trust from “21Shares Core Ethereum ETF” to “21Shares Ethereum ETF”.

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).

Coinbase Custody Trust Company, LLC (“Coinbase”),

BitGo New York Trust Company, LLC (“BitGo”), and Anchorage Digital Bank N.A (“Anchorage”, and, together with Coinbase

and BitGo, as the context may require, the “Custodian”, “Custodians” and each a “Custodian”) are

the custodians for the Trust and hold all of the Trust’s ether on the Trust’s behalf.

The transfer agent (the “Transfer

Agent”), the administrator for the Trust (the “Administrator”), and the cash custodian (the “Cash Custodian”),

is Bank of New York Mellon.

The Trust is an exchange-traded

fund that issues common units of beneficial interest (the “Shares”) representing fractional undivided beneficial interests

in its net assets that trade on the Cboe BZX Exchange, Inc.

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.

The ultimate parent company of 21co Holdings Limited is FalconX Holdings Limited (“FalconX”).

Coinbase Custody Trust Company, LLC (“Coinbase”), BitGo Bank & Trust, N.A.

(BitGo), BitGo New York Trust Company, LLC (“BitGo New York”), and Anchorage Digital Bank N.A (“Anchorage”, and, together with Coinbase, BitGo New York and BitGo, as the context may require, the “Ether Custodians”, “Custodians” and each an “Ether Custodian”) are the custodians for the Trust and hold all of the Trust’s ether on the Trust’s behalf.

The transfer agent (the “Transfer Agent”), the administrator for the Trust (the “Administrator”), and the cash custodian (the “Cash Custodian”), is Bank of New York Mellon.

The Trust is an exchange-traded fund that issues common shares of beneficial interest (the “Shares”) representing fractional undivided beneficial interests in its net assets that trade on the Cboe BZX Exchange, Inc.

(the “Exchange”).

The Shares were listed for trading on the Exchange

on July 23, 2024, and currently trade under the ticker symbol “TETH”.

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 (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.

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

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 (the “Pricing Benchmark”), 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”).

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

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

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.

The Sponsor served as the

“Seed Capital Investor” to the Trust.

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

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 Initial Seed Shares were $ 100 .

Delivery of the Seed Shares were 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 Seed Creation Baskets comprising 20,000

Shares (the “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 Seed Creation Baskets were $ 340,739 .

On June 18, 2024, the Trust purchased ether with the proceeds of the Seed Creation Baskets by transacting with an ether counterparty, which is a designated third party who is not an Authorized Participant (as defined below) but who may be an affiliate

of an Authorized Participant and with whom the Sponsor has entered into an agreement on behalf of the Trust (a “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.

acquired in connection with the Seed Creation Baskets is held by the one or more of the Custodians.

The statement of assets and

liabilities and schedule of investment on September 30, 2025, and the statements of operations, and changes in net assets for the three

and nine months ended September 30, 2025, and for the period May 1, 2024 (initial seed creation date) through September 30, 2024, have

been prepared on behalf of the Trust and are unaudited.

In the opinion of management of the Sponsor of the Trust, all adjustments (which

include normal recurring adjustments) necessary to present fairly the financial position and results of operations for the period ended

September 30, 2025, and for all interim periods presented have been made.

In addition, interim period results are not necessarily indicative

of results for a full-year period.

The fiscal year-end of the

Trust is December 31st.

is the administrator for the Pricing Benchmark (the “Pricing Benchmark Provider”).

The Pricing Benchmark 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 Pricing Benchmark.

The Trust is an “emerging 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 Sponsor served as the “Seed Capital Investor” to the Trust.

On May 1, 2024, the Sponsor, in its capacity as Seed Capital Investor, subject to certain 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 Initial Seed Shares were $ 100 .

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

On June 18, 2024, 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 .

On June 18, 2024, the Trust purchased ether with the proceeds of the Initial Seed Creation Baskets by transacting with a designated third party, who may be an Authorized Participant or an affiliate of an Authorized Participant and with whom the Sponsor has entered into an agreement on behalf of the Trust (each such third party, an “Ether Counterparty”), to acquire ether on behalf of the Trust in exchange for cash provided by the Sponsor, in its capacity as Seed Capital Investor.

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

The statements of assets and liabilities and schedules of investment on March 31, 2026, and the statements of operations, and changes in net assets for the three months ended March 31, 2026 and 2025, have been prepared on behalf of the Trust and are unaudited.

In the opinion of management of the Sponsor of the Trust, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position and results of operations for the three months ended March 31, 2026 and 2025, and for all interim periods presented have been made.

In addition, interim period results are not necessarily indicative of results for a full-year period.

The fiscal year-end of the Trust is December 31 st .

Significant Accounting Policies

Basis of Accounting

The financial statements have

been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP” or “GAAP”).

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 (“FASB”) Accounting Standards Codification (“ASC”) 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.

The Trust uses fair value as its method of accounting for ether in accordance with its classification

as an investment company for accounting purposes.

The preparation of the financial

statements in conformity with US GAAP requires the Trust to make estimates and assumptions that affect the reported amounts of assets

and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP” or “GAAP”).

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 (“FASB”) Accounting Standards Codification (“ASC”) 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 (the “1940 Act”).

The Trust uses fair value as its method of accounting for ether in accordance with its classification as an investment company for accounting purposes.

Accounting Estimates

The preparation of the financial statements in conformity with US GAAP requires the Trust to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results may differ materially from such estimates as additional information becomes available or actual amounts may become determinable.

Should actual results differ from those previously recognized, the recorded estimates will be revised accordingly with the impact reflected

in the operating results of the Trust in the reporting period in which they become known.

Cash includes non-interest

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

Should actual results differ from those previously recognized, the recorded estimates will be revised accordingly with the impact reflected in the operating results of the Trust in the reporting period in which they become known.

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

federally insured limits.

Investment Valuation

US 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.

US 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 investments held at fair value.

The Trust identifies and determines

the ether principal market (or in the absence of a principal market, the most advantageous market) for GAAP purposes consistent with the

application of the fair value measurement framework in FASB ASC 820 – Fair Value Measurement.

A principal market is the market with

the greatest volume and activity level for the asset or liability.

The determination of the principal market will be based on the market

with the greatest volume and level of activity that can be accessed.

The Trust obtains relevant volume and level of activity information

and based on initial analysis will select an exchange market as the Trust’s principal market.

The net asset value (“NAV”)

and NAV per Share will be calculated using the fair value of ether based on the price provided by this exchange market, as of 4:00 p.m.

The Trust identifies and determines the ether principal market (or in the absence of a principal market, the most advantageous market) for GAAP purposes consistent with the application of the fair value measurement framework in FASB ASC 820 – Fair Value Measurement.

A principal market is the market with the greatest volume and activity level for the asset or liability.

The determination of the principal market will be based on the market with the greatest volume and level of activity that can be accessed.

The Trust obtains relevant volume and level of activity information and based on initial analysis will select an exchange market as the Trust’s principal market.

The net asset value (“NAV”) and NAV per Share will be calculated using the fair value of ether based on the price provided by this exchange market, as of 4 :

ET on the measurement date for GAAP purposes.

The Trust will update its principal market analysis periodically and as needed to the extent

that events have occurred, or activities have changed in a manner that could change the Trust’s determination of the principal market.

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:

Unadjusted quoted prices in

active markets for identical assets or liabilities;

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;

Unobservable inputs, including

the Trust’s assumptions used in determining the fair value of investments, where there is little or no market activity for the asset

or liability at the measurement date.

Fair Value Measurement Using

September 30, 2025 (Unaudited)

The Trust will update its principal market analysis periodically and as needed to the extent that events have occurred, or activities have changed in a manner that could change the Sponsor’s determination of the Trust’s principal market.

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:

Unadjusted quoted prices in active markets for identical assets or liabilities;

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;

Unobservable inputs, including the Trust’s assumptions used in determining the fair value of investments, where there is little or no market activity for the asset or liability at the measurement date.

The following table presents information about the Trust’s assets measured at fair value as of March 31, 2026 (Unaudited) and December 31, 2025:

Amount at Fair Value Measurement Using

Fair Value Level 1 Level 2 Level 3

March 31, 2026 (Unaudited)

Investment in ether $ 18,191,793 $ 18,191,793 $ – $ –

Fair Value Measurement Using

Amount at Fair Value Measurement Using

Fair Value Level 1 Level 2 Level 3

December 31, 2025

Investment in ether $ 31,298,450 $ 31,298,450 $ – $ –

The cost basis of the investment

in ether recorded by the Trust for financial reporting purposes is the fair value of ether at the time of purchase.

The cost basis recorded

by the Trust may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors.

The cost basis of the investment in ether recorded by the Trust for financial reporting purposes is the fair value of ether at the time of purchase.

The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors.

Investment Transactions

The Trust considers investment transactions to

be the receipt of ether for Share creations and the delivery of ether for Share redemptions or for payment of expenses in ether.

records its investments transactions on a trade date basis and changes in fair value are reflected as net change in unrealized appreciation

or depreciation on investments.

The Trust considers investment transactions to be the receipt of ether for Share creations and the delivery of ether for Share redemptions or for payment of expenses in ether.

The Trust records its investment transactions on a trade date basis and changes in fair value are reflected as net change in unrealized appreciation or depreciation on investments.

Realized gains and losses are calculated using the specific identification method.

Realized gains and

losses are recognized in connection with transactions including redemption of shares and settling obligations for the Sponsor’s

fee in ether.

Realized gains and losses are recognized in connection with transactions including redemption of shares and settling obligations for the Sponsor Fee in ether.

The Trust earns staking rewards (“Staking Rewards”) by delegating a portion of its ether on the Ethereum blockchain’s proof-of-stake consensus protocol.

The Sponsor has entered into contractual arrangements with Coinbase Crypto Services, LLC (“Coinbase Crypto”), Figment Inc.

(“Figment”) and Twinstake Ltd (“Twinstake” and collectively with Coinbase Crypto and Figment, the “Staking Services Providers”) to facilitate the staking of the Trust’s ether.

Each Staking Services Provider that generates staking rewards is entitled to compensation determined as a portion of the staking rewards, which is generally determined by a fixed percentage of the overall rewards amount (the “Staking Provider Consideration”).

Staking rewards represent variable consideration based on a variety of factors such as the amount of the ether holdings the Trust has made available to the network, the staking yield, and other factors, for its contribution to the network.

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 Services Provider.

Staking rewards are recorded as staking income recognized at fair value when earned.

Because the Sponsor is not the principal to the block validation service, it does not control the full output of the reward-generating activity, and instead receives an aggregate of 25 % of the Staking Rewards.

Of the Staking Fee (as defined below), the Sponsor pays the Staking Provider Consideration.

The Trust receives and retains the remainder of the Staking Rewards.

As such, the Trust presents staking rewards on a gross basis.

The rewards owed or paid to the Staking Services Providers reduce the amount of staking rewards that are generated from the Trust’s staking activities (the “Staking Activities”) that are available in the assets of the Trust.

Staking Rewards are received in general daily at its Custodians’ account, as earned.

The unbonding period for staked ether can vary subject to the discretion of the Sponsor’s request to unstake such assets.

The Trust’s staked ether is unable to be moved on the blockchain or traded during this period.

Temporary lock-up periods or transfer restrictions from staking could limit the Trust’s ability to meet redemptions.

For the quarters ended March 31, 2026 and December 31, 2025, the Trust staked an average of 22.69 % and 16.65 %, respectively, of its ether holdings on a daily basis.

As of March 31, 2026 and December 31, 2025, the Trust had staked 23.02 % and 23.73 %, respectively, of its ether holdings.

The staked percentage as of any particular date, including at the end of a reporting period, may differ from the quarterly average.

Distributions to Shareholders

The Trust pays cash distributions to Shareholders at least quarterly.

Distributions are funded from staking rewards earned on the Trust’s ether holdings.

Staking Rewards are recognized as income by the Trust on a daily basis as they accrue and are reflected in the Trust’s NAV prior to distribution.

Distributions to Shareholders are recorded on the ex-dividend date, which also serves as the record date.

Shareholders of record as of the ex-dividend date are entitled to receive distributions paid on the applicable payment date.

The amount of each distribution is based on the staking rewards actually earned by the Trust during the relevant period, net of the Staking Fee (as defined below).

Distributions are reflected as a reduction of net assets as of the ex-dividend date.

The tax character of distributions is determined annually in accordance with U.S.

federal income tax principles, which may differ from the treatment of such amounts for GAAP purposes.

Any differences between the tax and book distributable amounts are reclassified within the components of net assets at year-end.

During the three months ended March 31, 2026, the Trust made cash distributions to shareholders derived from a portion of the ether received as Staking Rewards from the Trust’s staking activities, including $ 22,935 , or $ 0.010378 per Share, on January 8, 2026 and $ 18,670 , or $ 0.012530 per Share on March 30, 2026, for aggregate distributions of $ 41,605 , or $ 0.022908 per Share.

The distributions reduced the Trust’s ether holdings through the sale of ether to generate cash.

Calculation of NAV and NAV per Share

On each day other than when

the Exchange is closed for regular trading (a “Business Day”), as soon as practicable after 4:00 p.m.

NAV of the Trust is obtained by subtracting all accrued fees, expenses and other liabilities of the Trust from the fair value of the ether

and other assets held by the Trust.

The Trustee computes the NAV per Share by dividing the NAV of the Trust by the number of Shares outstanding

on the date the computation is made.

On each day other than when the Exchange is closed for regular trading (a “Business Day”), as soon as practicable after 4 :

ET, the NAV of the Trust is obtained by subtracting all accrued fees, expenses and other liabilities of the Trust from the fair value of the ether and other assets held by the Trust based on the Pricing Benchmark price.

The Administrator computes the NAV per Share by dividing the NAV of the Trust by the number of Shares outstanding on the date the computation is made.

Federal Income Taxes

The Sponsor and the Trustee

will treat the Trust as a “grantor trust” for U.S.

The Sponsor and the Trustee will treat the Trust as a “grantor trust” for U.S.

federal income tax purposes.

Although not free from doubt due to the lack

of directly governing authority, if the Trust operates as expected, the Trust should be classified as a “grantor trust” for

federal income tax purposes and the Trust itself should not be subject to U.S.

federal income tax.

Each beneficial owner of Shares

will be treated as directly owning its pro rata Share of the Trust’s assets and a pro rata portion of the Trust’s income,

gain, losses and deductions passed through to each beneficial owner of Shares.

If the Trust sells ether (for example, to pay fees or expenses),

such a sale is a taxable event to shareholders of the Trust (“Shareholders”).

Upon a Shareholder’s sale of its Shares, the Shareholder will be treated as having

sold the pro rata share of the ether held in the Trust at the time of the sale and may recognize gain or loss on such sale.

has reviewed the tax positions as of September 30, 2025, and has determined that no provision for income tax is required in the Trust’s

financial statements.

As a grantor trust, the Trust can undertake only certain types of activities.

For example, generally, the Trust cannot vary its investment portfolio to take advantage of market fluctuations.

The Trust may receive income from investment activities that do not require such decision-making.

If staking is treated for U.S.

federal income tax purposes as a passive ministerial and administrative activity, it should be permissible for the Trust.

To that end, on November 10, 2025, the Treasury Department and IRS issued a revenue procedure that provided a safe harbor for trusts that otherwise qualify as investment trusts and as grantor trusts to stake their digital assets without jeopardizing their tax status as investment trusts and grantor trusts for U.S.

federal income tax purposes.

The revenue procedure provides specific requirements that must be satisfied by a Trust in order to be eligible to rely on the safe harbor.

The Trust intends to operate so that it will qualify to be treated for U.S.

federal income tax purposes as a grantor trust.

Because the treatment of staking in a grantor trust, including interpretation of the requirements under the safe harbor, is still developing, there remains a risk of adverse regulatory or legal determinations that could affect the tax treatment of the Trust as a grantor trust or affect the Trust’s operations.

Each beneficial owner of Shares will be treated as directly owning its pro rata Share of the Trust’s assets and will be treated as if it directly received a pro rata portion of the Trust’s income, gain, losses and deductions.

If the Trust sells ether (for example, to pay fees or expenses), such a sale is a taxable event to shareholders of the Trust (“Shareholders”).

Upon a Shareholder’s sale of its Shares, the Shareholder will be treated as having sold the pro rata share of the ether held in the Trust at the time of the sale and recognizes gain or loss on such sale.

The Sponsor has reviewed the tax positions as of March 31, 2026 and December 31,2025 , and has determined that no provision for income tax is required in the Trust’s financial statements.

Segment Reporting

The Trust operates in one

The segment derives its revenues from Trust investments made in accordance with the defined investment strategy of the Trust,

as prescribed in the Trust’s prospectus.

The Chief Operating Decision Maker (“CODM”) is the Sponsor.

The CODM monitors

the operating results of the Trust.

The financial information that the CODM leverages to assess the segment’s performance and to

make decisions for the Trust’s single segment, is consistent with the financial information that is presented within the Trust’s

financial statements.

Segment assets are reflected on the accompanying Statements of Assets and Liabilities as Total assets and the only

significant segment expense, the Sponsor fee, is included in the accompanying Statements of Operations.

The Trust operates in one segment.

The segment derives its revenues from Trust investments made in accordance with the defined investment strategy of the Trust, as prescribed in the Trust’s prospectus.

The Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer of the Sponsor.

The CODM monitors the operating results of the Trust.

The financial information that the CODM leverages to assess the segment’s performance and to make decisions for the Trust’s single segment, is consistent with the financial information that is presented within the Trust’s financial statements.

Segment assets are reflected on the accompanying Statements of Assets and Liabilities as Total assets and the only significant segment expenses, the Sponsor Fee and the Staking Fee, are included in the accompanying Statements of Operations.

Fair Value of Ether

The following represents the

changes in quantity of ether and the respective fair value for the nine months ended September 30, 2025 and the period from May 1,

2024 (initial seed creation date) to September 30, 2024 (Unaudited):

The following represents the changes in quantity of ether and the fair value for the three months ended on March 31, 2026 (Unaudited) and 2025 (Unaudited):

ether Fair Value

Beginning balance as of January 1, 2026 10,534.5809 $ 31,298,450

Ether purchased

( 14,446.5142 )

( 53,408,140 )

Net realized gain (loss) on investment in ether sold to pay Sponsor fee

Net realized gain (loss) on investment in ether sold for redemptions

Change in unrealized appreciation (depreciation) on investment in ether

Ending balance as of September 30, 2025

Beginning balance as of May 1, 2024 (initial seed creation date)

Ether purchased

Net realized gain (loss) on investment in ether sold to pay Sponsor fee

Net realized gain (loss) on investment in ether sold for redemptions

Change in unrealized appreciation (depreciation) on investment in ether

( 3,222,047 )

Ending balance as of September 30, 2024

The following represents the

changes in quantity of ether and the respective fair value for the three months ended September 30, 2025 and 2024 (Unaudited):

Beginning balance as of July 1, 2025

Ether purchased

( 11,391.3532 )

( 47,718,601 )

Net realized gain (loss) on investment in ether sold to pay Sponsor fee

Net realized gain (loss) on investment in ether sold for redemptions

Change in unrealized appreciation (depreciation) on investment in ether

Ending balance as of September 30, 2025

Beginning balance as of July 1, 2024

Ether purchased

Net realized gain (loss) on investment in ether sold to pay Sponsor fee

Net realized gain (loss) on investment in ether sold for redemptions

Change in unrealized appreciation (depreciation) on investment in ether

( 3,223,608 )

Ending balance as of September 30, 2024

Ether purchased for contributions 8,440.5491 19,571,380

Ether rewards received 22.7627 62,288

Ether sold for income distribution ( 16.7122 ) ( 41,605 )

Ether sold for redemptions ( 10,290.4138 ) ( 24,642,679 )

Ether sold to pay expenses ( 5.3846 ) ( 15,555 )

Net realized loss on investment in ether sold for income distribution – ( 12,410 )

Net realized loss on investment in ether sold for redemptions – ( 9,122,723 )

Change in unrealized appreciation on investment in ether – 1,094,647

Ending balance as of March 31, 2026 * 8,685.3821 $ 18,191,793

ether Fair Value

Beginning balance as of January 1, 2025 5,050.0000 $ 16,869,879

Ether purchased for contributions 2,599.7490 7,070,589

Ether rewards received – –

Ether sold for income distribution – –

Ether sold for redemptions ( 3,049.1610 ) ( 5,676,038 )

Ether sold to pay expenses – –

Net realized loss on investment in ether sold for income distribution – –

Net realized loss on investment in ether sold for redemptions – ( 3,476,102

Change in unrealized depreciation on investment in ether – ( 6,380,524 )

Ending balance as of March 31, 2025 4,600.5880 $ 8,407,804

Trust Expenses

The Trust pays the unitary

Sponsor fee of 0.21 % of the Trust’s ether holdings.

The Sponsor fee is paid by the Trust to the Sponsor as compensation for services

performed under the Trust Agreement.

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 Trust pays the unitary Sponsor fee of 0.21 % of the Trust’s ether holdings (the “Sponsor Fee”).

The Sponsor Fee is paid by the Trust to the Sponsor as compensation for services performed under the Trust Agreement.

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 ending on October 8, 2026.

Except for during periods in which the Sponsor Fee was 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 incurred Sponsor fees

for the nine-month period ended September 30, 2025 and for the period May 1, 2024 (initial seed creation date) through September 30, 2024

of $ 38,251 and $ 0 , net of Sponsor fees waived of $ 2,169 and $ 3,777 , respectively.

The Sponsor has agreed to

pay all operating expenses (except for litigation expenses and other extraordinary expenses) out of the Sponsor fee.

Operating expenses

assumed by the Sponsor include;

(i) the fee payable to marketing agents for services provided to the Trust (the “Marketing Fee”),

(ii) fees to the Administrator, if any, (iii) fees to the Custodians, (iv) fees to the Transfer Agent, (v) fees to the Trustee,

(vi) the fees and expenses related to any future listing, trading or quotation of the Shares on any listing exchange or quotation system

(including legal, marketing and audit fees and expenses), (vii) ordinary course legal fees and expenses but not litigation-related expenses,

(viii) audit fees, (ix) regulatory fees, including, if applicable, any fees relating to the registration of the Shares under the Securities

Act or Exchange Act, (x) printing and mailing costs;

(xi) costs of maintaining the Sponsor’s website and (xii) applicable license

fees (each, a “Sponsor-paid Expense,” and together, the “Sponsor-paid Expenses”), provided that any expense that

qualifies as an Additional Trust Expense (as defined below) will be deemed to be an Additional Trust Expense and not a Sponsor-paid Expense.

The Sponsor will not, however,

assume certain extraordinary, non-recurring expenses that are not Sponsor-paid Expenses, including, but not limited to, taxes and governmental

charges, expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust

to protect the Trust or the interests of Shareholders, any indemnification of the Custodians, Administrator or other agents, service

providers or counter-parties of the Trust, the fees and expenses related to the listing, and extraordinary legal fees and expenses, including

any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters (collectively, “Additional

Trust Expenses”).

Of the Sponsor-paid Expenses, ordinary course legal fees and expenses shall be subject to a cap of $ 100,000 per

In the Sponsor’s sole discretion, all or any portion of a Sponsor-paid Expense may be re-designated as an Additional Trust

To the extent that the Sponsor

does not voluntarily assume expenses, they will be the responsibility of the Trust.

The Sponsor also pays the costs of the Trust’s

organization and offering.

The Trust is not obligated to repay any such costs related to the Trust’s organization and offering paid

by the Sponsor.

The Administrator calculates the Sponsor Fee on a daily basis by applying an 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 Pricing Benchmark.

The Sponsor has agreed to pay all operating expenses (except for litigation expenses and other extraordinary expenses) out of the Sponsor Fee.

The Trust incurred Sponsor Fee for the quarters ended March 31, 2026 and 2025 of $ 0 and $ 5,907 net of Sponsor Fee waived of $ 12,125 and $ 2,169 , respectively.

As partial consideration for receipt of the Sponsor Fee, the Sponsor shall assume and pay all fees and other expenses incurred by the Trust in the ordinary course of its affairs, excluding taxes, but including (i) the fee payable to marketing agent for services provided to the Trust (the “Marketing Fee”), (ii) fees to the Administrator, if any, (iii) fees to the Custodians, (iv) fees to the Transfer Agent, (v) fees to the Trustee, (vi) the fees and expenses related to any future listing, trading or quotation of the Shares on any listing exchange or quotation system (including legal, marketing and audit fees and expenses), (vii) ordinary course legal fees and expenses but not litigation-related expenses, (viii) audit fees, (ix) regulatory fees, including, if applicable, any fees relating to the registration of the Shares under the Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (x) printing and mailing costs;

(xi) costs of maintaining the Sponsor’s website and (xii) applicable license fees (each, a “Sponsor-paid Expense,” and together, the “Sponsor-paid Expenses”), provided that any expense that qualifies as an Additional Trust Expense will be deemed to be an Additional Trust Expense and not a Sponsor-paid Expense.

There is currently no predetermined cap on the aggregate amount of Sponsor-paid expenses.

Should the Trust implement a predetermined cap on aggregate Sponsor-paid expenses, the Trust will notify the owners of the beneficial interests of Shares in a prospectus supplement or in its periodic Exchange Act reports, as applicable.

The Sponsor will not, however, assume certain extraordinary, non-recurring expenses that are not Sponsor-paid Expenses, including, but not limited to, taxes and governmental charges, expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust to protect the Trust or the interests of Shareholders, any indemnification of the Custodians, Administrator or other agents, service providers or counter-parties of the Trust, the fees and expenses related to the listing, and extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters (collectively, “Additional Trust Expenses”).

Of the Sponsor-paid Expenses, ordinary course legal fees and expenses shall be subject to a cap of $ 100,000 per annum.

In the Sponsor’s sole discretion, all or any portion of a Sponsor-paid Expense may be re-designated as an Additional Trust Expense, if among other reasons, the Sponsor determines that a Sponsor-paid Expense is an extraordinary, non-recurring expense of the Trust.

The Trust shall not be responsible for paying any fees or expenses associated with the transfer of ether as needed to pay the Sponsor Fee or Additional Trust Expenses.

To the extent that the Sponsor does not voluntarily assume expenses, they will be the responsibility of the Trust.

The Sponsor also pays the costs of the Trust’s organization and offering.

The Trust is not obligated to repay any such costs related to the Trust’s organization and offering paid by the Sponsor.

In consideration for the Sponsor’s facilitation of staking, the Trust pays 25 % of the Staking Rewards to the Sponsor (“Staking Fee”) and retains the remainder of the Staking Rewards.

The Staking Fee is accrued in ether and converted to U.S.

Dollars by reference to the Pricing Benchmark and is payable in ether weekly in arrears.

The Trust incurred Staking Fee for the three months ended March 31, 2026 and 2025 of $ 15,555 and $ 0 , respectively.

The accrued liability as of March 31, 2026 and December 31, 2025, was $ 90 and $ 0 , respectively.

Creation and Redemption of Shares

The Trust creates and redeems

Shares on a continuous basis but only in Creation Baskets consisting of 10,000 Shares or multiples thereof on the NAV of the date of the

creation or redemption.

Only “Authorized Participants”, which are registered broker-dealers who have entered into written agreements with

the Sponsor and the Administrator, can place orders.

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).

The Trust conducts its ether purchase and sale transactions

by, in its sole discretion, choosing 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 Broker acting in an agency capacity with third parties such as through its Coinbase Prime service pursuant to the Prime

Broker Agreement.

An ether Trading Counterparty may be an affiliate of an Authorized Participant.

The Authorized Participants may deliver cash or in-kind orders to create Shares and receive cash or in-kind orders when redeeming Shares.

The Trust creates Shares by

receiving ether from an ether Trading Counterparty that is not the Authorized Participant and the Trust—not the Authorized Participant—is

responsible for selecting the ether Trading Counterparty to deliver the ether.

Further, the ether Trading Counterparty will not be acting as an agent of the Authorized

Participant with respect to the delivery of the ether to the Trust or acting at the direction of the Authorized Participant with respect

to the delivery of the ether to the Trust.

The Trust redeems shares by delivering ether to a ether Trading Counterparty that is not the Authorized Participant

and the Trust—not the Authorized Participant—is responsible for selecting the ether Trading Counterparty to receive the ether.

ether Trading Counterparty will not be acting as an agent of the Authorized Participant with respect to the receipt of the ether from the Trust or acting

at the direction of the Authorized Participant with respect to the receipt of the ether from the Trust.

The ether Trading Counterparty is unaffiliated

with the Trust and the Sponsor.

September 30,

period May 1,

2024 (initial seed creation date) through

September 30,

Activity in Capital Transactions:

The Trust creates and redeems Shares on a continuous basis but only in one or more Creation Baskets (other than in the case of the Initial Seed Shares) consisting of 10,000 Shares or multiples thereof at the NAV on the date of the creation or redemption.

Only Authorized Participants, which are registered broker-dealers who have entered into written agreements with the Sponsor and the Administrator, can place orders.

Authorized Participants may purchase Shares in cash by depositing cash in the Trust’s account with the Cash Custodian.

This will cause the Sponsor, on behalf of the Trust, to automatically instruct an Ether Counterparty to (i) purchase the amount of ether equivalent in value to the cash deposit amount associated with the order and (ii) deposit the resulting ether amount in the Trust’s accounts with the Ether Custodians, resulting in the Transfer Agent crediting the applicable amount of Shares to the Authorized Participant.

Authorized Participants may also purchase Shares in-kind.

To purchase Shares in-kind, an Authorized Participant delivers, or arranges for the delivery by such Authorized Participant’s designee of, ether to the Trust’s accounts with an Ether Custodian in exchange for Shares.

When such an Authorized Participant redeems its Shares in cash, the Sponsor, on behalf of the Trust will direct an Ether Custodian to transfer ether to an Ether Counterparty, who will sell the ether to be executed, in the Sponsor’s reasonable efforts, at the Pricing Benchmark price used to calculate the Trust’s NAV, taking into account any spread, commissions, or other trading costs and deposit the cash proceeds of such sale in the Trust’s account with the Cash Custodian for settlement with the Authorized Participant.

Any slippage incurred (including, but not limited to, any trading fees, spreads, or commissions), on a cash equivalent basis, will be the responsibility of the Authorized Participant and not of the Trust or Sponsor.

Authorized Participants may also redeem Shares in-kind.

When such an Authorized Participant redeems Shares in-kind, the Trust, through an Ether Custodian, will deliver ether to the Authorized Participant or its designee in exchange for Shares.

2026 Three months

(Unaudited) (Unaudited)

Activity in Capital Shares:

Shares issued 1,690,000 520,000

Shares redeemed ( 2,060,000 ) ( 610,000 )

( 2,280,000 )

( 2,890,000 )

Net Change in Capital Transactions

September 30,

period May 1,

2024 (initial seed creation date) through

September 30,

Net Change in Capital Shares ( 370,000 ) ( 90,000 )

2026 Three months

(Unaudited) (Unaudited)

Activity in Capital Transactions:

Shares issued

Shares redeemed

( 47,704,815 )

( 53,380,852 )

Contributions for Shares issued $ 19,571,380 $ 7,070,589

Distributions for Shares redeemed ( 24,642,679 ) ( 5,676,037 )

Net Change in Capital Transactions $ ( 5,071,299 ) $ 1,394,552

Ether purchased payable represents

the quantity of ether purchased for the creation of Shares where the ether has not yet settled.

Generally, ether is transferred within

two Business Days of the trade date.

September 30,

Ether purchased payable represents the quantity of ether purchased for the creation of Shares or Staking Rewards where the ether has not yet settled.

Generally, ether is transferred within two Business Days of the trade date.

2026 December 31,

Ether purchased payable $ 2,617,489 $ –

Ether sold receivable represents

the quantity of ether sold for the redemption of Shares where the ether has not yet been settled.

Generally, ether is transferred within

two Business Days of the trade date.

September 30,

Ether sold receivable represents the quantity of ether sold for the redemption of Shares or Staking Rewards where the ether has not yet been settled.

Generally, ether is transferred within two Business Days of the trade date.

2026 December 31,

Ether sold receivable $ - $ –

Related Parties

The Sponsor is a related party

to the Trust.

The Trust’s operations are supported by its Sponsor, who is in turn supported by its parent company and affiliated

companies and external service providers.

As of September 30, 2025,

the Sponsor owned zero Shares of the Trust.

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

The Sponsor arranged for the

creation of the Trust and is responsible for the ongoing registration of the Shares for their public offering in the United States and

the listing of Shares on the Exchange.

The Sponsor is a related party to the Trust.

The Trust’s operations are supported by its Sponsor, who is in turn supported by its parent company and affiliated companies and external service providers.

As of March 31, 2026, and December 31, 2025, the Sponsor owned zero Shares of the Trust.

The Sponsor arranged for the creation of the Trust and is responsible for the ongoing registration of the Shares for their public offering in the United States and the listing of Shares on the Exchange.

For the three months ended March 31, 2026, the Trust engaged in no digital asset trading activity with FalconX Bravo, Inc.

(“FalconX Bravo”), a registered swap dealer and a subsidiary of FalconX, which became an affiliated entity on November 2025.

Financial Highlights

Per Share Performance (for a Share

outstanding throughout each period presented)

three months ended

September 30,

three months ended

September 30,

nine months ended

September 30,

2024 (initial seed creation date) to September 30,

Per Share Performance (for a Share outstanding throughout the periods presented) Three Months

2026 Three Months

(Unaudited) (Unaudited)

Net asset value per Share, beginning of period $ 14.83 $ 16.70

Net investment loss 2

Net investment income (loss) on investment in ether (1) 0.02 ( 0.01 )

Net realized and change in unrealized gain (loss) on investment in ether (2) ( 4.37 ) ( 7.56 )

Net change in net assets from operations ( 4.35 ) ( 7.57 )

Less distributions from:

Net investment income ( 0.02 ) 0.00

Total distributions ( 0.02 ) 0.00

Net asset value per Share, end of period $ 10.46 $ 9.13

3 unchanged sentences

Gross expenses 0.48 % 0.21 %

1 The amount represents the NAV per Share on June 18, 2024, the Seed Capital Purchase Date.

2 Calculated using average Shares outstanding.

3 The amount shown for a share outstanding throughout the period may not agree with the change in the aggregate gains and losses for such period because of the timing of sales and repurchases of the Trust's shares in relation to fluctuating market values for the Trust.

4 Total return is calculated based on the change in value during the period and is not annualized.

Net expenses 0.27 % 0.15 %

(1) Calculated using average Shares outstanding method.

(2) The amount shown for a Share outstanding throughout the period may not agree with the change in the aggregate gains and losses for such period because of the timing of sales and repurchases of the Trust’s Shares in relation to fluctuating market value for the Trust.

(3) Total return is calculated based on the change in the value during the period and is not annualized.

An individual shareholder’s total return and ratio may vary from the above total returns and ratios based on the timing of contributions to and withdrawals from the Trust.

(4) Annualized.

6 Not annualized.

Commitments and Contingent Liabilities

In the normal course of business, the Trust may

enter into contracts that contain a variety of 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 which have not yet occurred and cannot be predicted

with any certainty.

In the normal course of business, the Trust may enter into contracts that contain a variety of 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 which have not yet occurred and cannot be predicted with any certainty.

However, the Sponsor believes the risk of loss under these arrangements to be remote.

Concentration Risk

Unlike other funds that may

invest in diversified assets, the Trust’s investment strategy is concentrated in a single asset within a single asset class.

concentration maximizes the degree of the Trust’s exposure to a variety of market risks associated with ether and digital assets.

By concentrating its investment strategy solely in ether, any losses suffered as a result of a decrease in the value of ether can be expected

to reduce the value of an interest in the Trust and will not be offset by other gains if the Trust were to invest in underlying assets

that were diversified.

Unlike other funds that may invest in diversified assets, the Trust’s investment strategy is concentrated in a single asset within a single asset class.

This concentration maximizes the degree of the Trust’s exposure to a variety of market risks associated with ether and digital assets.

By concentrating its investment strategy solely in ether, any losses suffered as a result of a decrease in the value of ether can be expected to reduce the value of an interest in the Trust and will not be offset by other gains if the Trust were to invest in underlying assets that were diversified.

Indemnification

The Sponsor will not be liable

to the Trust, the Trustee or any Shareholder for any action taken or for refraining from taking any action in good faith, or for errors

in judgment or for depreciation or loss incurred by reason of the sale of any ether or other assets of the Trust.

However, the preceding

liability exclusion will not protect the Sponsor against any liability resulting from its own gross negligence, bad faith, or willful

The Sponsor and each of its

shareholders, members, directors, officers, employees, affiliates, and subsidiaries will be indemnified by the Trust and held harmless

against any losses, liabilities or expenses incurred in the performance of its duties under the Trust Agreement without gross negligence,

bad faith, or willful misconduct.

The Sponsor may rely in good faith on any paper, order, notice, list, affidavit, receipt, evaluation,

opinion, endorsement, assignment, draft, or any other document of any kind prima facie properly executed and submitted to it by the Trustee,

the Trustee’s counsel or by any other person for any matters arising under the Trust Agreement.

The Sponsor shall in no event be

deemed to have assumed or incurred any liability, duty, or obligation to any Shareholder or to the Trustee other than as expressly provided

for in the Trust Agreement.

Such indemnity includes payment from the Trust of the costs and expenses incurred in defending against any

indemnified claim or liability under the Trust Agreement.

The Trustee will not be liable

or accountable to the Trust or any other person or under any agreement to which the Trust or any series of the Trust is a party, except

for the Trustee’s breach of its obligations pursuant to the Trust Agreement or its own willful misconduct, bad faith or gross negligence.

The Trustee and each of the Trustee’s officers, affiliates, directors, employees, and agents will be indemnified by the Trust from

and against any losses, claims, taxes, damages, reasonable expenses, and liabilities incurred with respect to the creation, operation

or termination of the Trust, the execution, delivery or performance of the Trust Agreement or the transactions contemplated thereby;

that the indemnified party acted without willful misconduct, bad faith or gross negligence.

The Sponsor will not be liable to the Trust, the Trustee or any Shareholder for any action taken or for refraining from taking any action in good faith, or for errors in judgment or for depreciation or loss incurred by reason of the sale of any ether or other assets of the Trust.

However, the preceding liability exclusion will not protect the Sponsor against any liability resulting from its own gross negligence, bad faith, or willful misconduct.

The Sponsor and each of its shareholders, members, directors, officers, employees, affiliates, and subsidiaries will be indemnified by the Trust and held harmless against any losses, liabilities or expenses incurred in the performance of its duties under the Trust Agreement without gross negligence, bad faith, or willful misconduct.

The Sponsor may rely in good faith on any paper, order, notice, list, affidavit, receipt, evaluation, opinion, endorsement, assignment, draft, or any other document of any kind prima facie properly executed and submitted to it by the Trustee, the Trustee’s counsel or by any other person for any matters arising under the Trust Agreement.

The Sponsor shall in no event be deemed to have assumed or incurred any liability, duty, or obligation to any Shareholder or to the Trustee other than as expressly provided for in the Trust Agreement.

Such indemnity includes payment from the Trust of the costs and expenses incurred in defending against any indemnified claim or liability under the Trust Agreement.

The Trustee will not be liable or accountable to the Trust or any other person or under any agreement to which the Trust or any series of the Trust is a party, except for the Trustee’s breach of its obligations pursuant to the Trust Agreement or its own willful misconduct, bad faith or gross negligence.

The Trustee and each of the Trustee’s officers, affiliates, directors, employees, and agents will be indemnified by the Trust from and against any losses, claims, taxes, damages, reasonable expenses, and liabilities incurred with respect to the creation, operation or termination of the Trust, the execution, delivery or performance of the Trust Agreement or the transactions contemplated thereby;

provided that the indemnified party acted without willful misconduct, bad faith or gross negligence.

Subsequent Events

On October 7, 2025, 21Shares

Ethereum ETF (the “Trust”) entered into a Master Infrastructure-As-A-Service Agreement (the “Staking Services Agreement”)

with Coinbase Crypto Services, LLC, a Delaware limited liability company (“Coinbase Crypto” or the “Staking Services

On October 8, 2025, the Trust

entered into an amendment to the Sponsor Agreement, by and between the Trust and the Sponsor, to allow for staking of the Trust’s

The amendment to the Sponsor Agreement provides that the portion of the consideration paid to the Sponsor for arranging for the

staking of the Trust’s ether will be comprised of an aggregate of 25 % of the gross staking consideration generated from staking.

Of this amount, the Sponsor will pay the Staking Services Provider for their services under the Staking Services Agreement and the Trust’s

ether custodians in connection with staking activities.

The Trust will receive and retain the remainder of the gross staking consideration.

The Trust has evaluated all

subsequent events through the issuance of the financial statements and has noted no other events requiring adjustment or additional disclosure

in the financial statements other than the items noted above.

The Trust has evaluated all subsequent events and transactions for potential recognition or disclosure through the issuance of the financial statements and has noted no events requiring adjustment or additional disclosure in the financial statements.

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