Item 7. Management’s Discussion and Analysis
Item 7. 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 with this report. 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,” “will,” “should,” “could,” “expect,”
“plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential”
or the negative of these terms or other comparable terminology. All statements (other than statements of historical fact) included
in this Report that address activities, events or developments that may occur in the future, including such matters as changes
in commodity prices and market conditions (for bitcoin and the Shares), the operations of the Trust, the plans of the Sponsor and
references to the Trust’s future success and other similar matters are forward-looking statements. 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 is subject to a number of risks and uncertainties, including the special considerations
discussed in this Report, 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. Consequently,
all the forward-looking statements made in this Report are qualified by these cautionary statements, and there can be no assurance
that the actual results or developments the Sponsor anticipates will be realized or, even if substantially realized, will result
in the expected consequences to, or have the expected effects on, the Trust’s operations or the value of the Shares issued
by the Trust. Moreover, neither the Sponsor nor any other person assumes responsibility for the accuracy or completeness of the
forward-looking statements. Neither the Trust nor the Sponsor undertakes an obligation to publicly update or conform to actual
results any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required
by law.
As of December 31, 2025, the Trust’s
activities consisted primarily of organizational and offering-related matters and the seed capital transactions, including the
sale of 4,000 Seed Shares for $100,000 on June 10, 2025 and the subsequent cash redemption of the Seed Shares and sale of 400,000
Shares for $10,000,000 on October 29, 2025.
Introduction
The Trust is a Delaware statutory trust. The
Trust does not have directors, officers or employees. The creation and operation of the Trust have been arranged by the Sponsor.
The Trust is administered by the Trust Agreement, among the Sponsor and the Trustee. The Trust is managed and controlled by the
Sponsor, a wholly owned subsidiary of VanEck. The Sponsor is not governed by a board of directors.
The Trust’s investment objective is to
reflect the performance of the price of SOL and rewards from staking a portion of the Trust’s SOL, 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,
by jeopardizing the Trust’s ability to qualify as a grantor trust for tax purposes, less the operating expenses of the Trust.
The Trust is a passive investment vehicle that does not seek to pursue any investment strategy beyond tracking the price of SOL.
The Trust does not engage in any activities designed to obtain a profit from, or ameliorate losses caused by, changes in the price
of SOL.
The Trust issues and redeems Shares only in
aggregations of 25,000 Shares, a Basket or integral multiples thereof, and only in transactions with authorized participants.
Shares of the Trust trade on the Exchange under
the ticker symbol “VSOL.”
Computation of Net Asset Value
The Trust’s NAV is calculated based on
the Trust’s net asset holdings as reconciled to the SOL Custodians’ accounts on a market approach, determined on a
daily basis in accordance with the MarketVector Solana Benchmark Rate price at 4:00 p.m. Eastern time. The Trust’s NAV per
Share is calculated by taking the current market value of its total assets, subtracting any liabilities and then dividing that
total by the total number of outstanding Shares. The Trust Agreement gives the Sponsor the exclusive authority to determine the
Trust’s NAV and the Trust’s NAV per Share, which it has delegated to the Administrator.
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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 that
is incurred is the Sponsor’s Fee. The Trust’s only source of liquidity is its sales of SOL.
Significant Accounting Policies
In preparing financial statements in conformity
with GAAP, management makes estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements, as well as the reported amount of revenue and expenses
reported during the period. Actual results could differ from these estimates. A description of the valuation of SOL, 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 “Computation of Net Asset Value” 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 Year Ended December 31, 2025
From January 1, 2025 to June 10, 2025 (date of Seeding), the Trust
had no operations other than a sale to the Seed Capital Investor, the parent of the Sponsor, of 4,000 Shares at a per-Share price
of $25.00. Delivery of the Seed Shares was made on June 10, 2025. Total proceeds to the Trust from the sale of the Seed Shares
were $100,000. The Trust did not have any operations from June 10, 2025 to October 29, 2025, other than Seed audits of the Trust
on June 10, 2025 and September 24, 2025.
On October 29, 2025 (date of initial SOL investment), the Seed Shares
were redeemed for cash and the Seed Capital Investor purchased the Seed Creation Baskets, comprising of 400,000 Shares at a per-Share
price of $25.00. Total proceeds to the Trust from the sale of the Seed Creation Baskets were $10,000,000 which resulted in the
Trust receiving 51,656 SOL. As of December 31, 2025, the Seed Capital Investor’s ownership in the Trust represents approximately
28% of net assets.
The Trust’s NAV increased from $100,000 at June 10, 2025 to
$23,539,566 at December 31, 2025, a 23,440% increase. The increase in the Trust’s NAV resulted primarily from an increase
in the number of outstanding shares, which increased from 4,000 Shares at June 10, 2025 to 1,450,000 Shares at December 31, 2025.
This is the net result of 1,454,000 Shares (58 Baskets) being created and 4,000 Seed Shares being redeemed during the period, offset
by a decrease in the price of SOL, which contracted from $193.59 at October 29, 2025 (date of initial SOL investment) to $124.73
at December 31, 2025 resulting in a decline of 35.57%.
The 35.08% decrease in the NAV per Share from $25.00 at October
29, 2025 (date of initial SOL investment) to $16.23 at December 31, 2025, is directly related to the 35.57% decrease in the price
of SOL during this period.
The NAV per Share of $24.16 on October 31, 2025, was the highest
during the period, compared with a low during the period of $15.32 on December 18, 2025.
Net decrease in net assets resulting from operations for the period
ended December 31, 2025, was $4,640,619 resulting from net unrealized depreciation on investment in SOL of $4,760,507, offset by
net investment income of $119,888. The Trust had no expenses during the period as they were all waived by the Sponsor.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.