21Shares Ethereum ETF

Previous wording

This information should be read in conjunction with the financial statements and notes included in Item 1 of Part I of this Form 10-Q. This Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of theExchange Act,and such forward-looking statements involve risks and uncertainties. All statements (other than statements of historical fact) included in this Form 10-Q 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. We express our estimates, expectations, beliefs, and projections in good faith and believe them to have a reasonable basis. However, we make no assurances that management’s estimates, expectations, beliefs, or projections will be achieved or accomplished. These forward-looking statements are based on assumptions about many important factors that could cause actual results to differ materially from those in the forward-looking statements. We do not intend to update any forward-looking statements even if new information becomes available or other events occur in the future, except as required by the federal securities laws.

Current wording

This information should be read in conjunction with the financial statements and notes included in Item 1 of Part I of this Form 10-Q. This Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities 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-Q 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. We express our estimates, expectations, beliefs, and projections in good faith and believe them to have a reasonable basis. However, we make no assurances that management’s estimates, expectations, beliefs, or projections will be achieved or accomplished. These forward-looking statements are based on assumptions about many important factors that could cause actual results to differ materially from those in the forward-looking statements. We do not intend to update any forward-looking statements even if new information becomes available or other events occur in the future, except as required by the federal securities laws.

Previous wording

The Trust’s investment objective is to seek to track the performance of ether, as measured by the performance of 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 Pricing Benchmark Provider. The Pricing Benchmark is designed to reflect the performance of ether in U.S. dollars. 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 a passive investment vehicle and is not a leveraged product. The Sponsor does not actively manage the ether held by the Trust.

Current wording

The Trust’s investment objective is to seek to track the performance of ether, as measured by the performance of 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 Pricing Benchmark Provider. The Pricing Benchmark is designed to reflect the performance of ether in U.S. dollars. In seeking to achieve its investment objective, the Trust holds ether at its Custodians and the Administrator values the Shares daily based on the Pricing Benchmark. The Trust is a passive investment vehicle and is not a leveraged product. The Sponsor does not actively manage the ether held by the Trust. On June 30, 2026, the Sponsor provided notice to the Pricing Benchmark Provider of the termination, effective August 31, 2026, of the licensing agreement between the Sponsor and the Pricing Benchmark Provider relating to the use of the Pricing Benchmark. The Sponsor intends to enter into a licensing agreement with FTSE on or about August 24, 2026, whereby FTSE will provide each of the Sponsor, the Trust, and their affiliates a non-exclusive, non-transferable, non-sub-licensable, worldwide license to access, view and use FTSE index data to develop, create, calculate, settle, maintain or support and market the Trust. Accordingly, the change in pricing benchmark provider is not expected to have a material impact on the Trust's net asset value, the fair value measurement of the Trust's ether, or the Trust's results of operations, and does not represent a change in accounting principle. The change will be applied prospectively from the date the successor benchmark becomes effective.

Previous wording

The Trust issues Shares only 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 “TETH”. The Trust issues Shares in Creation Baskets on a continuous basis at the applicable NAV per Share on the creation order date.

Current wording

The Trust issues Shares only in Creation Baskets of 10,000 or multiples thereof. Creation Baskets are issued and redeemed in exchange for cash or in-kind for ether. Individual Shares will not be redeemed by the Trust but are listed and traded on the Exchange under the ticker symbol “TETH”. The Trust issues Shares in Creation Baskets on a continuous basis at the applicable NAV per Share on the creation order date.

Previous wording

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

Current wording

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 Sponsor Fee 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 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.

Previous wording

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

Current wording

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

Previous wording

The Trust’s NAV decreased from $31,298,450 on December 31, 2025 to $18,191,793 on March 31, 2026, a 41.88% decrease. The decrease in the Trust’s NAV resulted primarily from a 29.33% decrease in the price of ether, which fell from $2,971.02 on December 31, 2025 to $2,094.53 on March 31, 2026. The decrease was further amplified by a net decrease in outstanding Shares, which fell from 2,110,000 on December 31, 2025 to 1,740,000 on March 31, 2026, as a result of 1,690,000 Shares (169 Baskets) being created and 2,060,000 Shares (206 Baskets) being redeemed during the quarter. During the quarter, the Trust staked an average of 22.69% of its ether holdings on a daily basis and had 23.02% of its ether staked as of March 31, 2026.

Current wording

The Trust’s NAV decreased from $18,191,793 on March 31, 2026 to $12,916,751 on June 30, 2026, a 29.00% decrease. The decrease resulted primarily from a 24.66% decrease in the price of ether, which fell from $2,094.53 on March 31, 2026 to $1,578.01 on June 30, 2026. The decrease was further amplified by a net decrease in outstanding Shares, which fell from 1,740,000 on March 31, 2026 to 1,640,000 on June 30, 2026, as a result of 2,070,000 Shares (207 Creation Baskets) being created and 2,170,000 Shares (217 Creation Baskets) being redeemed during the quarter. The Trust had 86.42% of its ether holdings staked as of June 30, 2026, with an average of 31.64% staked on a daily basis during the quarter.

Previous wording

The Trust also pays 25% of the Staking Rewards to the Sponsor and retains the remainder of the Staking Rewards. The Trust incurred Staking Fee for the three ended March 31, 2026 of $15,555. The Trust had no staking operations during the three months ended March 31, 2025.

Current wording

For the Three Months Ended June 30, 2025

Previous wording

The Trust’s NAV decreased from $16,869,879 on December 31, 2024 to $8,403,421 on March 31, 2025, a 50.17% decrease. The decrease in the Trust’s NAV resulted primarily from a 45.33% decrease in the price of ether, which fell from $3,340.57 on December 31, 2024 to $1,827.55 on March 31, 2025. The decrease was further amplified by a net decrease in outstanding Shares, which fell from 5,050,000 on December 31, 2024 to 4,960,000 on March 31, 2025, as a result of 520,000 Shares being created and 610,000 Shares being redeemed during the quarter. The Trust had no staking operations during the three months ended March 31, 2025.

Current wording

The Trust’s NAV decreased from $31,298,450 on December 31, 2025 to $12,916,751 on June 30, 2026, a 58.73% decrease. The decrease resulted primarily from a 46.89% decrease in the price of ether, which fell from $2,971.02 on December 31, 2025 to $1,578.01 on June 30, 2026. The decrease was further amplified by a net decrease in outstanding Shares, which fell from 2,110,000 on December 31, 2025 to 1,640,000 on June 30, 2026, as a result of 3,760,000 Shares (376 Creation Baskets) being created and 4,230,000 Shares (423 Creation Baskets) being redeemed during the six month period. The Trust had 86.42% of its ether staked as of June 30, 2026, with an average of 27.32% staked on a daily basis during the six month period.

Previous wording

Net decrease in net assets resulting from operations for the three months ended March 31, 2026 was $(7,993,753), resulting from a net change in unrealized appreciation on investment in ether of $1,094,647 — partially offset by net realized losses of $(9,135,133) comprising $(9,122,723) from ether sold for redemptions and $(12,410) from ether sold to fund the staking income distribution — and net investment income of $46,733. Net investment income comprised staking income of $62,288, less the Staking Fee of $15,555. The Sponsor Fee of $12,125 was fully waived during the quarter pursuant to the Sponsor’s one-year fee waiver effective October 9, 2025. In addition to net assets resulting from operations, the Trust paid a staking income distribution of $41,605 ($0.010378 per Share on January 8, 2026, and $0.012530 per Share on March 30, 2026) to Shareholders during the quarter. Other than the Staking Fee, the Trust had no net expenses during the quarter.

Current wording

Net decrease in net assets resulting from operations for the six months ended June 30, 2026 was $(12,073,301), resulting from a net realized loss of $(12,768,869) from ether sold for redemptions and a net realized loss of $(21,254) from ether sold for income distributions, partially offset by a net change in unrealized appreciation on investment in ether of $649,292 and net investment income of $67,530. Net investment income comprised Staking Rewards of $90,018, less the Staking Fee of $22,488. The Sponsor Fee of $21,782 was fully waived during the six-month period pursuant to the Sponsor’s one-year fee waiver effective October 9, 2025. In addition to net assets resulting from operations, the Trust paid a total staking income distributions of $57,129 ($0.010378 per Share on January 8, 2026, $0.012530 per Share on March 30, 2026, and $0.009466 per Share on June 29, 2026) to Shareholders during the six month period. Except for the Staking Fee, the Trust had no other net expenses during the six months ended June 30, 2026.

Previous wording

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 expenses are the Sponsor Fee and the Staking Fee. 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’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 the Administrator, the Custodians, the Transfer Agent and the Trustee, the Marketing Fee, the Exchange’s listing fees, typical maintenance and transaction fees of the Depository Trust Company (“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.

Current wording

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 expenses are the Sponsor Fee and the Staking Fee. 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 Sponsor Fee 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 the Administrator, the Custodians, the Transfer Agent and the Trustee, the Marketing Fee, the Exchange’s listing fees, typical maintenance and transaction fees of the Depository Trust Company (“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.

Previous wording

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.

Current wording

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 Fee and Staking Fee.