Canary Staked SUI ETF

Current report

Item** 2.** Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Current report

The following discussion and analysis of the Trust’s financial condition and results of operations should be read together with, and is qualified in its entirety by reference to, the Trust’s unaudited financial statements and related notes included elsewhere in this Quarterly Report, which have been prepared in accordance with GAAP.

Current report

This Quarterly Report on Form 10-Q (the “Quarterly Report”) includes “forward-looking statements” with respect to the financial conditions, results of operations, plans, objectives, future performance and business of Canary Staked SUI ETF (the “Trust”). In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “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 Quarterly Report that address activities, events, or developments that will or may occur in the future, including such matters as movements in the digital asset markets, the Trust’s operations, the plans of Canary Capital Group LLC (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 the Sponsor has made based on its perception of historical trends, current conditions, and expected future developments, as well as other factors appropriate in the circumstances.

Current report

Factors which could have a material adverse effect on the Trust’s business, financial condition or results of operations and future prospects or which could cause actual results to differ materially from the Trust's expectations include, but are not limited to:

Current report

All the forward-looking statements made in this Quarterly 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, that they will result in the expected consequences to, or have the expected effects on, the Trust’s operations or the value of the Shares.

Current report

Should one or more of these factors or other uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those described in forward-looking statements. Forward-looking statements are made based on the Sponsor’s beliefs, estimates and opinions on the date the statements are made, and neither the Trust nor the Sponsor is under a duty to update any of the forward-looking statements to conform such statements to actual results or to reflect a change in the Sponsor’s expectations or predictions, other than as required by applicable laws. Investors are therefore cautioned against relying on forward-looking statements.

Current report

Overview of the Trust

Current report

The Trust is an exchange-traded fund that issues Shares that are listed and trade on the Exchange. The Trust’s investment objective is to seek to provide exposure to the price of SUI held by the Trust, less the expenses of the Trust’s operations and other liabilities. A secondary investment objective is for the Trust to earn additional SUI through the validation of transactions in the SUI network’s (the “SUI Network”) proof-of-stake (“PoS”) process. In seeking to achieve its investment objectives, the Trust holds SUI and establishes its NAV on each business day by reference to the Pricing Benchmark. The Pricing Benchmark is calculated by the Benchmark Provider based on a 60-minute time-weighted average price of the Underlying Index, which is an aggregation of executed trade flow of Constituent Platforms. The Benchmark Provider publishes the Pricing Benchmark. The Trust is sponsored by the Sponsor.

Current report

The Shareholders of the Trust take no part in the management or control, and have no voice in, the Trust’s operations or business. Except to elect a successor Sponsor upon the resignation of the Sponsor or as otherwise required by laws of the state of Delaware, Shareholders have no voting rights under the Trust Agreement.

Current report

Liquidity and Capital Resources

Current report

The Trust typically does not hold a cash balance except in connection with the creation and redemption of “Baskets” (i.e., blocks of 10,000 Shares) or to pay expenses not assumed by the Sponsor. The Trust pays the Sponsor an annual unified fee of 0.75% of the Trust’s SUI Holdings (the “Sponsor Fee”). The Trust’s “SUI Holdings” is the quantity of the Trust’s SUI plus any cash or other assets held by the Trust represented in SUI as calculated using the Pricing Benchmark price, less its liabilities (which include estimated accrued but unpaid fees and expenses) represented in SUI as calculated using the Pricing Benchmark price.

Current report

The Trust may also incur certain extraordinary, nonrecurring expenses that are not assumed by the Sponsor, including, but not limited to, brokerage and transaction costs associated with the sale or transfer of SUI, 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, the Trust’s assets, or the interests of Shareholders, any indemnification of the Custodians or other agents, service providers or counterparties of the Trust, and extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters (collectively, “Extraordinary Expenses”). To the extent on-chain transaction fees are incurred in connection with transfers or sales of SUI to pay Extraordinary Expenses, the Trust will bear such fees.

Current report

To the extent it does not have cash readily available, the Sponsor shall cause the transfer or sale of SUI in such quantity as may be necessary to permit the payment of Trust expenses and liabilities not assumed by the Sponsor or for payment of redemption proceeds to Authorized Participants. The Trust does not bear any costs associated with the transfer or sale of SUI to pay the Sponsor Fee. To the extent the Trust incurs any Extraordinary Expenses, the Trust will bear the costs of any transfers or sales of SUI to pay such expenses. The Trust seeks to transfer SUI at such times and in the smallest amounts required to permit such payments as they become due. With respect to transfers or sales necessary to pay Trust expenses and liabilities that are denominated other than in SUI, the amount of SUI transferred or sold may vary from time to time depending on the actual sales price of SUI relative to the Trust’s expenses and liabilities (e.g., if the price of SUI falls, the amount of SUI needed to be transferred or sold to pay an expense denominated in U.S. dollars will increase). To the extent the Trust must buy or sell SUI, the Trust may do so through a third-party digital asset broker or dealer. When the Trust buys or sells SUI, the Sponsor seeks quotes from its SUI trading counterparties. Such transactions are typically conducted over the counter rather than over a trading platform or similar order matching service. The Sponsor selects third party brokers or dealers that it believes have implemented adequate AML, KYC and other legal compliance policies and procedures.

Current report

Results of Operations*

Current report

Three Months Ended June 30, 2026

Current report

Period from Inception (February 17, 2026) through June 30, 2026

Current report

The net asset value per Share decreased -27.81% from $25.00 at February 17, 2026, to $18.05 at June 30, 2026.

Current report — wording carried from elsewhere

The Trust’s net asset value decreased from $24,184,075 at March 31, 2026, to $20,395,119 at June 30, 2026. The change in the Trust’s net assets resulted from an increase in outstanding Shares, which rose from 1,060,000 at March 31, 2026, to 1,130,000 at June 30, 2026, as a result of 70,000 Shares being created and no Shares being redeemed during the quarter, and a decrease in the value of SUI, which depreciated -21.01% from $0.88 at March 31, 2026, to $0.70 at June 30, 2026.

Current report — wording carried from elsewhere

The net asset value per Share of $34.22 at May 11, 2026, was the highest since inception, compared with a low of $17.42 at June 25, 2026.

Current report — wording carried from elsewhere

The decrease in net assets from operations for the period from inception (February 17, 2026) through June 30, 2026, was $(7,430,033), resulting from a decrease in unrealized gain on the Trust’s SUI investment of $(7,491,763), realized losses on the disposition of SUI of $(3,909), staking income of $134,887, and Sponsor Fees incurred of $69,248.

Current report — wording carried from elsewhere

No comparative prior-year periods have been presented as the initial share purchase date of the Trust was February 17, 2026.