iset20240630

iset20240630_10q.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-42166

iShares® Ethereum Trust ETF

(Exact name of registrant as specified in its charter)

Delaware

99-6353885

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

c/o iShares Delaware Trust Sponsor LLC
400 Howard Street
San Francisco, California 94105

(Address of principal executive offices) (Zip Code)

(415) 670-2000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Shares	ETHA	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 31, 2024, the Registrant had 24,800,000 Shares outstanding.

		Page
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	1

	Statement of Assets and Liabilities at June 30, 2024	1

	Statement of Operations for the Period from May 21, 2024 (Date of Seeding) to June 30, 2024	2

	Statement of Changes in Net Assets for the Period from May 21, 2024 (Date of Seeding) to June 30, 2024	3

	Statement of Cash Flows for the Period from May 21, 2024 (Date of Seeding) to June 30, 2024	4

	Schedule of Investments at June 30, 2024	5

	Notes to Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	12

Item 4.	Controls and Procedures	12

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	13

Item 1A.	Risk Factors	13

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13

Item 3.	Defaults Upon Senior Securities	13

Item 4.	Mine Safety Disclosures	13

Item 5.	Other Information	13

Item 6.	Exhibits	14

SIGNATURES		15

	June 30, 2024
Assets
Investment in ether, at fair value(a)	$	10,590,295
Total Assets		10,590,295

Liabilities
Sponsor’s fees payable		420
Total Liabilities		420
Commitments and contingent liabilities (Note 6)		—

Net Assets	$	10,589,875
Shares issued and outstanding(b)		400,000
Net asset value per Share (Note 2C)	$	26.47

(a)	Cost of investment in ether is $10,000,000.
(b)	No par value, unlimited amount authorized.

	For the Period from May 21, 2024 (Date of Seeding) to June 30,
	2024
Expenses
Sponsor’s fees	$	420

Total expenses		420
Net investment loss		(420	)

Net Realized and Unrealized Gain (Loss)
Net realized gain		—
Net change in unrealized appreciation/depreciation		590,295
Net realized and unrealized gain		590,295

Net increase in net assets resulting from operations		589,875

Net increase in net assets per Share(a)	$	1.47

	For the Period from May 21, 2024 (Date of Seeding) to June 30,
	2024
Net Assets at May 21, 2024	$	—

Operations:
Net investment loss		(420	)
Net realized gain		—
Net change in unrealized appreciation/depreciation		590,295
Net increase in net assets resulting from operations		589,875

Capital Share Transactions:
Contributions for Shares issued		10,000,000
Distributions for Shares redeemed		—
Net increase in net assets from capital share transactions		10,000,000

Increase in net assets		10,589,875

Net Assets at June 30, 2024	$	10,589,875

Shares issued and redeemed
Shares issued		400,000
Shares redeemed		—
Net increase in Shares issued and outstanding		400,000

	For the Period from May 21, 2024 (Date of Seeding) to June 30,
	2024
Cash Flows from Operating Activities
Net increase in net assets resulting from operations	$	589,875
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchases of ether		(10,000,000	)
Proceeds from ether sold to pay expenses		—
Net realized (gain) loss		—
Net change in unrealized appreciation/depreciation		(590,295	)
Change in operating assets and liabilities:
Sponsor’s fees payable		420
Net cash used in operating activities		(10,000,000	)

Cash Provided by Financing Activities
Proceeds from issuance of Shares		10,000,000
Net cash provided by financing activities		10,000,000

Cash
Net increase in cash		—
Cash, beginning of period		—
Cash, end of period		—

Description	Quantity		Cost		Fair Value
Ether		3,031	$	10,000,000	$	10,590,295

Total Investments — 100.00%						10,590,295
Less Liabilities — 0.00%						(420	)
Net Assets — 100.00%					$	10,589,875

Period from May 21, 2024 (Date of Seeding) to June 30, 2024	Quantity		Cost		Fair Value		Realized Gain (Loss)
Beginning balance		—	$	—	$	—	$	—
Ether purchased		3,031		10,000,000		10,000,000		—
Ether sold for the redemption of shares		—		—	—			—
Ether sold to pay expenses		—		—		—		—
Net realized gain		—		—		—		—
Net change in unrealized appreciation/depreciation		—		—		590,295		—
Ending balance		3,031	$	10,000,000	$	10,590,295	$	—

Exhibit No.			Description
3.1			Certificate of Trust of iShares Ethereum Trust incorporated by reference to Exhibit 3.1 of the Registration Statement on Form S‑1 (File No. 333-275583) filed by the Registrant on November 16, 2023

3.2			Certificate of Amendment to Certificate of Trust of iShares Ethereum Trust incorporated by reference to Exhibit 3.2 of the Registration Statement on Form S‑1 (File No. 333-275583) filed by the Registrant on May 29, 2024

3.3			Certificate of Amendment to Certificate of Trust of iShares Ethereum Trust incorporated by reference to Exhibit 3.3 of the Registration Statement on Form S‑1 (File No. 333-275583) filed by the Registrant on June 21, 2024

4.1			Second Amended and Restated Trust Agreement incorporated by reference to Exhibit 4.1 of the Registration Statement on Form S-1 (File No. 333-275583) filed by the Registrant on July 8, 2024

4.2			Form of Authorized Participant Agreement incorporated by reference to Exhibit 4.2 of the Registration Statement on Form S-1 (File No. 333-275583) filed by the Registrant on May 29, 2024

10.1			Amended and Restated Coinbase Prime Broker Agreement incorporated by reference to Exhibit 10.1 of the Registration Statement on Form S‑1 (File No. 333-275583) filed by the Registrant on May 29, 2024

10.2			Coinbase Custody Custodial Services Agreement (included as Exhibit A in Exhibit 10.1) incorporated by reference to Exhibit 10.2 of the Registration Statement on Form S-1 (File No. 333-275583) filed by the Registrant on May 29, 2024

10.3			Services Agreement with The Bank of New York Mellon, as cash custodian and trust administrator incorporated by reference to Exhibit 10.3 of the Registration Statement on Form S-1 (File No. 333-275583) filed by the Registrant on May 29, 2024

10.4			ETF Services Agreement with BRIL incorporated by reference to Exhibit 10.4 of the Registration Statement on Form S-1 (File No. 333‑275583) filed by the Registrant on May 29, 2024

31.1*			Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*			Certification by Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*			Certification by Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002

32.2*			Certification by Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002

101.INS*		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File included as Exhibit 101 (embedded within the Inline XBRL document)

SEC Form 10-Q filed by iShares Ethereum Trust ETF