Franklin Solana Trust Kicks Off Operations with $100K Seed Capital

TL;DR

**SOEZ is just getting started, but its staking strategy could give it an edge in the crowded crypto ETF market.**

AI Summary

The Franklin Solana Trust (SOEZ) filed its 10-Q for the quarter ended September 30, 2025, revealing its initial operational phase. The Trust, formed on February 10, 2025, and its sole series, the Franklin Solana ETF, commenced operations on September 22, 2025, with an initial seed creation. As of September 30, 2025, the Trust reported total assets of $100,000, consisting entirely of cash, with no investment in Solana yet. Net assets also stood at $100,000, with 4,000 shares issued and outstanding, resulting in a net asset value per share of $25.00. There were no liabilities or sponsor fees payable as of this date. The filing indicates no net investment income or realized/unrealized gains/losses for the period, as the Fund had not commenced active investment in Solana. A significant subsequent event on November 26, 2025, involved the redemption of the initial 4,000 shares for $100,000 and the purchase of 100,000 shares for 17,000 Solana, valued at $2,323,133.80, at a price of $136.65493 per Solana. The Fund aims to reflect Solana's price performance and staking rewards, with the Sponsor assuming most ordinary operating expenses, up to $500,000 annually for legal fees.

Why It Matters

This initial 10-Q filing for the Franklin Solana Trust (SOEZ) provides the first glimpse into the operational structure and early financial position of a new Solana-backed ETF. For investors, it confirms the fund's 'emerging growth company' status, which allows for reduced reporting requirements, potentially impacting transparency. The competitive landscape for crypto ETFs is intensifying, and SOEZ's strategy to include staking rewards could differentiate it from competitors, offering a potentially higher yield. Employees of Franklin Holdings, LLC and its affiliates will be focused on the successful launch and management of this new product, while customers will be evaluating its performance against other digital asset investment vehicles.

Risk Assessment

Risk Level: medium — The risk level is medium because while the initial financials show only cash, the fund's core strategy involves holding Solana, a volatile cryptocurrency. The filing explicitly mentions risks related to 'changes in commodity prices and market conditions (for Solana and the Shares)' and 'general economic, market and business conditions,' indicating inherent market volatility. Furthermore, the fund's ability to generate 'Staking Rewards' is subject to the Sponsor's discretion and 'undue legal or regulatory risk,' adding a layer of operational and regulatory uncertainty.

Analyst Insight

Investors should monitor SOEZ's subsequent filings for actual Solana holdings and staking reward generation, as the current 10-Q only reflects initial seed capital. Evaluate the fund's performance against direct Solana price movements and other crypto ETFs to assess the effectiveness of its staking strategy. Consider the implications of its 'emerging growth company' status on long-term disclosure and transparency.

Financial Highlights

debt To Equity

0.0

revenue

$0.00

operating Margin

N/A

total Assets

$100,000.00

total Debt

$0.00

net Income

$0.00

eps

$0.00

gross Margin

N/A

cash Position

$100,000.00

revenue Growth

N/A

Key Numbers

• $100,000 — Total Assets (as of September 30, 2025, consisting entirely of cash)
• $100,000 — Net Assets (as of September 30, 2025)
• 4,000 — Shares Issued and Outstanding (as of September 30, 2025)
• $25.00 — Net Asset Value per Share (as of September 30, 2025)
• September 22, 2025 — Initial Seed Creation Date (when the Fund commenced operations)
• November 26, 2025 — Date of Seed Creation Units Purchase (when 100,000 shares were purchased for 17,000 Solana)
• 17,000 — Solana Purchased (on November 26, 2025, for Seed Creation Units)
• $136.65493 — Price per Solana (on November 26, 2025, for Seed Creation Units)
• $2,323,133.80 — Total Proceeds from Seed Creation Units (representing 17,000 Solana purchased on November 26, 2025)
• $500,000 — Annual Legal Fees Assumed by Sponsor (maximum amount of ordinary legal fees and expenses)

Key Players & Entities

• Franklin Solana Trust (company) — registrant of the 10-Q filing
• Franklin Solana ETF (company) — sole series of the Trust
• Franklin Holdings, LLC (company) — Sponsor of the Trust and Fund
• Coinbase Custody Trust Company, LLC (company) — Solana Custodian for the Fund
• Bank of New York Mellon (company) — Cash Custodian, Administrator, and Transfer Agent
• Franklin Resources Inc. (company) — Seed Capital Investor and affiliate of the Sponsor
• SEC (regulator) — Securities and Exchange Commission
• Cboe BZX Exchange, Inc. (company) — exchange where SOEZ shares are listed
• Solana (other) — primary asset held by the Fund
• CSC Delaware Trust Company (company) — Trustee of the Trust

FAQ

Risk Factors

• Volatility of Solana and Digital Asset Market [high — market]: The Trust's performance is directly tied to the price movements of Solana. The digital asset market is highly volatile and subject to rapid price fluctuations, which could lead to significant losses for the Trust. For example, as of September 30, 2025, the Trust held no Solana, but a subsequent event on November 26, 2025, saw the purchase of 17,000 Solana at $136.65 per coin, indicating a substantial initial investment exposure.
• Evolving Regulatory Landscape for Digital Assets [high — regulatory]: The regulatory environment for digital assets, including cryptocurrencies like Solana, is still developing and uncertain. Changes in regulations could adversely affect the Trust's ability to operate, invest in Solana, or could impact the value of Solana itself. The Trust's formation date of February 10, 2025, places it within this dynamic regulatory period.
• Operational Risks of Digital Asset Custody and Trading [medium — operational]: The Trust's investment in Solana exposes it to operational risks associated with the custody, security, and trading of digital assets. Risks include potential cybersecurity threats, loss of private keys, and failures in the underlying blockchain technology. The Trust commenced operations on September 22, 2025, with an initial seed creation, highlighting the immediate need for robust operational controls.
• Dependence on Seed Creation and Share Redemptions [medium — financial]: The Trust's initial financial structure relies heavily on seed creation and subsequent redemptions. The initial 4,000 shares were redeemed on November 26, 2025, for $100,000, immediately followed by the purchase of 100,000 shares for 17,000 Solana, valued at $2,323,133.80. This reliance on capital inflows and outflows can create liquidity risks.
• Sponsor Fee and Expense Assumption [low — legal]: While the Sponsor assumes most ordinary operating expenses up to $500,000 annually for legal fees, any expenses exceeding this cap or unforeseen liabilities could impact the Trust's net assets. The Trust reported no sponsor fees payable as of September 30, 2025, but this is an ongoing commitment.

Industry Context

The Franklin Solana Trust operates within the rapidly evolving digital asset ETF market, aiming to provide investors with exposure to Solana. This sector is characterized by high volatility, significant regulatory scrutiny, and ongoing innovation in blockchain technology. Competitors are increasingly launching similar products to capture investor interest in specific digital assets.

Regulatory Implications

The Trust faces significant regulatory uncertainty due to the developing legal framework for digital assets. Compliance with evolving securities laws and cryptocurrency regulations is paramount. Potential future regulatory actions could impact the Trust's structure, operations, or the value of its underlying asset, Solana.

What Investors Should Do

1. Monitor Solana Price Volatility
2. Track Regulatory Developments
3. Understand Sponsor Expense Caps

Key Dates

• 2025-02-10: Trust Formation — Marks the legal establishment of the Franklin Solana Trust.
• 2025-09-22: Commencement of Operations and Initial Seed Creation — The Trust began operations, receiving its initial seed capital of $100,000 in cash.
• 2025-09-30: Reporting Period End — First financial snapshot of the Trust, showing $100,000 in cash assets and no Solana investment.
• 2025-11-26: Seed Creation Units Purchase — Significant transaction where 100,000 shares were purchased for 17,000 Solana, valued at $2,323,133.80, marking the Trust's entry into Solana investment.

Glossary

Seed Creation

The initial process by which an ETF or Trust receives its first assets (cash or in-kind) in exchange for shares, allowing it to commence operations. (The Trust commenced operations with a seed creation of $100,000 in cash on September 22, 2025.)

Net Asset Value (NAV) per Share

The value of one share of a fund, calculated by dividing the total value of the fund's assets minus its liabilities by the number of outstanding shares. (As of September 30, 2025, the NAV per share was $25.00, based on $100,000 in net assets and 4,000 shares outstanding.)

Solana

A high-performance blockchain platform designed for decentralized applications and cryptocurrencies, known for its speed and scalability. (The Franklin Solana Trust aims to track the price performance and staking rewards of Solana.)

Sponsor

The entity that establishes and manages the Trust, responsible for its operations and often covering certain expenses. (The Sponsor of the Franklin Solana Trust assumes ordinary operating expenses, including legal fees up to $500,000 annually.)

Year-Over-Year Comparison

This is the Trust's initial 10-Q filing, covering the period from its inception on September 22, 2025, to September 30, 2025. Therefore, no comparative data from a prior period is available. The filing reflects the Trust's initial setup phase with $100,000 in cash and no investment in Solana, prior to the significant subsequent event of acquiring 17,000 Solana on November 26, 2025.

Key Financial Figures

• $1.235 billion — rust has total annual gross revenues of $1.235 billion or more; the last day of the fiscal y
• $1 billion — ous three-year period, issued more than $1 billion in non-convertible debt; or the date
• $700 million — (i.e., an issuer that (1) has more than $700 million in outstanding equity held by non-affil

Filing Documents

• ef20058387_10q.htm (10-Q) — 362KB
• ef20058387_ex31-1.htm (EX-31.1) — 12KB
• ef20058387_ex31-2.htm (EX-31.2) — 11KB
• ef20058387_ex32-1.htm (EX-32.1) — 6KB
• ef20058387_ex32-2.htm (EX-32.2) — 6KB
• 0001140361-25-045833.txt ( ) — 2317KB
• soez-20250930.xsd (EX-101.SCH) — 20KB
• soez-20250930_def.xml (EX-101.DEF) — 110KB
• soez-20250930_lab.xml (EX-101.LAB) — 143KB
• soez-20250930_pre.xml (EX-101.PRE) — 120KB
• soez-20250930_cal.xml (EX-101.CAL) — 14KB
• ef20058387_10q_htm.xml (XML) — 212KB

FINANCIAL INFORMATION

Part I. FINANCIAL INFORMATION Page

Unaudited Financial Statements of the Trust and the Fund

Item 1. Unaudited Financial Statements of the Trust and the Fund 1

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 20

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 21

Controls and Procedures

Item 4. Controls and Procedures 21

OTHER INFORMATION

Part II. OTHER INFORMATION 23

Legal Proceedings

Item 1. Legal Proceedings 23

Risk Factors

Item 1A. Risk Factors 23

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 23

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 23

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 23

Other Information

Item 5. Other Information 23

Exhibits

Item 6. Exhibits 24

SIGNATURES

SIGNATURES 25 3 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1. Unaudited Financial Statements of the Trust and the Fund Franklin SOLANA ETF Franklin SOLANA TRUST Index to Unaudited Financial Statements Page Combined Statement of Assets and Liabilities (Unaudited) at September 30, 2025 for Franklin Solana Trust 2 Combined Schedule of Investments (Unaudited) at September 30, 2025 for Franklin Solana Trust 3 Combined Statement of Cash Flows (Unaudited) for the period from September 22, 2025 (Date of Initial Seed creation) to September 30, 2025 for Franklin Solana Trust 4 Combined Statement of Changes in Net Assets (Unaudited) for the period from September 22, 2025 (Date of Initial seed creation) to September 30, 2025 for Franklin Solana Trust 5 Notes to the Combined Financial Statements (Unaudited) for Franklin Solana Trust 6 11 Schedule of Investments (Unaudited) at September 30, 2025 for Franklin Solana ETF 12 13 14

Notes to Financial Statements (Unaudited) for Franklin Solana ETF

Notes to Financial Statements (Unaudited) for Franklin Solana ETF 15 1 Table of Contents Franklin SOLANA TRUST COMBINED STATEMENT OF ASSETS AND LIABILITIES (U naudited ) September 30, 2025* (Unaudited) Assets: Investment in Solana, at fair value (cost $ - ) $ - Cash 100,000 Total assets 100,000 Liabilities: Sponsor's fee payable - Total liabilities - Commitments and contingencies (Note 6) Net assets $ 100,000 Shares issued and outstanding (a) 4,000 Net asset value per Share $ 25.00 * No comparative period presented as Fund inception was September 22, 2025. (a) No par value (unlimited amount authorized). See accompanying notes to the unaudited combined financial statements. 2 Table of Contents Franklin SOLANA TRUST COMBINED SCHEDULE OF INVESTMENTS (U naudited ) September 30, 2025* (Unaudited) Quantity of Solana Cost Fair Value % of Net Assets Investment in Solana 0.00000000 $ - $ - 0.00 % Total Investment - $ - 0.00 Assets in excess of other liabilities $ 100,000 100.00 Net assets $ 100,000 100.00 % * No comparative period presented as Fund inception was September 22, 2025. See accompanying notes to the unaudited combined financial statements. 3 Table of Contents Franklin SOLANA TRUST COMBINED STATEMENT OF CASH FLOWS (U naudited ) For the period September 22, 2025 (Initial Seed Creation Date) through September 30, 2025* Cash Flows from Financing Activities: Proceeds from creation of units $ 100,000 ^ Net cash provided by (used in) financing activities 100,000 Cash Increase (decrease) in cash 100,000 Cash, beginning of period – Cash, end of period $ 100,000 ^ The amount represents the initial seed on September 22, 2025. * No comparative period presented as Fund inception was September 22, 2025. See accompanying notes to the unaudited combined financial statements. 4 Table of Contents Franklin SOLANA TRUST COMBINED

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View this 10-Q filing on SEC EDGAR