Canary HBAR ETF Reports Zero Operations, Assets in Q3 2025 Filing

TL;DR

**Don't touch Canary HBAR ETF yet; it's a paper bird with zero assets and no operations as of Q3 2025.**

AI Summary

The Canary HBAR ETF, a Delaware statutory trust formed on September 24, 2024, filed its 10-Q for the quarterly period ended September 30, 2025. As of this reporting date, the Trust had no operations other than organizational and registration matters, resulting in zero revenue and zero net income. The Statement of Assets and Liabilities shows total assets and total liabilities of $0, leading to net assets of $0. Similarly, the Statement of Changes in Net Assets for the period August 27, 2025, through September 30, 2025, reports no net investment loss, no net realized gain or loss, and no change in unrealized appreciation or depreciation, culminating in a total increase (decrease) in net assets of $0. The Trust's investment objective is to provide exposure to HBAR, the native asset of the Hedera Network, tracking the CoinDesk Hedera USD CCIXber 60m New York Rate. Key risks include the uncertain tax treatment of digital assets, as the IRS could reclassify the Trust from a grantor trust to a partnership or even a corporation, significantly altering tax consequences for shareholders. The Trust had 3,360,000 outstanding Shares as of December 8, 2025, despite having no operational activity by September 30, 2025.

Why It Matters

This filing reveals the Canary HBAR ETF is still in its pre-operational phase, with no assets or liabilities as of September 30, 2025. For investors, this means the ETF has not yet begun tracking HBAR, and its performance metrics are non-existent. The competitive landscape for crypto ETFs is rapidly evolving, and a delay in active operations could impact its ability to attract capital once launched. Employees and customers are not yet directly impacted, but the lack of activity underscores the nascent stage of this investment vehicle. The broader market should note the ongoing regulatory and tax uncertainties surrounding digital asset trusts, which could set precedents for other similar offerings.

Risk Assessment

Risk Level: high — The risk level is high because the Trust reported $0 in assets and $0 in liabilities as of September 30, 2025, indicating it is not yet operational. Furthermore, the filing explicitly states, "As of September 30, 2025, the Trust has had no operations other than those actions relating to organizational and registration matters." This means there is no underlying HBAR investment, and the ETF carries significant pre-launch risk.

Analyst Insight

Investors should hold off on any investment decisions regarding the Canary HBAR ETF until it becomes fully operational and begins acquiring HBAR. Monitor future filings for evidence of actual asset acquisition and trading activity, as the current filing provides no financial performance data.

Financial Highlights

debt To Equity

0.0

revenue

$0

operating Margin

N/A

total Assets

$0

total Debt

$0

net Income

$0

eps

$0.00

gross Margin

N/A

cash Position

$0

revenue Growth

N/A

Key Numbers

• $0 — Total Assets (As of September 30, 2025, indicating no operational activity.)
• $0 — Total Liabilities (As of September 30, 2025, indicating no operational activity.)
• $0 — Net Assets (As of September 30, 2025, reflecting no operational activity.)
• $0 — Net Investment Loss (For the period ended September 30, 2025, due to no operations.)
• 3,360,000 — Outstanding Shares (As of December 8, 2025, despite no operational assets.)
• 0.95% — Annual Sponsor Fee (Of the Trust's HBAR Holdings, payable monthly in HBAR or cash.)
• September 30, 2025 — Quarterly Period End Date (Date for which financial statements show no operations.)
• September 24, 2024 — Trust Formation Date (Date the Delaware statutory trust was formed.)
• October 27, 2025 — Commencement of Operations (Date the Trust's operations are expected to commence, after the reporting period.)
• 10,000 — Shares per Basket (Block size for creation and redemption of Shares.)

Key Players & Entities

• Canary HBAR ETF (company) — Registrant and exchange-traded fund
• Canary Capital Group LLC (company) — Sponsor of the Trust
• HBAR (dollar_amount) — Native asset of the Hedera Network, the Trust's investment objective
• Nasdaq Stock Market, LLC (company) — Exchange where Shares are listed and traded under symbol HBR
• CoinDesk Hedera USD CCIXber 60m New York Rate (company) — Pricing Benchmark for HBAR
• Internal Revenue Service (regulator) — Potential reclassification of the Trust for tax purposes
• U.S. Bancorp Fund Services, LLC (company) — Administrator and Transfer Agent of the Trust
• Coinbase Custody Trust Company, LLC (company) — Custodian for the Trust's HBAR
• BitGo Trust Company, Inc. (company) — Custodian for the Trust's HBAR
• Paralel Distributors LLC (company) — Marketing Agent of the Trust

FAQ

Risk Factors

• Uncertain Tax Treatment of Digital Assets [high — regulatory]: The IRS may reclassify the Trust from a grantor trust to a partnership or corporation, significantly altering tax consequences for shareholders. This uncertainty impacts the fundamental tax structure and potential liabilities for investors.
• Volatility of HBAR and Digital Asset Markets [high — market]: The Trust's performance is directly tied to the price movements of HBAR, the native asset of the Hedera Network. The digital asset market is known for extreme volatility, which can lead to substantial fluctuations in the Trust's Net Asset Value.
• Reliance on Third-Party Custodians [medium — operational]: The Trust relies on custodians for the safekeeping of its HBAR holdings. Any failure or security breach by these custodians could result in the loss of assets, impacting the Trust's ability to track HBAR.
• Technology Developments [medium — operational]: Technological advancements related to HBAR and other digital assets, as well as the systems used by the Sponsor and custodians, could impact the Trust's operations. Unexpected changes or failures in these technologies pose a risk.
• Changes in Laws or Regulations [high — regulatory]: New or modified laws and regulations, particularly concerning taxes and digital assets, enacted by governmental authorities or regulatory bodies could adversely affect the Trust's structure, operations, and tax treatment.
• General Economic and Business Conditions [medium — market]: Broader economic downturns or adverse business conditions can negatively impact investor sentiment towards digital assets and the Trust, potentially leading to decreased demand and share price volatility.

Industry Context

The digital asset ETF market is rapidly evolving, with increasing investor interest in gaining exposure to cryptocurrencies like HBAR. However, this sector faces significant regulatory scrutiny and inherent market volatility. Competitors include other digital asset-focused ETFs and direct investment in cryptocurrencies, making differentiation and robust risk management crucial.

Regulatory Implications

The primary regulatory concern is the IRS's potential reclassification of the Trust, which could shift tax liabilities from shareholders to the Trust itself. Compliance with evolving digital asset regulations and tax laws is paramount for the Trust's long-term viability and investor confidence.

What Investors Should Do

1. Monitor IRS pronouncements on digital asset taxation.
2. Assess HBAR's market volatility and Hedera Network developments.
3. Evaluate the Sponsor's operational capabilities and custodian security.
4. Understand the fee structure (0.95% annual sponsor fee).

Key Dates

• 2024-09-24: Trust Formation Date — Marks the legal establishment of the Canary HBAR ETF as a Delaware statutory trust.
• 2025-09-30: Quarterly Period End Date — Financial statements for this date show no operational activity, with $0 in assets and liabilities.
• 2025-10-27: Registration Statement Effective & Seed Capital Investment — The Trust's registration became effective, and the HBAR Foundation invested $1,000,000 in HBAR for 40,000 Shares, marking the commencement of capital inflow.
• 2025-10-28: Shares Listed on Exchange — The Trust's Shares began trading on an exchange, providing liquidity and accessibility for investors.

Glossary

HBAR

The native digital asset of the Hedera Network, a decentralized public ledger. (This is the underlying asset the ETF aims to provide exposure to, making its performance critical to the ETF's value.)

Grantor Trust

A type of trust where the income and deductions are reported directly on the grantor's personal income tax return. (The Trust's current classification as a grantor trust has specific tax implications for shareholders, which could change if reclassified.)

CoinDesk Hedera USD CCIXber 60m New York Rate

A specific benchmark rate used to track the price of HBAR against the US Dollar. (This is the index the ETF is designed to track, directly influencing the ETF's investment strategy and performance.)

Seed Shares

Shares purchased by the initial 'Seed Capital Investor' (HBAR Foundation) before broader public offering. (Represents the initial capital infusion and the first significant transaction for the Trust.)

In-kind transaction

A transaction where assets are exchanged directly for other assets, rather than for cash. (The Trust acquired HBAR for Seed Shares through an in-kind transaction, meaning no cash changed hands initially for this portion.)

Basket

A block of shares of the Trust, typically representing a specific quantity of the underlying asset, used for creation and redemption transactions. (Defines the unit size for institutional investors to create or redeem ETF shares, impacting market liquidity.)

Year-Over-Year Comparison

This is the first 10-Q filing for the Canary HBAR ETF, covering the period ended September 30, 2025. As such, there are no prior period comparisons available for metrics like revenue, net income, or margins. The filing details the Trust's formation and initial setup, with zero operational activity reported as of the period end. Subsequent events indicate the commencement of operations and initial capital investment post-reporting period.

Filing Documents

• hbr-10q_093025.htm (10-Q) — 230KB
• ex10-1.htm (EX-10.1) — 255KB
• ex31-1.htm (EX-31.1) — 19KB
• ex31-2.htm (EX-31.2) — 14KB
• ex32-1.htm (EX-32.1) — 7KB
• ex32-2.htm (EX-32.2) — 9KB
• 0001999371-25-019916.txt ( ) — 1598KB
• hbr-20250930.xsd (EX-101.SCH) — 12KB
• hbr-20250930_cal.xml (EX-101.CAL) — 13KB
• hbr-20250930_def.xml (EX-101.DEF) — 16KB
• hbr-20250930_lab.xml (EX-101.LAB) — 127KB
• hbr-20250930_pre.xml (EX-101.PRE) — 93KB
• hbr-10q_093025_htm.xml (XML) — 89KB

financial statements

financial statements. 7. Subsequent Events On October 27, 2025, the Trust's registration statement became effective in accordance with the provisions of section 8(a) of the Securities Act of 1933, and the HBAR Foundation ("Seed Capital Investor") purchased 40,000 Shares of the Trust at a per-Share price of $ 25.00 ("Seed Shares"). The Trust issued the Seed Shares in exchange for $ 1,000,000 of HBAR in an in-kind transaction. On October 28, 2025, the Shares of the Trust were listed on the Exchange. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 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. 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 HBAR 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

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View this 10-Q filing on SEC EDGAR