This
information should be read in conjunction with the financial statements and notes to the financial statements included in Item
1 of Part 1 of this Form 10-Q. The discussion and analysis that follows may contain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
and within the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements may relate to the
Trust’s financial condition, operations, future performance and business. These statements can be identified by the use
of the words “may”, “should”, “expect”, “plan”, “anticipate”, “believe”,
“estimate”, “predict”, “potential” or similar words and phrases. 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. 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 management’s expectations or predictions.
Introduction
The
Trust is a common law trust, formed under the laws of the state of New York on July 20, 2009. The Trust is not managed like
a corporation or an active investment vehicle. It does not have any officers, directors, or employees and is administered by the
Trustee pursuant to the Trust Agreement. The Trust is not registered as an investment company under the Investment Company Act
of 1940 and is not required to register under such act. It does not hold or trade in commodity futures contracts, nor is it a
commodity pool, or subject to regulation as a commodity pool operator or a commodity trading adviser in connection with issuing
Shares.
The
Trust holds silver and is expected to issue Baskets in exchange for deposits of silver and to distribute silver
in connection with redemptions of Baskets. Shares issued by the Trust represent units of undivided beneficial interest in and
ownership of the Trust. The investment objective of the Trust is for the Shares to reflect the performance of the price of physical
silver, less the Trust’s expenses. The Sponsor believes that, for many investors, the Shares will represent a cost
effective investment relative to traditional means of investing in silver.
The
Trust issues and redeems Shares only with Authorized Participants in exchange for silver and only in aggregations of 50,000
Shares or integral multiples thereof. A list of current Authorized Participants is available from the Sponsor or the Trustee.
Shares
of the Trust trade on the NYSE Arca, Inc. (“NYSE Arca”) under the symbol “SIVR”.
Valuation
of Silver and Computation of Net Asset Value
On
each day that the NYSE Arca is open for regular trading, as promptly as practicable after 4:00 p.m. New York time on such day
(the “Evaluation Time”), the Trustee evaluates the silver held by the Trust and determines both the ANAV and
the NAV of the Trust.
At
the Evaluation Time, the Trustee values the Trust’s silver on the basis of that day’s “LBMA Silver Price”
(the daily price of an ounce of silver determined by an electronic, over-the-counter auction that starts at 12:00 noon London,
England time in which LBMA-accredited bullion banks or market makers participate), or, if no LBMA Silver Price is made on such
day or has not been announced by the Evaluation Time, the next most recent LBMA Silver Price determined prior to the Evaluation
Time is used, unless the Sponsor determines that such price is inappropriate as a basis for evaluation. In the event the Sponsor
determines that the LBMA Silver Price or such other publicly available price as the Sponsor may deem fairly represents the commercial
value of the Trust’s silver is not an appropriate basis for evaluation of the Trust’s silver, it shall identify an
alternative basis for such evaluation to be employed by the Trustee. Neither the Trustee nor the Sponsor shall be liable to any
person for the determination that the LBMA Silver Price or such other publicly available price is not appropriate as a basis for
evaluation of the Trust’s silver or for any determination as to the alternative basis for such evaluation provided that
such determination is made in good faith.
Once
the value of the silver has been determined, the Trustee subtracts all estimated accrued but unpaid fees (other than the
fees accruing for such day on which the valuation takes place that are computed by reference to the value of the Trust or its
assets), expenses and other liabilities of the Trust from the total value of the silver and all other assets of the Trust. The
resulting figure is the ANAV of the Trust. The ANAV of the Trust is used to compute the Sponsor’s Fee.
13
All
fees accruing for the day on which the valuation takes place that are computed by reference to the value of the Trust or its assets
are calculated using the ANAV calculated for such day. The Trustee subtracts from the ANAV the amount of the accrued fees so computed
for such day and the resulting figure is the NAV of the Trust. The Trustee also determines the NAV per Share by dividing the NAV
of the Trust by the number of Shares outstanding as of the close of trading on the NYSE Arca (which includes the net number of
any Shares created or redeemed on such evaluation day).
Any
estimate of the accrued but unpaid fees, expenses and liabilities of the Trust for purposes of computing the NAV of the Trust
and ANAV made by the Trustee in good faith shall be conclusive upon all persons interested in the Trust and no revision or correction
in any computation made under the Trust Agreement will be required by reason of any difference in amounts estimated from those
actually paid.
The
NAV of the Trust is obtained by subtracting the Trust’s liabilities on any day from the value of the silver owned and receivable
by the Trust on that day; the NAV per Share is obtained by dividing the NAV of the Trust on a given day by the number of Shares
outstanding on that day.
The
Quarter Ended June 30, 2026
The
Trust’s NAV decreased from $4,970,486,736 at March 31, 2026 to $3,950,569,678 at June 30, 2026, a 20.52% decrease for the
quarter. The change in the Trust's NAV resulted from a decrease in the price per ounce of silver, which fell 19.12% from $72.69
at March 31, 2026 to $58.80 at June 30, 2026, and a decrease in outstanding Shares, which fell from 71,900,000 Shares at March
31, 2026 to 70,700,000 Shares at June 30, 2026 as a result of 3,200,000 Shares (64 Baskets) being created and 4,400,000 Shares
(88 Baskets) being redeemed during the quarter.
The
NAV per Share decreased 19.17% from $69.13 at March 31, 2026 to $55.88 at June 30, 2026. The Trust’s NAV per Share fell
slightly more than the price per ounce of silver on a percentage basis due to the Sponsor’s Fee, net of waiver, which was
$3,738,176 for the quarter, or 0.30% of the Trust’s ANAV on an annualized basis.
The
NAV per Share of $82.51 at May 14, 2026 was the highest during the quarter, compared with a low of $54.52 at June 25, 2026.
The
decrease in net assets from operations for the quarter ended June 30, 2026 was $946,623,466, resulting from a change in unrealized
loss on investment in silver of $1,084,420,973 and the Sponsor's Fee, net of waiver, of $3,738,176, offset by a realized gain
of $2,053,538 on the transfer of silver to pay expenses and a realized gain of $139,482,145 on silver distributed for the redemption
of Shares. Other than the Sponsor's Fee, the Trust had no expenses during the quarter ended June 30, 2026.
The
Six Months Ended June 30, 2026
The
Trust’s NAV decreased from $5,430,232,445 at December 31, 2025 to $3,950,569,678 at June 30, 2026, a 27.25% decrease for
the period. The change in the Trust’s NAV resulted from a decrease in the price per ounce of silver, which fell 18.32% from
$71.99 at December 31, 2025 to $58.80 at June 30, 2026 and a decrease in outstanding Shares, which fell from 79,250,000 Shares
at December 31, 2025 to 70,700,000 Shares at June 30, 2026 as a result of 9,200,000 Shares (184 Baskets) being created and 17,750,000
Shares (355 Baskets) being redeemed during the period.
The
NAV per Share decreased 18.45% from $68.52 at December 31, 2025 to $55.88 at June 30, 2026. The Trust’s NAV per Share fell
slightly more than the price per ounce of silver on a percentage basis due to the Sponsor’s Fee, net of waiver, which was
$8,047,139 for the period, or 0.30% of the Trust’s ANAV on an annualized basis.
14
The
NAV per Share of $112.71 at January 29, 2026 was the highest during the period, compared with a low of $54.52 at June 25, 2026.
The
decrease in net assets from operations for the period ended June 30, 2026 was $834,766,376, resulting from a change in unrealized
loss on investment in silver of $1,575,497,323 and the Sponsor's Fee, net of waiver, of $8,047,139, offset by a realized gain
of $4,483,544 on the transfer of silver to pay expenses and a realized gain of $744,294,542 on silver distributed for the redemption
of Shares. Other than the Sponsor’s Fee, the Trust had no expenses during the period ended June 30, 2026.
Liquidity
& Capital Resources
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. In exchange for the Sponsor’s Fee, the Sponsor has agreed to assume most of the expenses
incurred by the Trust. As a result, the only ordinary expense of the Trust during the period covered by this report was the Sponsor’s
Fee. The Trust's only source of liquidity is its transfers and sales of silver.
The
Trustee will, at the direction of the Sponsor or in its own discretion, sell the Trust’s silver as necessary to
pay the Trust’s expenses not otherwise assumed by the Sponsor. The Trustee will not sell silver to pay the Sponsor’s
Fee but will pay the Sponsor’s Fee through in-kind transfers of silver to the Sponsor. At June 30, 2026, the Trust
did not have any cash balances.
Off-Balance
Sheet Arrangements
The
Trust is not a party to any off-balance sheet arrangements.
Critical
Accounting Policies
The
financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United
States of America. The preparation of these financial statements relies on estimates and assumptions that impact the Trust’s
financial position and results of operations. These estimates and assumptions affect the Trust’s application of accounting
policies. Refer to Note 2 to the Financial Statements for further information on accounting policies.
Item