XRPZ 10-K & 10-Q changes, risk factors and insider trading

In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in our Prospectus dated November 24, 2025 (Registration No. 333-285706). The risks described in our ProspectusAnnual Report on Form 10-K are not the only risks facing the Trust and the Fund. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

This information should be read in conjunction with the financial statements and notes included in Item 1 of Part I of this Form 10-Q. This quarterly report on Form 10-Q, including this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,”10-Q contains “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 such forward-looking statements involve risks and uncertainties. All statements (other than statements of historical fact) included in this Form 10-Q that address activities, events or developments that may occur in the future, the Trust’s and the Fund’s operations, the Sponsor’s plans and references to the Trust’s and the Fund’s future success and other similar matters are forward-looking statements. Words such as “could,” “would,” “may,” “expect,” “intend,” “estimate,” “predict,” and variations on such words or negatives thereof, and similar expressions that reflect our current views with respect to future events and Fund performance, are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties that are difficult to predict and many of which are outside of our control, and actual results could differ materially from those discussed. Forward-looking statements involve risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed therein. We express our estimates, expectations, beliefs, and projections in good faith and believe them to have a reasonable basis. However, we make no assurances that management’s estimates, expectations, beliefs, or projections will be achieved or accomplished. These forward-looking statements are based on assumptions about many important factors that could cause actual results to differ materially from those in the forward-looking statements. We do not intend to update any forward-looking statements even if new information becomes available or other events occur in the future, except as required by the federal securities laws.

The Franklin XRP Trust (the “Trust”) was formed as a Delaware statutory trust on February 28, 2025, and is governed by the provisions of an Amended and Restated Agreement and Declaration of Trust dated as of October 1, 2025. The Trust is not registered as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”) and is not a commodity pool for purposes of the Commodity Exchange Act (“CEA”). The Trust currently offers a single series, the Franklin XRP ETF (the “Fund”), which is the sole series of the Trust. The Sponsor of the Trust and the Fund (the “Sponsor”) is Franklin Holdings, LLC. The Sponsor is not subject to regulation by U.S. the Commodity Futures Trading Commission (“CFTC”) as a commodity pool operator with respect to the Fund, or a commodity trading advisor with respect to the Fund. The Fund issues shares (the “Shares”), which represent units of fractional undivided beneficial interest in and ownership of the Fund. The Shares of the Fund are listed on the NYSE Arca, Inc. (the “Exchange”). The Shares were first listed for trading and the Fund commenced operations on November 24, 2025.

The Fund issues and redeems Shares only to eligible financial institutions called Authorized Participants and only in one or more blocks of 50,000 Shares (“Creation Units”). Creation Units are redeemable only by Authorized Participants. Creation Units are issued and redeemed in exchange for XRP and/or cash. Individual Shares are not redeemed by the Fund but the Shares are listed and traded on the Exchange under the ticker symbol “XRPZ.” The market price of the Shares may be different than the Fund’s NAV per Share. The Fund issues and redeems Shares in Creation Units on a continuous basis at the applicable NAV per Share on the creationtransaction order date. Except when aggregated in Creation Units, the Shares are not redeemable securities.

The Fund’s only ordinary recurring expense is expected to be the Sponsor’s fee. In exchange for the Sponsor’s fee, the Sponsor has agreed to assume the ordinary fees and expenses incurred by the Fund, including but not limited to the following: the fees charged by the Administrator, the Marketing Agent, the Custodians and the Trustee, Exchange listing fees, typical maintenance and transaction fees of the DTC, SEC registration fees, printing and mailing costs, tax reporting fees, audit fees, license fees and expenses, and up to $500,000 per annum in ordinary legal fees and expenses. The Sponsor paid the costs of the Trust’s and Fund’s organization and the initial offering costs, and may not seek reimbursement of such costs.

The Sponsor’s feefee, which is compensation for the Sponsor's services rendered to the Fund, is calculated and is accrued daily at an annualized rate equal to 0.19% (i.e., 0.19%/365 days) of the net asset value of the Fund and is payable at least quarterly in arrears in U.S. dollars. The Sponsor may, at its sole discretion and from time to time, waive all or a portion of the Sponsor’s fee for stated periods of time. The Sponsor is under no obligation to waive any portion of its fees and any such waiver shall create no obligation to waive any such fees during any period not covered by the waiver. The Fund will sell XRP as needed to pay the Sponsor’s fee. The Fund bears transaction costs, including any XRP Ledger fees or other similar transaction fees, in connection with any sales of XRP necessary to pay the Sponsor’s fee, as well as other Fund expenses (if any) that are not assumed by the Sponsor (expenses assumed by the Sponsor are specified above). Any XRP Ledger fees and similar transaction fees incurred in connection with the creation or redemption of Creation Units are borne by the Authorized Participant.

For a period from November 24, 2025 (the day the Shares were initially listed on the Exchange) to May 31, 2026, the Sponsor agreed to waivewaived the entire Sponsor’s Fee on the first $5.0 billion of the Fund’s assets. In the future, if the Sponsor decides to waive all or a portion of the Sponsor’s Fee, Shareholders will be notified in a prospectus supplement, in the Fund’s periodic reports, and/or on the Fund’s website.

The FundTrust is an “emerging growth company” as that term is used in the SecuritiesJumpstart Our Business Startups Act of 1933, as amended (the “SecuritiesJOBS Act”), and, as such, the Fund may electsubject to comply with certain reduced public company reporting requirements.requirements under U.S. federal securities laws.

The Administrator will rely on the Index as the index price to be used when determining NAV. However, determining the value of the Trust’s XRP using the Index is not in accordance with GAAP, and therefore is not used in the Trust’s financial statements. The Trust’s XRP is carried, for financial statement purposes, at fair value, as required by GAAP. The Trust determines the fair value of XRP based on the price provided by the XRP market that the Trust considers its “principal market” as of 11:59:59 P.M., ET on the valuation date.date (the “Principal Market Price”). The net asset value of the Trust determined on a GAAP basis is referred to as the “Principal Market NAV” and the net asset value of the Trust per Share determined on a GAAP basis is referred to as the “Principal Market NAV per Share.Share”.

ResultsDiscussion of Operations (Financing Activities)

On October 15, 2025, Franklin Resources Inc. (the “Seed Capital Investor”), an affiliate of the Sponsor, subject to conditions, purchased 4,000 Shares at a per-Share price equal to $25.00 (the “Initial Seed Shares”). Delivery of the Initial Seed Shares was made on October 15, 2025. Total proceeds to the Fund from the sale of the Initial Seed Shares was $100,000. On November 18, 2025, the Initial Seed Shares were redeemed for $100,000 and the Seed Capital Investor purchased two creation units in a cash transaction comprised of a total of 100,000 Shares at a per-Share price based on 543,060.34 XRP per Creation Unit (or 10.86 XRP per Share), for a total of 1,086,120.68 XRP (the "Seed Creation Units"). The cash proceeds to the Fund from the sale of the Seed Creation Units were used by the Fund to purchase 1,086,120,681,086,120.68 XRP at the price of $2.0458 per XRP on November 19, 2025 (exclusive of transaction and other costs incurred in connection with the conversion of the cash proceeds to XRP, which were paid by the Seed Capital Investor). Thus, the ultimate total proceeds to the Fund from the sale of the Seed Creation Units were $2,221,985.69 (an amount representing 1,086,120.68 XRP). Further, the transaction and other costs incurred in connection with the Seed Creation Units were paid by the Seed Capital Investor and not borne by the Fund. The Seed Capital Investor will actacted as a statutory underwriter with respect to the Seed Creation Units. Shares of the Fund were first listed and began trading on November 24, 2025.

At DecemberJune 31,30, 2025,2026, the Custodian held 118,387,154.1619225,368,820.7314 XRP on behalf of the Fund, with a market value of $216,376,202$236,479,504 (cost: $244,809,834$410,972,027) based on the Principal Market Price at quarter end.

For the periodthree Novembermonths 24,ended 2025June (Date30, of2026, Commencement of operations) to December 31, 2025* For the period from November 24, 2025 (Date of Commencement of operations) to December 31, 2025, 10,800,0006,050,000 Shares were issued in exchange for 117,301,033.481965,709,080.7156 XRP and no Shares were redeemed. The Fund’s NAV per Share began the period at $24.40$14.63 and ended the period at $19.85.$11.39. The 18.65%22.15% decrease in the Fund's NAV from $24.40$14.63 at NovemberMarch 24,31, 2025 (Date of Commencement of operations)2026 to $19.85$11.39 at DecemberJune 31,30, 20252026 is directly related to the 18.65%22.10% decrease in the price of XRP. The Fund's NAV decreased slightly more on a percentage basis than the decrease in the price of XRP for the same period due to the Fund's payment of the Sponsor Fee.

Net realized and unrealized loss on investment in XRP for the periodthree Novembermonths 24,ended 2025June (Date30, of Commencement of operations) to December 31, 2025,2026, was approximately $28,649,503$67,404,501 which consisted of a net change in unrealized depreciation on investment in XRP of approximately $28,649,503.$67,404,501. Net decrease in net assets resulting from operations was approximately $28,649,503$67,443,064 for the periodthree frommonths Novemberended 24,June 202530, (Date of Commencement of operations) to December 31, 2025,2026, which consisted of the net realized and unrealized loss on investment in XRP of $28,649,503,$67,404,501, and accrual of the Sponsor Fee in the amount of $28,166,$118,464, which was offset by a waiver of $28,166.$79,901.

The Fund is not aware of any trends, demands, commitments, events, or uncertainties that are reasonably likely to result in material changes to its liquidity needs. The Fund’s only ordinary recurring expense is expected to be the Sponsor’s fee. In exchange for the Sponsor’s fee, the Sponsor has agreed to assume the ordinary fees and expenses incurred by the Fund, including but not limited to the following: the fees charged by the Administrator, the Marketing Agent, the Custodians and the Trustee, Exchange listing fees, typical maintenance and transaction fees of the DTC, SEC registration fees, printing and mailing costs, tax reporting fees, audit fees, license fees and expenses, and up to $500,000 per annum in ordinary legal fees and expenses. The Sponsor paid the costs of the Fund’s organization and the initial offering costs, and may not seek reimbursement of such costs. The Sponsor is not required to pay any extraordinary or non-routine expenses.

The Sponsor’s feefee, which is compensation for the Sponsor's services rendered to the Fund, is calculated and is accrued daily at an annualized rate equal to 0.19% (i.e., 0.19%/365 days) of the net asset value of the Fund and is payable at least quarterly in arrears in U.S. dollars. The Sponsor may, at its sole discretion and from time to time, waive all or a portion of the Sponsor’s fee for stated periods of time. The Sponsor is under no obligation to waive any portion of its fees and any such waiver shall create no obligation to waive any such fees during any period not covered by the waiver. The Fund will sell XRP as needed to pay the Sponsor’s fee. From November 24, 2025 (the day the Shares were initially listed on the Exchange) to May 31, 2026, the Sponsor agreed to waivewaived the entire Sponsor’s Fee on the first $5.0 billion of the Fund’s assets. In the future, if the Sponsor decides to waive all or a portion of the Sponsor’s Fee, Shareholders will be notified in a prospectus supplement, in the Fund’s periodic reports, and/or on the Sponsor’s website for the Fund.

At DecemberJune 31,30, 20252026 the Fund as well as the Trust did not have any off-balance sheet arrangements.

The following chart shows movements in the price of XRP based on the CME CF XRP Reference Rate – New York Variant for the XRP – U.S. Dollar trading pair (the “CF Benchmarks Index”) in U.S. dollars per unit over the period from NovemberApril 24,1, 20252026 to DecemberJune 31,30, 2025.2026.