Item 2. Management’s Discussion and Analysis
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This
information should be read in conjunction with the financial statements and notes to the financial statements included in Item 1 of Part
I of this Form 10-Q. The discussion and analysis that follows may contain statements that relate to future events or future performance.
In some cases, such forward-looking statements can be identified by terminology such as “may,” “should,” “could,”
“expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,”
“potential” or the negative of these terms or other comparable terminology. Except as required by applicable disclosure laws,
neither the Sponsor, nor any other person assumes responsibility for the accuracy or completeness of any forward-looking statements.
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 a change in the Sponsor’s expectations or predictions.
Introduction
The
Trust is a common law trust, formed under the laws of the state of New York on January 11, 2018. 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 platinum and is expected to issue Baskets in exchange for deposits of platinum, and to distribute platinum 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 platinum, 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 platinum.
The
Trust issues and redeems Shares only with Authorized Participants in exchange for platinum 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 New York Stock Exchange (the “NYSE”) Arca under the symbol “PLTM”.
Valuation
of Platinum; Computation of Net Asset Value
On
each business day, as soon as practicable after 4:00 p.m. (New York time), the Trustee evaluates the platinum held by the Trust and determines
the net asset value of the Trust and the NAV. The Trustee values the platinum held by the Trust using that day’s LBMA Platinum
Price PM. If there is no announced LBMA Platinum PM on a business day, the Trustee is authorized to use that day’s LBMA Platinum
Price AM. Having valued the platinum held by the Trust, the Trustee then subtracts all accrued fees, expenses and other liabilities of
the Trust from the value of the platinum and other assets of the Trust. The result is the net asset value of the Trust. The Trustee computes
the NAV by dividing the net asset value of the Trust by the number of Shares outstanding on the date the computation is made.
Liquidity
and 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
Trustee will, at the direction of the Sponsor or in its own discretion, sell the Trust’s platinum as necessary to pay the Trust’s
expenses not otherwise assumed by the Sponsor. The Trustee will not sell platinum to pay the Sponsor’s Fee but will pay the Sponsor’s
Fee through in-kind transfers of platinum to the Sponsor. At September 30, 2023 the Trust did not have any cash balances.
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Off-Balance
Sheet Arrangements
The
Trust has no 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. Below,
the Trust describes the valuation of platinum bullion, a critical accounting policy that the Trust believes is important to understanding
its results of operations and financial position. In addition, please refer to Note 2 to the financial statements included in this report
for further discussion of the Trust’s accounting policies.
Results
of Operations
The
Quarter Ended September 30, 2023
During
the quarter the Trust’s net asset value increased by 4.05% from $34,919,057 on June 30, 2023, to $36,334,386 on September 30, 2023.
The increase in the Trust’s net asset value was partly due to an increase in the number of shares outstanding from 4,000,000 to
4,050,000 over this period. The net 50,000 shares increase was a result of 9 creation orders and 8 redemption orders (50,000 shares per
creation and redemption). The Trust’s net asset value was also positively impacted by the change in the price of platinum, which
increase 2.90% from $897.00 on June 30, 2023 to $923.00 on September 30, 2023.
The
2.75% increase in the Trust’s net asset value per share from $8.73 at June 30, 2023 to $8.97 at September 30, 2023 is directly
related to the 2.90% increase in the price of platinum.
The
Trust’s net asset value per share increased slightly less than the price of platinum on a percentage basis due to the Sponsor’s
fees, which were $46,869 for the period, or 0.13% of the Trust’s average weighted assets of $37,288,366 during the period. The
net asset value per share of $9.58 on July 19, 2023 was the highest during the period, compared with a low during the period of $8.63
on August 16, 2023.
Net
increase in net assets resulting from operations for the quarter ended September 30, 2023 was $1,266,002, resulting primarily from an
unrealized gain on investment in platinum bullion of $1,486,930, reduced by a loss of $174,059 on metal sold to cover redemption orders
and Sponsor’s fees and by the Sponsor’s fees of $46,869. Other than the Sponsor’s fees the Trust had no expenses during
the quarter.
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Item
3. Quantitative and Qualitative Disclosures About Market Risk
Not
applicable.
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