Item
1. Financial Statements
Statements
of Assets and Liabilities
at
December 31, 2019 (unaudited) and June 30, 2019
Amounts in 000’s of US$ except share and per share data
|
|
December
31, 2019
|
|
|
June 30, 2019
|
|
|
|
(unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Investment in platinum, at fair value(1)
|
|
$
|
7,696
|
|
|
$
|
3,656
|
|
Total Assets
|
|
$
|
7,696
|
|
|
$
|
3,656
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Fees payable to Sponsor
|
|
$
|
3
|
|
|
$
|
1
|
|
Total Liabilities
|
|
|
3
|
|
|
|
1
|
|
Net Assets
|
|
$
|
7,693
|
|
|
$
|
3,655
|
|
|
|
|
|
|
|
|
|
|
Shares issued and outstanding(2)
|
|
|
800,000
|
|
|
|
450,000
|
|
Net asset value per Share
|
|
$
|
9.62
|
|
|
$
|
8.12
|
|
(1)
|
Cost
of investment in platinum: $7,420 and $4,380, respectively.
|
(2)
|
No
par value, unlimited amount authorized.
|
See
Notes to the Financial Statements
Schedule
of Investment (Unaudited)
At
December 31, 2019 (unaudited) and June 30, 2019
Amounts
in 000’s of US$, except for ounces and percentages
December 31, 2019 (unaudited)
|
|
Ounces of
platinum
|
|
|
Cost
|
|
|
Value
|
|
|
% of Net
Assets
|
|
Platinum
|
|
|
7,926.347
|
|
|
$
|
7,420
|
|
|
$
|
7,696
|
|
|
|
100.04
|
%
|
Total investment
|
|
|
|
|
|
$
|
7,420
|
|
|
$
|
7,696
|
|
|
|
100.04
|
%
|
Liabilities in excess of other assets
|
|
|
|
|
|
|
|
|
|
$
|
(3
|
)
|
|
|
(0.04
|
)%
|
Net assets
|
|
|
|
|
|
|
|
|
|
$
|
7,693
|
|
|
|
100.00
|
%
|
June
30, 2019
|
|
Ounces
of
platinum
|
|
|
Cost
|
|
|
Value
|
|
|
%
of Net
Assets
|
|
Platinum
|
|
|
4,469.435
|
|
|
$
|
4,380
|
|
|
$
|
3,656
|
|
|
|
100.03
|
%
|
Total
investment
|
|
|
|
|
|
$
|
4,380
|
|
|
$
|
3,656
|
|
|
|
100.03
|
%
|
Liabilities
in excess of other assets
|
|
|
|
|
|
|
|
|
|
$
|
(1
|
)
|
|
|
(0.03
|
)%
|
Net
assets
|
|
|
|
|
|
|
|
|
|
$
|
3,655
|
|
|
|
100.00
|
%
|
See
Notes to the Financial Statements
Statements
of Operations (Unaudited)
For
the periods ended December 31, 2019 and 2018
Amounts in 000’s of US$, except per share data
|
|
Three
Months
Ended
December 31, 2019
|
|
|
Three
Month
Ended
December 31, 2018
|
|
|
Six
Months
Ended
December 31, 2019
|
|
|
Six Months
Ended
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sponsor fees
|
|
$
|
9
|
|
|
$
|
5
|
|
|
$
|
15
|
|
|
$
|
9
|
|
Total expenses
|
|
$
|
9
|
|
|
$
|
5
|
|
|
$
|
15
|
|
|
$
|
9
|
|
Net investment loss
|
|
$
|
(9
|
)
|
|
$
|
(5
|
)
|
|
$
|
(15
|
)
|
|
$
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized and unrealized gains (losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain (loss) from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Platinum sold to pay expenses
|
|
|
-
|
(2)
|
|
|
(1
|
)
|
|
|
-
|
(2)
|
|
|
(2
|
)
|
Platinum distributed for the redemption of Shares
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net realized gain (loss)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net change in unrealized appreciation (depreciation)
|
|
$
|
579
|
|
|
$
|
(93
|
)
|
|
$
|
1,000
|
|
|
$
|
(254
|
)
|
Net realized and unrealized gain (loss)
|
|
$
|
579
|
|
|
$
|
(94
|
)
|
|
$
|
1,000
|
|
|
$
|
(256
|
)
|
Net increase (decrease) in net assets resulting from operations
|
|
$
|
570
|
|
|
$
|
(99
|
)
|
|
$
|
985
|
|
|
$
|
(265
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets per share
|
|
$
|
0.76
|
|
|
$
|
(0.22
|
)(1)
|
|
$
|
1.51
|
|
|
$
|
(0.59
|
)(1)
|
Weighted average number of shares (in 000’s)
|
|
|
747
|
|
|
|
450
|
(1)
|
|
|
653
|
|
|
|
450
|
(1)
|
|
(1)
|
Adjusted
for effects of a 10-for-1 stock split. The stock split was effective on March 21, 2019. See Note 1.
|
|
(2)
|
Amounts
do not round to $1
|
See
Notes to the Financial Statements
Statements
of Changes in Net Assets (Unaudited)
For
the six months ended December 31, 2019 (unaudited)
Amounts in 000’s of US$
|
|
|
|
Net Assets at July 1, 2019
|
|
$
|
3,655
|
|
Creations
|
|
|
1,731
|
|
Redemptions
|
|
|
-
|
|
Net investment gain (loss)
|
|
|
(6
|
)
|
Net realized gain (loss) from platinum sold to pay expenses
|
|
|
-
|
|
Net realized gain (loss) from platinum distributed for redemptions
|
|
|
-
|
|
Net change in unrealized gain (loss) on investment in platinum
|
|
|
421
|
|
Net Assets at September 30, 2019
|
|
$
|
5,801
|
|
Creations
|
|
|
1,322
|
|
Redemptions
|
|
|
-
|
|
Net investment gain (loss)
|
|
|
(9
|
)
|
Net realized gain (loss) from platinum sold to pay expenses
|
|
|
-
|
|
Net realized gain (loss) from platinum distributed for redemptions
|
|
|
-
|
|
Net change in unrealized gain (loss) on investment in platinum
|
|
|
579
|
|
Net Assets at December 31, 2019
|
|
$
|
7,693
|
|
For
the six months ended December 31, 2018 (unaudited)
Amounts in 000’s of US$
|
|
|
|
Net Assets at July 1, 2018
|
|
$
|
3,821
|
|
Creations
|
|
|
-
|
|
Redemptions
|
|
|
-
|
|
Net investment gain (loss)
|
|
|
(4
|
)
|
Net realized gain (loss) from platinum sold to pay expenses
|
|
|
(1
|
)
|
Net realized gain (loss) from platinum distributed for
redemptions
|
|
|
-
|
|
Net change in unrealized gain (loss) on investment in platinum
|
|
|
(161
|
)
|
Net Assets at September 30, 2018
|
|
$
|
(3,655
|
)
|
Creations
|
|
|
-
|
|
Redemptions
|
|
|
-
|
|
Net investment gain (loss)
|
|
|
(5
|
)
|
Net realized gain (loss) from platinum sold to pay expenses
|
|
|
(1
|
)
|
Net realized gain (loss) from platinum distributed for
redemptions
|
|
|
-
|
|
Net change in unrealized gain (loss) on investment in platinum
|
|
|
(93
|
)
|
Net Assets at December 31, 2018
|
|
$
|
3,556
|
|
See
Notes to the Financial Statements
Financial
Highlights (Unaudited)
For
the three months ended December 31, 2019 and 2018 and for the six months ended December 31, 2019 and 2018
Per Share Performance
(for a Share outstanding throughout each period)
|
|
Three
Months
Ended
December 31, 2019
|
|
|
Three
Months
Ended
December 31, 2018(1)
|
|
|
Six
Months
Ended
December 31, 2019
|
|
|
Six Months
Ended
December 31, 2018(1)
|
|
Net asset value per Share at beginning of period
|
|
$
|
8.92
|
|
|
$
|
8.12
|
|
|
$
|
8.12
|
|
|
$
|
8.49
|
|
Net investment gain (loss)(2)
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
|
(0.02
|
)
|
|
|
(0.02
|
)
|
Net realized and unrealized gain (loss) on investment in platinum
|
|
|
0.71
|
|
|
|
(0.21
|
)
|
|
|
1.52
|
|
|
|
(0.57
|
)
|
Net change in net assets from operations
|
|
|
0.70
|
|
|
|
(0.22
|
)
|
|
|
1.50
|
|
|
|
(0.59
|
)
|
Net asset value per Share at end of period
|
|
$
|
9.62
|
|
|
$
|
7.90
|
|
|
$
|
9.62
|
|
|
$
|
7.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total return, at net asset value(3)
|
|
|
7.85
|
%
|
|
|
(2.70
|
)%
|
|
|
18.47
|
%
|
|
|
(6.94
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets ($000’s)
|
|
$
|
7,693
|
|
|
$
|
3,556
|
|
|
$
|
7,693
|
|
|
$
|
3,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio to average net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss (4)
|
|
|
(0.50
|
)%
|
|
|
(0.50
|
)%
|
|
|
(0.50
|
)%
|
|
|
(0.50
|
)%
|
Expenses (4)
|
|
|
0.50
|
%
|
|
|
0.50
|
%
|
|
|
0.50
|
%
|
|
|
0.50
|
%
|
|
(1)
|
Adjusted
for effects of a 10-for-1 stock split. The stock split was effective on March 21, 2019. See Note 1.
|
|
(2)
|
Calculated
using the average shares outstanding method
|
|
(3)
|
Percentage
not annualized.
|
|
(4)
|
Percentage
annualized.
|
See
Notes to the Financial Statements
Notes
to the Financial Statements for the period ended December 31, 2019 (unaudited)
1.
Organization
GraniteShares
Platinum Trust (the “Trust”) is an investment trust formed on January 11, 2018 under New York law pursuant to a trust
indenture. The Sponsor of the Trust, GraniteShares LLC (the “Sponsor”), is responsible for, among other things, overseeing
the performance of The Bank of New York Mellon (the “Trustee”) and the Trust’s principal service providers,
including the preparation of financial statements. The Trustee is responsible for the day-to-day administration of the Trust.
The
objective of the Trust is for the value of the Shares to reflect, at any given time, the value of the assets owned by the Trust
at that time less the Trust’s accrued expenses and liabilities as of that time. The Shares are intended to constitute a
simple and cost-effective means of making an investment similar to an investment in platinum.
On
March 11, 2019, the Trust announced a 10-for-1 Share split for all shareholders of record as of March 21, 2019. The ticker symbol
for the Trust did not change, and the Trust continues to trade on the NYSE Arca. The split was applied retroactively for all periods
presented, increasing the number of Shares outstanding for the Trust, and resulted in a proportionate decrease in the price per
Share and per Share information of the Trust. Therefore, the split did not change the aggregate net asset value of a shareholder’s
investment at the time of the split.
The
fiscal year end for the Trust is June 30.
Undefined
capitalized terms shall have the meaning as set forth in the Trust’s registration statement.
2.
Significant accounting policies
The
Sponsor has determined that the Trust falls within the scope of Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (“ASC”) 946, Financial Services—Investment Companies, and has concluded that for reporting
purposes, the Trust is classified as an Investment Company. 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.
The
preparation of financial statements in accordance with accounting principles generally accepted in the United States of America
requires those responsible for preparing financial statements to make estimates and assumptions that affect the reported amounts
and disclosures. Actual results could differ from those estimates.
The
following is a summary of significant accounting policies followed by the Trust.
2.1
Valuation of Platinum
The
Trust follows the provisions of ASC 820, Fair Value Measurements (“ASC 820”). ASC 820 provides guidance for determining
fair value and requires increased disclosure regarding the inputs to valuation techniques used to measure fair value. ASC 820
defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
Platinum
is held by ICBC Standard Bank Plc (the “Custodian”), on behalf of the Trust, at the Custodian’s London, United
Kingdom vaulting premises. The cost of platinum is determined according to the average cost method and the fair value is based
on the London Bullion Market Association (“LBMA”) Platinum Price PM.
LBMA
Platinum Price PM is the price per troy ounce of platinum, stated in U.S. dollars, determined by the LME, following an auction
process starting after 2:00 p.m. (London time), on each day that the London platinum market is open for business, and announced
by the LME shortly thereafter.
The
per Share amount of platinum exchanged for a purchase or redemption is calculated daily by the Trustee, using the LBMA Platinum
Price PM to calculate the platinum amount in respect of any liabilities for which covering platinum sales have not yet been made,
and represents the per Share amount of platinum held by the Trust, after giving effect to its liabilities, to cover expenses and
liabilities and any losses that may have occurred.
ASC
820 establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The three levels of inputs
are as follows:
Level
1: Unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access.
Level
2: Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly
or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments
and similar data.
Level
3: Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing
the Trust’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability,
and that would be based on the best information available.
The
Trustee categorizes the Trust’s investment in platinum as a level 1 asset within the ASC 820 hierarchy.
2.2
Expenses, realized gains and losses
The
Trust’s only ordinary recurring fee is expected to be the fee paid to the Sponsor, which will accrue daily at an annualized
rate equal to 0.50% of the adjusted daily net asset value of the Trust, paid monthly in arrears.
The
Sponsor has agreed to assume administrative and marketing expenses incurred by the Trust, including the Trustee’s monthly
fee and out of pocket expenses, the Custodian’s fee and the reimbursement of the Custodian’s expenses, exchange listing
fees, United States Securities and Exchange Commission (the “SEC”) registration fees, printing and mailing costs,
audit fees and certain legal expenses.
As
of December 31, 2019, the fees payable to the Sponsor were $3,096. As of June 30, 2019, the fees payable to the Sponsor were $1,480.
With
respect to expenses not otherwise assumed by the Sponsor, the Trustee will, at the direction of the Sponsor or in its own discretion,
sell the Trust’s platinum as necessary to pay these expenses. When selling platinum to pay expenses, the Trustee will endeavor
to sell the smallest amounts of platinum needed to pay these expenses in order to minimize the Trust’s holdings of assets
other than platinum. Other than the Sponsor’s Fee, the Trust had no expenses during the three months and six months ended
December 31, 2019 and 2018.
Unless
otherwise directed by the Sponsor, when selling platinum the Trustee will endeavor to sell at the price established by the LBMA
PM Platinum Price. The Trustee will place orders with dealers (which may include the Custodian) through which the Trustee expects
to receive the most favorable price and execution of orders. The Custodian may be the purchaser of such platinum only if the sale
transaction is made at the next LBMA PM Platinum Price or such other publicly available price that the Sponsor deems fair, in
each case as set following the sale order. A gain or loss is recognized based on the difference between the selling price and
the cost of the platinum sold. Neither the Trustee nor the Sponsor is liable for depreciation or loss incurred by reason of any
sale.
Realized
gains and losses result from the transfer of platinum for Share redemptions and / or to pay expenses and are recognized on a trade
date basis as the difference between the fair value and cost of platinum transferred. Gain or loss on sales of platinum bullion
is calculated on a trade date basis using the average cost method.
2.3
Platinum. Receivable and Payable
Platinum
receivable or payable represents the quantity of platinum covered by contractually binding orders for the creation or redemption
of Shares respectively, where the platinum has not yet been transferred to or from the Trust’s account. Generally, ownership
of the platinum is transferred within two business days of the trade date.
2.4
Creations and Redemptions of Shares
The
Trust issues and redeems in one or more blocks of 50,000 Shares (a block of 50,000 Shares is called a “Basket”) only
to Authorized Participants. The creation and redemption of Baskets will only be made in exchange for the delivery to the Trust
or the distribution by the Trust of the amount of platinum represented by the Baskets being created or redeemed, the amount of
which will be based on the combined ounces represented by the number of shares included in the Baskets being created or redeemed
determined on the day the order to create or redeem Baskets is properly received.
Orders
to create and redeem Baskets may be placed only by Authorized Participants. An Authorized Participant must: (1) be a registered
broker-dealer or other securities market participant, such as a bank or other financial institution, which, but for an exclusion
from registration, would be required to register as a broker-dealer to engage in securities transactions, (2) be a participant
in DTC, and (3) must have an agreement with the Custodian establishing an unallocated account in London or have an existing unallocated
account meeting the standards described herein. To become an Authorized Participant, a person must enter into an Authorized Participant
Agreement with the Sponsor and the Trustee. The Authorized Participant Agreement provides the procedures for the creation and
redemption of Baskets and for the delivery of the platinum required for such creations and redemptions. The Authorized Participant
Agreement and the related procedures attached thereto may be amended by the Trustee and the Sponsor, without the consent of any
investor or Authorized Participant. A transaction fee of $500 will be assessed on all creation and redemption transactions. Multiple
Baskets may be created on the same day, provided each Basket meets the requirements described below and that the Custodian is
able to allocate platinum to the Trust Allocated Account such that the Trust Unallocated Account holds no more than 192 ounces
of platinum at the close of a business day.
Authorized
Participants who make deposits with the Trust in exchange for Baskets will receive no fees, commissions or other form of compensation
or inducement of any kind from either the Sponsor or the Trust, and no such person has any obligation or responsibility to the
Sponsor or the Trust to effect any sale or resale of shares.
Changes
in the Shares for the three months ended December 31, 2019 and 2018 were:
|
|
Six Months Ended
|
|
|
Six Months Ended
|
|
(Amounts in 000’s)
|
|
Dec-31, 2019
|
|
|
Dec-31, 2018(1)
|
|
Activity in Number of Shares Created and Redeemed:
|
|
|
|
|
|
|
|
|
Creations
|
|
|
350
|
|
|
|
0
|
|
Redemptions
|
|
|
0
|
|
|
|
0
|
|
Net change in Number of Shares Created and Redeemed
|
|
|
350
|
|
|
|
0
|
|
|
|
Six Months Ended
|
|
|
Six Months Ended
|
|
(Amounts in 000’s of US$)
|
|
Dec-31, 2019
|
|
|
Dec-31, 2018
|
|
Activity in Value of Shares Created and Redeemed:
|
|
|
|
|
|
|
|
|
Creations
|
|
$
|
3,053
|
|
|
$
|
0
|
|
Redemptions
|
|
|
0
|
|
|
|
0
|
|
Net change in Value of Shares Created and Redeemed
|
|
$
|
3,053
|
|
|
$
|
0
|
|
|
(1)
|
Adjusted
for effects of stock split. Stock split was effective on March 21, 2019. See Note 1.
|
2.5
Income Taxes
The
Trust is classified as a “grantor trust” for United States federal income tax purposes. As a result, the Trust itself
will not be subject to United States federal income tax. Instead, the Trust’s income and expenses will “flow through”
to the Shareholders, and the Trustee will report the Trust’s income, gains, losses and deductions to the Internal Revenue
Service on that basis.
The
Sponsor has evaluated whether or not there are uncertain tax positions that require financial statement recognition and has determined
that no reserves for uncertain tax positions are required as of December 31, 2019 and June 30, 2019.
The
Sponsor evaluates tax positions taken or expected to be taken in the course of preparing the Trust’s tax returns to determine
whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions
not deemed to meet that threshold would be recorded as an expense in the current year. The Trust is required to analyze all open
tax years. Open tax years are those years that are open for examination by the relevant income taxing authority. As of December
31, 2019, the 2019 and 2018 tax years remain open for examination.
2.6
Emerging Growth Company qualification
The
Trust is an “emerging growth company” as defined in the JOBS Act, and as such, is permitted to meet reduced public
company reporting requirements.
3.
Investment in platinum
Changes
in ounces of platinum and their respective values for the period ended December 31, 2019.
Amounts in 000’s of US$, except for ounces data
|
|
Ounces
|
|
|
Fair Value
|
|
Opening balance as of June 30, 2019
|
|
|
4,469.435
|
|
|
$
|
3,656
|
|
Platinum contributed
|
|
|
3,471.295
|
|
|
|
3,053
|
|
Platinum distributed
|
|
|
(14.383
|
)
|
|
|
(13
|
)
|
|
|
|
-
|
|
|
|
1,000
|
|
Change in unrealized depreciation
|
|
|
7,926.347
|
|
|
|
7,696
|
|
Changes
in ounces of platinum and their respective values for the year ended June 30, 2019.
Amounts in 000’s of US$, except for ounces data
|
|
Ounces
|
|
|
Fair Value
|
|
Opening balance as of June 30, 2018
|
|
|
4,491.805
|
|
|
$
|
3,823
|
|
Platinum contributed
|
|
|
-
|
|
|
|
-
|
|
Platinum distributed
|
|
|
(22.370
|
)
|
|
|
(22
|
)
|
Change in unrealized depreciation
|
|
|
-
|
|
|
|
(145
|
)
|
Ending balance as of June 30, 2019
|
|
|
4,469.435
|
|
|
$
|
3,656
|
|
4.
Related parties – Sponsor and Trustee
A
fee is paid to the Sponsor as compensation for services performed under the Trust Agreement. In exchange for the Sponsor’s
fee, the Sponsor has agreed to assume the following administrative and marketing expenses incurred by the Trust: the Trustee’s
fee and out-of-pocket expenses, the custodian’s fee and reimbursement of the custodian expenses, NYSE Arca listing fees,
SEC registration fees, printing and mailing costs, audit fees and expenses, and up to $100,000 per annum in legal fees and expenses.
The Sponsor’s fee is payable at an annualized rate of 0.50% of the Trust’s Net Asset Value, accrued on a daily basis
computed on the prior Business Day’s Net Asset Value and paid monthly in arrears.
The
Sponsor, from time to time, may temporarily waive all or a portion of the Sponsor’s Fee at its discretion for a stated period
of time. Presently, the Sponsor does not intend to waive any part of its fee.
Affiliates
of the Trustee may from time to time act as Authorized Participants or purchase or sell platinum or Shares for their own account,
as agent for their customers and for accounts over which they exercise investment discretion.
5.
Concentration of risk
In
accordance with Statement of Position No. 94-6, Disclosure of Certain Significant Risks and Uncertainties, the Trust’s sole
business activity is the investment in platinum. Several factors could affect the price of platinum, including: (i) global platinum
supply and demand, which is influenced by factors such as production and cost levels in major platinum-producing countries, recycling,
autocatalyst demand, industrial demand, jewelry demand and investment demand; (ii) investors’ expectations with respect
to the rate of inflation; (iii) currency exchange rates; (iv) interest rates; (v) investment and trading activities of hedge funds
and commodity funds; and (vi) global or regional political, economic or financial events and situations. In addition, there is
no assurance that platinum will maintain its long-term value in terms of purchasing power in the future. In the event that the
price of platinum declines, the Sponsor expects the value of an investment in the Shares to decline proportionately. Each of these
events could have a material effect on the Trust’s financial position and results of operations.
6.
Indemnification
Under
the Trust’s organizational documents, each of the Trustee (and its directors, officers, employees, shareholders, agents
and affiliates) and the Sponsor (and its members, managers, directors, officers, employees, agents and affiliates) is indemnified
against any liability, loss or expense it incurs without (i) gross negligence, bad faith, willful misconduct or willful misfeasance
on its part in connection with the performance of its obligations under the Trust Agreement or any such other agreement or any
actions taken in accordance with the provisions of the Trust Agreement or any such other agreement and (ii) reckless disregard
on its part of its obligations and duties under the Trust Agreement or any such other agreement. Such indemnity shall also include
payment from the Trust of the reasonable costs and expenses incurred by the indemnified party in investigating or defending itself
against any such loss, liability or expense or any claim therefor. In addition, the Sponsor may, in its sole discretion, undertake
any action that it may deem necessary or desirable in respect of the Trust Agreement and in such event, the reasonable legal expenses
and costs and other disbursements of any such actions shall be expenses and costs of the Trust and the Sponsor shall be entitled
to reimbursement by the Trust. The Trust’s maximum exposure under these arrangements is unknown as this would involve future
claims that may be made against the Trust that have not yet occurred.
7.
Subsequent events
Management
has evaluated the events and transactions that have occurred through the date the financial statements were issued and noted no
items requiring adjustment of the financial statements or additional disclosures.
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 December 31, 2019 the Trust did
not have any cash balances.
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 December 31, 2019
The
Trust’s net asset value grew from $5,800,860 on September 30, 2019 to $7,693,387 on December 31, 2019, a 32.62% increase.
The increase in the Trust’s net asset value was due to an increase in the number of shares outstanding from 650,000 to 800,000
over this period. The 150,000 shares increase was the result of 3 creation orders (50,000 shares per creation and redemption order).
There were no redemption orders over the quarter. The increase in the Trust’s net asset value was also due to a change in
the price of platinum, which increased 7.89% from $900.00 on September 30, 2019 to $971.00 on December 31, 2019.
The
7.76% increase in the Trust’s net asset value per share, from $8.92 at September 30, 2019 to $9.62 at December 31, 2019
is directly related to the 7.89% 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 $8,429 for the quarter, or 0.125% of the Trust’s average weighted net assets of $6,726,362 during the quarter.
The net asset value per share of $9.62 on December 31, 2019 was the highest during the quarter, compared with a low during the
quarter of $8.59 on November 13, 2019.
Net
increase in net assets resulting from operations for the quarter ended December 31, 2019 was $570,783, resulting primarily from
an unrealized gain on investment in platinum of $579,480, reduced by a loss of $268 on metal sold to cover the Sponsor’s
fees as well as by the Sponsor’s fees of $8,429. Other than the Sponsor’s fees the Trust had no expenses during the
quarter.
Six
Months Ended December 31, 2019
The
Trust’s net asset value increased from $3,654,518 on June 30, 2019 to $7,693,387 on December 31, 2019, a 110.5% increase.
The increase in the Trust’s net asset value was due to an increase in the number of shares outstanding from 450,000 to 800,000
over this period. The 350,000 shares increase was the result of 7 creation orders (50,000 shares per creation and redemption order).
There were no redemption orders over the quarter. The increase in the Trust’s net asset value was also due to a change in
the price of platinum, which increased 18.70% from $818.00 on June 30, 2019 to $971.00 on December 31, 2019.
The
18.47% increase in the Trust’s net asset value per share, from $8.12 at June 30, 2019 to $9.62 at December 31, 2019 is directly
related to the 18.70% 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 $14,573 for the period, or 0.25% of the Trust’s average weighted net assets of $5,818,489 during the quarter.
The net asset value per share of $9.69 on September 4, 2019 was the highest during the quarter, compared with a low during the
quarter of $8.03 on July 9, 2019.
Net
increase in net assets resulting from operations for the 6 months period ending December 31, 2019 was $985,646, resulting primarily
from an unrealized gain on investment in platinum of $1,000,919, decreased by a loss of $700 on metal sold to cover the Sponsor’s
fees but reduced by the Sponsor’s fees of $14,573. Other than the Sponsor’s fees the Trust had no expenses during
the quarter.