WisdomTree, Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures As of December 31, 2020, our management, with the participation of our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b) promulgated under the Exchange Act. Based upon that evaluation, our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer concluded that, as of December 31, 2020, our disclosure controls and procedures were effective at a reasonable assurance level in ensuring that material information required to be disclosed by us in the reports that we file or submit under the 65 Table of Contents Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules, regulations and forms of the SEC, including ensuring that such material information is accumulated by and communicated to our management, including our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, as appropriate to allow timely decisions regarding required disclosure. Changes in Internal Control Over Financial Reporting During the quarter ended December 31, 2020, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Report of Management on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. In order to evaluate the effectiveness of internal control over financial reporting, management has conducted an assessment, including testing, using the criteria in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (the COSO criteria). Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Based on the assessment, management has concluded that the Company maintained effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria. The effectiveness of the Company’s internal control over financial reporting as of December 31, 2020 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report, which is included herein. ITEM 9B. OTHER INFORMATION None. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by Item 401 of Regulation S-K regarding directors and officers will be contained in our definitive proxy statement to be filed pursuant to Regulation 14A for our 2021 Annual Meeting of Stockholders, expected to be filed within 120 days of our fiscal year end, or in an amendment to this Form 10-K, and is incorporated herein by reference. The information required by Item 405 of Regulation S-K will be contained in our definitive proxy statement or in an amendment to this Form 10-K and is incorporated herein by reference. We have adopted a Code of Conduct that applies to all of our directors, officers and employees, including our principal executive officer and principal financial and accounting officer. The Code of Conduct is posted on our website at http://ir.wisdomtree.com/corporate-governance . We will post any amendments to, or waivers from, a provision of this Code of Conduct by posting such information on our website, at the address and location specified above. The information required by Item 407(c)(3), (d)(4) and (d)(5) of Regulation S-K will be contained in our definitive proxy statement or in an amendment to this Form 10-K and is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION The information required by Item 402 and Item 407(e)(4) and (e)(5) of Regulation S-K will be contained in our definitive proxy statement or in an amendment to this Form 10-K and is incorporated herein by reference. 66 Table of Contents ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by Item 201(d) and Item 403 of Regulation S-K will be contained in our definitive proxy statement or in an amendment to this Form 10-K and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by Item 404 and Item 407(a) of Regulation S-K will be contained in our definitive proxy statement or in an amendment to this Form 10-K and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by Item 9(e) of Schedule 14A will be contained in our definitive proxy statement or in an amendment to this Form 10-K and is incorporated herein by reference. PART IV ITEM 15. EXHIBITS; FINANCIAL STATEMENT SCHEDULES (a). The following are filed as part of this Report: 1. Consolidated Financial Statements : The consolidated financial statements and reports of independent registered public accounting firm required by this item are included beginning on page F-1. 2. Financial Statement Schedules : None. All other schedules are omitted because they are not applicable or not required, or because the required information is shown either in the consolidated financial statements or in the notes thereto. (b). Exhibits: The list of exhibits in the Exhibit Index immediately preceding the exhibits to this Report is incorporated herein by reference in response to this item. ITEM 16. FORM 10-K SUMMARY None. 67 Table of Contents WISDOMTREE INVESTMENTS, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements Reports of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of December 31, 2020 and 2019 F-6 Consolidated Statements of Operations for the Years Ended December 31, 2020, 2019 and 2018 F-7 Consolidated Statements of Comprehensive (Loss)/Income for the Years Ended December 31, 2020, 2019 and 2018 F-8 Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2020, 2019 and 2018 F-9 Consolidated Statements of Cash Flows for the Years Ended December 31, 2020, 2019 and 2018 F-10 Notes to Consolidated Financial Statements F-12 F-1 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of WisdomTree Investments, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of WisdomTree Investments, Inc. and Subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive (loss)/income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 19, 2021 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Valuation of Deferred Consideration Description of the Matter At December 31, 2020, the Company recorded a current deferred consideration liability of $17,374,000 and a long-term deferred consideration liability of $212,763,000 and for the year ended December 31, 2020, the Company recorded a loss on the revaluation of deferred consideration of $56,821,000. As more fully described in Notes 2, 5 and 12 to the consolidated financial statements, deferred consideration represents an obligation of the Company for fixed payments of physical gold bullion to a third party into perpetuity that is carried at fair value. The Company values deferred consideration using a discounted cash flow model and the significant unobservable inputs used are the discount rate, the perpetual growth rate and the extrapolated forward-looking gold prices. F-2 Table of Contents Auditing the Company’s valuation of deferred consideration was complex due to the significant estimation required in determining the fair value of the current and long-term liability. In particular, the fair value estimate was sensitive to the significant unobservable inputs described above which are affected by future economic and market conditions and thus require significant judgment. How we addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s deferred consideration fair value process. This included controls over management’s review of the significant unobservable inputs described above and the completeness and accuracy of the inputs to the valuation model. To test the estimated fair value of the deferred consideration liability, our audit procedures included, among others, reading the terms of the gold royalty agreement to make gold payments, evaluating the Company’s selection of its fair value methodology, testing the significant unobservable inputs used in the model, evaluating the clerical accuracy of the valuation model and testing the completeness and accuracy of the underlying data used by the Company to determine fair value. For example, we agreed underlying data used in management’s valuation model to source documents and/or publicly available data, such as the gold royalty agreement and third-party gold price projections. In addition, we involved our valuation specialists to assist in our evaluation of the Company’s valuation model and the discount rate used by the Company, to calculate an independent estimate of the fair value of the Company’s deferred consideration liability which we compared to the Company’s fair value estimate and to assist in performing a sensitivity analysis of the significant unobservable inputs to evaluate the change in the fair value estimate that would result from changes in these inputs. ETFS Indefinite-Lived Intangible Assets – Assessment of Carrying Value Description of the Matter At December 31, 2020, the Company held indefinite-lived intangible assets related to rights to advisory agreements in connection with the ETFS acquisition, with an aggregate carrying value of $601,247,000. As described in Notes 2 and 26 to the consolidated financial statements, these assets were assessed for impairment based upon a quantitative test. Indefinite-lived intangible assets are impaired if their estimated fair values are less than their carrying values. The Company determined the fair value of its ETFS intangible assets using an income approach (discounted cash flow analysis) with significant unobservable inputs that included the weighted average cost of capital and projected revenue growth rates. Auditing the Company’s quantitative impairment assessment for its ETFS indefinite-lived intangible assets was complex due to the significant unobservable inputs required in determining fair value. In particular, the fair value estimate of the ETFS indefinite-lived intangible assets was sensitive to the significant unobservable inputs described above which are affected by future economic and market conditions and thus require significant judgment. How we addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s indefinite-lived intangible asset impairment assessment process. This included controls around management’s review of the significant unobservable inputs described above and the completeness and accuracy of the inputs to the valuation model. F-3 Table of Contents To test the Company’s quantitative impairment assessment of ETFS indefinite-lived intangible assets, our audit procedures included, among others, evaluating the Company’s selection of its fair value methodology, testing the significant unobservable inputs used in the valuation model, evaluating the clerical accuracy of the valuation model and testing the completeness and accuracy of the underlying data used by the Company to determine fair value. For example, we agreed to our audit workpapers the ETFS cash flows which were used as a data point in the discounted cash flow analysis. We compared the projected revenue growth rates to the Company’s historical results and to those of other guideline public companies in the same industry. In addition, we assessed the accuracy of the Company’s historical projections by comparing them to actual operating results. We involved our valuation specialists to assist in our evaluation of the Company’s valuation model, the weighted average cost of capital used by the Company and the comparability of the guideline public companies selected by the Company and to calculate an independent estimate of the indefinite-lived intangible assets which we compared to the Company’s fair value estimate. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2010. New York, NY February 19, 2021 F-4 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of WisdomTree Investments, Inc. Opinion on Internal Control Over Financial Reporting We have audited WisdomTree Investments, Inc. and Subsidiaries’ internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, WisdomTree Investments, Inc. and Subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria . We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2020 consolidated financial statements of the Company and our report dated February 19, 2021 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP New York, NY February 19, 2021 F-5 Table of Contents WisdomTree Investments, Inc. and Subsidiaries Consolidated Balance Sheets (In Thousands, Except Per Share Amounts) December 31, 2020 December 31, 2019 Assets Current assets: Cash and cash equivalents $ 73,425 $ 74,972 Securities owned, at fair value (including $ 23,932 and $ 16,886 invested in WisdomTree ETFs at December 31, 2020 and 2019, respectively) 34,895 17,319 Accounts receivable (including $ 26,884 and $ 25,667 due from related parties at December 31, 2020 and 2019, respectively) 29,455 26,838 Prepaid expenses 3,827 3,724 Other current assets 259 207 Total current assets 141,861 123,060 Fixed assets, net 7,579 8,127 Notes receivable, net (Note 9) — 28,172 Indemnification receivable (Note 24) 27,016 32,101 Securities held-to-maturity 451 16,863 Deferred tax assets, net 8,063 7,398 Investments (Note 10) 8,112 11,192 Right of use assets – operating leases (Note 16) 16,327 18,161 Goodwill (Note 26) 85,856 85,856 Intangible assets (Note 26) 601,247 603,294 Other noncurrent assets 180 983 Total assets $ 896,692 $ 935,207 Liabilities and stockholders’ equity Liabilities Current liabilities: Fund management and administration payable $ 19,564 $ 22,021 Compensation and benefits payable 22,803 26,501 Deferred consideration – gold payments (Note 12) 17,374 13,953 Securities sold, but not yet purchased, at fair value — 582 Operating lease liabilities (Note 16) 3,135 3,682 Income taxes payable 916 3,372 Accounts payable and other liabilities 10,207 8,930 Total current liabilities 73,999 79,041 Convertible notes (Note 14) 166,646 — Debt (Note 13) — 175,956 Deferred consideration – gold payments (Note 12) 212,763 159,071 Operating lease liabilities (Note 16) 17,434 19,057 Other noncurrent liabilities (Note 24) 27,016 32,101 Total liabilities 497,858 465,226 Preferred stock – Series A Non-Voting Convertible, par value $ 0.01 ; 14.750 shares authorized, issued and outstanding; redemption value of $ 72,667 and $ 71,630 at December 31, 2020 and 2019, respectively) (Note 15) 132,569 132,569 Contingencies (Note 17 ) Stockholders’ equity Preferred stock, par value $ 0.01 ; 2,000 shares authorized: — — Common stock, par value $ 0.01 ; 250,000 shares authorized; issued and outstanding: 148,716 and 155,264 at December 31, 2020 and 2019, respectively 1,487 1,553 Additional paid-in capital 317,075 352,658 Accumulated other comprehensive income 1,102 945 Accumulated deficit ( 53,399 ) ( 17,744 ) Total stockholders’ equity 266,265 337,412 Total liabilities and stockholders’ equity $ 896,692 $ 935,207 The accompanying notes are an integral part of these consolidated financial statements F- 6 Table of Contents WisdomTree Investments, Inc. and Subsidiaries Consolidated Statements of Operations (In Thousands, Except Per Share Amounts) Year Ended December 31, 2020 2019 2018 Operating Revenues: Advisory fees $ 250,182 $ 265,652 $ 271,104 Other income 3,517 2,751 3,012 Total revenues 253,699 268,403 274,116 Operating Expenses: Compensation and benefits 74,675 80,761 74,515 Fund management and administration 60,515 61,502 56,686 Marketing and advertising 11,128 12,163 13,884 Sales and business development 10,579 18,276 17,153 Contractual gold payments (Note 12) 16,811 13,226 8,512 Professional and consulting fees 4,902 5,641 7,984 Occupancy, communications and equipment 6,427 6,302 6,203 Depreciation and amortization 1,021 1,045 1,301 Third-party distribution fees 5,219 6,968 6,611 Acquisition and disposition-related costs 416 902 11,454 Other 6,924 8,083 8,534 Total operating expenses 198,617 214,869 212,837 Operating income 55,082 53,534 61,279 Other Income/(Expenses): Interest expense ( 9,668 ) ( 11,240 ) ( 7,962 ) (Loss)/gain on revaluation of deferred consideration – gold payments (Note 12) ( 56,821 ) ( 11,293 ) 12,220 Interest income 744 3,332 3,093 Impairments (Note 27) ( 22,752 ) ( 30,710 ) ( 17,386 ) Loss on extinguishment of debt (Note 13) ( 2,387 ) — — Other gains and losses, net 580 ( 3,502 ) ( 205 ) (Loss)/income before income taxes ( 35,222 ) 121 51,039 Income tax expense 433 10,546 14,406 Net (loss)/income $ ( 35,655 ) $ ( 10,425 ) $ 36,633 (Loss)/earnings per share—basic $ ( 0.25 ) $ ( 0.08 ) $ 0.23 (Loss)/earnings per share—diluted $ ( 0.25 ) $ ( 0.08 ) $ 0.23 Weighted-average common shares—basic 148,682 151,823 146,645 Weighted-average common shares—diluted 148,682 151,823 158,415 Cash dividends declared per common share $ 0.12 $ 0.12 $ 0.12 The accompanying notes are an integral part of these consolidated financial statements F- 7 Table of Contents WisdomTree Investments, Inc. and Subsidiaries Consolidated Statements of Comprehensive (Loss)/Income (In Thousands) Year Ended December 31, 2020 2019 2018 Net (loss)/income $ ( 35,655 ) $ ( 10,425 ) $ 36,633 Other comprehensive income Reclassification of foreign currency translation adjustment to other gains and losses, net, upon the sale of WisdomTree Asset Management Canada, Inc. (“WTAMC” or “Canadian ETF business”) (Note 3) ( 167 ) — — Reclassification of foreign currency translation adjustment to other gains and losses, net, upon the liquidation of WisdomTree Japan Inc. (Note 3) — ( 397 ) — Change in unrealized gains/(losses) on available-for-sale debt securities, net of tax — — 477 Foreign currency translation adjustment, net of income taxes 324 875 ( 301 ) Other comprehensive income 157 478 176 Comprehensive (loss)/income $ ( 35,498 ) $ ( 9,947 ) $ 36,809 The accompanying notes are an integral part of these consolidated financial statements F- 8 Table of Contents WisdomTree Investments, Inc. and Subsidiaries Consolidated Statements of Changes in Stockholders’ Equity (In Thousands) Common Stock Additional Paid-In Capital Accumulated Other Accumulated Deficit Total Shares Issued Par Value Comprehensive Income/(Loss) Balance—January 1, 2018 136,996 $ 1,370 $ 216,006 $ 291 $ ( 24,716 ) $ 192,951 Common stock issued (Note 3) 15,250 153 137,097 — — 137,250 Restricted stock issued and vesting of restricted stock units, net 759 9 ( 9 ) — — — Shares repurchased ( 334 ) — ( 2,885 ) — — ( 2,885 ) Exercise of stock options, net 531 — 191 — — 191 Stock-based compensation — — 13,255 — — 13,255 Other comprehensive income — — — 176 — 176 Dividends — — — — ( 19,236 ) ( 19,236 ) Net income — — — — 36,633 36,633 Balance—December 31, 2018 153,202 $ 1,532 $ 363,655 $ 467 $ ( 7,319 ) $ 358,335 Restricted stock issued and vesting of restricted stock units, net 2,347 22 ( 22 ) — — — Shares repurchased ( 370 ) ( 1 ) ( 2,340 ) — — ( 2,341 ) Exercise of stock options, net 85 — 160 — — 160 Stock-based compensation — — 11,590 — — 11,590 Other comprehensive income — — — 478 — 478 Dividends — — ( 20,385 ) — — ( 20,385 ) Net loss — — — — ( 10,425 ) ( 10,425 ) Balance—December 31, 2019 155,264 $ 1,553 $ 352,658 $ 945 $ ( 17,744 ) $ 337,412 Restricted stock issued and vesting of restricted stock units, net 1,569 15 ( 15 ) — — — Shares repurchased ( 8,234 ) ( 82 ) ( 31,115 ) — — ( 31,197 ) Exercise of stock options, net 117 1 291 — — 292 Stock-based compensation — — 11,706 — — 11,706 Allocation of equity component related to convertible notes, net of issuance costs of $ 157 and deferred taxes of $ 1,239 — — 3,663 — — 3,663 Other comprehensive income — — — 157 — 157 Dividends — — ( 20,113 ) — — ( 20,113 ) Net loss — — — — ( 35,655 ) ( 35,655 ) Balance—December 31, 2020 148,716 $ 1,487 $ 317,075 $ 1,102 $ ( 53,399 ) $ 266,265 The accompanying notes are an integral part of these consolidated financial statements F- 9 Table of Contents WisdomTree Investments, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In Thousands) Year Ended December 31, 2020 2019 2018 Cash flows from operating activities: Net (loss)/income $ ( 35,655 ) $ ( 10,425 ) $ 36,633 Adjustments to reconcile net (loss)/income to net cash provided by operating activities: Advisory fees received in gold and other precious metals ( 62,416 ) ( 49,887 ) ( 32,238 ) Loss/(gain) on revaluation of deferred consideration – gold payments 56,821 11,293 ( 12,220 ) Impairments 22,752 30,710 17,386 Contractual gold payments 16,811 13,226 8,512 Stock-based compensation 11,706 11,590 13,255 Amortization of right of use asset 3,182 3,174 — Gain on sale – Canadian ETF business ( 2,877 ) — — Loss on extinguishment of debt 2,387 — — Deferred income taxes ( 2,192 ) ( 349 ) ( 6,083 ) Amortization of issuance costs – convertible notes 1,710 — — Amortization of issuance costs – former credit facility 1,328 2,888 2,087 Depreciation and amortization 1,021 1,045 1,301 Paid-in-kind interest income — ( 2,498 ) ( 1,974 ) Other ( 1,169 ) ( 173 ) 798 Changes in operating assets and liabilities: Securities owned, at fair value ( 17,576 ) ( 8,446 ) ( 7,182 ) Accounts receivable ( 193 ) ( 19 ) 3,804 Prepaid expenses ( 159 ) 738 427 Gold and other precious metals 45,087 35,886 25,604 Other assets 107 172 984 Fund management and administration payable ( 2,264 ) ( 476 ) 221 Compensation and benefits payable ( 3,804 ) 7,885 ( 16,050 ) Income taxes payable ( 2,441 ) 4,524 5,706 Securities sold, but not yet purchased, at fair value ( 582 ) ( 1,116 ) 748 Operating lease liabilities ( 3,517 ) ( 3,587 ) — Accounts payable and other liabilities 1,328 677 ( 4,251 ) Net cash provided by operating activities 29,395 46,832 37,468 Cash flows from investing activities: Purchase of fixed assets ( 472 ) ( 47 ) ( 71 ) Proceeds from held-to-maturity securities maturing or called prior to maturity 16,488 3,244 1,107 Proceeds from the sale of the Company’s financial interests in AdvisorEngine Inc. 9,592 — — Proceeds from the sale of Canadian ETF business, net 2,774 — — Purchase of investments — ( 8,112 ) — Funding of notes receivable — ( 2,090 ) ( 8,000 ) Proceeds from sales and maturities of debt securities available-for-sale — — 64,498 Cash paid for acquisition, net of cash acquired — — ( 239,313 ) Net cash provided by/(used in) investing activities 28,382 ( 7,005 ) ( 181,779 ) Cash flows from financing activities: Repayment of debt ( 179,000 ) ( 21,000 ) — Shares repurchased ( 31,197 ) ( 2,341 ) ( 2,885 ) Dividends paid ( 20,113 ) ( 20,385 ) ( 19,236 ) Convertible notes issuance costs ( 5,411 ) — — Proceeds from the issuance of convertible notes (Note 14) 175,250 — — Proceeds from exercise of stock options 292 160 191 Credit facility issuance costs — — ( 8,690 ) Preferred stock issuance costs — — ( 181 ) Proceeds from the issuance of debt — — 200,000 Net cash (used in)/provided by financing activities ( 60,179 ) ( 43,566 ) 169,199 Increase/(decrease) in cash flow due to changes in foreign exchange rate 855 927 ( 1,297 ) Net (decrease)/increase in cash and cash equivalents ( 1,547 ) ( 2,812 ) 23,591 Cash and cash equivalents—beginning of year 74,972 77,784 54,193 Cash and cash equivalents—end of year $ 73,425 $ 74,972 $ 77,784 F-10 Table of Contents Year Ended December 31, Supplemental disclosure of cash flow information: 2020 2019 2018 Cash paid for taxes $ 10,131 $ 10,060 $ 14,398 Cash paid for interest $ 7,088 $ 8,037 $ 5,577 NON-CASH ACTIVITIES On January 1, 2019, the Company recognized a right-of-use asset and lease liability of $ 19,827 and $ 24,817 , respectively, upon the implementation of Accounting Standards Update 2016-02, Leases ( Note 16 ) . In April 2018, the Company issued 14,750 shares of preferred stock and 15,250,000 shares of common stock to ETFS Capital in connection with the ETFS Acquisition which were collectively valued at $ 270,000 (Note 3). In addition, a wholly-owned subsidiary of the Company assumed a deferred consideration obligation which was valued at $ 172,746 on the acquisition date (Note 12). During the year ended December 31, 2018, stock options that would have resulted in $ 508 of proceeds upon exercise were instead exercised on a cashless basis. The accompanying notes are an integral part of these consolidated financial statements F- 11 Table of Contents WisdomTree Investments, Inc. and Subsidiaries Notes to Consolidated Financial Statements (In Thousands, Except Share and Per Share Amounts) 1. Organization and Description of Business WisdomTree Investments, Inc., through its global subsidiaries (collectively, “WisdomTree” or the “Company”), is an exchange-traded product (“ETP”) sponsor and asset manager headquartered in New York. WisdomTree offers ETPs covering equity, commodity, fixed income, leveraged and inverse, currency and alternative strategies. The Company has the following wholly-owned operating subsidiaries: • WisdomTree Asset Management, Inc. is a New York based investment adviser registered with the SEC, providing investment advisory and other management services to the WisdomTree Trust (“WTT”) and WisdomTree exchange-traded funds (“ETFs”). The WisdomTree ETFs are issued in the U.S. by WTT. WTT, a non-consolidated third party, is a Delaware statutory trust registered with the SEC as an open-end management investment company. The Company has licensed to WTT the use of certain of its own indexes on an exclusive basis for the WisdomTree ETFs in the U.S. • WisdomTree Management Jersey Limited (“ManJer”) is a Jersey based management company providing management services to seven issuers (the “ManJer Issuers”) in respect of the ETPs issued and listed by the ManJer Issuers covering commodity, currency, cryptocurrency and leveraged-and-inverse strategies. • WisdomTree Multi Asset Management Limited (“WTMAML”) is a Jersey based management company providing management services to WisdomTree Multi Asset Issuer PLC (“WMAI”) in respect of the ETPs issued by WMAI. WMAI, a non-consolidated third party, is a public limited company domiciled in Ireland. • WisdomTree Management Limited (“WML”) is an Ireland based management company providing management services to WisdomTree Issuer ICAV (“WTI”) in respect of the WisdomTree UCITS ETFs issued by WTI. WTI, a non-consolidated third party, is a public limited company domiciled in Ireland. • WisdomTree UK Limited (“WTUK”) is a U.K. based company registered with the Financial Conduct Authority currently providing distribution and support services to ManJer, WTMAML and WML. • WisdomTree Europe Limited is a U.K. based company which is the legacy distributor of the WMAI ETPs and WisdomTree UCITS ETFs. These services are now provided directly by WTUK. WisdomTree Europe Limited is no longer regulated and does not provide any regulated services. • WisdomTree Ireland Limited is an Ireland based company authorized by the Central Bank of Ireland providing distribution services to ManJer, WTMAML and WML. • WisdomTree Commodity Services, LLC (“WTCS”) is a New York based company that served as the managing owner and commodity pool operator of the WisdomTree Continuous Commodity Index Fund (“GCC”) until December 2020 when GCC was reorganized into the WisdomTree Enhanced Commodity Strategy Fund under WTT. Sale of Canadian ETF Business On February 19, 2020, the Company completed the sale of WTAMC to CI Financial Corp. (Note 3). 2. Significant Accounting Policies Basis of Presentation These consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and in the opinion of management reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of financial condition, results of operations, and cash flows for the periods presented. The consolidated financial statements include the accounts of the Company’s wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The financial results of ETFS are included in the Company’s consolidated financial statements since the acquisition date, April 11, 2018 (Note 3). Consolidation The Company consolidates entities in which it has a controlling financial interest. The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity (“VOE”) or a variable interest entity (“VIE”). The usual condition for a controlling financial interest in a VOE is ownership of a majority voting interest. If the F-1 2 Table of Contents Company has a majority voting interest in a VOE, the entity is consolidated. The Company has a controlling financial interest in a VIE when the Company has a variable interest that provides it with (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company reassesses its evaluation of whether an entity is a VIE when certain reconsideration events occur. Segment and Geographic Information Effective January 1, 2020, the Company, through its subsidiaries in the U.S. and Europe, conducts business as a single operating segment as an ETP sponsor and asset manager which is based upon the Company’s current organizational and management structure, as well as information used by the chief operating decision maker to allocate resources and other factors. Previously, the Company’s financial results were reported in its U.S. Business and International Business reportable segments. Foreign Currency Translation Assets and liabilities of subsidiaries whose functional currency is not the U.S. dollar are translated based on the end of period exchange rates from local currency to U.S. dollars. Results of operations are translated at the average exchange rates in effect during the period. The impact of the foreign currency translation adjustment is included in the Consolidated Statements of Comprehensive (Loss)/Income as a component of other comprehensive income. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet dates and the reported amounts of revenues and expenses for the periods presented. Actual results could differ materially from those estimates. Revenue Recognition The Company earns substantially all of its revenue in the form of advisory fees from its ETPs and recognizes this revenue over time, as the performance obligation is satisfied. Advisory fees are based on a percentage of the ETPs’ average daily net assets. Progress is measured using the practical expedient under the output method resulting in the recognition of revenue in the amount for which the Company has a right to invoice. Contractual Gold Payments Contractual gold payments are measured and paid monthly based upon the average daily spot price of gold (Note 12). Marketing and Advertising Marketing and advertising costs, including media advertising and production costs, are expensed when incurred. Depreciation and Amortization Depreciation is provided for using the straight-line method over the estimated useful lives of the related assets as follows: Equipment 5 years Furniture and fixtures 15 years Leasehold improvements are amortized over the term of their respective leases or service lives of the improvements, whichever is shorter. Fixed assets are recorded at cost less accumulated depreciation and amortization. Stock-Based Awards Accounting for stock-based compensation requires the measurement and recognition of compensation expense for all equity awards based on estimated fair values. Stock-based compensation is measured based on the grant-date fair value of the award and is amortized over the relevant service period. Forfeitures are recognized when they occur. Third-Party Distribution Fees The Company pays a percentage of its advisory fee revenues based on incremental growth in assets under management (“AUM”), subject to caps or minimums, to marketing agents to sell WisdomTree ETFs and for including WisdomTree ETFs on third-party customer platforms and recognizes these expenses as incurred. F- 13 Table of Contents Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of 90 days or less at the time of purchase to be classified as cash equivalents. The Company maintains deposits with financial institutions in an amount that is in excess of federally insured limits. Accounts Receivable Accounts receivable are customer and other obligations due under normal trade terms. The Company measures credit losses , if any, by applying historical loss rates, adjusted for current conditions and reasonable and supportable forecasts to amounts outstanding using the aging method. Impairment of Long-Lived Assets The Company performs a review for the impairment of long-lived assets when events or changes in circumstances indicate that the estimated undiscounted future cash flows expected to be generated by the assets are less than their carrying amounts or when other events occur which may indicate that the carrying amount of an asset may not be recoverable. Notes Receivable Notes receivable are accounted for on an amortized cost basis, including accrued interest and net of original issue discount and impairments, if any. Interest income is accrued over the term of the notes using the effective interest method. Notes receivable are placed on non-accrual status when the Company is in receipt of information indicating collection of interest is doubtful. Cash received on notes receivable placed on non-accrual status is recognized on a cash basis as interest income if and when received. Effective January 1, 2020, the Company performs a review for the impairment of the notes receivable and accrued interest on a quarterly basis using the current expected credit loss model and provides for an allowance for credit losses by applying an estimated loss rate to amounts outstanding at the balance sheet date. Previously, credit losses were measured using an incurred loss approach. Securities Owned and Securities Sold, but not yet Purchased (at fair value) Securities owned and securities sold, but not yet purchased are securities classified as either trading or available-for-sale (“AFS”). These securities are recorded on their trade date and are measured at fair value. All equity securities are classified by the Company as trading. Debt securities are classified based primarily on the Company’s intent to hold or sell the security. Changes in the fair value of debt securities classified as trading and AFS are reported in other income and other comprehensive income, respectively, in the period the change occurs. Debt securities classified as AFS are assessed for impairment on a quarterly basis and an estimate for credit loss is provided when the fair value of the AFS debt security is below its amortized cost basis. Credit-related impairments are recognized in earnings with a corresponding adjustment to the security’s amortized cost basis if the Company intends to sell the impaired AFS debt security or it is more likely than not the Company will be required to sell the security before recovering its amortized cost basis. Other credit-related impairments are recognized as an allowance with a corresponding adjustment to earnings. Impairments resulting from noncredit-related factors are recognized in other comprehensive income. Amounts recorded in other comprehensive income are reclassified into earnings upon sale of the AFS debt security using the specific identification method. Securities Held-to-Maturity The Company accounts for certain of its securities as held-to-maturity on a trade date basis, which are recorded at amortized cost. For held-to-maturity securities, the Company has the intent and ability to hold these securities to maturity and it is not more-likely-than-not that the Company will be required to sell these securities before recovery of their amortized cost bases, which may be maturity. Held-to-maturity securities are placed on non-accrual status when the Company is in receipt of information indicating collection of interest is doubtful. Cash received on held-to-maturity securities placed on non-accrual status is recognized on a cash basis as interest income if and when received. Effective January 1, 2020, the Company reviews its portfolio of held-to-maturity securities for impairment on a quarterly basis, recognizing an allowance, if any, by applying an estimated loss rate after consideration for the nature of collateral securing the financial asset as well as potential future changes in collateral values and historical loss information for financial assets secured with similar collateral. Previously, these securities were evaluated for impairment on a quarterly basis and if a decline in fair value was deemed to be other-than-temporary, the securities were written down to their fair value through earnings. Investments in pass-through government-sponsored enterprises (“GSEs”) are determined to have an estimated loss rate of zero due to an implicit U.S. government guarantee. F-1 4 Table of Contents Investments The Company accounts for equity investments that do not have a readily determinable fair value under the measurement alternative prescribed within Accounting Standards Update (“ASU”) 2016-01, Financial Instruments – Recognition and Measurement of Financial Assets and Financial Liabilities , to the extent such investments are not subject to consolidation or the equity method. Under the measurement alternative, these financial instruments are carried at cost, less any impairment (assessed quarterly), plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. In addition, income is recognized when dividends are received only to the extent they are distributed from net accumulated earnings of the investee. Otherwise, such distributions are considered returns of investment and are recorded as a reduction of the cost of the investment. Business Combinations The Company accounts for business combinations under the acquisition method of accounting in accordance with Accounting Standards Codification Topic 805, Business Combinations, which requires an allocation of the consideration we paid to the identifiable assets, intangible assets and liabilities based on the estimated fair values as of the closing date of the acquisition. The excess of the fair value of purchase price over the fair values of these identifiable assets, intangible assets and liabilities is recorded as goodwill. Goodwill Goodwill is the excess of the purchase price over the fair values of the identifiable net assets at the acquisition date. The Company tests goodwill for impairment at least annually and at the time of a triggering event requiring re-evaluation, if one were to occur. Goodwill is considered impaired when the estimated fair value of the reporting unit that was allocated the goodwill is less than its carrying value. If the estimated fair value of such reporting unit is less than its carrying value, goodwill impairment is recognized based on that difference, not to exceed the carrying amount of goodwill. A reporting unit is an operating segment or a component of an operating segment provided that the component constitutes a business for which discrete financial information is available and management regularly reviews the operating results of that component. Goodwill is allocated to the Company’s U.S. Business and European Business components. Effective January 1, 2020, for impairment testing purposes, these components are aggregated as a single reporting unit as they fall under the same operating segment and have similar economic characteristics. Previously, these components were tested separately for impairment when the Company was operating as more than one operating segment. Goodwill is assessed for impairment annually on November 30 th . When performing its goodwill impairment test, the Company considers a qualitative assessment, when appropriate, and a quantitative assessment using the market approach and its market capitalization when determining the fair value of the reporting unit. Intangible Assets Indefinite-lived intangible assets are tested for impairment at least annually and are also reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Indefinite-lived intangible assets are impaired if their estimated fair values are less than their carrying values. Finite-lived intangible assets, if any, are amortized over their estimated useful life, which is the period over which the assets are expected to contribute directly or indirectly to the future cash flows of the Company. These intangible assets are tested for impairment at the time of a triggering event, if one were to occur. Finite-lived intangible assets may be impaired when the estimated undiscounted future cash flows generated from the assets are less than their carrying amounts. The Company may rely on a qualitative assessment when performing its intangible asset impairment test. Otherwise, the impairment evaluation is performed at the lowest level of reasonably identifiable cash flows independent of other assets. The annual impairment testing date for all of the Company’s intangible assets is November 30 th . Leases Effective January 1, 2019, the Company accounts for its lease obligations in accordance with Accounting Standards Codification (“ASC”) Topic 842, Leases (ASC 842), which requires the recognition of both (i) a lease liability equal to the present value of the remaining lease payments and (ii) an offsetting right-of-use asset. The remaining lease payments are discounted using the rate implicit in the lease, if known, or otherwise the Company’s incremental borrowing rate. After lease commencement, right-of-use assets are assessed for impairment and otherwise are amortized over the remaining lease term on a straight-line basis. These recognition requirements are not applied to short-term leases which are those with a lease term of 12 months or less. Instead, lease payments associated with short-term leases are recognized as an expense on a straight-line basis over the lease term. F-15 Table of Contents ASC 842 also provides a practical expedient which allows for consideration in a contract to be accounted for as a single lease component rather than allocated between lease and non-lease components. The Company has elected to apply this practical expedient to all lease contracts, where applicable. Upon adoption of ASC 842 on January 1, 2019, the Company applied the transitional practical expedients to its outstanding leases and therefore the Company did not reassess (i) whether any expired or existing contracts are or contain leases; (ii) the lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. The Company also elected to apply the new lease requirements at the effective date, rather than the beginning of the earliest comparative period presented. Deferred Consideration – Gold Payments Deferred consideration represents the present value of an obligation to pay gold to a third party into perpetuity and is measured using forward-looking gold prices observed on the CMX exchange, a selected discount rate and perpetual growth rate (Note 12). Changes in the fair value of this obligation are reported as (loss)/gain on revaluation of deferred consideration – gold payments on the Company’s Consolidated Statements of Operations. Convertible Notes and Debt Convertible notes and debt are carried at amortized cost, net of discounts and issuance costs. The convertible notes are required to be separated into their liability and equity components by allocating the issuance proceeds to each of these components. The liability component for convertible instruments that qualify for a derivative scope exception (applicable to the convertible notes) is allocated proceeds equal to the estimated fair value of similar debt instruments without the conversion option. The difference between the gross proceeds received from the issuance of the convertible notes and the proceeds allocated to the liability component represents the residual amount that is recorded in additional paid-in capital. Interest expense is recognized using the effective interest method and includes amortization of discounts and debt issuance costs over the life of the debt. Contingencies The Company may be subject to reviews, inspections and investigations by regulatory authorities as well as legal proceedings arising in the ordinary course of business. The Company evaluates the likelihood of an unfavorable outcome of all legal or regulatory proceedings to which it is a party and accrues a loss contingency when the loss is probable and reasonably estimable. Earnings per Share Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Net income available to common stockholders represents net income of the Company reduced by an allocation of earnings to participating securities. The Series A non-voting convertible preferred stock (Note 15) and unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of EPS pursuant to the two-class method. Share-based payment awards that do not contain such rights are not deemed participating securities and are included in diluted shares outstanding (if dilutive). Diluted EPS is calculated under the treasury stock method and the two-class method. The calculation that results in the lowest diluted EPS amount for the common stock is reported in the Company’s consolidated financial statements. The treasury stock method includes the dilutive effect of potential common shares including unvested stock-based awards, the Series A non-voting convertible preferred stock and the convertible notes, if any. Potential common shares associated with the Series A non-voting convertible preferred stock and the convertible notes are computed under the if-converted method. Potential common shares associated with the conversion option embedded in the convertible notes are dilutive when the Company’s average stock price exceeds the conversion price. Income Taxes The Company accounts for income taxes using the liability method, which requires the determination of deferred tax assets and liabilities based on the differences between the financial and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more-likely-than-not that some portion or all the deferred tax assets will not be realized. Tax positions are evaluated utilizing a two-step process. The Company first determines whether any of its tax positions are more-likely-than-not to be sustained upon examination, based solely on the technical merits of the position. Once it is determined that a position meets this recognition threshold, the position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company records interest expense and penalties related to tax expenses as income tax expense. F-16 Table of Contents The Global Intangible Low-Taxed Income (“GILTI”) provisions of the Tax Reform Act requires the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. An accounting policy election is available to either account for the tax effects of GILTI in the period that is subject to such taxes or to provide deferred taxes for book and tax basis differences that upon reversal may be subject to such taxes. The Company accounts for the tax effects of these provisions in the period that is subject to such tax. Non-income based taxes are recorded as part of other liabilities and other expenses. Recently Issued Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt – Debt with Conversion and Other Options (ASU 2020-06). Under the ASU, the accounting for convertible instruments will be simplified by removing major separation models required under current GAAP. Accordingly, more convertible instruments will be reported as a single liability or equity with no separate accounting for embedded conversion features. Certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception will be removed and, as a result, more equity contracts will qualify for the scope exception. The ASU will also simplify the diluted earnings-per-share calculation in certain areas. The ASU will be effective for years beginning after December 31, 2021, including interim periods within those fiscal years. Early adoption is permitted for fiscal periods beginning after December 15, 2020 (including interim periods within the same fiscal year). The adoption of this ASU will result in a reduction of interest expense recognized on the Company’s convertible notes (Note 14) of approximately $ 420 per quarter. The Company expects to early adopt this ASU. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes (ASU 2019-12). The main objective of the standard is to reduce complexity in the accounting for income taxes by removing the following exceptions: (1) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items (for example, discontinued operations or other comprehensive income); (2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; (3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; and (4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The standard also simplifies the accounting for income taxes by enacting the following: (a) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount as a non-income-based tax; (b) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered as a separate transaction; (c) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements; and (d) requiring that an entity reflect the enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. ASU 2019-12 is effective for years beginning after December 15, 2020, including the interim periods within those reporting periods. Early adoption is permitted. The Company has determined that this standard will not have a material impact on its financial statements and has not early adopted this ASU. Recently Adopted Accounting Pronouncements On January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments (ASU 2016-13). The main objective of the standard is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. In issuing this standard, the FASB is responding to criticism that prior guidance delayed recognition of credit losses. The standard replaced the prior guidance’s “incurred loss” approach with an “expected loss” model. The new model, referred to as the current expected credit loss (“CECL”) model, applies to: (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. The standard is applicable to loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, loan commitments and certain other off-balance sheet credit exposures, debt securities (including those held-to-maturity) and other financial assets measured at fair value through other comprehensive income, and beneficial interests in securitized financial assets. The CECL model does not apply to AFS debt securities. For AFS debt securities with unrealized losses, entities measure credit losses in a manner similar to prior guidance, except that the credit losses are recognized as allowances rather than reductions in the amortized cost of the securities. Accordingly, the new methodology is utilized when assessing the Company’s financial instruments for impairment. As a result, entities recognize improvements to estimated credit losses immediately in earnings rather than as interest income over time. The ASU also simplified the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 also expanded the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for loan and lease losses. The adoption of this standard, which is applicable to the Company’s trade receivables, notes receivable and held-to-maturity securities, did not have a material impact on the Company’s consolidated financial statements. F-17 Table of Contents On January 1, 2020, the Company adopted ASU 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which modified the disclosure requirements on fair value measurements, including removing the requirement to disclose (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, (2) the policy for timing of transfers between levels and (3) the valuation processes for Level 3 fair value measurements. ASU 2018-13 also added new disclosures including the requirement to disclose (a) the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and (b) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This standard only impacted the disclosures pertaining to fair value measurements and were incorporated into the notes to the Company’s consolidated financial statements. 3. Acquisitions and Exit Activities Acquisition of ETFS On April 11, 2018, the Company acquired the European exchange-traded commodity, currency and leveraged-and-inverse business (“ETFS”) of ETFS Capital Limited (“ETFS Capital”) for a purchase price consisting of $ 253,000 in cash and a fixed number of shares of the Company’s capital stock, consisting of (i) 15,250,000 shares of common stock (the “Common Shares”) and (ii) 14,750 shares of Series A Non-Voting Convertible Preferred Stock (the “Preferred Shares”), which are convertible into an aggregate of 14,750,000 shares of common stock. The Company also assumed an obligation to pay deferred consideration into perpetuity (Note 12). This acquisition is referred to throughout the consolidated financial statements as the ETFS Acquisition. The Company’s Consolidated Statements of Operations include the following operating results of ETFS since the acquisition date of April 11, 2018 through December 31, 2018: Revenues: $ 55,882 Income before taxes: $ 23,197 (including a gain on revaluation of deferred consideration of $ 12,220 ) Supplemental Unaudited Pro Forma Financial Information Had the ETFS Acquisition been consummated on January 1, 2018, the Company’s revenues and net income for the year ended December 31, 2018 would have been $ 297,541 and $ 37,336 , respectively. This information was derived from the historical financial results of the Company and ETFS and was adjusted to give effect to pro forma events that are directly attributable to the acquisition, factually supportable and expected to have a continuing impact on the combined results following the acquisition. Significant adjustments to the unaudited pro forma financial information above include the recognition of interest expense arising from a borrowing to consummate the acquisition, eliminating acquisition-related costs directly attributable to the acquisition and adjusting consolidated income tax expense based upon the Company’s anticipated normalized consolidated effective tax rate. The unaudited pro forma financial information above is not necessarily indicative of what the combined results of the Company would have been had the acquisition been completed as of January 1, 2018 and does not purport to project the future results of the combined company. In addition, the unaudited pro forma financial information does not reflect any cost savings initiatives following the completion of the acquisition. Exit Activities The following table summarizes operating losses recognized by the Company’s wholly-owned subsidiaries that have either been sold or liquidated during reporting periods covered by its consolidated financial statements: Years Ended December 31, 2020 2019 2018 WTAMC $ 428 $ 2,786 $ 3,925 WisdomTree Japan Inc. (“WTJ”) (1) — 550 4,520 Total $ 428 $ 3,336 $ 8,445 (1) WTJ also recognized an impairment expense of $ 572 in connection with the termination of its office lease during the year ended December 31, 2019. F-18 Table of Contents Sale of Canadian ETF Business On February 19, 2020, the Company completed the sale of all the outstanding shares of WTAMC to CI Financial Corp. The Company received CDN $ 3,720 (USD $ 2,774 ) in cash at closing and will receive additional cash consideration of CDN $ 2,000 to $ 8,000 , depending on the achievement of certain AUM growth targets over the next three years . During the year ended December 31, 2020, the Company recognized a $ 2,877 gain on sale which was recorded in other gains and losses, net on the Consolidated Statements of Operations and represents the difference between the minimum cash consideration payable to the Company and the carrying value of WTAMC’s net assets upon disposition. Contingent payments, if any, are recognized by the Company when the contingency is resolved and the gain is realized. Restructuring of Distribution Strategy in Japan In July 2018, the Company determined to restructure its distribution strategy in Japan. As a result, WTJ ceased operations and was liquidated in September 2019. Acquisition and Disposition-Related Costs During the years ended December 31, 2020, 2019 and 2018, the Company incurred acquisition and disposition-related costs of $ 416 , $ 902 and $ 11,454 , respectively, in connection with the sale of WTAMC and the ETFS Acquisition. 4. Cash and Cash Equivalents Of the total cash and cash equivalents of $ 73,425 and $ 74,972 at December 31, 2020 and December 31, 2019, respectively, $ 70,911 and $ 72,120 were held at two financial institutions. At December 31, 2020 and December 31, 2019, cash equivalents were approximately $ 660 and $ 317 , respectively. Certain of the Company’s international subsidiaries are required to maintain a minimum level of regulatory capital, which was $ 10,745 and $ 12,312 at December 31, 2020 and December 31, 2019, respectively. These requirements are generally satisfied by cash on hand. In addition, the Company collateralized its U.S. office lease through a standby letter of credit totaling $ 1,384 which is restricted from further use. 5. Fair Value Measurements The fair value of financial instruments is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., “the exit price”) in an orderly transaction between market participants at the measurement date. ASC 820, Fair Value Measurement , establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs reflect assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the transparency of inputs as follows: Level 1 – Quoted prices for identical instruments in active markets. Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 – Instruments whose significant drivers are unobservable. The availability of observable inputs can vary from product to product and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by management in determining fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The tables below summarize the categorization of the Company’s assets and liabilities measured at fair value. During the years ended December 31, 2020 and 2019, there were no transfers between Levels 2 and 3. F-19 Table of Contents December 31, 2020 Total Level 1 Level 2 Level 3 Assets: Recurring fair value measurements: Cash equivalents $ 660 $ 660 $ — $ — Securities owned, at fair value ETFs 24,165 24,165 — — Pass-through GSEs 8,613 — 8,613 — Corporate bonds 2,117 — 2,117 — Total $ 35,555 $ 24,825 $ 10,730 $ — Non-recurring fair value measurements: AdvisorEngine Inc. (“AdvisorEngine”) – Financial interests (1) $ — $ — $ — $ — Thesys Group, Inc. (“Thesys”) – Series Y Preferred Stock (1) — — — — Total $ — $ — $ — $ — Liabilities: Recurring fair value measurements: Deferred consideration (Note 12) $ 230,137 $ — $ — $ 230,137 Non-recurring fair value measurements: Convertible notes (2) $ 170,191 $ — $ 170,191 $ — (1) The fair value of the AdvisorEngine financial interests of $ 9,592 was determined on May 4, 2020, the date in which these financial interests were sold (Note 8). Thesys was written down to zero on September 30, 2020 (Note 10). (2) Fair value of $ 145,847 and $ 24,344 determined on June 16, 2020 and August 13, 2020, respectively (Note 14). December 31, 2019 Total Level 1 Level 2 Level 3 Assets: Recurring fair value measurements: Cash equivalents $ 317 $ 317 $ — $ — Securities owned, at fair value ETFs 17,319 17,319 — — Total $ 17,636 $ 17,636 $ — $ — Non-recurring fair value measurements: AdvisorEngine Inc. – Financial interests (1) $ 28,172 — — $ 28,172 Liabilities: Recurring fair value measurements: Deferred consideration (Note 12) $ 173,024 $ — $ — $ 173,024 Securities sold, but not yet purchased 582 582 — — Total $ 173,606 $ 582 $ — $ 173,024 (1) Fair value determined on December 31, 2019 (Note 8). Recurring Fair Value Measurements—Methodology Cash Equivalents – These financial assets represent cash invested in highly liquid investments with original maturities of less than 90 days. These investments are valued at par, which approximates fair value, and are classified as Level 1 in the fair value hierarchy. Securities Owned/Sold but Not Yet Purchased – Securities owned and sold, but not yet purchased are investments in ETFs, pass-through GSEs and corporate bonds. ETFs are generally traded in active, quoted and highly liquid markets and are therefore classified as Level 1 in the fair value hierarchy. Pricing of pass-through GSEs and corporate bonds include consideration given to collateral characteristics and market assumptions related to yields, credit risk and prepayments and are therefore classified as Level 2 in the fair value hierarchy. F-20 Table of Contents Deferred Consideration (Note 12) – Deferred consideration represents the present value of an obligation to pay gold into perpetuity. The following table presents a reconciliation of beginning and ending balances of recurring fair value measurements classified as Level 3: Years Ended December 31, 2020 2019 Deferred consideration (Note 12) Beginning balance $ 173,024 $ 161,540 Net realized losses (1) 16,811 13,226 Net unrealized losses (2) 56,821 11,293 Settlements ( 16,519 ) ( 13,035 ) Ending balance $ 230,137 $ 173,024 (1) Recorded as contractual gold payments expense on the Company’s Consolidated Statements of Operations. (2) Recorded as loss on revaluation of deferred consideration – gold payments on the Company’s Consolidated Statements of Operations. 6. Securities Owned/Sold but Not Yet Purchased These securities consist of the following: December 31, 2020 December 31, 2019 Securities Owned Trading securities $ 34,895 $ 17,319 Securities Sold, but not yet Purchased Trading securities $ — $ 582 Trading losses for securities owned and securities sold, but not yet purchased still held at December 31, 2020 and December 31, 2019 were $ 59 and $ 43 , respectively, which were recognized in other gains and losses, net, in the Consolidated Statements of Operations. The Company had no AFS debt securities at December 31, 2020 and December 31, 2019. During the year ended December 31, 2018, the Company received $ 64,498 of proceeds from the sale and maturity of available-for-sale securities and recognized gross realized losses of $ 739 . Those losses were reclassified out of accumulated other comprehensive income and into the Consolidated Statements of Operations. 7. Securities Held-to-Maturity The following table is a summary of the Company’s securities held-to-maturity: December 31, 2020 December 31, 2019 Debt instruments: Pass-through GSEs (amortized cost) $ 451 $ 16,863 During the years ended December 31, 2020 and 2019, the Company received proceeds of $ 16,488 and $ 3,244 , respectively, from held-to-maturity securities maturing or being called prior to maturity. The following table summarizes unrealized gains, losses, and fair value (classified as Level 2 within the fair value hierarchy) of securities held-to-maturity: F- 2 1 Table of Contents December 31, 2020 2019 Cost/amortized cost $ 451 $ 16,863 Gross unrealized gains 30 38 Gross unrealized losses ( 12 ) ( 297 ) Fair value $ 469 $ 16,604 An allowance for credit losses was not provided on the Company’s held-to-maturity securities as all securities are investments in pass-through GSEs which are determined to have an estimated loss rate of zero due to an implicit U.S. government guarantee. In addition, no securities were determined to be other-than-temporarily impaired at December 31, 2019. The following table sets forth the maturity profile of the securities held-to-maturity; however, these securities may be called prior to maturity date: December 31, 2020 2019 Due within one year $ — $ — Due one year through five years — 2,000 Due five years through ten years — 7,494 Due over ten years 451 7,369 Total $ 451 $ 16,863 8. AdvisorEngine Inc. – Sale of Financial Interests On May 4, 2020, the Company closed a transaction to exit its investment in AdvisorEngine . The fair value of upfront consideration paid to the Company was $ 9,592 . Consideration also includes contingent payments totaling up to $ 10,408 which will be payable only upon AdvisorEngine achieving certain revenue milestones during the first through fourth anniversaries of such exit. The fair value of the contingent payments was determined to be insignificant at closing and was measured using a Monte-Carlo simulation whereby forecasted revenue assumed during the first, second, third and fourth years was simulated forward in a risk-neutral framework to determine whether the revenues would exceed the pre-defined revenue targets. The table below presents the range and weighted averages of significant unobservable inputs utilized in the Monte-Carlo simulation (classified as Level 3 in the fair value hierarchy): Unobservable Inputs (Initial Recognition – May 4, 2020) Forecasted revenue simulated forward as a percentage of the pre-defined revenue targets 34 % - 71 % ( 47 % weighted average) Revenue volatility 25 % The weighted-average forecasted revenue simulated forward as a percentage of the pre-defined revenue targets represents the arithmetic average of the percentages for each of the four years. An increase in the forecasted revenue percentages and revenue volatility input would result in a higher fair value. The contingent payments are subsequently remeasured when the contingency is resolved and the gain is realized. Summarized below are the financial interests previously held: December 31, 2020 December 31, 2019 Amortized Cost, plus Accrued Interest Net Carrying Value Amortized Cost, plus Accrued Interest Net Carrying Value Unsecured convertible note $ — $ — $ 2,126 $ 2,126 Unsecured non-convertible note — — 31,184 26,046 Subtotal—Notes receivable — — 33,310 28,172 Preferred stock — — 25,000 — Total $ — $ — $ 58,310 $ 28,172 (1) F-22 Table of Contents (1) Net of an impairment of $ 30,138 at December 31, 2019, which was determined based upon that status of the sale negotiations at the time. During the year ended December 31, 2020, the Company adjusted the carrying value of its financial interests by recording an impairment of $ 19,672 on its notes receivable and subsequently recognized a gain of $ 1,093 arising from an adjustment to the estimated fair value of consideration received . These fair value adjustments recognized during the year ended December 31, 2020 were based upon the final sale terms as disclosed above. The gain was included in other gains and losses, net on the Consolidated Statements of Operations. 9. Notes Receivable On May 4, 2020, the Company closed a transaction to exit its investment in AdvisorEngine. See Note 8 for additional information. Accrued Interest Effective January 1, 2020, notes receivable were placed on non-accrual status. During the years ended December 31, 2020 and 2019, the Company recognized interest income of $ 0 and $ 2,498 , respectively. 10. Investments The following table sets forth the Company’s investments: December 31, 2020 December 31, 2019 Securrency, Inc. – Preferred stock $ 8,112 $ 8,112 Thesys – Preferred stock — 3,080 Total $ 8,112 $ 11,192 Securrency, Inc. – Preferred Stock On December 27, 2019, the Company made a $ 8,112 strategic investment in Securrency, Inc. (“Securrency”), a leading developer of institutional-grade blockchain-based financial and regulatory technology. In consideration of its investment, the Company received 5,178,488 shares of Series A convertible preferred stock representing approximately 25 % ownership of Securrency (or approximately 20 % on a fully diluted basis). The shares of Series A preferred stock are convertible into common stock at the option of the Company and contain various rights and protections including a non-cumulative 6.0 % dividend, payable if and when declared by the board of directors of Securrency, and a liquidation preference that is senior to the holders of common stock. In addition, the Company has redemption rights which provide that, at any time on or after December 31, 2029, upon approval by holders of at least 60 % of the Series A preferred stock then outstanding, Securrency will be required to redeem all of the outstanding shares of Series A preferred stock for the original issue price thereof, plus all declared and unpaid dividends. The investment is accounted for under the measurement alternative prescribed within ASU 2016-01, as it does not have a readily determinable fair value and is not considered to be in-substance common stock. The investment is assessed for impairment and similar observable transactions on a quarterly basis. There was no impairment recognized during the year ended December 31, 2020 based upon a qualitative assessment. In addition, there were no observable price changes during the reporting period. Thesys On June 20, 2017, the Company was issued 7,797,533 newly authorized shares of Series Y preferred stock (“Series Y Preferred”) of Thesys in connection with the resolution of a dispute related to the Company’s ownership stake in Thesys. The Series Y Preferred represents current ownership of approximately 19 % of Thesys on a fully diluted basis . The Series Y Preferred is accounted for under the measurement alternative prescribed within ASU 2016-01 as it does not have a readily determinable fair value and is not considered to be in-substance common stock. The investment is assessed for impairment and similar observable transactions on a quarterly basis. During the year ended December 31, 2020, the Company recognized an impairment of $ 3,080 on its Series Y Preferred as Thesys has underperformed financially when assessed against prior expectations. The carrying value of the Series Y Preferred was $ 0 and $ 3,080 at December 31, 2020 and December 31, 2019, respectively. F-2 3 Table of Contents 11. Fixed Assets, net The following table summarizes fixed assets: December 31, 2020 2019 Equipment $ 2,836 $ 2,330 Furniture and fixtures 2,225 2,218 Leasehold improvements 11,012 10,989 Less: accumulated depreciation and amortization ( 8,494 ) ( 7,410 ) Total $ 7,579 $ 8,127 12. Deferred Consideration Deferred consideration represents an obligation the Company assumed in connection with the ETFS Acquisition. The obligation is for fixed payments to ETFS Capital of physical gold bullion equating to 9,500 ounces of gold per year through March 31, 2058 and then subsequently reduced to 6,333 ounces of gold continuing into perpetuity (“Contractual Gold Payments”). The Contractual Gold Payments are paid from advisory fee income generated by any Company-sponsored financial product backed by physical gold and are subject to adjustment and reduction for declines in advisory fee income generated by such products, with any reduction remaining due and payable until paid in full. ETFS Capital’s recourse is limited to such advisory fee income and it has no recourse back to the Company for any unpaid amounts that exceed advisory fees earned. ETFS Capital ultimately has the right to claw back Gold Bullion Securities Ltd. (a physically backed gold ETP issuer) if the Company fails to remit any amounts due. The Company determined the present value of the deferred consideration of $ 230,137 and $ 173,024 at December 31, 2020 and December 31, 2019 using the following assumptions: December 31, 2020 December 31, 2019 Forward-looking gold price (low) – per ounce $ 1,903 $ 1,535 Forward-looking gold price (high) – per ounce $ 2,662 $ 2,328 Forward-looking gold price (weighted average) – per ounce $ 2,117 $ 1,757 Discount rate 9.0 % 10.0 % Perpetual growth rate 0.9 % 1.5 % The forward-looking gold prices at December 31, 2020 were extrapolated from the last observable CMX exchange price (beyond 2026) and the weighted-average price per ounce was derived from the relative present values of the annual payment obligations. The perpetual growth rate was determined based upon the increases in observable forward-looking gold prices through 2026. This obligation is classified as Level 3 as the discount rate and extrapolated forward-looking gold prices are significant unobservable inputs. An increase in forward-looking gold prices and the perpetual growth rate would result in an increase in deferred consideration, whereas an increase in the discount rate would reduce the fair value. Current amounts payable were $ 17,374 and $ 13,953 and long-term amounts payable were $ 212,763 and $ 159,071 , respectively, at December 31, 2020 and December 31, 2019, respectively. During the years ended December 31, 2020 and 2019, the Company recognized the following in respect of deferred consideration: Years Ended December 31, 2020 2019 Contractual Gold Payments $ 16,811 $ 13,226 Contractual Gold Payments – gold ounces paid 9,500 9,500 Loss on revaluation of deferred consideration – gold payments (1) $ ( 56,821 ) $ ( 11,293 ) (1) Losses arise due to increases in the forward-looking price of gold and the magnitude of any loss is highly correlated to the magnitude of the change in the forward-looking price of gold. In addition, losses arise due to increases in the perpetual growth rate and a reduction in the discount rate used to compute the present value of the annual payment obligations. F- 2 4 Table of Contents 13. Credit Facility The following table provides a summary of the Company’s outstanding borrowings under its credit facility: December 31, 2020 December 31, 2019 Term Loan Revolver Term Loan Revolver Amount borrowed $ 179,000 $ — $ 200,000 $ — Amounts repaid ( 179,000 ) — ( 21,000 ) — Amounts outstanding — — 179,000 — Unamortized issuance costs — — ( 3,044 ) 671 Carrying amount $ — $ — $ 175,956 $ 671 Effective interest rate 4.15 % n/a 5.32 % n/a On June 16, 2020, the Company terminated its credit facility by repaying all amounts outstanding under its term loan and terminating the revolver. A loss on extinguishment of debt of $ 2,387 was recognized which represented the write-off of the remaining unamortized issuance costs. Interest expense recognized on the credit facility during the years ended December 31, 2020 and 2019 was $ 4,086 and $ 11,240 , respectively. The fair value of the Company’s debt (classified as Level 2 within the fair value hierarchy) was $ 176,986 at December 31, 2019. 14. Convertible Notes On August 13, 2020, the Company issued and sold $ 25,000 in aggregate principal amount of 4.25 % Convertible Senior Notes due 2023 (the “Additional Notes”) pursuant to an Indenture (the “Indenture”), dated June 16, 2020, between the Company and U.S. Bank National Association, as trustee (the “Trustee”), in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The Additional Notes were issued at a price equal to 101% of the principal amount thereof, plus interest deemed to have accrued since June 16, 2020, and constitute a further issuance of, and form a single series with, the Company’s outstanding 4.25 % Convertible Senior Notes due 2023 issued on June 16, 2020 in the aggregate principal amount of $ 150,000 (the “Existing Notes” and together with the Additional Notes, the “Convertible Notes”). After the issuance of the Additional Notes, the Company had $ 175,000 aggregate principal amount of Convertible Notes outstanding. The Company used approximately $ 28,297 of the net proceeds from the issuance of the Convertible Notes to repurchase 7,487,335 shares of the Company’s common stock at an average price of $ 3.78 per share. Key terms of the Convertible Notes are as follows: • Maturity date : June 15, 2023 , unless earlier converted, repurchased or redeemed. • Interest rate of 4.25 % : Payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020. • Conversion price of $5.92 : Convertible at an initial conversion rate of 168.9189 shares of the Company’s common stock, per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $ 5.92 per share ) . • Conversion : Holders may convert at their option at any time prior to the close of business on the business day immediately preceding March 15, 2023 only under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on September 30, 2020, if the last reported sale price of the Company’s common stock for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sales price of the Company’s common stock and the conversion rate on each such trading day; (iii) upon a notice of redemption delivered by the Company in accordance with the terms in the Indenture but only with respect to the Convertible Notes called (or deemed called) for redemption; or (iv) upon the occurrence of specified corporate events. On or after March 15, 2023 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Convertible Notes at any time, regardless of the foregoing circumstances. • Cash settlement of principal amount : Upon conversion, the Company will pay cash up to the aggregate principal amount of the Convertible Notes to be converted. At its election, the Company will also settle its conversion obligation in excess of the aggregate principal amount to the Convertible Notes being converted in either cash, shares of its common stock or a combination of cash and shares of its common stock. F- 25 Table of Contents • Redemption price of $ 7 . 70 : The Company may redeem for cash all or any portion of the notes, at its option, on or after June 20, 2021 and on or prior to the 55 th scheduled trading day immediately preceding the maturity date, if the last reported sale price of the Company’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days, including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100 % of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding the redemption date. No sinking fund is provided for the Convertible Notes. • Limited investor put rights : Holders of the Convertible Notes have the right to require the Company to repurchase for cash all or a portion of their notes at 100 % of their principal amount, plus any accrued and unpaid interest, upon the occurrence of certain change of control transactions or liquidation, dissolution or common stock delisting events. • Conversion rate increase in certain customary circumstances : In certain circumstances, conversions in connection with a “make-whole fundamental change” (as defined in the Indenture) or conversions of Convertible Notes called (or deemed called) for redemption may result in an increase to the conversion rate, provided that the conversion rate will not exceed 270.2702 shares of the Company’s common stock per $ 1,000 principal amount of the Convertible Notes (the equivalent of 47,297,285 shares of the Company’s common stock), subject to adjustment. • Seniority and Security : The Convertible Notes are the Company’s senior unsecured obligations, but are subordinated in right of payment to the Company’s obligations to make certain redemption payments (if and when due) in respect of its Series A Non-Voting Convertible Preferred Stock (Note 15). The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25 % in aggregate principal amount of the Convertible Notes outstanding may declare the entire principal amount of all the Convertible Notes to be repurchased, plus any accrued special interest, if any, to be immediately due and payable. The following table provides a summary of the carrying value of the Convertible Notes at December 31, 2020: Total Additional Notes Existing Notes Principal amount $ 175,000 $ 25,000 $ 150,000 Plus: Premium on Additional Notes 250 250 — Gross proceeds 175,250 25,250 150,000 Less: Unamortized discount and issuance costs (1) ( 8,604 ) ( 1,490 ) ( 7,114 ) Carrying amount $ 166,646 $ 23,760 $ 142,886 Effective interest rate (2) 6.29 % 6.37 % 6.28 % (1) The discount arose from the bifurcation of the conversion option. The unamortized discount and issuance costs are reported net of the unamortized premium on the Additional Notes. (2) Includes amortization of the discount arising from the bifurcation of the conversion option, amortization of the issuance costs allocated to the Convertible Notes and amortization of the premium associated with the Additional Notes. Convertible instruments are required to be separated into their liability and equity components by allocating the issuance proceeds to each of those components. The liability component for convertible instruments that qualify for a derivative scope exception (applicable to the Convertible Notes) is allocated proceeds equal to the estimated fair value of similar debt without the conversion option. The difference between the gross proceeds received from the issuance of the Convertible Notes and the proceeds allocated to the liability component represents the residual amount that is recorded in additional paid-in capital. The discount arising from the recognition of this residual amount is amortized as interest expense over the life of the Convertible Notes. The Company estimated the fair value of the liability component of the Convertible Notes to be $ 170,191 , which represents the present value of the future contractual payments, discounted using the Company’s estimated nonconvertible debt borrowing rate of 5.33 % (classified as level 2 in the fair value hierarchy) on the pricing date. The excess of the gross proceeds received over the estimated fair value of the liability component totaling $ 5,059 ($ 906 and $ 4,153 for the Additional Notes and Existing Notes, respectively) was allocated to the conversion option (along with a proportional share of issuance costs totaling $ 157 ) and was recorded in additional paid-in capital, net of deferred taxes. F-2 6 Table of Contents Interest expense recognized during the year ended December 31, 2020 was $ 5,582 . Interest payable of $ 342 at December 31, 2020 is included in accounts payable and other liabilities on the Consolidated Balance Sheets. The fair value of the Convertible Notes (classified as Level 2 in the fair value hierarchy) was $ 198,968 at December 31, 2020. The if-converted value of the Convertible Notes did not exceed the principal amount at December 31, 2020. 15. Preferred Shares On April 10, 2018, the Company filed a Certificate of Designations of Series A Non-Voting Convertible Preferred Stock with the Secretary of State of the State of Delaware establishing the rights, preferences, privileges, qualifications, restrictions, and limitations relating to the Preferred Shares (defined below). The Preferred Shares are intended to provide ETFS Capital with economic rights equivalent to the Company’s common stock on an as-converted basis. The Preferred Shares have no voting rights, are not transferable and have the same priority with regard to dividends, distributions and payments as the common stock. As described in the Certificate of Designations, the Company will not issue, and ETFS Capital does not have the right to require the Company to issue, any shares of common stock upon conversion of the Preferred Shares, if, as a result of such conversion, ETFS Capital (together with certain attribution parties) would beneficially own more than 9.99% of the Company’s outstanding common stock immediately after giving effect to such conversion. In connection with the completion of the ETFS Acquisition, the Company issued 14,750 shares of Series A Non-Voting Convertible Preferred Stock (the “Preferred Shares”), which are convertible into an aggregate of 14,750,000 shares of common stock. The fair value of this consideration was $ 132,750 , based on the closing price of the Company’s common stock on April 10, 2018 of $ 9.00 per share, the trading day prior to the closing of the acquisition. The following is a summary of the Preferred Share balance: December 31, 2020 December 31, 2019 Issuance of Preferred Shares $ 132,750 $ 132,750 Less: Issuance costs ( 181 ) ( 181 ) Preferred Shares – carrying value $ 132,569 $ 132,569 Temporary equity classification is required for redeemable instruments for which redemption triggers are outside of the issuer’s control. ETFS Capital has the right to redeem all the Preferred Shares specified to be converted during the period of time specified in the Certificate of Designations in the event that: (a) the number of shares of the Company’s common stock authorized by its certificate of incorporation is insufficient to permit the Company to convert all of the Preferred Shares requested by ETFS Capital to be converted; or (b) ETFS Capital does not, upon completion of a change of control of the Company, receive the same amount per Preferred Share as it would have received had each outstanding Preferred Share been converted into common stock immediately prior to the change of control. However, the Company will not be obligated to make any such redemption payments to the extent such payments would be a breach of any covenant or obligation the Company owes to any of its secured creditors or is otherwise prohibited by applicable law. Any such redemption will be at a price per Preferred Share equal to the dollar volume-weighted average price for a share of common stock for the 30-trading day period ending on the date of such attempted conversion or change of control, as applicable, multiplied by 1,000. Such redemption payment will be made in one payment no later than 10 business days following the last day of the Company’s first fiscal quarter that begins on a date following the date ETFS Capital exercises such redemption right. The redemption value of the Preferred Shares was $ 72,667 and $ 71,630 at December 31, 2020 and December 31, 2019, respectively. The carrying amount of the Preferred Shares was not adjusted as it was not probable that the Preferred Shares would become redeemable. 16. Leases The Company has entered into operating leases for its corporate headquarters and other office facilities, financial data terminals and equipment. The Company has no finance leases. The following table provides additional information regarding the Company’s leases: Years Ended December 31, 2020 2019 Lease cost: Operating lease cost $ 3,182 $ 3,174 Short-term lease cost 1,227 1,426 Total lease cost $ 4,409 $ 4,600 F-2 7 Table of Contents Years Ended December 31, 2020 2019 Other information: Cash paid for amounts included in the measurement of operating liabilities (operating leases) $ 3,517 $ 3,587 Right-of-use assets obtained in exchange for new operating lease liabilities n/a n/a Weighted-average remaining lease term (in years) – operating leases 8.6 9.4 Weighted-average discount rate – operating leases 6.3 % 6.3 % None of the Company’s leases include variable payments, residual value guarantees or any restrictions or covenants relating to the Company’s ability to pay dividends or incur additional financing obligations. The Company’s lease of its headquarters, which expires on August 20, 2029, includes an option to extend for an additional five years. Rent payable under the option is equal to the fair market rent of the premises as determined by the landlord approximately six months prior to the commencement of the extension term. The lease also includes a cancellation option which is effective on August 21, 2024 and requires notice to be provided to the landlord at least 12 months prior. Triggering this option requires a cancellation payment of $ 4,236 . The cancellation and extension options were not reasonably certain of being exercised and were therefore not recognized as part of the right-of-use asset and lease liability. Other leases also include extension, automatic renewal and termination provisions. These provisions were also not reasonably certain of being exercised and were therefore not recognized as part of the right-of-use asset and lease liability. The following table discloses future minimum lease payments at December 31, 2020 with respect to the Company’s operating lease liabilities: 2021 $ 3,135 2022 2,958 2023 2,958 2024 3,037 2025 3,148 2026 and thereafter 11,457 Total future minimum lease payments (undiscounted) $ 26,693 The following table reconciles the future minimum lease payments (disclosed above) at December 31, 2020 to the operating lease liabilities recognized in the Company’s Consolidated Balance Sheet: Amounts recognized in the Company’s Consolidated Balance Sheet Lease liability – short term $ 3,135 Lease liability – long term 17,434 Subtotal 20,569 Difference between undiscounted and discounted cash flows 6,124 Total future minimum lease payments (undiscounted) $ 26,693 17. Contingencies The Company may be subject to reviews, inspections and investigations by regulatory authorities as well as legal proceedings arising in the ordinary course of business. Closure of the WisdomTree WTI Crude Oil 3x Daily Leveraged ETP In December 2020, WMAI, WTMAML, WTUK and WisdomTree Ireland Limited were served with a writ of summons to appear before the Court of Milan, Italy, and in January 2021, WTUK was served with a writ of summons to appear before the Court of Udine, Italy. Investors had filed actions seeking approximately € 9,000 ($ 11,056 ), in the aggregate, resulting from the closure of the WisdomTree WTI Crude Oil 3x Daily Leveraged ETP (“3OIL”) in March 2020. The product was dependent on the receipt of payments from a swap provider to satisfy payment obligations to the investors. Due to an extreme adverse move in oil futures relative to the oil futures’ closing price, the swap contract underlying 3OIL was terminated by the swap provider, which resulted in the compulsory redemption of 3OIL, all in accordance with the prospectus. F-2 8 Table of Contents The Company is currently assessing these claims and an accrual has not been made with respect to these matters at December 31, 2020. 18. Variable Interest Entities VIEs are entities with any of the following characteristics: (i) the entity does not have enough equity to finance its activities without additional financial support; (ii) the equity holders, as a group, lack the characteristics of a controlling financial interest; or (iii) the entity is structured with non-substantive voting rights. Consolidation of a VIE is required for the party deemed to be the primary beneficiary, if any. The primary beneficiary is the party who has both (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity. The Company is not the primary beneficiary of any entities in which it has a variable interest as it does not have the power to direct the activities that most significantly impact the entities’ economic performance. Such power is conveyed through the entities’ boards of directors and the Company does not have control over the boards. The following table presents information about the Company’s variable interests in non-consolidated VIEs: December 31, 2020 December 31, 2019 Carrying Amount – Assets (Securrency) Preferred stock (Note 10) $ 8,112 $ 8,112 Carrying Amount – Assets (AdvisorEngine) Unsecured convertible notes receivable — $ 2,126 Unsecured non-convertible note receivable — 26,046 Preferred stock — — Total carrying amount (Note 8) $ — $ 28,172 Total carrying amount – Assets $ 8,112 $ 36,284 Maximum exposure to loss $ 8,112 $ 36,284 19. Revenues from Contracts with Customers The following table presents the Company’s total revenues from contracts with customers: Years Ended December 31, 2020 2019 Revenues from contracts with customers: Advisory fees $ 250,182 $ 265,652 Other 3,517 2,751 Total operating revenues $ 253,699 $ 268,403 The Company recognizes revenues from contracts with customers when the performance obligation is satisfied, which is when the promised goods or services are transferred to the customer. A good or service is considered to be transferred when the customer obtains control, which is represented by the transfer of rights with regard to the good or service. Transfer of control happens either over time or at a point in time. When a performance obligation is satisfied over time, an entity is required to select a single method of measuring progress for each performance obligation that depicts the entity’s performance in transferring control of goods or services to the customer. Substantially all the Company’s revenues from contracts with customers are derived primarily from investment advisory agreements with related parties (Note 20). These advisory fees are recognized over time, are earned from the Company’s ETPs and are calculated based on a percentage of the ETPs’ average daily net assets. There is no significant judgment in calculating amounts due which are invoiced monthly in arrears and are not subject to any potential reversal. Progress is measured using the practical expedient under the output method resulting in the recognition of revenue in the amount for which the Company has a right to invoice. F-29 Table of Contents There are no contract assets or liabilities that arise in connection with the recognition of advisory fee revenue. In addition, there are no costs incurred to obtain or fulfill the contracts with customers, all of which are investment advisory agreements with related parties. Geographic Distribution of Revenue The following table presents the Company’s total revenues geographically as determined by where the respective management companies reside: Years Ended December 31, 2020 2019 Revenues from contracts with customers: United States $ 142,074 $ 170,827 Jersey 106,848 90,422 Ireland 4,412 4,714 Canada (Note 3) 365 2,440 Total operating revenues $ 253,699 $ 268,403 20. Related Party Transactions The Company’s revenues are derived primarily from investment advisory agreements with related parties. Under these agreements, the Company has licensed to related parties the use of certain of its own indexes for the U.S. WisdomTree ETFs and WisdomTree UCITS ETFs. The Board of Trustees and Board of Directors (including certain officers of the Company) of the related parties are primarily responsible for overseeing the management and affairs of the entities for the benefit of their stakeholders and have contracted with the Company to provide for general management and administration services. The Company is also responsible for certain expenses of the related parties, including the cost of transfer agency, custody, fund administration and accounting, legal, audit, and other non-distribution services, excluding extraordinary expenses, taxes and certain other expenses, which is included in fund management and administration on the Company’s Consolidated Statements of Operations. In exchange, the Company receives fees based on a percentage of the ETPs’ average daily net assets. A majority of the independent members of the Board of Trustees are required to annually approve the advisory agreements of the U.S. ETFs and these agreements may be terminated by the Board of Trustees upon notice. The following table summarizes accounts receivable from related parties which are included as a component of accounts receivable on the Company’s Consolidated Balance Sheets: December 31, 2020 2019 Receivable from WTT $ 13,030 $ 14,765 Receivable from ManJer Issuers 11,693 9,036 Receivable from WMAI and WTI 2,125 1,559 Receivable from WTCS 36 80 Receivable from WTAMC (Note 3) — 227 Total $ 26,884 $ 25,667 The allowance for credit losses on accounts receivable from related parties is insignificant when applying historical loss rates, adjusted for current conditions and supportable forecasts, to the amounts outstanding in the table above. Amounts outstanding are all invoiced in arrears, are less than 30 days aged and are collected shortly after the applicable reporting period. The following table summarizes revenues from advisory services provided to related parties: Years Ended December 31, 2020 2019 2018 Advisory services provided to WTT $ 141,079 $ 169,483 $ 203,031 Advisory services provided to ManJer Issuers 97,986 82,224 54,601 Advisory services provided to WMAI and WTI 10,124 10,499 10,448 Advisory services provided to WTCS 628 1,006 1,267 Advisory services provided to WTAMC 365 2,440 1,757 Total $ 250,182 $ 265,652 $ 271,104 F-30 Table of Contents The Company also has investments in certain WisdomTree ETFs of approximately $ 23,932 and $ 16,886 at December 31, 2020 and December 31, 2019, respectively. Gains and losses related to trading WisdomTree ETFs during the years ended December 31, 2020, 2019 and 2018 were a gain of $ 63 , a gain of $ 40 and a loss of ($ 406 ), respectively, from these investments which are recorded in other gains and losses, net on the Consolidated Statements of Operations. 21. Stock-Based Awards On June 20, 2016, the Company’s stockholders approved a new equity award plan under which the Company can issue up to 10,000,000 shares of common stock (less one share for every share granted under prior plans since March 31, 2016 and inclusive of shares available under the prior plans as of March 31, 2016) in the form of stock options and other stock-based awards. The Company grants equity awards to employees and directors which include restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”) and stock options. Certain awards described below are subject to acceleration under certain conditions. Stock options: Generally issued for terms of ten years and may vest after at least one year of service and have an exercise price equal to the Company’s stock price on the grant date. The Company estimates the fair value of stock options (when granted) using the Black-Scholes option pricing model. RSAs/RSUs: Awards are valued based on the Company’s stock price on grant date and generally vest ratably over three years. PRSUs: These awards cliff vest three years from the grant date and contain a market condition whereby the number of PRSUs ultimately vesting is tied to how the Company’s total shareholder return (“TSR”) compares to a peer group of other publicly traded asset managers over the three-year period. A Monte Carlo simulation is used to value these awards. The number of PRSUs vesting ranges from 0 % to 200 % of the target number of PRSUs granted, as follows: •  If the relative TSR is below the 25 th percentile, then 0 % of the target number of PRSUs granted will vest; •  If the relative TSR is at the 25 th percentile, then 50 % of the target number of PRSUs granted will vest; and •  If the relative TSR is above the 25 th percentile, then linear scaling is applied such that the percent of the target number of PRSUs vesting is 100 % at the 50 th percentile and capped at 200 % of the target number of PRSUs granted for performance at the 100 th percentile. During the years ended December 31, 2020, 2019 and 2018, total stock-based compensation expense was $ 11,706 , $ 11,590 and $ 13,255 , respectively, and the related tax benefit recognized on the Consolidated Statements of Operations was $ 2,739 , $ 2,791 and $ 3,015 , respectively. The actual tax benefit realized for the tax deductions for share-based compensation was $ 833 , $ 1,649 and $ 2,364 during the years ended December 31, 2020, 2019 and 2018, respectively. A summary of unrecognized stock-based compensation expense and average remaining vesting period is as follows: December 31, 2020 Unrecognized Stock- Based Compensation Weighted-Average Remaining Vesting Period (Years) Employees and directors $ 9,776 1.28 Stock Options A summary of option activity is as follows: Options Weighted-Average Exercise Price Outstanding January 1, 2018 1,158,828 $ 2.75 Granted — — Forfeitures/expirations — — Exercised ( 588,291 ) 1.19 Outstanding at December 31, 2018 570,537 $ 4.36 Granted — — Forfeitures/expirations ( 1 ) 6.50 Exercised ( 85,000 ) 0.70 F-31 Table of Contents Options Weighted-Average Exercise Price Outstanding at December 31, 2019 485,536 $ 4.80 Granted — — Forfeitures/expirations ( 63,536 ) 2.49 Exercised ( 117,000 ) 4.81 Outstanding at December 31, 2020 (1) 305,000 $ 5.68 (1) Expire on dates ranging from January 26, 2021 to November 15, 2021 . The total intrinsic value of options exercised during the years ended December 31, 2020, 2019 and 2018 was $ 168 , $ 301 and $ 4,218 , respectively. Cash received from option exercises during the years ended December 31, 2020, 2019 and 2018 was $ 292 , $ 160 and $ 191 , respectively. The following table summarizes information on stock options outstanding and exercisable at December 31, 2020: Options Outstanding and Exercisable Range of Exercise Prices Shares Weighted- Average Remaining Life (Years) Weighted- Average Exercise Price $ 5.05 190,000 0.1 $ 5.05 $ 6.42 – $ 6.82 67,500 0.4 6.47 $ 7.01 – $ 7.30 47,500 0.8 7.07 305,000 0.3 $ 5.68 At December 31, 20 2 0, outstanding options for 305,000 shares (all of which were exercisable) had a remaining weighted-average contractual term of 0.3 years and an intrinsic value of $ 57 . RSAs, RSUs and PRSUs The aggregate fair value of RSAs, RSUs and PRSUs that vested during the years ended December 31, 2020, 2019 and 2018 was $ 4,783 , $ 6,720 and $ 5,975 , respectively. A summary of activity is as follows: RSAs RSUs PRSUs (1) Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Unvested Balance at January 1, 2018 1,816,666 $ 11.75 5,678 $ 10.40 — $ — Granted 903,231 11.77 7,152 12.21 — — Vested ( 618,516 ) 12.67 ( 1,890 ) 10.40 — — Forfeited ( 144,279 ) 11.83 ( 1,446 ) 11.97 — — Unvested Balance at December 31, 2018 1,957,102 $ 11.47 9,494 $ 11.52 — $ — Granted 2,794,703 6.16 35,283 6.45 270,872 (2) 6.24 Vested ( 1,053,980 ) 11.25 ( 5,499 ) 9.85 — — Forfeited ( 453,267 ) 9.09 — — ( 38,262 ) 6.24 Unvested Balance at December 31, 2019 3,244,558 $ 7.29 39,278 $ 7.20 232,610 $ 6.24 Granted 1,653,186 3.80 32,901 3.82 117,013 (2) 3.11 Vested ( 1,206,879 ) 8.13 ( 27,130 ) 7.45 — — Forfeited ( 110,122 ) 4.79 ( 5,641 ) 5.39 ( 8,311 ) 6.24 Unvested Balance at December 31, 2020 3,580,743 $ 5.38 39,408 $ 4.46 341,312 $ 5.17 (1) Represents the target number of PRSUs granted and outstanding. The number of PRSUs that ultimately vest ranges from 0 % to 200 % of this amount. F-32 Table of Contents (2) A Monte Carlo simulation was used to value these awards using the following assumptions for the Company and the peer group: (i) beginning 90-day average stock prices; (ii) valuation date stock prices; (iii) correlation coefficients based upon the price data used to calculate the historical volatilities; and (iv) the following additional assumptions: Granted in 2020 Granted in 2019 Historical stock price volatility (low) 21 % 22 % Historical stock price volatility (high) 36 % 42 % Historical stock price volatility (average) 26 % 28 % Risk free interest rate 1.47 % 2.56 % Expected dividend yield 0.0 % 0.0 % 22. Employee Benefit Plans The Company has a 401(k) savings plan covering all eligible employees in which the Company can make discretionary contributions from its profits. The amounts included in the table below are recorded in compensation expense in the Consolidated Statements of Operations. A summary of discretionary contributions made by the Company is as follows: Years Ended December 31, 2020 2019 2018 $ 974 $ 966 $ 1,051 23. Earnings Per Share The following tables set forth reconciliations of the basic and diluted earnings per share computations for the periods presented: Years Ended December 31, Basic (Loss)/Earnings per Share 2020 2019 2018 Net (loss)/income $ ( 35,655 ) $ ( 10,425 ) $ 36,633 Less: Income distributed to participating securities ( 2,216 ) ( 2,163 ) ( 1,595 ) Less: Undistributed income allocable to participating securities — — ( 1,409 ) Net (loss)/income available to common stockholders – Basic EPS $ ( 37,871 ) $ ( 12,588 ) $ 33,629 Weighted average common shares (in thousands) 148,682 151,823 146,645 Basic (loss)/earnings per share $ ( 0.25 ) $ ( 0.08 ) $ 0.23 Years Ended December 31, Diluted (Loss)/Earnings per Share 2020 2019 2018 Net (loss)/income available to common stockholders $ ( 37,871 ) $ ( 12,588 ) $ 33,629 Add back: Undistributed income allocable to participating securities — — 1,409 Less: Reallocation of undistributed income allocable to participating securities considered potentially dilutive — — ( 1,403 ) Net (loss)/income available to common stockholders – Diluted EPS $ ( 37,871 ) $ ( 12,588 ) $ 33,635 Weighted Average Diluted Shares (in thousands) : Weighted average common shares 148,682 151,823 146,645 Dilutive effect of common stock equivalents, excluding participating securities — — 645 Weighted average diluted shares, excluding participating securities (in thousands) 148,682 151,823 147,290 Diluted (loss)/earnings per share $ ( 0.25 ) $ ( 0.08 ) $ 0.23 Diluted (loss)/earnings per share presented above is calculated using the two-class method as this method results in the lowest diluted earnings per share amount for common stock. During the years ended December 31, 2020 and 2019, there were no dilutive common stock equivalents as the Company reported a net loss for the period. Total antidilutive common stock equivalents were 7,886 during the year ended December 31, 2018. F-33 Table of Contents The following table reconciles weighted average diluted shares as reported on the Company’s Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018, which are determined pursuant to the treasury stock method, to the weighted average diluted shares used to calculate diluted (loss)/earnings per share as disclosed in the table above: Years Ended December 31, Reconciliation of Weighted Average Diluted Shares (in thousands) 2020 2019 2018 Weighted average diluted shares as disclosed on the Consolidated Statements of O perations 148,682 (1) 151,823 (1) 158,415 Less: Participating securities: Weighted average shares of common stock issuable upon conversion of the Preferred Shares (Note 15) — — ( 10,709 ) Potentially dilutive restricted stock awards — — ( 416 ) Weighted average diluted shares used to calculate diluted (loss)/earnings per share as disclosed in the table above 148,682 (1) 151,823 (1) 147,290 (1) Excludes 15,122 and 15,002 participating securities for the years ended December 31, 2020 and 2019, respectively, as the Company reported a net loss for those periods. Also excludes 6 and 152 potentially dilutive common stock equivalents for the years ended December 31, 2020 and 2019, respectively, as the Company reported a net loss for those periods (shares herein are reported in thousands). 24. Income Taxes (Loss)/Income before Income Tax Expense – Domestic and Foreign The U.S. and foreign components of (loss)/income before income tax expense for the years ended December 31, 2020, 2019 and 2018 are as follows: Year Ended December 31, 2020 2019 2018 U.S. $ ( 5,187 ) $ 6,774 $ 43,677 Foreign ( 30,035 ) ( 6,653 ) 7,362 Total $ ( 35,222 ) $ 121 $ 51,039 Income Tax Expense/(Benefit) – By Jurisdiction The components of current and deferred income tax expense included in the Consolidated Statement of Operations for years ended December 31, 2020, 2019 and 2018 are as follows: Years Ended December 31, 2020 2019 2018 Current: Federal $ 3,670 $ 10,311 $ 15,805 State and local 832 2,271 3,202 Foreign ( 1,877 ) ( 1,687 ) 1,482 $ 2,625 $ 10,895 $ 20,489 Deferred: Federal $ 60 $ ( 246 ) $ ( 5,318 ) State and local 13 ( 54 ) ( 1,077 ) Foreign ( 2,265 ) ( 49 ) 312 $ ( 2,192 ) $ ( 349 ) $ ( 6,083 ) Income tax expense $ 433 $ 10,546 $ 14,406 F-3 4 Table of Contents Reconciliation of Statutory Federal Income Tax Rate to the Effective Income Tax Rate A reconciliation of the statutory federal income tax expense and the Company’s total income tax expense is as follows: Years Ended December 31, 2020 2019 2018 U.S. federal statutory income tax $ ( 7,397 ) $ 25 $ 10,718 Loss/(gain) on revaluation of deferred consideration (1) 11,929 2,378 ( 2,570 ) Decrease in unrecognized tax benefits, net ( 5,661 ) ( 3,893 ) — Change in valuation allowance – Capital losses 4,448 7,555 794 Change in valuation allowance – Foreign net operating losses (“NOLs”) and interest carryforwards ( 2,018 ) 3,997 3,510 Foreign operations ( 3,342 ) ( 3,561 ) ( 1,041 ) Stock-based compensation tax (windfalls)/shortfalls 1,485 1,198 ( 543 ) Change in tax-related indemnification assets, net 1,189 740 — Non-taxable gain on sale – Canadian ETF business ( 740 ) — — Non-deductible executive compensation 399 1,608 4 Blended state income tax rate, net of federal benefit ( 171 ) 237 1,406 Non-deductible acquisition and disposition-related costs — — 1,506 Other differences, net 312 262 622 Income tax expense $ 433 $ 10,546 $ 14,406 (1) The loss/(gain) on revaluation is not adjusted for income taxes as the obligation was assumed by a wholly-owned subsidiary that is based in Jersey, a jurisdiction where the Company is subject to a zero percent tax rate. Income Tax Payments A summary of income taxes paid by jurisdiction for the years ended December 31, 2020, 2019 & 2018 is as follows: Years Ended December 31, 2020 2019 2018 Federal $ 4,470 $ 6,990 $ 10,710 State and local 1,353 1,818 2,498 Foreign 4,308 1,252 1,190 $ 10,131 $ 10,060 $ 14,398 Deferred Tax Assets (“DTAs”) A summary of the components of the Company’s deferred tax assets at December 31, 2020 and 2019 is as follows: December 31, 2020 2019 Deferred tax assets: Capital losses $ 16,596 $ 8,226 Operating lease liabilities 4,953 5,529 Accrued expenses 3,507 4,054 Interest carryforwards 2,235 2,615 NOLs – Foreign 2,167 6,721 Stock-based compensation 1,922 1,754 Goodwill and intangible assets 1,466 1,671 F-3 5 Table of Contents NOLs – U.S. 510 642 Outside basis differences 122 123 Other 111 218 Deferred tax assets 33,589 31,553 Deferred tax liabilities: Right of use assets – operating leases 3,927 4,400 Fixed assets and prepaid assets 1,261 1,326 Allocated equity component of convertible notes 1,022 — Foreign currency translation adjustment 293 — Unremitted earnings – International subsidiaries 138 — Unrealized gains — 744 Deferred tax liabilities 6,641 6,470 Total deferred tax assets less deferred tax liabilities 26,948 25,083 Less: Valuation allowance ( 18,885 ) ( 17,685 ) Deferred tax assets, net $ 8,063 $ 7,398 Net Operating and Capital Losses – U.S. The Company’s tax effected net operating losses (“NOLs”) at December 31, 2020 were $ 510 , which expire in 2024 . The net operating loss carryforwards have been reduced by the impact of annual limitations described in the Internal Revenue Code Section 382 that arose as a result of an ownership change. The Company’s tax effected capital losses at December 31, 2020 and December 31, 2019 were $ 16,596 and $ 8,226 , respectively. The change in capital losses is due to the impairment recognized on the Company’s financial interests in AdvisorEngine (Note 8) and a capital loss recognized upon sale of the Canadian ETF business. Net Operating Losses and Interest Carryforwards – Foreign Certain of the Company’s European subsidiaries generated NOLs and interest carryforwards outside the U.S. These tax effected NOLs and interest carryforwards were $ 4,402 and $ 9,336 at December 31, 2020 and December 31, 2019, respectively. All of these amounts are carried forward indefinitely. The change in foreign NOLs includes a reduction of $4,930 due to the sale of the Company’s Canadian ETF business, which occurred on February 19, 2020 (Note 3). Valuation Allowance During the year ended December 31, 2020, the Company reduced the valuation allowance on its deferred tax assets by $ 2,615 associated with interest carryforwards in the UK . The Company has determined that it is more likely than not that these interest carryforwards will be utilized as the Company extinguished its term loan on June 16, 2020 and is therefore no longer accumulating non-deductible interest carryforwards in the UK . The Company also generates profits in that jurisdiction and unused amounts are carried forward indefinitely. The Company’s remaining valuation allowance has been established on its capital losses, international net operating losses and outside basis differences as it is more-likely-than-not that these deferred tax assets will not be realized. Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”) On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic which included temporary changes to income and non-income based tax laws including: (i) the elimination of the 80 % of taxable income limitation by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 and 2020; (ii) allowing NOLs originating in 2018, 2019 and 2020 to be carried back five years; (iii) increasing the net interest expense deduction limit to 50 % of adjusted taxable income from 30 % for tax years beginning January 1, 2019 and 2020; and (iv) other related provisions. The CARES Act did not have a material impact on the Company’s consolidated financial statements. F-3 6 Table of Contents Uncertain Tax Positions Tax positions are evaluated utilizing a two-step process. The Company first determines whether any of its tax positions are more-likely-than-not to be sustained upon examination, based solely on the technical merits of the position. Once it is determined that a position meets this recognition threshold, the position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. In connection with the ETFS Acquisition, the Company accrued a liability for uncertain tax positions and interest and penalties at the acquisition date. The table below sets forth the aggregate changes in the balance of gross unrecognized tax benefits: Total Unrecognized Tax Benefits Interest and Penalties Balance on January 1, 2019 $ 34,876 $ 28,101 $ 6,775 Decrease - Lapse of statute of limitations ( 4,309 ) ( 2,999 ) ( 1,310 ) Increases 416 — 416 Foreign currency translation (1) 1,118 896 222 Balance at December 31, 2019 $ 32,101 $ 25,998 $ 6,103 Decrease - Lapse of statute of limitations ( 5,981 ) ( 4,620 ) ( 1,361 ) Increases 320 — 320 Foreign currency translation (1) 576 472 104 Balance at December 31, 2020 $ 27,016 $ 21,850 $ 5,166 (1) The gross unrecognized tax benefits were accrued in British pounds. The Company also recorded an offsetting indemnification asset provided by ETFS Capital as part of its agreement to indemnify the Company for any potential claims, for which an amount is being held in escrow. ETFS Capital has also agreed to provide additional collateral by maintaining a minimum working capital balance up to a stipulated amount. The decreases resulting from the lapsing of the statute of limitations of $ 5,981 and $ 4,309 for the years ended December 31, 2020 and 2019, respectively, were recorded as income tax benefits and equal and offsetting amounts to reduce the indemnification assets were recorded in other gains and losses, net. The gross unrecognized tax benefits and interest and penalties totaling $ 27,016 and $ 32,101 at December 31, 2020 and December 31, 2019, respectively, are included in other non-current liabilities on the Consolidated Balance Sheets. It is reasonably possible that the total amount of unrecognized tax benefits will decrease by $ 5,055 (including interest and penalties of $ 1,539 ) in the next 12 months upon lapsing of the statute of limitations. At December 31, 2020 there were $ 27,016 of unrecognized tax benefits (including interest and penalties) that, if recognized, would impact the effective tax rate. The recognition of any unrecognized tax benefits would result in an equal and offsetting adjustment to the indemnification asset which would be recorded in income before taxes due to the indemnity for any potential claims. Income Tax Examinations The Company is subject to U.S. federal income tax as well as income tax of multiple state, local and certain foreign jurisdictions. The Company’s federal tax return and ManJer’s tax return (a Jersey-based subsidiary) for the year ended December 31, 2016 is currently under review by the relevant tax authorities. The Company is indemnified by ETFS Capital for any potential exposure associated with ManJer’s tax return under audit. The Company is not currently under audit in any other income tax jurisdictions. As of December 31, 2020, with few exceptions, the Company was no longer subject to income tax examinations by any taxing authority for years before 2016. Undistributed Earnings of Foreign Subsidiaries ASC 740-30 Income Taxes provides guidance that US companies do not need to recognize tax effects on foreign earnings that are indefinitely reinvested. The Company’s assertion has changed such that earnings of foreign subsidiaries will be repatriated, resulting in the recognition of a deferred tax liability of $ 138 at December 31, 2020. 25. Shares Repurchased On April 24, 2019, the Company’s Board of Directors extended the term of the Company’s share repurchase program for three years through April 27, 2022 . Included under this program are purchases to offset future equity grants made under the Company’s equity plans and purchases made in open market or privately negotiated transactions. This authority may be exercised from time to time, subject to regulatory considerations. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements and priorities. The repurchase program may be suspended or terminated at any time without prior notice. Shares repurchased under this program are returned to the status of authorized and unissued on the Company’s books and records. F-37 Table of Contents During the years ended December 31, 2020, 2019 and 2018, the Company repurchased 8,234,324 shares, 370,428 shares and 334,953 shares of its common stock, respectively, under this program for an aggregate cost of $ 31,197 , $ 2,341 and $ 2,885 , respectively. Shares repurchased under this program were returned to the status of authorized and unissued on the Company’s books and records. As of December 31, 2020, $ 52,191 remained under this program for future purchases. 26. Goodwill and Intangible Assets Goodwill The table below sets forth goodwill which is tested annually for impairment on November 30 th : Total Balance at January 1, 2020 $ 85,856 Changes — Balance at December 31, 2020 $ 85,856 Goodwill was tested for impairment on November 30, 2020. The impairment test was performed using a market approach, whereby the market capitalization of the Company (a single reporting unit) was compared to its carrying value. The market capitalization was derived from the Company’s publicly traded stock price plus a reasonable control premium. The fair value of the reporting unit exceeded its carrying value and therefore no impairment was recognized. Goodwill arising from the ETFS Acquisition of $ 84,057 is not deductible for tax purposes as the acquisition was structured as a stock acquisition occurring in the UK . The remainder of the goodwill is deductible for U.S. tax purposes. Intangible Assets (Indefinite-Lived) The table below sets forth the Company’s intangible assets which are tested annually for impairment on November 30 th : Advisory Agreements (ETFS) Advisory Agreements (Questrade AUM) Total Balance at January 1, 2020 $ 601,247 $ 2,047 $ 603,294 Decreases (1) — ( 1,992 ) ( 1,992 ) Foreign currency translation — ( 55 ) ( 55 ) Balance at December 31, 2020 $ 601,247 $ — $ 601,247 (1) Derecognized upon the sale of the Company’s Canadian ETF business (Note 3) ETFS In connection with the ETFS Acquisition which was completed on April 11, 2018 (Note 3), the Company identified intangible assets valued at $ 601,247 related to the right to manage AUM through customary advisory agreements. The intangible assets were determined to have indefinite useful lives and are not deductible for tax purposes. The Company performed its indefinite-lived intangible asset impairment test related to its ETFS customary advisory agreements on November 30, 2020. The results of this analysis identified no indicators of impairment to be recognized based upon a quantitative assessment (discounted cash flow analysis) which relied upon significant unobservable inputs including projected revenue growth rates ranging from 3 % to 11 % ( 3.5 % weighted average) and a weighted average cost of capital of 9.0 %. F-38 Table of Contents 27. Impairments The following table summarizes impairments recognized by the Company: Years Ended December 31, 2020 2019 2018 AdvisorEngine – Financial interests (Note 8) $ 19,672 $ 30,138 $ — GCC – Intangible asset — — 9,953 AdvisorEngine – Option — — 3,278 Thesys – Series Y Preferred (Note 10) 3,080 — 3,829 WisdomTree Japan — 572 326 Total $ 22,752 $ 30,710 $ 17,386 WisdomTree Continuous Commodity Index Fund (“GCC”) During the fourth quarter of 2018, the Company performed its indefinite-lived intangible asset impairment test related to its GCC customary advisory agreements using a quantitative approach. The fair value of the intangible asset was derived from a discounted cash flow analysis which assumed projected revenue growth rates of 0 % to 5 %. Consideration was also given to the historical performance of GCC against prior expectations. The analysis resulted in the recognition of an impairment of $ 9,953 . There is no value ascribed to this intangible asset at December 31, 2020. AdvisorEngine—Option During the year ended December 31, 2018, the Company recognized an impairment of $ 3,278 upon the expiration of an option to purchase the remaining equity interests in AdvisorEngine. The fair value of the option was originally determined on December 29, 2017 using a Monte Carlo simulation which was predominantly based on unobservable inputs and was therefore classified as Level 3. The enterprise value was derived from unobservable inputs including a WACC of 27 % and an option volatility of 40 %. An increase in the WACC would have reduced AdvisorEngine’s enterprise value, thereby reducing the fair value of the option, whereas an increase in the option volatility would have increased the fair value of the option. WisdomTree Japan The Company recorded an impairment expense of $ 572 in connection with the termination of its Japan office lease during the year ended December 31, 2019 and $ 326 on fixed assets of the Japan office during the year ended December 31, 2018 in connection with the closure of WTJ. 28. Supplemental Financial Information – Quarterly Results (Unaudited) Three Months Ended Dec. 31 Sept. 30 June 30 Mar. 31 Dec. 31 Sept. 30 June 30 Mar. 31 2020 2020 2020 2020 2019 2019 2019 2019 Total revenues $ 67,059 $ 64,640 $ 58,126 $ 63,874 $ 68,907 $ 67,718 $ 66,293 $ 65,485 Operating income $ 12,907 $ 14,744 $ 11,797 $ 15,634 $ 14,809 $ 16,131 $ 11,911 $ 10,683 (Loss)/income before income taxes ($ 11,297 ) $ 1,138 ($ 14,054 ) ($ 11,009 ) ($ 22,355 ) $ 8,635 $ 6,066 $ 7,775 Net (loss)/income ($ 13,497 ) ($ 270 ) ($ 13,250 ) ($ 8,638 ) ($ 25,880 ) $ 4,152 $ 2,479 $ 8,824 (Loss)/earnings per share—basic ($ 0.10 ) ($ 0.01 ) ($ 0.09 ) ($ 0.06 ) ($ 0.17 ) $ 0.02 $ 0.01 $ 0.05 (Loss)/earnings per share—diluted ($ 0.10 ) ($ 0.01 ) ($ 0.09 ) ($ 0.06 ) ($ 0.17 ) $ 0.02 $ 0.01 $ 0.05 Dividends per common share $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 Unusual or Infrequent Items: (Loss)/gain on revaluation of deferred consideration (Note 12) ($ 22,385 ) ($ 8,870 ) ($ 23,358 ) ($ 2,208 ) ($ 5,354 ) ($ 6,306 ) ($ 4,037 ) $ 4,404 Impairments (Note 27) — ($ 3,080 ) — ($ 19,672 ) ($ 30,138 ) — — ($ 572 ) Loss on extinguishment of debt (Note 13) — — ($ 2,387 ) — — — — — 29. Subsequent Events The Company evaluated subsequent events through the date of issuance of the accompanying consolidated financial statements. There were no events requiring disclosure. F-39 Table of Contents EXHIBIT INDEX Exhibit Number Description 3.1 Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 3.2 Certificate of Designations of Series A Non-Voting Convertible Preferred Stock of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on April 13, 2018) 3.3 Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, filed with the SEC on February 26, 2019) 4.1 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 4.2 Amended and Restated Stockholders Agreement among the Registrant and certain investors dated December 21, 2006 (incorporated by reference to Exhibit 4.2 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 4.3 Securities Purchase Agreement among the Registrant and certain investors dated December 21, 2006 (incorporated by reference to Exhibit 4.3 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 4.4 Securities Purchase Agreement among the Registrant and certain investors dated October 15, 2009 (incorporated by reference to Exhibit 4.4 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 4.5 Third Amended and Restated Registration Rights Agreement dated October 15, 2009 (incorporated by reference to Exhibit 4.5 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 4.6 Investor Rights Agreement, dated April 11, 2018, between the Registrant and ETFS Capital (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on April 13, 2018). 4.7 Indenture, dated as of June 16, 2020, by and between the Registrant and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on June 17, 2020). 4.8 Form of Global Note, representing the Registrant’s 4.25% Convertible Senior Notes due 2023 (included as Exhibit A to the Indenture filed as Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on June 17, 2020). 10.1 Share Sale Agreement among the Registrant, WisdomTree International and ETFS Capital dated November 13, 2017 (incorporated by reference to Exhibit 4.6 of the Registrant’s Annual Report on Form 10-K filed with the SEC on March 1, 2018) 10.2 Waiver and Variation Agreement, dated April 11, 2018, by and among the Registrant, WisdomTree International and ETFS Capital (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed with the SEC on April 13, 2018) 10.3 Representative Form of Advisory Agreement between WisdomTree Asset Management, Inc. and WisdomTree Trust (incorporated by reference to Exhibit 10.1 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 10.4 Amended and Restated License Agreement between the Registrant and WisdomTree Trust dated March 1, 2012 (incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 14, 2012) 10.5 WisdomTree Investments, Inc. 2005 Performance Equity Plan (incorporated by reference to Exhibit 10.9 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 10.6 Amendment to WisdomTree Investments, Inc. 2005 Performance Equity Plan approved by stockholders on August 20, 2007 (incorporated by reference to Exhibit 10.10 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) Table of Contents Exhibit Number Description 10.7 Amendment to WisdomTree Investments, Inc. 2005 Performance Equity Plan approved by stockholders on August 23, 2010 (incorporated by reference to Exhibit 10.11 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 10.8 Form of Stock Option Agreement for Executive Officers (incorporated by reference to Exhibit 10.14 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 10.9 Form of Proprietary Rights and Confidentiality Agreement (incorporated by reference to Exhibit 10.34 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 10.10 Form of Indemnification Agreement for Officers and Directors (incorporated by reference to Exhibit 10.35 of the Registrant’s Amendment to Registration Statement on Form 10, filed with the SEC on May 26, 2011) 10.11 WisdomTree Investments, Inc. 2016 Equity Plan (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 9, 2016) 10.12 Form of Employment Agreement for Executive Officers dated December 22, 2016 (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on December 23, 2016) 10.13(a) Appendix A to Employment Agreement between the Registrant and Jonathan Steinberg, dated December 22, 2016 (incorporated by reference to Exhibit 10.1(A) of the Registrant’s Current Report on Form 8-K filed with the SEC on December 23, 2016) 10.13(b) Appendix A to Employment Agreement between the Registrant and Amit Muni, dated December 22, 2016 (incorporated by reference to Exhibit 10.1(D) of the Registrant’s Current Report on Form 8-K filed with the SEC on December 23, 2016) 10.13(c) Appendix A to Employment Agreement between the Registrant and Peter M. Ziemba, dated December 22, 2016 (incorporated by reference to Exhibit 10.1(E) of the Registrant’s Current Report on Form 8-K filed with the SEC on December 23, 2016) 10.14 Form of Amendment, dated May 5, 2017, to Form of Employment Agreement for Executive Officers, dated December 22, 2016 (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 8, 2017) 10.15 Form of Restricted Stock Agreement for Executive Officers (incorporated by reference to Exhibit 10.15 of the Registrant’s Annual Report on Form 10-K filed with the SEC on March 1, 2019) 10.16 Form of Restricted Stock Agreement for Non-Employee Directors (incorporated by reference to Exhibit 10.17 of the Registrant’s Annual Report on Form 10-K filed with the SEC on March 1, 2017) 10.17 Employment Agreement between the Registrant and R. Jarrett Lilien, dated November 27, 2017 (incorporated by reference to Exhibit 10.19 of the Registrant’s Annual Report on Form 10-K filed with the SEC on March 1, 2018) 10.18 Form of Performance-Based Restricted Stock Unit Award Agreement for Executive Officers applicable to grants prior to January 1, 2021 (incorporated by reference to Exhibit 10.22 of Amendment No. 1 to the Registrant’s Annual Report on Form 10-K on Form 10-K/A filed with the SEC on April 30, 2019) 10.19 Separation Agreement between the Registrant and David Abner, dated August 27, 2019 (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on August 29, 2019) 10.20 Employment Agreement between the Registrant and Marci Frankenthaler, dated November 5, 2020 (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 6, 2020) 21.1 Subsidiaries of the Registrant (filed herewith) 23.1 Consent of Ernst & Young LLP, independent registered public accounting firm (filed herewith) 31.1 Rule 13a-14(a) / 15d-14(a) Certification (filed herewith) 31.2 Rule 13a-14(a) / 15d-14(a) Certification (filed herewith) 31.3 Rule 13a-14(a) / 15d-14(a) Certification (filed herewith) Table of Contents Exhibit Number Description 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith) 101 Financial Statements from the Annual Report on Form 10-K of the Company are attached to this report, formatted in XBRL pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets at December 31, 2020 and December 31, 2019; (ii) Consolidated Statements of Operations for the years ended December 31, 2020, December 31, 2019 and December 31, 2018; (iii) Consolidated Statements of Comprehensive (Loss)/Income for the years ended December 31, 2020, December 31, 2019 and December 31, 2018; (iv) Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2020, December 31, 2019 and December 31, 2018; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2020, December 31, 2019 and December 31, 2018 and (vi) Notes to the Consolidated Financial Statements. 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 (1) Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) Table of Contents SIGNATURES Pursuant to the requirements of the Section 13 or 15(d) Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. WISDOMTREE INVESTMENTS, INC. By: /s/ J ONATHAN S TEINBERG Jonathan Steinberg February 19, 2021 Chief Executive Officer and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated below on the 19 th day of February, 2021. Signature Title /s/ J ONATHAN S TEINBERG Chief Executive Officer and Director Jonathan Steinberg (Principal Executive Officer) /s/ A MIT M UNI Chief Financial Officer Amit Muni (Principal Financial Officer) /s/ B RYAN E DMISTON Chief Accounting Officer Bryan Edmiston (Principal Accounting Officer) /s/ F RANK S ALERNO Non-Executive Chairman of the Board Frank Salerno /s/ A NTHONY B OSSONE Director Anthony Bossone Director Smita Conjeevaram /s/ S USAN C OSGROVE Director Susan Cosgrove /s/ B RUCE L AVINE Director Bruce Lavine /s/ W IN N EUGER Director Win Neuger