What changed in this filing

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Item 1. Financial Statements

2021-11-05 compared with 2021-08-06 · 324 added, 208 removed, 817 unchanged (39% of the section changed)

4 unchanged sentences

(In Thousands, Except Per Share Amounts)

September 30,

Current assets:

Cash and cash equivalents

Securities owned, at fair value (including $ 21,330 and $ 23,932 invested in WisdomTree ETFs at June 30, 2021 and December 31, 2020, respectively)

Accounts receivable (including $ 31,679 and $ 26,884 due from related parties at June 30, 2021 and December 31, 2020, respectively)

Securities owned, at fair value (including $ 21,180 and $ 23,932 invested in WisdomTree ETFs at September 30, 2021 and December 31, 2020, respectively)

Accounts receivable (including $ 24,055 and $ 26,884 due from related parties at September 30, 2021 and December 31, 2020, respectively)

Income taxes receivable

28 unchanged sentences

14.750 shares authorized, issued and outstanding;

redemption value of $ 97,549 and $ 72,667 at June 30, 2021 and December 31, 2020, respectively) (Note 12)

Contingencies

redemption value of $ 88,456 and $ 72,667 at September 30, 2021 and December 31, 2020, respectively) (Note 12)

Contingencies (Note

Stockholders’ equity

4 unchanged sentences

issued and outstanding:

145,114 and 148,716 at June 30, 2021 and December 31, 2020, respectively

145,150 and 148,716 at

September 30, 2021 and December 31, 2020, respectively

Additional paid-in

8 unchanged sentences

(In Thousands, Except Per Share Amounts)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Operating Revenues:

20 unchanged sentences

Loss on extinguishment of debt (Note 10)

Other gains and losses, net

Other losses and gains, net

Income/(loss) before income taxes

7 unchanged sentences

The accompanying notes are an integral part of these consolidated financial statements

(See Note 2 for revisions made to certain amounts previously reported)

WisdomTree Investments, Inc.

2 unchanged sentences

(In Thousands)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Net income/(loss)

Other comprehensive income/(loss)

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 23)

Other comprehensive (loss)/income

Reclassification of foreign currency translation adjustment to other losses and gains, net, upon the sale of WisdomTree Asset Management Canada, Inc.

(“WTAMC” or “Canadian ETF business”)

Foreign currency translation adjustment, net of income taxes

Other comprehensive income/(loss)

Other comprehensive (loss)/income

Comprehensive income/(loss)

4 unchanged sentences

(In Thousands)

For the Three Months Ended June 30, 2021

For the Three Months Ended September 30, 2021

Comprehensive

Balance—April 1, 2021

Balance—July 1, 2021

Restricted stock issued and vesting of restricted stock units, net

Shares repurchased

Exercise of stock options, net

Stock-based compensation

Other comprehensive income

Balance—June 30, 2021

For the Three Months Ended June 30, 2020

Other comprehensive loss

Balance—September 30, 2021

For the Three Months Ended September 30, 2020

Comprehensive

Balance—April 1, 2020

Balance—July 1, 2020

Restricted stock issued and vesting of restricted stock units, net

1 unchanged sentence

Stock-based compensation

Allocation of equity component related to convertible notes, net of issuance costs of $ 128 and deferred taxes of $ 1,017

Allocation of equity

of issuance costs of $ 29 and deferred taxes of $ 222

Other comprehensive income

Balance—June 30, 2020

Balance—September 30, 2020

The accompanying notes are an integral part of these consolidated financial statements

3 unchanged sentences

(In Thousands)

For the Six Months Ended June 30, 2021

For the Nine Months Ended September 30, 2021

Comprehensive

2 unchanged sentences

Balance—January 1, 2021 (as adjusted)

Restricted stock issued and vesting of restricted stock units, net

Restricted stock issued and vesting of restricted

stock units, net

Shares repurchased

1 unchanged sentence

Stock-based compensation

Other comprehensive income

Balance—June 30, 2021

For the Six Months Ended June 30, 2020

Other comprehensive loss

Balance—September 30, 2021

For the Nine Months Ended September 30, 2020

Comprehensive

Balance—January 1, 2020

Restricted stock issued and vesting of restricted stock units, net

Restricted stock issued and vesting of restricted stock units,

Shares repurchased

1 unchanged sentence

Stock-based compensation

Allocation of equity component related to convertible notes, net of issuance costs of $ 128 and deferred taxes of $ 1,017

Allocation of equity component related to convertible notes, net of issuance costs of

$ 157 and deferred taxes of $ 1,239

Other comprehensive loss

Balance—June 30, 2020

Balance—September 30, 2020

The accompanying notes are an integral part of these consolidated financial statements

3 unchanged sentences

(In Thousands)

Six Months Ended June 30,

Nine Months Ended

September 30,

Cash flows from operating activities:

Net income/(loss)

Adjustments to reconcile net income/(loss) to net cash (used in)/provided by operating activities:

Adjustments to reconcile net income/(loss) to net cash provided by operating activities:

Advisory fees received in gold, other precious metals and cryptocurrencies

2 unchanged sentences

(Gain/)/loss on revaluation of deferred consideration – gold payments

Deferred income taxes

Unrealized losses

Amortization of right of use asset

Amortization of issuance costs – convertible notes

Deferred income taxes

Gain on sale – Canadian ETF business, including remeasurement of contingent consideration

Depreciation and amortization

Gain on sale – Canadian ETF business

Loss on extinguishment of debt

9 unchanged sentences

Securities sold, but not yet purchased, at fair value

Operating lease liabilities

Operating lease liabilities (including lease termination payment of $ 12,725 )

Accounts payable and other liabilities

Net cash (used in)/provided by operating activities

Net cash provided by operating activities

Cash flows from investing activities:

Purchase of securities owned, a fair value

Purchase of investments

Purchase of fixed assets

Proceeds from the sale of securities owned, at fair value

Proceeds from held-to-maturity

1 unchanged sentence

Proceeds from the sale of the Company’s financial interests in AdvisorEngine Inc.

Proceeds from sale of Canadian ETF business, net

Proceeds from the sale of Canadian ETF business, net, including receipt of contingent consideration

Net cash (used in)/provided by investing activities

7 unchanged sentences

Net cash provided by/(used in) financing activities

Increase/(decrease) in cash flow due to changes in foreign exchange rate

Decrease in cash flow due to changes in foreign exchange rate

Increase/(decrease) in cash and cash equivalents

4 unchanged sentences

Cash paid for interest

On January 1, 2021, the Company reclassified the equity component related to the convertible notes, net of deferred taxes, reducing accumulated deficit by

$ 616 , increasing the carrying value of the convertible notes by $ 4,088 , reducing additional paid in capital by $ 3,682 and reducing deferred tax liabilities by

$ 1,022 , upon the implementation of Accounting Standards Update (“ASU”) 2020-06, Debt – Debt with Conversion and Other Options

The accompanying notes are an integral part of these consolidated financial statements

, 2021, the Company reclassified the equity component related to the convertible notes, net of deferred taxes, reducing accumulated deficit by $ 616 , increasing the carrying value of the convertible notes by $ 4,088 , reducing additional paid in capital by $ 3,682 and reducing deferred tax liabilities by $ 1,022 , upon the implementation of Accounting Standards Update (“ASU”) 2020-06,

Debt – Debt with Conversion and Other

The accompanying notes are an integral part of these consolidated financial statements (See Note 2 for reclassifications made to certain amounts previously reported)

WisdomTree Investments, Inc.

39 unchanged sentences

All intercompany accounts and transactions have been eliminated in consolidation.

Immaterial Correction of an Error – Consolidated Statements of Operations

The presentation of amounts

collected on behalf of third parties of

$ 891 and $ 2,380

for the three and nine months ended September 30, 2020, respectively, has been revised due to an immaterial error correction.

These amounts were originally recorded as advisory fee revenue and fund management and administration expense while no such amounts should have been recorded in the Company’s Consolidated Statements of Operations.

The following table summarizes these revisions, which had no effect on previously reported net income:

September 30,

Operating Revenues:

Advisory fees (previously reported)

Amounts collected on behalf of third parties

Advisory fees (as corrected)

Total revenues (previously reported)

Amounts collected on behalf of third parties

Total revenues (as corrected)

Operating Expenses:

Fund management and administration (previously reported)

Amounts collected on behalf of third parties

Fund management and administration (as corrected)

Total operating expenses (previously reported)

Amounts collected on behalf of third parties

Total operating expenses (as corrected)

Reclassifications - Consolidated Statements of Cash Flows

Cash flows from purchasing securities owned, at fair value of $ 34,683 and selling securities owned, at fair value of $ 18,122 during the nine months ended September 30, 2020 that were not acquired specifically for resale or associated with the Company’s business activities have been reclassified from operating activities to investing activities to conform to the current year’s presentation in the Company’s Consolidated Statements of Cash Flows.

The following table summarizes these reclassifications for the nine months ended September 30, 2020:

September 30,

Consolidated Statements of Cash Flows:

Cash Flows from Operating Activities

Net cash provided by operating activities (previously reported)

Reclassification of net cash flows from securities purchases and sales

Net cash provided by operating activities (currently reported)

Cash Flows from Investing Activities

Net cash provided by investing activities (previously reported)

Purchases of securities owned, at fair value

Proceeds from the sale of securities owned, at fair value

Net cash provided by investing activities (currently reported)

Consolidation

4 unchanged sentences

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.

The Company reassesses its evaluation of whether an entity is a VOE or VIE when certain reconsideration events occur.

Segment and Geographic Information

146 unchanged sentences

Recently Adopted Accounting Pronouncements

On January 1, 2021, the Company early adopted ASU 2020-06, Debt – Debt with Conversion and Other Options

(ASU 2020-06) under the modified retrospective approach.

On January 1, 2021, the Company early adopted ASU 2020-06,

Debt – Debt with Conversion and Other Options

(ASU 2020-06)

under the modified retrospective approach.

Under the ASU, the accounting for convertible instruments was simplified by removing major separation models required under current GAAP.

1 unchanged sentence

Certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception are removed and, as a result, more equity contracts will qualify for the scope exception.

The ASU also simplifies the diluted earnings-per-share calculation in certain areas.

Upon the adoption of this ASU, the Company reclassified the equity component related to the convertible notes, net of deferred taxes, reducing accumulated deficit by

$ 616 , increasing the carrying value of the convertible notes by $ 4,088 , reducing additional paid-in

The ASU also simplifies the diluted earnings-per-share

calculation in certain areas.

Upon the adoption of this ASU, the Company reclassified the equity component related to the convertible notes, net of deferred taxes, reducing accumulated deficit by $ 616 , increasing the carrying value of the convertible notes by $ 4,088 , reducing additional paid-in

capital by $ 3,682 and reducing deferred tax liabilities by $ 1,022 .

These updates also reduced interest expense recognized on the Company’s convertible notes by approximately $ 420 per quarter (Note 11).

These updates also reduced interest expense recognized on the Company’s convertible notes by approximately $ 420 per quarter

On January 1, 2021, the Company adopted ASU 2019-12,

8 unchanged sentences

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

(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;

(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

(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;

2 unchanged sentences

Cash and Cash Equivalents

Substantially all of the Company’s cash and cash equivalents was held at three financial institutions on June 30, 2021.

Cash equivalents were approximately

$ 81,536 and $ 660 at June 30, 2021 and December 31, 2020, respectively.

Certain of the Company’s international subsidiaries are required to maintain a minimum level of regulatory capital, which was

$ 12,439 and $ 10,745 at June 30, 2021 and December 31, 2020, respectively.

Of the total cash and cash equivalents of $ 127,924 and $ 73,425 at September 30, 2021 and December 31, 2020, respectively, $ 105,885 and $ 70,911 were held at two financial institutions.

At September 30, 2021 and December 3 1

, 2020, cash equivalents were approximately $ 20,143 and $ 660 , respectively.

Certain of the Company’s international subsidiaries are required to maintain a minimum level of regulatory capital, which was $ 12,384 and $ 10,745 at September 30, 2021 and December 31, 2020, 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.

Fair Value Measurements

5 unchanged sentences

The hierarchy is broken down into three levels based on the transparency of inputs as follows:

Quoted prices for identical instruments in active markets.

Quoted prices for similar instruments in active markets;

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.

Instruments whose significant drivers are unobservable.

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.

4 unchanged sentences

The tables below summarize the categorization of the Company’s assets and liabilities measured at fair value.

During the three and six months ended June 30, 2021 and 2020 there were no transfers between Levels 2 and 3.

June 30, 2021

During the three and nine months ended September 30, 2021 and 2020 there were no transfers between Levels 2 and 3.

September 30, 2021

Recurring fair value measurements:

3 unchanged sentences

Corporate bonds

Non-recurring fair value measurements:

Non-recurring

fair value measurements:

Securrency, Inc.

21 unchanged sentences

The fair value of the AdvisorEngine financial interests of $ 9,592 was determined on May 4, 2020, the date on which these financial interests were sold (Note 23).

Thesys was written down to

zero on September 30, 2020.

Thesys was written down to zero on September 30, 2020.

Fair value of $ 145,847 and $ 24,344 determined for convertible notes raised on June 16, 2020 and August 13, 2020, respectively (Note 11).

1 unchanged sentence

Cash Equivalents (Note 3) –

These financial assets represent cash invested

in highly liquid investments with original maturities of less than 90 days.

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.

4 unchanged sentences

Pass-through GSE positions invested in through a fund structure with a quoted market price on an exchange are generally classified as Level 1.

nsideration (Note 9)

Deferred Consideration (Note 9)

– Deferred consideration represents the present value of an obligation to pay gold into perpetuity.

1 unchanged sentence

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Deferred consideration (Note 9)

1 unchanged sentence

Net realized losses/(gains) (1)

Net unrealized losses/(gains) (2)

Net unrealized (gains)/losses (2)

Ending balance

3 unchanged sentences

These securities consist of the following:

September 30,

Securities Owned

Trading securities

The Company recognized net trading gains and losses on securities

owned that were still held at the reporting dates of ($ 272 ) and $ 324 during the three months ended June 30, 2021 and 2020, respectively, and ($ 833 ) and $ 105 during the six months ended June 30, 2021 and 2020, respectively.

The Company had no AFS debt securities at June 30, 2021 and December 31, 2020.

The Company recognized net trading losses on securities owned that were still held at the reporting dates of $ 1,323 and $ 180 during the three months ended September 30, 2021 and 2020, respectively, and $ 2,156 and $ 25 during the nine months ended September 30, 2021 and 2020, respectively.

The Company had no AFS debt securities at September 30, 2021 and December 31, 2020.

Securities Held-to-Maturity

The following table is a summary of the Company’s securities held-to-maturity:

September 30,

Debt instruments:

Pass-through GSEs (amortized cost)

During the six months ended June 30, 2021 and 2020, the Company received proceeds of $ 77 and $ 16,365 , respectively, from held-to-maturity

During the nine months ended September 30, 2021 and 2020, the Company received proceeds of $ 114 and $ 16,441 , 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:

September 30,

Cost/amortized cost

6 unchanged sentences

however, these securities may be called prior to maturity date:

September 30,

Due within one year

3 unchanged sentences

The following table sets forth the Company’s investments:

June 30, 2021

September 30, 2021

December 31, 2020

10 unchanged sentences

In consideration of such investments, the Company received 5,178,488 shares of Series A convertible preferred stock (“Series A Shares”) and 2,004,665 shares of Series B convertible preferred stock (“Series B Shares”).

The Series B Shares contain a liquidation preference that is pari passu with shares of Series B-1 convertible preferred stock (which are substantially the same as the Series B Shares except that they have limited voting rights) and senior to that of the holders of the Series A Shares, which are senior to the holders of common stock.

The Series B Shares contain a liquidation preference that is pari passu with shares of Series B-1

convertible preferred stock (which are substantially the same as the Series B Shares except that they have limited voting rights) and senior to that of the holders of the Series A Shares, which are senior to the holders of common stock.

Otherwise, the Series A Shares and Series B Shares have substantially the same terms, are convertible into common stock at the option of the Company and contain various rights and protections including a non-cumulative

2 unchanged sentences

convertible preferred stock) are separately redeemable, with respect to all of the shares outstanding of the applicable series of preferred stock (subject to certain regulatory restrictions of certain investors), for the original issue price thereof, plus all declared and unpaid dividends, upon approval by holders of at least 60 % of the Series A Shares (at any time on or after December 31, 2029) and 90 % of the Series B Shares (at any time on or after March 31, 2031).

The investment is accounted for under the measurement alternative prescribed in 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 accounted for under the measurement alternative prescribed in 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 three and six months ended June 30, 2021, the Company recognized a gain of

$ 139 and $ 376 , respectively, on its Series A Shares, which were re-measured

There was no impairment recognized during the three months ended September 30, 2021 based upon a qualitative assessment.

During the nine months ended September 30, 2021, the Company recognized a gain of $ 376 on its Series A Shares, which was re-measured

to fair value upon the issuance of Securrency’s Series B Shares.

4 unchanged sentences

Time to exit (in years)

There was no impairment recognized during the three and six months ended June 30, 2020 based upon a qualitative assessment.

There was no impairment recognized during the three and nine months ended September 30, 2020 based upon a qualitative assessment.

Onramp Invest, LLC

In June 2021, the Company invested $ 250

in Onramp Invest, LLC (“Onramp”), a technology company that provides access to cryptoassets for registered investment advisers.

In consideration for its investment, the Company holds a Simple Agreement for Future Equity (“SAFE”) ,

which provides the Company with the right to be issued certain shares of Onramp’s preferred stock in connection with Onramp’s future equity financing for preferred stock, at a

20 % discount to the price per share issued in connection with such equity financing, subject to a pre-determined valuation cap.

In June 2021, the Company invested $ 250 in Onramp Invest, LLC (“Onramp”), a technology company that provides access to cryptoassets for registered investment advisers.

In consideration for its investment, the Company holds a Simple Agreement for Future Equity (“SAFE”), which provides the Company with the right to be issued certain shares of Onramp’s preferred stock in connection with Onramp’s future equity financing for preferred stock, at a 20 % discount to the price per share issued in connection with such equity financing, subject to a pre-determined

valuation cap.

The preferred stock is issuable upon the occurrence of such preferred equity financing, which would occur after Onramp’s conversion to a corporation.

The investment is accounted for under the measurement alternative prescribed in 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 three and six months ended June 30, 2021 based upon a qualitative assessment.

There was no impairment recognized during the three and nine months ended September 30, 2021 based upon a qualitative assessment.

Fixed Assets, net

The following table summarizes fixed assets:

September 30,

Furniture and fixtures

1 unchanged sentence

accumulated depreciation and amortization

During the three months ended September 30, 2021, the Company recognized an impairment charge of $ 6,576 , representing the write-off of leasehold improvements and fixed assets in connection with the termination of the lease for its principal executive office at 245 Park Avenue, New York, New York.

See Notes 13 and 24 for additional information.

Deferred Consideration

Deferred consideration represents an obligation the Company assumed in connection with its acquisition of the European exchange-traded commodity, currency and leveraged and inverse business of ETFS Capital Limited (“ETFS Capital”) which occurred on April 11, 2018 (“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

6,333 ounces of gold continuing into perpetuity (“Contractual Gold Payments”).

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.

2 unchanged sentences

(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 $ 226,706 and $ 230,137 at June 30, 2021 and December 31, 2020 using the following assumptions:

The Company determined the present value of the deferred consideration of $ 224,953 and $ 230,137 at September 30, 2021 and December 31, 2020 using the following assumptions:

September 30,

Forward-looking gold price (low) – per ounce

3 unchanged sentences

Perpetual growth rate

The forward-looking gold prices at June 30, 2021 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 forward-looking gold prices at September 30, 2021 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 increase in observable forward-looking gold prices through 2027.

1 unchanged sentence

An increase in spot gold prices, 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 $ 16,101 and $ 17,374 and long-term amounts payable were $ 210,605 and $ 212,763 , respectively, at June 30, 2021 and December 31, 2020, respectively.

During the three and six months ended June 30, 2021 and 2020, the Company recognized the following in respect of deferred consideration:

Current amounts payable were $ 15,961 and $ 17,374 and long-term amounts payable were $ 208,992 and $ 212,763 , respectively, at September 30, 2021 and December 31, 2020, respectively.

During the three and nine months ended September 30, 2021 and 2020, the Company recognized the following in respect of deferred consideration:

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Contractual gold payments

2 unchanged sentences

Gains on revaluation of deferred consideration – gold payments result from a decrease in spot gold prices, a decrease in the forward-looking price of gold, a decrease in the perpetual growth rate and an increase in the discount rate used to compute the present value of the annual payment obligations.

Losses on revaluation of deferred consideration – gold payments result from an increase in spot gold prices, an increase in the forward-looking price of gold, an increase in the perpetual growth rate and a decrease in the discount rate used to compute the annual payment obligations.

Former Credit Facility

On June 16, 2020, the Company terminated its former credit facility by repaying $ 174,000 that was 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 former credit facility during the three and six months ended June 30, 2020 was $ 1,667 and $ 4,086 , respectively.

A loss on extinguishment of debt of $ 2,387 was recognized during the nine months ended September 30, 2020, which represented the write-off of the remaining unamortized

issuance costs.

expense recognized on the former credit facility during the nine months ended September 30, 2020 was $

Convertible Notes

2 unchanged sentences

On June 16, 2020, the Company issued and sold $ 150,000 in aggregate principal amount of 4.25 % Convertible Senior Notes due 2023 (the “June 2020 Notes”) pursuant to an indenture dated June 16, 2020, between the Company and the Trustee, in a private offering to qualified institutional buyers pursuant to Rule 144A.

On August 13, 2020, the Company issued and sold $ 25,000 in aggregate principal amount of 4.25 % Convertible Senior Notes due 2023 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 June 2020 Notes (the “August 2020 Notes” and

together with the June 2020 Notes, the “2020 Notes”).

After the issuance of the 2021 Notes (and together with the 2020 Notes, the “Convertible Notes”), the Company had $ 325,000 aggregate principal amount of Convertible Notes outstanding.

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(i) 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 f i ve business d a y period after any t e n consecutive trading d a y 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;

(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 of the indentures but only with respect to the Convertible Notes called (or deemed called) for redemption;

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Redemption price:

The Company may redeem for cash all or any portion of the notes, at its option, on or after June 20, 2026 and June 20, 2023 in respect of the 2021 Notes and 2020 Notes, respectively, and on or prior to the

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.

The Company may redeem for cash all or any portion of the notes, at its option , on or after June 20, 2026 and June 20, 2023 in respect of the 2021 Notes and 2020 Notes, respectively, 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.

4 unchanged sentences

Seniority and Security

The 2021 Notes and 2020 Notes rank equal in right of payment, and 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 12).

Convertible Preferred Stock (Note 12).

The indentures contain 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 June 30, 2021 and December 31, 2020:

June 30, 2021

The following table provides a summary of the carrying value of the Convertible Notes at September 30, 2021 and December 31, 2020:

September 30, 2021

Principal amount

14 unchanged sentences

The discount arising from the recognition of the equity component was amortized as interest expense over the life of the 2020 Notes.

Interest expense on the Convertible Notes during the three and six months ended June 30, 2021 was

$ 2,567 and $ 4,863 , respectively.

Interest expense on the 2020 Notes during the three and six months ended June 30, 2020 was

Interest payable of $ 588 and $ 342 at June 30, 2021 and 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 $ 356,602 at June 30, 2021.

The if-converted

value of the 2020 Notes was $ 183,277 at June 30, 2021.

Interest expense on the Convertible Notes during the three and nine months ended September 30, 2021 was $ 3,729 and $ 8,592 , respectively.

Interest expense on the 2020 Notes during the three and nine months ended September 30, 2020 was $ 2,511 and $ 2,888 , respectively.

Interest payable of $ 3,674 and $ 2,173 at September 30, 2021 and December 31, 2020 is included in accounts payable and other liabilities on the Company’s Consolidated Balance Sheets.

The fair value of the Convertible Notes (classified as Level 2 in the fair value hierarchy) was $ 350,331 at September 30, 2021.

The if-converted

value of the 2021 Notes did not exceed the principal amount at June 30, 2021.

value of the 2020 Notes and the 2021 Notes did not exceed the principal amount at September 30, 2021.

Preferred Shares

8 unchanged sentences

The following is a summary of the Preferred Share balance:

September 30,

Issuance of Preferred Shares

9 unchanged sentences

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 $97,549 and $72,667 at June 30, 2021 and December 31, 2020, respectively.

The redemption value of the Preferred Shares was $ 88,456 and $ 72,667 at September 30, 2021 and December 31, 2020, respectively.

The carrying amount of the Preferred Shares was not adjusted as it was not probable that the Preferred Shares would become redeemable.

The Company has entered into operating leases for its corporate headquarters and other office facilities, financial data terminals and equipment.

The Company has entered into operating leases for office facilities, financial data terminals and equipment.

The Company has no finance leases.

The following table provides additional information regarding the Company’s leases:

The following table provides additional

information regarding the Company’s leases:

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Operating lease cost

2 unchanged sentences

Other information:

Cash paid for amounts included in the measurement of operating liabilities (operating leases)

Cash paid for amounts included in the measurement of operating lease

assets obtained in exchange for new operating lease liabilities

2 unchanged sentences

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 in August 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.

On September 9, 2021, the Company entered into a Surrender Agreement to terminate the lease for its principal executive office at 245 Park Avenue, New York, New York effective immediately.

In consideration for the landlord’s agreement to enter into the Surrender Agreement and accelerate the expiration date of the term of the lease from August 31, 2029, the Company paid a termination fee of

As a result, the Company recognized a loss on the termination of a lease of

$ 9,277 during the three months ended September 30, 2021, which was inclusive of the write-off of the right-of-use asset, broker fees and a reduction in operating lease liabilities.

This loss is included in impairments in the Company’s Consolidated Statements of Operations (Note 24).

The following table provides additional information regarding lease impairment charges recognized by the Company:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Impairment charges – Leases:

New York office

London office

Total impairment charges – Leases:

The Company’s leases also included 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.

During the six months ended June 30, 2021, the Company recognized an impairment charge of $ 303 resulting from the derecognition of a right-of-use

asset upon exiting its London office in February 2021, as well as costs incurred to restore the office space to its original condition.

The following table discloses future minimum lease payments at June 30, 2021 with respect to the Company’s operating lease liabilities:

The following table discloses future minimum lease payments at September 30, 2021 with respect to the Company’s operating lease liabilities:

Remainder of 2021

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Total future minimum lease payments (undiscounted)

The following table reconciles the future minimum lease payments (disclosed above) at June 30, 2021 to the operating lease liabilities recognized in the Company’s Consolidated Balance Sheet:

Amounts recognized in the Company’s Consolidated Balance Sheet

The following table reconciles the future minimum lease payments (disclosed above) at September 30, 2021 to the operating lease liabilities recognized in the Company’s Consolidated Balance Sheets:

Amounts recognized in the Company’s Consolidated Balance Sheets

Lease liability – short term

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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.

The Company is currently assessing these claims and an accrual has not been made with respect to these matters at June 30, 2021 and December 31, 2020.

The Company is currently assessing these claims and an accrual has not been made with respect to these matters at September 30, 2021 and December 31, 2020.

Variable Interest Entities

9 unchanged sentences

The following table presents information about the Company’s variable interests in non-consolidated

September 30,

Carrying Amount – Assets (Securrency)

5 unchanged sentences

Maximum exposure to loss

Revenues from Contracts with Customers

from Contracts with Customers

The following table presents the Company’s total revenues from contracts with customers:

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Revenues from contracts with customers:

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Total operating revenues

Advisory fees previously reported have been revised due to an immaterial error correction.

These revisions had no effect on previously reported net income.

See Note 2 for additional information.

The Company recognizes revenues from contracts with customers when the performance obligation is satisfied, which is when the promised services are transferred to the customer.

4 unchanged sentences

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.

is no significant judgment in calculating amounts due which are invoiced monthly in arrears and are not subject to any potential reversal.

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.

4 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Revenues from contracts with customers:

2 unchanged sentences

Total operating revenues

Advisory fees previously reported have been revised due to an immaterial error correction.

These revisions had no effect on previously reported net income.

See Note 2 for additional information.

Related Party Transactions

9 unchanged sentences

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:

September 30,

Receivable from WTT

6 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Advisory services provided to WTT

3 unchanged sentences

Advisory services provided to WTCS

The Company also has investments in certain WisdomTree ETFs of approximately $ 21,330 and $ 23,932 at June 30, 2021 and December 31, 2020, respectively.

Net gains and losses related to trading WisdomTree ETFs during the three months ended June 30, 2021 and 2020 were

$ 167 and $ 298 , respectively, and during the six months ended June 30, 2021 and 2020 were

($ 217 ) and $ 8 , respectively, which are recorded in other gains and losses, net.

Advisory fees previously reported have been revised due to an immaterial error correction.

These revisions had no effect on previously reported net income.

See Note 2 for additional information.

The Company also has investments in certain WisdomTree ETFs of approximately $ 21,180 and $ 23,932 at September 30, 2021 and December 31, 2020, respectively.

Net losses and gains related to trading WisdomTree ETFs during the three months ended September 30, 2021 and 2020 were ($ 92 ) and $ 86 , respectively, and during the nine months ended September 30, 2021 and 2020 were $ 75 and $ 94 , respectively, which are recorded in other losses and gains, net.

Stock-Based Awards

18 unchanged sentences

percentile for grants made during 2019 and 2020).

• If the Company’s TSR is negative, the target number of PRSUs vesting is capped at 100

% regardless of the relative TSR percentile.

Stock-based compensation expense during the three months ended June 30, 2021 and 2020 was $ 2,121 and $ 2,920 , respectively, and during the six months ended June 30, 2021 and 2020 was $ 5,264 and $ 6,159 , respectively.

• If the Company’s TSR is negative, the target number of PRSUs vesting is capped at 100 % regardless of the relative TSR percentile.

expense during the three months ended September 30, 2021 and 2020 was $ 2,397 and $ 2,844 , respectively, and during the nine months ended September 30, 2021 and 2020 was $ 7,661 and $ 9,003 , respectively.

A summary of unrecognized stock-based compensation expense and average remaining vesting period is as follows:

June 30, 2021

Vesting Period (Years)

September 30, 2021

Unrecognized Stock-

Vesting Period

Employees and directors

A summary of stock-based compensation award activity during the three months ended June 30, 2021 is as follows:

Balance at April 1, 2021

A summary of stock-based compensation award activity during the three months ended September 30, 2021 is as follows:

Balance at July 1, 2021

Exercised/vested

Balance at June 30, 2021

Balance at September 30, 2021

Earnings Per Share

1 unchanged sentence

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Basic Earnings/(Loss) per Share

6 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Diluted Earnings/(Loss) per Share

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method as this method results in the lowest diluted earnings per share amount for common stock.

During the three and six months ended June 30, 2020, there were no dilutive common stock equivalents as the Company reported a net loss for the period.

During the three and nine months ended September 30, 2020, there were no dilutive common stock equivalents as the Company reported a net loss for the period.

Total antidilutive non-participating

common stock equivalents were 55 and 358 during the three months ended June 30, 2021 and 2020, respectively,

and 130 and 441 during the six months ended June 30, 2021 and 2020, respectively (shares herein are reported in thousands).

Potential common shares associated with the conversion option embedded in the Convertible Notes for the three and six months ended June 30, 2021 were 3,019 and 1,191 , respectively (shares herein are reported in thousands).

There were no potential common shares included in weighted average diluted shares for the three and six months ended June 30, 2020 as the Company’s average stock price during those respective periods was lower than the conversion price.

The following table reconciles weighted average diluted shares as reported on the Company’s Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020, which are determined pursuant to the treasury stock method, to the weighted average diluted shares used to calculate diluted earnings/(loss) per share as disclosed in the table above:

common stock equivalents were 48 and 324 during the three months ended September 30, 2021 and 2020, respectively, and 130 and 441 during the nine months ended September 30, 2021 and 2020, respectively (shares herein are reported in thousands).

Potential common shares associated with the conversion option embedded in the Convertible Notes for the three and nine months ended September 30, 2021 were 1,042 and 1,140 , respectively (shares herein are reported in thousands).

There were no potential common shares included in weighted average diluted shares for the three and nine months ended September 30, 2020 as the Company’s average stock price during those respective periods was lower than the conversion price.

The following table reconciles weighted average diluted shares as reported on the Company’s Consolidated Statements

of Operations for the three and nine months ended September 30, 2021 and 2020, which are determined pursuant to the treasury stock method, to the weighted average diluted shares used to calculate diluted earnings/(loss) per share as disclosed in the table above:

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Reconciliation of Weighted Average Diluted Shares (in thousands)

1 unchanged sentence

Participating securities

Weighted average shares of common stock issuable upon conversion of the Preferred

Shares (Note 12)

Potentially dilutive restricted stock awards

Weighted average diluted shares used to calculate diluted earnings/(loss) per share

as disclosed in the table above

Excludes 15,011 participating securities and zero potentially dilutive common stock equivalents for the three months ended June 30, 2020 and 14,991 participating securities and 8 potentially dilutive common stock equivalents for the six months ended June 30, 2020, as the Company reported a net loss for the period (shares herein are reported in thousands).

Effective Income Tax Rate – Three and Six Months Ended June 30, 2021

The Company’s effective income tax rate during the three months ended June 30, 2021 of 19.5 % resulted in income tax expense of $ 4,259 .

The effective income tax rate differs from the federal statutory tax rate of 21 % primarily due to a lower tax rate on foreign earnings.

The Company’s effective income tax rate for the six months ended June 30, 2021 of 6.5 % resulted in income tax expense of $ 2,290 .

Weighted average diluted shares used to calculate diluted earnings/(loss) per share as disclosed in the table above

Excludes 15,307 participating securities and 5 potentially dilutive common stock equivalents for the three months ended September 30, 2020 and 14,997 participating securities and 5 potentially dilutive common stock equivalents for the nine months ended September 30, 2020, as the Company reported a net loss for the period (shares herein are reported in thousands).

Effective Income Tax Rate – Three and Nine Months Ended September 30, 2021

The Company’s effective income tax rate during the three months ended September 30, 2021 of 7.9 % resulted in income tax expense of $ 500 .

The effective income tax rate differs from the federal statutory tax rate of 21 % primarily due to a lower tax rate on foreign earnings and a non-taxable

gain on revaluation of deferred consideration, partly offset by higher non-deductible

compensation.

The Company’s effective income tax rate for the nine months ended September 30, 2021 of 6.7 % resulted in income tax expense of $ 2,790 .

The effective income tax rate differs from the federal statutory rate of 21 % primarily due to a $ 5,171 reduction in unrecognized tax benefits, a lower tax rate on foreign earnings and a non-taxable

gain on revaluation of deferred consideration.

These items were partly offset by tax shortfalls associated with the vesting and exercise of stock-based compensation and state and local taxes.

Effective Income Tax Rate – Three and Six Months Ended June 30, 2020

The Company’s effective income tax rate during the three months ended June 30, 2020 of 5.7 % resulted in an income tax benefit of $ 804 .

These items were partly offset by tax shortfalls associated with the vesting and exercise of stock-based compensation and non-deductible

executive compensation.

Effective Income Tax Rate – Three and Nine Months Ended September 30, 2020

The Company’s effective income tax rate during the three months ended September 30, 2020 of 123.7 % resulted in an income tax expense of $ 1,408 .

The effective income tax rate differs from the federal statutory tax rate of 21 % primarily due to a non-deductible

loss on revaluation of deferred consideration.

This loss was partly offset by a tax benefit of $ 2,842 recognized in connection with the release of a deferred tax asset valuation allowance on interest carryforwards arising from the Company’s debt previously held in the United Kingdom and a lower tax rate on foreign earnings.

The Company’s effective income tax rate for the six months ended June 30, 2020 of 12.7 % resulted in an income tax benefit of $ 3,175 .

This loss was partly offset by a lower tax rate on foreign earnings.

The Company’s effective income tax rate for the nine months ended September 30, 2020 of 7.4 % resulted in an income tax benefit of $ 1,767 .

The effective income tax rate differs from the federal statutory rate of 21 % primarily due to a valuation allowance on capital losses, a non-deductible

1 unchanged sentence

These items were partly offset by a $ 5,981 reduction in unrecognized tax benefits, a $ 2,877 non-taxable

gain recognized upon sale of the Canadian ETF business in the first

quarter of 2020, a tax

benefit of $ 2,842 recognized in connection with the release of a deferred tax asset valuation allowance on interest carryforwards arising from the Company’s debt previously held in the United Kingdom and a lower tax rate on foreign earnings.

gain recognized upon sale of the Canadian ETF business in the first quarter of 2020, a tax benefit of $ 2,842 recognized in connection with the release of a deferred tax asset valuation allowance on interest carryforwards arising from the Company’s debt previously held in the United Kingdom and a lower tax rate on foreign earnings.

Deferred Tax Assets

A summary of the components of the Company’s deferred tax assets at June 30, 2021 and December 31, 2020 are as follows:

A summary of the components of the Company’s deferred tax assets at September 30, 2021 and December 31, 2020 are as follows:

September 30,

Deferred tax assets:

Capital losses

Operating lease liabilities

Accrued expenses

3 unchanged sentences

Stock-based compensation

Unrealized losses

Outside basis differences

Operating lease liabilitie s

Deferred tax assets

Deferred tax liabilities:

Right of use assets – operating leases

Fixed assets and prepaid assets

1 unchanged sentence

Unremitted earnings – International subsidiaries

Right of use assets – operating leases

Allocated equity component of convertible notes

Deferred tax liabilities

Deferred tax liabilitie s

Total deferred tax assets less deferred tax liabilities

2 unchanged sentences

Net Operating and Capital Losses – U.S

The Company’s tax effected net operating losses (“NOLs”) at June 30, 2021 were $ 382 which expire in 2024 .

The Company’s tax effected net operating losses (“NOLs”) at September 30, 2021 were $ 382 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 were $ 16,596 at June 30, 2021 and December 31, 2020.

The Company’s tax effected capital losses were $ 16,368 at September 30, 2021.

These capital losses expire between the years 2023 and 2025.

Net Operating Losses – International

One of the Company’s European subsidiary’s generated NOLs outside the U.S.

These tax effected NOLs, all of which are carried forward indefinitely, were $ 2,093 and $ 2,167 at June 30, 2021 and December 31, 2020, respectively.

One of the Company’s European subsidiar ie

s generated NOLs outside the U.S.

These tax effected NOLs, all of which are carried forward indefinitely, were $ 2,016 at September 30, 2021.

Valuation Allowance

The Company’s valuation allowance has been established on its net 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.

The Company’s valuation allowance has been established on its net 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.

Uncertain Tax Positions

4 unchanged sentences

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 these gross unrecognized tax benefits during the three and six months ended June 30, 2021:

The table below sets forth the aggregate changes in the balance of these gross unrecognized tax benefits during the three and nine months ended September 30, 2021:

Balance on January 1, 2021

Decrease - Lapse of statute of limitations (1)

Lapse of statute of limitations (1)

Foreign currency translation (2)

2 unchanged sentences

Balance at June 30, 2021

Recorded as an income tax benefit of $ 5,171 during the six months ended June 30, 2021, along with an equal and offsetting amount recorded in other gains and losses, net, to recognize a reduction in the indemnification asset.

During the six months ended June 30, 2020, an income tax benefit of $ 5,981 was recorded along with an equal and offsetting amount in other gains and losses, net.

Foreign currency translation (2)

Balance at September 30, 2021

Recorded as an income tax benefit of $ 5,171 during the nine months ended September

30, 2021, along with an equal and offsetting amount recorded in other gains and losses, net, to recognize a reduction in the indemnification asset.

During the nine months ended September 30, 2020, an income tax benefit of $ 5,981 was recorded along with an equal and offsetting amount in other gains and losses, net.

The gross unrecognized tax benefits were accrued in British pounds.

1 unchanged sentence

ETFS Capital has also agreed to provide additional collateral by maintaining a minimum working capital balance up to a stipulated amount.

The gross unrecognized tax benefits and interest and penalties totaling $ 22,427 at June 30, 2021 are included in other non-current

liabilities on the Consolidated Balance Sheets.

The gross unrecognized tax benefits and interest and penalties totaling $ 21,872 at September 30, 2021 are included in other non-current

liabilities on the Company’s Consolidated Balance Sheets.

It is reasonably possible that the total amount of unrecognized tax benefits will decrease by $ 6,995 (including interest and penalties of $ 2,041 ) in the next 12 months upon lapsing of the statute of limitations.

At June 30, 2021, there were $ 22,427 of unrecognized tax benefits (including interest and penalties) that, if recognized, would impact the effective tax rate.

At September 30, 2021, there were $ 21,872 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.

2 unchanged sentences

federal income tax as well as income tax of multiple state, local and certain foreign jurisdictions.

The Company’s federal tax return for the year ended December 31, 2016 and ManJer’s tax returns (a Jersey-based subsidiary) for the years ended December 31, 2014 through 2016 are currently under review by the relevant tax authorities.

ManJer’s tax returns (a Jersey-based subsidiary) for the years ended December 31, 2014 through 2016 are 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 June 30, 2021, with few exceptions, the Company was no longer subject to income tax examinations by any taxing authority for years before 2016.

As of September 30, 2021, 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

, provides guidance that US companies do not need to recognize tax effects on foreign earnings that are indefinitely reinvested.

The Company repatriates earnings of its foreign subsidiaries and therefore has recognized a deferred tax liability of $ 131 and $ 138 at June 30, 2021 and December 31, 2020, respectively.

The Company repatriates earnings of its foreign subsidiaries and therefore has recognized a deferred tax liability of $ 185 and $ 138 at September 30, 2021 and December 31, 2020, respectively.

Shares Repurchased

5 unchanged sentences

Shares repurchased under this program are returned to the status of authorized and unissued on the Company’s books and records.

During the three and six months ended June 30, 2021, the Company repurchased 4,630,733 and 5,120,496 shares of its common stock, respectively, under this program for an aggregate cost of $ 31,876 and $ 34,506 , respectively.

During the three and six months ended June 30, 2020, the Company repurchased 6,738,313 and 7,123,712 shares of its common stock, respectively, under this program for an aggregate cost of $ 24,949 and $ 26,444 , respectively.

There were no shares repurchased during the three months ended September 30, 2021.

During the nine months ended September 30, 2021, the Company repurchased 5,120,496 shares of its common stock under this program for an aggregate cost of $ 34,506 .

During the three and nine months ended September 30, 2020, the Company repurchased 1,066,261 and 8,189,973 shares of its common stock, respectively, under this program for an aggregate cost of $ 4,535 and $ 30,979 , respectively.

Shares repurchased under this program were returned to the status of authorized and unissued on the Company’s books and records.

As of June 30, 2021, $ 17,685 remained under this program for future repurchases.

As of September 30, 2021, $ 17,685 remained under this program for future repurchases

Goodwill and Intangible Assets

1 unchanged sentence

Balance at January 1, 2021

Balance at June 30, 2021

Balance at September 30, 2021

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 United Kingdom.

4 unchanged sentences

Balance at January 1, 2021

Balance at June 30, 2021

Balance at September 30, 2021

In connection with the ETFS Acquisition, which was completed on April 11, 2018 , the Company identified intangible assets valued at $ 601,247 related to the right to manage AUM through customary advisory agreements.

6 unchanged sentences

Consideration also included 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.

No value has been ascribed to these contingent payments at June 30, 2021 and December 31, 2020.

During the six months ended June 30, 2020, the Company recognized an impairment of $ 19,672 to adjust the carrying value of its previously held financial interests in AdvisorEngine to fair value.

During the three and six months ended June 30, 2020, the Company subsequently recognized a gain of $ 868 arising from an adjustment to the estimate fair value of consideration received.

No value has been ascribed to these contingent payments at September 30, 2021 and December 31, 2020.

During the nine months ended September 30, 2020, the Company recognized an impairment of $ 19,672 to adjust the carrying value of its previously held financial interests in AdvisorEngine to fair value.

During the three and nine months ended September 30, 2020, the Company subsequently recognized a gain of $ 225 and $ 1,093 , respectively, arising from an adjustment to the estimate fair value of consideration received.

These fair value adjustments were based upon the final sale terms as disclosed above.

1 unchanged sentence

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.

The Company recorded CDN $ 2,000 in other receivables on the Consolidated Statements of Financial Condition at June 30, 2021 and December 31, 2020.

In connection with this sale, the Company recognized a gain of $ 2,877 during the six months ended June 30, 2020 which was recorded in other gains and losses, net on the Consolidated Statements of Operations.

This gain represents the difference between the minimum cash consideration payable to the Company and the carrying value of WTAMC’s net assets upon disposition.

The Company received CDN $ 3,720 (USD $ 2,774 )

in cash at closing and is entitled to additional cash consideration depending on the achievement of certain AUM growth targets as determined on the 18-

anniversaries of the closing date.

In connection with this sale, the Company recognized a gain of $ 2,877

during the nine months ended September 30, 2020 which was recorded in other losses and gains, net.

This gain represented the difference between the minimum cash consideration payable to the Company and the carrying value of WTAMC’s net assets upon disposition.

During the three months ended September 30, 2021, it was determined that the Company is entitled to CDN

$ 3,000 (USD $ 2,360 )

of additional cash consideration as determined on the 18-month

anniversary of the closing date, which was paid to the Company on October 4, 2021.

from remeasuring the contingent payment to its realizable value was recorded in other losses and gains, net.

The Company may receive additional cash consideration of CDN $ 0 to $ 4,000

depending on the achievement of certain AUM growth targets as determined on the 36-month

anniversary of the closing date.

The following table summarizes impairments recognized by the Company:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Lease termination – New York office (Note 13)

Fixed assets – New York office (Note 8)

Lease termination – London office (Note 13)

AdvisorEngine – Financial Interests (Note 23)

Thesys – Series Y Preferred (Note 4)

Subsequent Events

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements