What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-05-05 compared with 2021-11-05 · 342 added, 441 removed, 700 unchanged (53% 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 $ 21,180 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

Securities owned, at fair value (including $ 15,769 and $ 18,526 invested in WisdomTree ETFs at March 31, 2022 and

December 31, 2021, respectively)

Accounts receivable (including

and $ 25,628 due from related parties at March 31, 2022 and December 31, 2021, respectively)

Prepaid expenses

Income taxes receivable

Other current assets

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14.750 shares authorized, issued and outstanding;

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

redemption value of $ 81,207 and $ 90,741 at March 31, 2022 and December 31, 2021, respectively) (Note 11)

Contingencies (Note 13)

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issued and outstanding:

145,150 and 148,716 at

September 30, 2021 and December 31, 2020, respectively

146,560 and 145,107 at March 31, 2022 and December 31, 2021, respectively

Additional paid-in

9 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Operating Revenues:

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Third-party distribution fees

Acquisition and disposition-related costs

Total operating expenses

2 unchanged sentences

Interest expense

Gain/(loss) on revaluation of deferred consideration – gold payments (Note 9)

(Loss)/gain on revaluation of deferred consideration – gold payments (Note 9)

Interest income

Impairments (Note 13 and 24)

Loss on extinguishment of debt (Note 10)

Other losses and gains, net

Income/(loss) before income taxes

Income tax expense/(benefit)

Net income/(loss)

Earnings/(loss) per share—basic

Earnings/(loss) per share—diluted

Impairment (Note 12)

Other losses, net

(Loss)/income before income taxes

Income tax benefit

Net (loss)/income

(Loss)/earnings per share—basic

(Loss)/earnings per share—diluted

Weighted-average common shares—basic

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and Subsidiaries

Consolidated Statements of Comprehensive Income/(Loss)

Consolidated Statements of Comprehensive (Loss)/Income

(In Thousands)

Three Months Ended

September 30,

Nine Months Ended

September 30,

Net income/(loss)

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”)

Net (loss)/income

Other comprehensive loss

Foreign currency translation adjustment, net of income taxes

Other comprehensive (loss)/income

Comprehensive income/(loss)

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

WisdomTree Investments, Inc.

and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

(In Thousands)

For the Three Months Ended September 30, 2021

Comprehensive

Balance—July 1, 2021

Restricted stock issued and vesting of restricted stock units, net

Stock-based compensation

Other comprehensive loss

Balance—September 30, 2021

For the Three Months Ended September 30, 2020

Comprehensive

Balance—July 1, 2020

Restricted stock issued and vesting of restricted stock units, net

Shares repurchased

Stock-based compensation

Allocation of equity

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

Other comprehensive income

Balance—September 30, 2020

Comprehensive (loss)/income

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

1 unchanged sentence

and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (Continued)

Consolidated Statements of Changes in Stockholders’ Equity

(In Thousands)

For the Nine Months Ended September 30, 2021

For the Three Months Ended March 31, 2022

Comprehensive

Balance—January 1, 2022

Reclassification of equity component related to convertible notes, net deferred taxes of $ 1,022 , upon the implementation of Accounting Standards Update 2020-06

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

Exercise of stock options, net

Stock-based compensation

Other comprehensive loss

Balance—September 30, 2021

For the Nine Months Ended September 30, 2020

Balance—March 31, 2022

For the Three Months Ended March 31, 2021

Comprehensive

Balance—January 1, 2021

Reclassification of equity component related to convertible

notes, net of deferred taxes of

implementation of ASU 2020-06

Balance—January 1, 2021 (as adjusted)

Restricted stock issued and vesting of restricted stock units,

2 unchanged sentences

Stock-based compensation

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

$ 157 and deferred taxes of $ 1,239

Other comprehensive loss

Balance—September 30, 2020

Balance—March 31, 2021

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

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(In Thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

Net income/(loss)

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

Advisory fees received in gold, other precious metals and cryptocurrencies

Net (loss)/income

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

Loss/(gain) on revaluation of deferred consideration—gold payments

Advisory and license fees paid in gold, other precious metals and cryptocurrency

Deferred income taxes

Losses on securities owned, at fair value

Contractual gold payments

Stock-based compensation

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

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

Amortization of right of use asset

Depreciation and amortization

Loss on extinguishment of debt

Amortization of issuance costs – former credit facility

Changes in operating assets and liabilities:

Securities owned, at fair value

Accounts receivable

Prepaid expenses

Gold, other precious metals and cryptocurrencies

Gold and other precious metals

Fund management and administration payable

1 unchanged sentence

Income taxes receivable/payable

Securities sold, but not yet purchased, at fair value

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

Operating lease liabilities

Accounts payable and other liabilities

Net cash provided by operating activities

Net cash (used in)/provided by operating activities

Cash flows from investing activities:

Purchase of securities owned, a fair value

Purchase of securities owned, at fair value

Purchase of investments

3 unchanged sentences

securities maturing or called prior to maturity

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

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

Net cash (used in)/provided by investing activities

Net cash used in investing activities

Cash flows from financing activities:

Shares repurchased

Dividends paid

Convertible notes issuance costs

Repayment of debt

Proceeds from the issuance of convertible notes

Shares repurchased

Proceeds from exercise of stock options

Net cash provided by/(used in) financing activities

Net cash used in financing activities

Decrease in cash flow due to changes in foreign exchange rate

Increase/(decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents—beginning of year

3 unchanged sentences

Cash paid for interest

, 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)

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

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

WisdomTree Investments, Inc.

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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.

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, cryptocurrency and alternative strategies.

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The WisdomTree ETFs are issued in the U.S.

WTT, a non-consolidated

third party, is a Delaware statutory trust registered with the SEC as an open-end

WTT is a non-consolidated

Delaware statutory trust registered with the SEC as an open-end

management investment company.

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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.

WMAI is a non-consolidated

public limited company domiciled in Ireland.

WisdomTree Management Limited

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.

(“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 is a non-consolidated

public limited company domiciled in Ireland.

WisdomTree UK Limited

is a United Kingdom based company registered with the Financial Conduct Authority currently providing distribution and support services to ManJer, WTMAML and WML.

(“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 United Kingdom based company which is the legacy distributor of the WMAI ETPs and WisdomTree UCITS ETFs.

based company which is the legacy distributor of the WMAI ETPs and WisdomTree UCITS ETFs.

These services are now provided directly by WTUK.

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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.

WisdomTree Digital Commodity Services, LLC

is a New York based company that has been formed to serve as the sponsor of the WisdomTree Bitcoin Trust and WisdomTree Ethereum Trust, each an ETF currently under review with the SEC.

WisdomTree Digital Management, Inc.

is a New York based company that has been formed to serve as a SEC-registered

investment adviser (not yet registered) and will provide investment advisory and other management services to mutual funds including the WisdomTree Digital Trust and the WisdomTree Digital Short-Term Treasury Fund whose shares are secondarily recorded on a blockchain (currently under review with the SEC), and other products.

WisdomTree Securities, Inc.

is a New York based company that has been formed to operate as a limited purpose broker-dealer (i.e., mutual fund retailer) upon registration with the SEC, FINRA and state regulatory authorities.

Significant Accounting Policies

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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 presentation of the amount collected on behalf of third parties of $ 1,574 for the three months ended March 31, 2021 has been revised due to an immaterial error correction.

This amount was originally recorded as advisory fee revenue and fund management and administration expense while no such amount should have been recorded in the Consolidated Statements of Operations.

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

September 30,

March 31, 2021

Operating Revenues:

13 unchanged sentences

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,

Cash flows from purchasing securities owned, at fair value of $ 1,657 and selling securities owned, at fair value of $ 1,232 during the three months ended March 31, 2021 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 Consolidated Statements of Cash Flows.

The following table summarizes these reclassifications for the three months ended March 31, 2021:

March 31, 2021

Consolidated Statements of Cash Flows:

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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)

Net cash used in investing activities (previously reported)

Reclassification of purchases of securities owned, at fair value

Reclassification of proceeds from the sale of securities owned, at fair

Net cash used in investing activities (currently reported)

Consolidation

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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 Income/(Loss) as a component of other comprehensive income/(loss).

The impact of the foreign currency translation adjustment is included in the Consolidated Statements of Comprehensive Income/(Loss) as a component of other comprehensive (loss)/income.

Use of Estimates

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Marketing and Advertising

Marketing and advertising costs, including media advertising and production costs, are expensed when incurred.

ting 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:

Furniture and fixtures

Leasehold improvements are amortized over the term of their respective leases or service lives of the improvements, whichever is shorter.

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government guarantee.

The Company accounts for equity investments that do not have a readily determinable fair value under the measurement alternative prescribed in 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.

The Company accounts for equity investments that do not have a readily determinable fair value under the measurement alternative prescribed in Accounting Standards Codification (“ASC”) Topic 321, Investments – Equity Securities

(“ASC 321”), 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.

1 unchanged sentence

Otherwise, such distributions are considered returns of investment and are recorded as a reduction of the cost of the investment.

Investments in debt instruments are accounted for at fair value, with changes in fair value reported in other income.

Goodwill is the excess of the purchase price over the fair values of the identifiable net assets at the acquisition date.

1 unchanged sentence

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.

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.

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The annual impairment testing date for all of the Company’s intangible assets is November 30 th

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

The Company accounts for its lease obligations in accordance with ASC Topic 842, Leases

, 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

The remaining lease payments are discounted using the rate implicit in the lease, if known, or otherwise the Company’s incremental borrowing rate.

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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.

These recognition requirements are not applied to short-term leases which are those with a lease term

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.

3 unchanged sentences

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 9).

Changes in the fair value of this obligation are reported as gain/(loss) on revaluation of deferred consideration – gold payments on the Company’s Consolidated Statements of Operations.

Changes in the fair value of this obligation are reported as (loss)/gain on revaluation of deferred consideration – gold payments in the Consolidated Statements of Operations.

Convertible Notes

Convertible notes are carried at amortized cost, net of issuance costs.

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

In accordance with Accounting Standards Update (“ASU”) 2020-06

Debt – Debt with Conversion and Other Options

under the modified retrospective approach.

provides for convertible instruments being reported as a single liability (applicable to the convertible notes) or equity with no separate accounting for embedded conversion features unless the conversion feature meets the criteria for accounting under the substantial premium model or does not qualify for a derivative scope exception.

Previously, the convertible notes were required to be separated into their liability and equity components by allocating the issuance proceeds to each of those components.

The liability component was 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 represented the residual amount that was recorded in additional paid-in

, the Company accounts for convertible instruments as a single liability (applicable to the convertible notes) or equity with no separate accounting for embedded conversion features unless the conversion feature meets the criteria for accounting under the substantial premium model or does not qualify for a derivative scope exception.

Interest expense is recognized using the effective interest method and includes amortization of issuance costs over the life of the debt.

3 unchanged sentences

Contingent Payments

The Company recognizes contingent payments when the contingency is resolved and the gain is realized.

The Company recognizes a gain on contingent payments when the contingency is resolved and the gain is realized.

Earnings per Share

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based taxes are recorded as part of other liabilities and other expenses.

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.

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

Accordingly, more convertible instruments are 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 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

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

On January 1, 2021, the Company adopted 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

(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.

The Company has determined that the adoption of this standard did not have a material impact on its financial statements.

Cash and Cash Equivalents

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.

Of the total cash and cash equivalents of $ 110,395 and $ 140,709 at March 31, 2022 and December 31, 2021, respectively, $ 109,867 and $ 127,328 were held at two financial institutions.

At March 31, 2022 and December 31, 2021, cash equivalents were approximately $ 449 and $ 11,488 , respectively.

Certain of the Company’s international subsidiaries are required to maintain a minimum level of regulatory capital, which was $ 12,602

and $ 12,320 at March 31, 2022 and December 31, 2021, respectively.

These requirements are generally satisfied by cash on hand.

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

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

September 30, 2021

During the three months ended March 31, 2022 and 2021 there were no transfers between Levels 2 and 3.

March 31, 2022

Recurring fair value measurements:

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Corporate bonds

Non-recurring

fair value measurements:

Securrency, Inc.

– Series A convertible preferred stock (1)

Fnality International Limited – convertible note (Note 7)

Recurring fair value measurements:

Deferred consideration (Note 9)

Fair value of $ 8,488 and $ 8,349 determined on June 9, 2021 and March 8, 2021, respectively (Note 7).

December 31, 2021

6 unchanged sentences

fair value measurements:

AdvisorEngine Inc.

(“AdvisorEngine”) – Financial interests (1)

Thesys Group, Inc.

(“Thesys”) – Series Y Preferred Stock (1)

Securrency, Inc.

– Series A convertible preferred stock (1)

Recurring fair value measurements:

Deferred consideration (Note 9)

Non-recurring

fair value measurements:

Convertible notes (2)

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.

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

Fair value of $ 8,488 and $ 8,349 determined on June 9, 2021 and March 8, 2021, respectively (Note 7).

Recurring Fair Value Measurements - Methodology

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

Deferred Consideration (Note 9)

– 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:

Fair Value Measurements classified as Level 3

– The following tables presents a reconciliation of beginning and ending balances of recurring fair value measurements classified as Level 3:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Deferred consideration (Note 9)

Fnality International Limited – Convertible note (Note 7)

Beginning balance

Net realized losses/(gains) (1)

Net unrealized gains/(losses) (1)

Ending balance

Recorded as contractual gold payments expense on the Company’s Consolidated Statements of Operations.

Recorded as gain/(loss) on revaluation of deferred consideration – gold payments on the Company’s Consolidated Statements of Operations.

Recorded in other losses, net in the Consolidated Statements of Operations.

Three Months Ended

Deferred consideration (Note 9)

Beginning balance

Net realized losses (1)

Net unrealized losses/(gains) (2)

Ending balance

Recorded as contractual gold payments expense in the Consolidated Statements of Operations.

Recorded as (loss)/gain on revaluation of deferred consideration – gold payments in the Consolidated Statements of Operations.

Securities Owned

These securities consist of the following:

September 30,

Securities Owned

Trading securities

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.

The Company recognized net trading losses on securities owned that were still held at the reporting dates of $

561 during the three months ended March 31, 2022 and 2021, respectively, which were recorded in other losses, net, in the Consolidated Statements of Operations.

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 nine months ended September 30, 2021 and 2020, the Company received proceeds of $ 114 and $ 16,441 , respectively, from held-to-maturity

During the three months ended March 31, 2022 and 2021, the Company received proceeds of $ 18 and $ 38 , 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

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

September 30,

Due within one year

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The following table sets forth the Company’s investments:

September 30, 2021

March 31, 2022

December 31, 2021

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Subtotal – Securrency, Inc.

Fnality International Limited – convertible note

Onramp Invest, LLC – Simple Agreement for Future Equity

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– Preferred Stock

The Company owns approximately 22 % (or 18 % on a fully-diluted basis) of the capital stock of Securrency, Inc.

(“Securrency”), a leading developer of institutional-grade blockchain-based financial and regulatory technology, issued as a result of strategic investments totaling $ 13,612 .

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.

owns approximately 22 % (or 17 % on a fully-diluted basis) of the capital stock of Securrency, Inc.

(“Securrency”), a developer of institutional-grade blockchain-based financial and regulatory technology, issued as a result of strategic investments totaling $ 13,612 .

In consideration of such investments, the Company received 5,178,488 shares of Series A convertible preferred stock (“Series A Shares”) in December of 2019 and

2,004,665 shares of Series B convertible preferred stock (“Series B Shares”) in March of 2021.

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

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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

The investment is accounted for under the measurement alternative prescribed in ASC 321, 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 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

There was no impairment recognized during the three months ended March 31, 2022 based upon a qualitative assessment.

On March 8, 2021, the Company recognized a gain of $ 237 on its Series A Shares, which was re-measured

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

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The table below presents the inputs used in backsolve valuation approach (classified as Level 3 in the fair value hierarchy):

March 8, 2021

Expected volatility

Time to exit (in years)

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

Fnality International Limited – Convertible Note

In February 2022, the Company participated in a convertible note financing, making

a £ 5,000 ($ 6,863 ) investment in Fnality

International Limited (“Fnality”),

a company incorporated in England and Wales and focused on creating a peer-to-peer

digital wholesale settlement ecosystem

comprised of a consortium of financial institutions

, offering real time cross-border payments from a single pool of liquidity.

In consideration for its investment, the Company was issued a 5 % Convertible Unsecured Loan Note maturing on December 31, 2023 .

The note is convertible into equity shares in the event of a Qualified Financing Round (as defined in the note instrument) at a conversion price equal to the lower of (i) a discount

of 20 % to lowest price paid per equity share issued pursuant to such Qualified Financing Round and (ii) an amount paid per share subject to a pre-money

valuation cap.

The note is redeemable upon the occurrence of a Change of Control (as defined in the note instrument) provided that the amount repaid is the greater of (i) the principal amount and all accrued interest and (ii) the amount that would be received had the note been converted to equity shares immediately prior to the occurrence of the Change of Control.

Redemption may also occur at maturity or prior to maturity upon approval by holders of at

least 50 % and 75 %, respectively, of the outstanding notes.

The note is accounted for at fair value.

Fair value is determined by the Company using the probability-weighted expected return method (“PWERM”), a valuation approach that estimates the value of the note assuming various outcomes.

The note is also remeasured for changes in the British pound and U.S.

dollar exchange rate.

During the three months ended March 31, 2022, the Company recognized a loss

of $ 163 when re-measuring

the notes to fair value.

The table below presents the probability ascribed to potential outcomes used in the PWERM (classified as Level 3 in the fair value hierarchy):

Conversion of note upon a Qualified Financing Round

Redemption of note upon a Change of Control

Onramp Invest, LLC – Simple Agreement for Future Equity

2021, the Company invested $

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

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.

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The investment is assessed for impairment and similar observable transactions on a quarterly basis.

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

There was no impairment recognized during the three months ended March 31, 2022 based upon a qualitative assessment.

Fixed Assets, net

The following table summarizes fixed assets:

September 30,

Furniture and fixtures

Leasehold improvements

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

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(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 $ 224,953 and $ 230,137 at September 30, 2021 and December 31, 2020 using the following assumptions:

September 30,

The Company determined the present value of the deferred consideration of $ 245,177 and $ 228,062 at March 31, 2022 and December 31, 2021 using the following assumptions:

Forward-looking gold price (low) – per ounce

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Perpetual growth rate

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 forward-looking gold prices at March 31, 2022 were extrapolated from the last observable CMX exchange price (beyond 2027) 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.

This obligation is classified as Level 3 as the discount rate and extrapolated forward-looking gold prices are significant unobservable inputs.

This obligation is classified as Level 3 as the discount rate, the extrapolated forward-looking gold prices and perpetual growth rate are significant unobservable inputs.

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 $ 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:

Current amounts payable were $ 17,882 and $ 16,739 and long-term amounts payable were $ 227,295 and $ 211,323 , respectively, at March 31, 2022 and December 31, 2021, respectively.

During the three months ended March 31, 2022 and 2021, the Company recognized the following in respect of deferred consideration:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Contractual gold payments

Contractual gold payments – gold ounces paid

Gain/(loss) on revaluation of deferred consideration – gold payments (1)

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.

(Loss)/gain on revaluation of deferred consideration – gold payments (1)

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 present value of 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 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 $

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.

Convertible Notes

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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.

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.

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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 September 30, 2021 and December 31, 2020:

September 30, 2021

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 March 31, 2022 and December 31, 2021:

March 31, 2022

December 31, 2021

Principal amount

Gross proceeds

Unamortized discount (1)

Unamortized issuance costs (1)

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Effective interest rate (1)

Unamortized discount was reduced by $ 4,207 and unamortized issuance costs increased by $ 119 upon the early adoption of ASU 2020-06

on January 1, 2021.

The discount previously arose from the bifurcation of the conversion option which occurred prior to the adoption of ASU 2020-06.

The unamortized issuance costs are reported net of the unamortized premium.

Includes amortization of the issuance costs and premium.

The effective interest rate prior to January 1, 2021 also included amortization of the discount arising from the bifurcation of the conversion option.

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

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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 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.

Interest expense on the Convertible Notes during the three months ended March 31, 2022 and 2021 was $ 3,732 and $ 2,296 , respectively.

Interest payable of $ 3,676 and $ 590 at March 31, 2022 and December 31, 2021 is included in accounts payable and other liabilities in the Consolidated Balance Sheets.

The fair value of the Convertible Notes (classified as Level 2 in the fair value hierarchy) was $ 343,154 and $ 360,571 at March 31, 2022 and December 31, 2021, respectively.

The if-converted

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

value of the 2020 Notes did not exceed the principal amount at March 31, 2022 and was $ 180,912 at December 31, 2021.

The if-converted

value of the 2021 Notes did not exceed the principal amount at March 31, 2022 and December 31, 2021.

Preferred Shares

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The following is a summary of the Preferred Share balance:

September 30,

Issuance of Preferred Shares

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Preferred Shares – carrying value

Cash dividends declared per share

Temporary equity classification is required for redeemable instruments for which redemption triggers are outside of the issuer’s control.

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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 $ 88,456 and $ 72,667 at September 30, 2021 and December 31, 2020, respectively.

The redemption value of the Preferred Shares was $ 81,207 and $ 90,741 at March 31, 2022 and December 31, 2021, respectively.

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

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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

September 30,

Nine Months Ended

September 30,

Operating lease cost

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Other information:

Cash paid for amounts included in the measurement of operating lease

Cash paid for amounts included in the measurement of operating lease liabilities

assets obtained in exchange for new operating lease liabilities

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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.

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.

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

During the three months ended March 31, 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.

This loss is included in impairments in the Consolidated Statements of Operations.

The following table discloses future minimum lease payments at March 31, 2022 with respect to the Company’s operating lease liabilities:

Remainder of 2022

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Total future minimum lease payments (undiscounted)

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

The following table reconciles the future minimum lease payments (disclosed above) at March 31, 2022 to the operating lease liabilities recognized in the Consolidated Balance Sheets:

Amounts recognized in the Consolidated Balance Sheets

Lease liability – short term

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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 ($ 10,479 ), in the aggregate, resulting from the closure of the WisdomTree WTI Crude Oil 3x Daily Leveraged ETP (“3OIL”) in March 2020.

In December 2020, WMAI, WTMAML, WTUK and WisdomTree Ireland Limited (“WT Ireland”) were served with a writ of summons to appear before the Court of Milan, Italy.

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 € 8,900 ($ 9,912 ) and € 100 ($ 111 ) 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.

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.

In February 2022, the

Court of Udine ruled in the Company’s favor.

Also in February 2022, WMAI, WTMAML, WTUK and WT Ireland were served with another writ of summons to appear before the Court of Milan by additional investors seeking

approximately € 3,400 ($ 3,787 ) resulting from the closure of 3OIL.

In March 2022, WMAI and WTUK were served with (i) a writ of summons to appear before the Court of Turin by an investor seeking damages for

approximately € 2,000 ($ 2,227 )

and (ii) three writs of summons to appear before the Court of Milan by investors seeking damages for approximately € 1,500 ($ 1,671 ), in the aggregate, all resulting from the closure of 3OIL.

These writs were also served on the intermediary brokers for the respective claimants, with the claimants alleging joint and several liability of WMAI, WTUK and such intermediary brokers.

The Company is currently assessing these claims with its external counsel

An accrual has not been made with respect to these matters at March 31, 2022 and December 31, 2021.

Variable Interest Entities

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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 the entities in which it has a variable interest as it does not have the power to direct the activities that most significantly impact the entity’s economic performance.

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

September 30,

Carrying Amount – Assets (Securrency)

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Subtotal – Securrency

Carrying Amount – Assets (Fnality International Limited)

Convertible note

Carrying Amount – Assets (Onramp)

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Maximum exposure to loss

from Contracts with Customers

Revenues from Contracts with Customers

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

Three Months Ended

September 30,

Nine Months Ended

September 30,

Revenues from contracts with customers:

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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 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 16

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.

significant judgment in calculating amounts due which are invoiced monthly in arrears and are not subject to any potential reversal.

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.

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Three Months Ended

September 30,

Nine Months Ended

September 30,

Revenues from contracts with customers:

United States

Canada (Note 23)

Total operating revenues

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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 are included in fund management and administration on the Company’s Consolidated Statements of Operations.

services, excluding extraordinary expenses, taxes and certain other expenses, which are included in fund management and administration in the Consolidated Statements of Operations.

In exchange, the Company receives fees based on a percentage of the ETPs’ average daily net assets.

1 unchanged sentence

WisdomTree 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:

September 30,

The following table summarizes accounts receivable from related parties which are included as a component of accounts receivable in the Consolidated Balance Sheets:

Receivable from WTT

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Receivable from WMAI and WTI

Receivable from WTCS

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.

2 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Advisory services provided to WTT

1 unchanged sentence

Advisory services provided to WMAI and WTI

Advisory services provided to WTAMC

Advisory services provided to WTCS

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

1 unchanged sentence

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.

The Company also has investments in certain WisdomTree ETFs of approximately $

18,526 at March 31, 2022 and December 31, 2021, respectively.

Net losses related to trading WisdomTree ETFs during the three months ended March 31, 2022 and 2021 were $

384 , respectively, which are recorded in other losses, net

n the Consolidated Statements of Operations.

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.

On June 20, 2016, the Company’s stockholders approved an

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.

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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.

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.

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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:

The number of PRSUs vesting ranges from 0 %

of the target number of PRSUs granted, as follows:

• If the relative TSR is below the 25 th

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• 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.

Stock-based compensation expense during the three months ended March 31, 2022 and 2021

was $ 2,936 and $ 3,143 , respectively.

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

September 30, 2021

March 31, 2022

Unrecognized Stock-

Vesting Period

Vesting Period (Years)

Employees and directors

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

Balance at July 1, 2021

A summary of stock-based compensation award activity (shares) during the three months ended March 31, 2022 is as follows:

Balance at January 1, 2022

Exercised/vested

Balance at September 30, 2021

Balance at March 31, 2022

The payout on PRSUs vesting in January 2022 was zero.

Stockholder Rights Plan

On March 13, 2022, the Board of Directors of the Company adopted a stockholder rights plan, as set forth in the Stockholder Rights Agreement, dated March 14, 2022, between the Company and Continental Stock Transfer & Trust Company, as Rights Agent (the “Rights Agreement”).

Pursuant to the terms of the Rights Agreement, the Board of Directors declared a dividend distribution of (i) one Preferred Stock Purchase Right

(a “Right”) for each outstanding share of common stock, par value $ 0.01 per share, of the Company (the “Common Stock”) and (ii) 1,000 Rights for each outstanding share of Series A Non-Voting

Convertible Preferred Stock, par value $ 0.01 per share, of the Company (the “Series A Preferred Stock”), to stockholders of record as of the close of business on March 25, 2022 (the “Record Date”).

In addition, one Right will automatically attach to each share of Common Stock and 1,000 Rights will automatically attach to each share of Series A Preferred Stock, in each case, issued between the Record Date and the earlier of the Distribution Date (as defined below) and the expiration date of the Rights.

Each Right entitles the registered holder thereof to purchase from the Company a unit consisting of one ten-thousandth

of a share (a “Unit”) of Series B Junior Participating Cumulative Preferred Stock, par value $ 0.01 per share, of the Company (the “Preferred Stock”) at a cash exercise price of $ 27.00 per Unit (the “Exercise Price”), subject to adjustment, under certain conditions specified in the Rights Agreement.

Initially, the Rights are not exercisable and are attached to and trade with all shares of Common Stock and Series A Preferred Stock outstanding as of, and issued subsequent to, the Record Date.

The Rights will separate from the Common Stock and Series A Preferred Stock and will become exercisable upon the earlier of (i) the close of business on the tenth calendar day following the first public announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) has acquired beneficial ownership of 10 % (or 20 % in the case of a person or group which, together with all affiliates and associates of such person or group, is the beneficial owner of shares of Common Stock of the Company representing less than 20 % of the shares of Common Stock of the Company then outstanding, and which is entitled to file, and files, a statement on Schedule 13G pursuant to Rule 13d-1(b)

or Rule 13d-1(c)

of the General Rules and Regulations under the Exchange Act, as amended, as in effect at the time of the first public announcement of the declaration of the Rights dividend with respect to the shares of Common Stock beneficially owned by such person or group) or more of the outstanding shares of Common Stock, other than as a result of repurchases of stock by the Company or certain inadvertent actions by a stockholder (the date of such announcement being referred to as the “Stock Acquisition Date”), or (ii) the close of business on the tenth business day (or such later day as the Board of Directors may determine) following the commencement of a tender offer or exchange offer that could result upon its consummation in a person or group becoming an Acquiring Person (the earlier of such dates being herein referred to as the “Distribution Date”).

A person or group who beneficially owned 10 % or more (or 20 % or more in the case of passive stockholders) of the Company’s outstanding Common Stock prior to the first public announcement by the Company of the adoption of the Rights Agreement will not trigger the Rights Agreement so long as they do not acquire beneficial ownership of any additional shares of Common Stock at a time when they still beneficially own 10 % or more (or 20 % or more in the case of passive stockholders) of such Common Stock, subject to certain exceptions as set forth in the Rights Agreement.

For purposes of the Rights Agreement, beneficial ownership is defined to include ownership of securities that are subject to a derivative transaction and acquired derivative securities.

Swaps dealers unassociated with any control intent or intent to evade the purposes of the Rights Agreement are excepted from such imputed beneficial ownership.

In the event that a Stock Acquisition Date occurs, proper provision will be made so that each holder of a Right (other than an Acquiring Person or its associates or affiliates, whose Rights shall become null and void) will thereafter have the right to receive upon exercise, in lieu of a number of shares of Preferred Stock, that number of shares of Common Stock of the Company (or, in certain circumstances, including if there are insufficient shares of Common Stock to permit the exercise in full of the Rights, Units of Preferred Stock, other securities, cash or property, or any combination of the foregoing) having a market value of two times the Exercise Price of the Right (such right being referred to as the “Subscription Right”).

In the event that, at any time following the Stock Acquisition Date, (i) the Company consolidates with, or merges with and into, any other person, and the Company is not the continuing or surviving corporation, (ii) any person consolidates with the Company, or merges with and into the Company and the Company is the continuing or surviving corporation of such merger and, in connection with such merger, all or part of the shares of Common Stock are changed into or exchanged for stock or other securities of any other person or cash or any other property, or (iii)

50 % or more of the Company’s assets or earning power is sold, mortgaged or otherwise transferred, each holder of a Right (other than an Acquiring Person or its associates or affiliates, whose Rights shall become null and void) will thereafter have the right to receive, upon exercise, common stock of the acquiring company having a market value equal to two times the Exercise Price of the Right (such right being referred to as the “Merger Right”).

The holder of a Right will continue to have the Merger Right whether or not such holder has exercised the Subscription Right.

Rights that are or were beneficially owned by an Acquiring Person may (under certain circumstances specified in the Rights Agreement) become null and void.

The Rights may be redeemed in whole, but not in part, at a price of $ 0.01 per Right (payable in cash, Common Stock or other consideration deemed appropriate by the Board of Directors) by the Board of Directors only until the earlier of (i) the time at which any person becomes an Acquiring Person or (ii) the expiration date of the Rights Agreement.

Immediately upon the action of the Board of Directors ordering redemption of the Rights, the Rights will terminate and thereafter the only right of the holders of Rights will be to receive the redemption price.

The Rights Agreement may be amended by the Board of Directors in its sole discretion at any time prior to the time at which any person becomes an Acquiring Person.

After such time the Board of Directors may, subject to certain limitations set forth in the Rights Agreement, amend the Rights Agreement only to cure any ambiguity, defect or inconsistency, to shorten or lengthen any time period, or to make changes that do not adversely affect the interests of Rights holders (excluding the interests of an Acquiring Person or its associates or affiliates).

Until a Right is exercised, the holder will have no rights as a stockholder of the Company (beyond those as an existing stockholder), including the right to vote or to receive dividends.

While the distribution of the Rights will not be taxable to stockholders or to the Company, stockholders may, depending upon the circumstances, recognize taxable income in the event that the Rights become exercisable for shares of Common Stock, other securities of the Company, other consideration or for common stock of an acquiring company.

The Rights are not exercisable until the Distribution Date and will expire at the close of business on March 13, 2023;

provided that if the Company’s stockholders have not ratified the Rights Agreement by the close of business on the first day after the Company’s 2022 annual meeting of stockholders (including any adjournments or postponements thereof), the Rights will expire at such time, in each case, unless previously redeemed or exchanged by the Company.

The Rights Agreement provides the holders of the Common Stock with the ability to exempt an offer to acquire, or engage in another business combination transaction involving, the Company that is deemed a “Qualifying Offer” (as defined in the Rights Agreement) from the terms of the Rights Agreement.

A Qualifying Offer is, in summary, an offer determined by a majority of the independent members of the Board to have specific characteristics that are generally intended to preclude offers that are coercive, abusive or highly contingent.

Among those characteristics are that it be:

(i) a fully financed all-cash tender offer or an exchange offer offering shares of common stock of the offeror, or a combination thereof, for any and all of the Common Stock;

(ii) an offer whose per share offer price and consideration represent a “reasonable premium” over the highest reported per share market price of the Common Stock in the 24 months immediately preceding the date on which the offer is commenced;

(iii) an offer that, within 20 business days after the commencement date of the offer (or within 10 business days after any increase in the offer consideration), does not result in a nationally recognized investment banking firm retained by the Board rendering an opinion to the Board that the consideration being offered to the holders of the Common Stock is either inadequate or unfair;

and (iv) an offer that is otherwise in the best interests of the Company’s stockholders.

The Rights Agreement provides additional characteristics necessary for an acquisition offer to be deemed a “Qualifying Offer,” including if the consideration offered in a proposed transaction is stock of the acquiror.

Pursuant to the Rights Agreement, if the Company receives a Qualifying Offer and the Board has not redeemed the outstanding Rights or exempted such Qualifying Offer from the terms of the Rights Agreement or called a special meeting of stockholders (the “Special Meeting”) for the purpose of voting on whether to exempt such Qualifying Offer from the terms of the Rights Agreement, in each case by the end of the 90 business day period following the commencement of such Qualifying Offer, provided such offer remains a Qualifying Offer during such period, the holders of 10% of the Common Stock may request that the Board call a Special Meeting to vote on a resolution authorizing the exemption of the Qualifying Offer from the terms of the Rights Agreement.

If such a Special Meeting is not held by the 90th business day following the receipt of such a request from stockholders to call a Special Meeting, the Qualifying Offer will be deemed exempt from the terms of the Rights Agreement on the 10th business day thereafter.

Earnings Per Share

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Three Months Ended

September 30,

Nine Months Ended

September 30,

Basic Earnings/(Loss) per Share

Net income/(loss)

Basic (Loss)/Earnings per Share

Net (loss)/income

Income distributed to participating securities

Undistributed income allocable to participating securities

Net income/(loss) available to common stockholders – Basic EPS

Net (loss)/income available to common stockholders – Basic EPS

Weighted average common shares (in thousands)

Basic earnings/(loss) per share

Basic (loss)/earnings per share

Three Months Ended

September 30,

Nine Months Ended

September 30,

Diluted Earnings/(Loss) per Share

Net income/(loss) available to common stockholders

Diluted (Loss)/Earnings per Share

Net (loss)/income available to common stockholders

Undistributed income allocable to participating securities

Reallocation of undistributed income allocable to participating securities considered potentially dilutive

Net income/(loss) available to common stockholders – Diluted EPS

Net (loss)/income available to common stockholders – Diluted EPS

Weighted Average Diluted Shares (in thousands):

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Weighted average diluted shares, excluding participating securities (in thousands)

Diluted earnings/(loss) per share

Diluted earnings/(loss) per share presented above is calculated using the two-class

Diluted (loss)/earnings per share

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 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.

During the three months ended March 31, 2022, 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 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:

common stock equivalents were 509 and 149 during the three months ended March 31, 2022 and 2021, respectively (shares herein are reported in thousands).

Potential common shares associated with the conversion option embedded in the Convertible Notes were excluded from the computation for the three months ended March 31, 2022 and 2021 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 in the Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021, 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

September 30,

Nine Months Ended

September 30,

Reconciliation of Weighted Average Diluted Shares (in thousands)

Weighted average diluted shares as disclosed on the Consolidated Statements of Operations

Weighted average diluted shares as disclosed in the Consolidated Statements of Operations

Participating securities

Shares (Note 12)

Weighted average shares of common stock issuable upon conversion of the Preferred Shares (Note 11)

Potentially dilutive restricted stock awards

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

Excludes 15,307 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 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 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

loss on revaluation of deferred consideration and tax shortfalls associated with the vesting and exercise of stock-based compensation awards.

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.

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

Excludes 15,521 participating securities and 31 potentially dilutive non-participating

common stock equivalents for the three months ended March 31, 2022 as the Company reported a net loss for the period (shares herein are reported in thousands).

Effective Income Tax Rate – Three Months Ended March 31, 2022 and March 31, 2021

The Company’s effective income tax rate during the three months ended March 31, 2022 of 62.0 % resulted in an income tax benefit of

The effective income tax rate differs from the federal statutory tax rate

of 21 % primarily due to a

$ 19,897 reduction in unrecognized tax benefits (including interest and penalties), a lower tax rate on foreign earnings and tax windfalls associated with the vesting of stock-based compensation awards.

These items were partly offset by a

loss on revaluation of deferred consideration and an increase in the deferred tax asset valuation

allowance on losses recognized on securities owned.

The Company’s effective income tax rate for the three months ended March 31, 2021 of negative 14.9 % resulted in an income tax benefit of $ 1,969 .

The Company’s effective income tax rate differs from the federal statutory tax rate of 21 % primarily due to a $ 5,171 reduction in unrecognized tax benefits

(including interest and penalties),

a non-taxable

gain on revaluation of deferred consideration and a lower tax rate on foreign earnings, partly offset by tax shortfalls associated with the vesting and exercise of stock-based compensation awards.

Deferred Tax Assets

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,

A summary of the components of the Company’s deferred tax assets at March 31, 2022 and December 31, 2021 are as follows:

Deferred tax assets:

Capital losses

Accrued expenses

NOLs – Foreign

Unrealized losses

Accrued expenses

Goodwill and intangible assets

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Stock-based compensation

Unrealized losses

Outside basis differences

Operating lease liabilitie s

Deferred tax assets

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Fixed assets and prepaid assets

Foreign currency translation adjustment

Unremitted earnings – International subsidiaries

Right of use assets – operating leases

Allocated equity component of convertible notes

Deferred tax liabilitie s

Unrealized gains

Foreign currency translation adjustment

Deferred tax liabilities

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 September 30, 2021 were $ 382 which expire in 2024 .

The Company’s tax effected net operating losses (“NOLs”) at March 31, 2022 were $ 255 , 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 $ 16,368 at September 30, 2021.

The Company’s tax effected capital losses at March 31, 2022 were

These capital losses expire between the years 2023 and 2027.

Net Operating Losses – International

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.

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

These tax effected NOLs, all of which are carried forward indefinitely, were $ 1,846 at March 31, 2022.

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

The Company’s valuation allowance has been established on its net capital losses, international net operating losses, unrealized losses and outside basis differences, as it is

more-likely-than-not

that these deferred tax assets will not be realized.

5 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 nine months ended September 30, 2021:

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.

The table below sets forth the aggregate changes in the balance of these gross unrecognized tax benefits:

Balance on January 1, 2022

Lapse of statute of limitations (1)

Decrease - Settlements (1)

Decrease - Lapse of statute of limitations (1)

Foreign currency translation (2)

Balance at March 31, 2022

Foreign currency translation (2)

Balance at June 30, 2021

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.

In January 2022, an audit of ManJer’s tax returns (a Jersey-based subsidiary) for the years ended December 31, 2014, 2016, 2017 and 2018 were resolved in favor of ManJer.

The settlement, as well as the reduction in unrecognized tax benefits from the lapse of the statute of limitations totaling $ 19,897 during the three months ended March 31, 2022, was recorded as an income tax benefit with an equal and offsetting amount recorded in other losses, net, to recognize a reduction in the indemnification asset.

During the three months ended March 31, 2021, an income tax benefit of $ 5,171 was recorded along with an equal and offsetting amount in other losses, net.

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 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 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.

The gross unrecognized tax benefits and interest and penalties totaling $ 1,451 at March 31, 2022 are included in other

liabilities in the Consolidated Balance Sheets.

It is reasonably possible that these unrecognized tax benefits will reduce to zero in the next 12 months upon lapsing of the statute of limitations.

If recognized, these unrecognized tax benefits 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.

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 September 30, 2021, with few exceptions, the Company was no longer subject to income tax examinations by any taxing authority for years before 2016.

federal income tax as well as income tax of multiple state, local and certain foreign jurisdictions and is currently under review by the State of Michigan for the years ended 2017 through 2020.

As of March 31, 2022, with few exceptions, the Company was no longer subject to income tax examinations by any taxing authority for the years before 2017.

ManJer’s tax returns (a Jersey-based subsidiary) were previously under review for the years ended December 31, 2014, 2016, 2017 and 2018.

In January 2022, the audit was resolved in favor of ManJer.

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 $ 185 and $ 138 at September 30, 2021 and December 31, 2020, respectively.

The Company repatriates earnings of its foreign subsidiaries and therefore has recognized a deferred tax liability of $ 146 and $ 118 at March 31, 2022 and December 31, 2021, respectively.

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.

On February 22, 2022, the Company’s board of directors approved an increase of $ 85,709 to the Company’s share repurchase program to $ 100,000 and extended the term for three years through April 27, 2025 .

Included under the Company’s share repurchase 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.

2 unchanged sentences

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

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.

During the three months ended March 31, 2022 and 2021, the Company repurchased 588,694 and 489,763 shares of its common stock, respectively, under this program for an aggregate cost of $ 3,394 and $ 2,630 , respectively.

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

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

of March 31, 2022, $ 100,000 remained under this program for future purchases.

Goodwill and Intangible Assets

1 unchanged sentence

Balance at January 1, 2022

Balance at September 30, 2021

Balance at March 31, 2022

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, 2022

Balance at September 30, 2021

Balance at March 31, 2022

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.

1 unchanged sentence

Contingent Payments

The Company recognizes contingent payments when the contingency is resolved and the gain is realized.

AdvisorEngine – Sale of Financial Interests

2 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 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.

No value has been ascribed to these contingent payments at March 31, 2022 and December 31, 2021 and no contingent payments were

received during the three months ended March 31, 2022 and 2021.

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 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

The Company received CDN $ 3,720 (USD $ 2,774 ) in cash at closing and was paid CDN $ 3,000 (USD $ 2,360 ) of additional cash consideration based upon the achievement of certain AUM growth targets as determined during the 18-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)

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.

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