What changed in this filing

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Item 1. Financial Statements

2022-08-05 compared with 2022-05-05 · 331 added, 266 removed, 776 unchanged (43% of the section changed)

6 unchanged sentences

Cash and cash equivalents

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

Securities owned, at fair value (including $ 12,841 and $ 18,526 invested in WisdomTree ETFs at June 30, 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)

Accounts receivable (including $ 23,905 and $ 25,628 due from related parties at June 30, 2022 and December 31,

2021, respectively)

Prepaid expenses

13 unchanged sentences

Current liabilities:

Convertible notes—current (Note 10)

Fund management and administration payable

5 unchanged sentences

Total current liabilities

Convertible notes (Note 10)

Convertible notes—long term

Deferred consideration—gold payments (Note 9

5 unchanged sentences

14.750 shares authorized, issued and outstanding;

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

redemption value of $ 81,970 and $ 90,741 at June 30, 2022 and December 31, 2021, respectively) (Note 11

Contingencies (Note 13)

5 unchanged sentences

issued and outstanding:

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

146,511 and 145,107 at June 30,

2022 and December 31, 2021, respectively

Additional paid-in

Accumulated other comprehensive income

Accumulated other comprehensive (loss) income

Accumulated deficit

6 unchanged sentences

(In Thousands, Except Per Share Amounts)

Three Months Ended

Three Months Ended June 30,

Six Months Ended June 30,

Operating Revenues:

15 unchanged sentences

Interest expense

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

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

Interest income

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

Impairments (Note 12

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

Weighted-average common shares—basic

5 unchanged sentences

and Subsidiaries

Consolidated Statements of Comprehensive (Loss)/Income

Consolidated Statements of Comprehensive Income/(Loss)

(In Thousands)

Three Months Ended

Net (loss)/income

Other comprehensive loss

Three Months Ended June 30,

Six Months Ended June 30,

Net income/(loss)

Other comprehensive (loss)/income

Foreign currency translation adjustment, net of income taxes

Other comprehensive loss

Comprehensive (loss)/income

Other comprehensive (loss)/income

Comprehensive income/(loss)

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

3 unchanged sentences

(In Thousands)

For the Three Months Ended March 31, 2022

For the Three Months Ended June 30, 2022

Comprehensive

Balance—April 1, 2022

Restricted stock issued and vesting of restricted stock units, net

Stock-based compensation

Other comprehensive loss

Balance—June 30, 2022

For the Three Months Ended June 30, 2021

Comprehensive

Balance—April 1, 2021

Restricted stock issued and vesting of restricted stock units, net

Shares repurchased

Exercise of stock options, net

Stock-based compensation

Other comprehensive loss

Balance—June 30, 2021

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

WisdomTree Investments, Inc.

and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (Continued)

(In Thousands)

For the Six Months Ended June 30, 2022

Comprehensive

Balance—January 1, 2022

3 unchanged sentences

Other comprehensive loss

Balance—March 31, 2022

For the Three Months Ended March 31, 2021

Balance—June 30, 2022

For the Six Months Ended June 30, 2021

Comprehensive

Balance—January 1, 2021

Reclassification of equity component related to convertible

notes, net of deferred taxes of

implementation of ASU 2020-06

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,

Restricted stock issued and vesting of restricted stock units, net

Shares repurchased

1 unchanged sentence

Stock-based compensation

Other comprehensive loss

Balance—March 31, 2021

Other comprehensive income

Balance—June 30, 2021

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

3 unchanged sentences

(In Thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

Net (loss)/income

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

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

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

11 unchanged sentences

Gold and other precious metals

Intangibles—software development

Fund management and administration payable

Compensation and benefits payable

Income taxes receivable/payable

Income taxes payable

Operating lease liabilities

Accounts payable and other liabilities

Net cash (used in)/provided by operating activities

Net cash provided by operating activities

Cash flows from investing activities:

9 unchanged sentences

Shares repurchased

Convertible notes issuance costs

Proceeds from the issuance of convertible notes

Proceeds from exercise of stock options

Net cash used in financing activities

Decrease in cash flow due to changes in foreign exchange rate

Net decrease in cash and cash equivalents

Net cash (used in)/provided by financing activities

(Decrease)/increase in cash flow due to changes in foreign exchange rate

Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents—beginning of year

1 unchanged sentence

Supplemental disclosure of cash flow information:

Cash paid for taxes

Cash paid for income taxes

Cash paid for interest

8 unchanged sentences

Organization and Description of Business

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 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.

30 unchanged sentences

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.

investment adviser and will provide investment advisory and other management services to blockchain-enabled mutual

funds whose s

hares are secondarily recorded on a blockchain.

WisdomTree Digital Movement, Inc

is a New York based company that has been formed to operate a money services business registered with the Financial Crimes Enforcement Network (“FinCEN”) and is seeking state money transmitter licenses to operate a platform for the purchase, sale and exchange of digital assets, while also providing digital wallet services to facilitate such activity.

WisdomTree Securities, Inc.

7 unchanged sentences

Immaterial Correction of an Error – 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 presentation of the amounts collected on behalf of third parties of $ 1,828 and $ 3,402 for the three and six months ended June 30, 2021 have 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 Consolidated Statements of Operations.

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

March 31, 2021

June 30, 2021

Operating Revenues :

13 unchanged sentences

Reclassifications—Consolidated Statements of Cash Flows

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

Cash flows from purchasing securities owned, at fair value of $ 29,819 and selling securities owned, at fair value of $ 5,212 during the six months ended June 30, 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 six months ended June 30, 2021:

June 30, 2021

Consolidated Statements of Cash Flows :

Cash Flows from Operating Activities

Net cash provided by operating activities (previously reported)

Net cash used in operating activities (previously reported)

Reclassification of net cash flows from securities purchases and sales

3 unchanged sentences

Reclassification of purchases of securities owned, at fair value

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

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

Net cash used in investing activities (currently reported)

25 unchanged sentences

Marketing and Advertising

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

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

Depreciation and Amortization

Depreciation is provided for using the straight-line method over the estimated useful lives of the related assets as follows:

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

Fixed assets are recorded at cost less accumulated depreciation and amortization.

Depreciation and amortization is provided for using the straight-line method over the estimated useful lives of the related assets as follows:

Internally-developed software

The assets listed above are recorded at cost less accumulated depreciation and amortization.

Stock-Based Awards

48 unchanged sentences

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.

14 unchanged sentences

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

Software Development Costs

Software development costs incurred after the preliminary project stage is complete are capitalized if it is probable that the project will be completed and the software will be used as intended.

Capitalized costs consist of employee compensation costs and fees paid to third parties who are directly involved in the application development efforts.

Capitalized costs are amortized over the estimated useful life of the software on a straight-line basis and are included in depreciation and amortization in the Consolidated Statements of Operations.

Once the application development stage is complete, additional costs are expensed as incurred.

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

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

1 unchanged sentence

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

12 months or less.

These recognition requirements are not applied to short-term leases which are those with a lease term of 12 months or less.

Instead, lease payments associated with short-term leases are recognized as an expense on a straight-line basis over the lease term.

44 unchanged sentences

Cash and Cash Equivalents

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.

Of the total cash and cash equivalents of $ 109,736 and $ 140,709 at June 30, 2022 and December 31, 2021, respectively, $ 107,666 and $ 127,328 were held at two financial institutions.

At June 30, 2022 and December 31, 2021, cash equivalents were approximately $ 2,001 and $ 11,488 , respectively.

Certain of the Company’s international subsidiaries are required to maintain a minimum level of regulatory capital, which was $ 25,450 and $ 12,320 at June 30, 2022 and December 31, 2021, respectively.

These requirements are generally satisfied by cash on hand.

17 unchanged sentences

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

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

March 31, 2022

During the three and six months ended June 30, 2022 and 2021 there were no transfers between Levels 2 and 3.

June 30, 2022

Recurring fair value measurements:

3 unchanged sentences

Corporate bonds

Investments in Convertible Notes

Securrency, Inc.

– convertible note

Fnality International Limited – convertible note (Note 7

Non-recurring fair value measurements:

Onramp Invest, Inc.

preferred stock (Note 7

Recurring fair value measurements:

Deferred consideration (Note 9

Fair value determined on May 10, 2022 (Note 7).

December 31, 2021

23 unchanged sentences

Three Months Ended

Fnality International Limited – Convertible note (Note 7)

Six Months Ended

Investments in Convertible Notes (Note 7)

Beginning balance

1 unchanged sentence

Ending balance

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

Three Months Ended

Deferred Consideration (Note 9)

1 unchanged sentence

Net realized losses ( 2

Net unrealized losses/(gains) (2)

Net unrealized (gains)/losses ( 3

Ending balance

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

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.

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

Securities Owned

2 unchanged sentences

Trading securities

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.

The Company recognized net trading losses on securities owned that were still held at the reporting dates of $ 3,596 and $ 272 during the three months ended June 30, 2022 and 2021, respectively, and $ 7,912 and $ 833 during the six months ended June 30, 2022 and 2021, respectively, which were recorded in other losses and gains, net, in the Consolidated Statements of Operations.

Securities Held-to-Maturity

2 unchanged sentences

Pass-through GSEs (amortized cost)

During the three months ended March 31, 2022 and 2021, the Company received proceeds of $ 18 and $ 38 , respectively, from held-to-maturity

During the six months ended June 30, 2022 and 2021, the Company received proceeds of $ 31 and $ 77 , respectively, from held-to-maturity

securities maturing or being called prior to maturity.

13 unchanged sentences

The following table sets forth the Company’s investments:

March 31, 2022

June 30, 2022

December 31, 2021

3 unchanged sentences

– Series B convertible preferred stock

Securrency, Inc.

– convertible note

Subtotal – Securrency, Inc.

Fnality International Limited – convertible note

Onramp Invest, LLC – Simple Agreement for Future Equity

Onramp Invest, Inc.

– Series A-4 preferred stock

Securrency, Inc.

– Preferred Stock

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

The Company owns approximately 22 % (or 18 % 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.

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

6.0 % dividend, payable if and when declared by the board of directors of Securrency.

In addition, the Series A Shares and Series B Shares (together with the Series B-1

6.0 % dividend, payable if and when declared by the board of directors of

In addition, the Series A

Shares and Series B Shares (together with the Series B-1

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 ASC 321, 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 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

There was no impairment recognized during the three and six months ended June 30, 2022 based upon a qualitative assessment.

During the three and six months ended June 30, 2021, the Company recognized a gain of $ 139 and $ 376 , respectively, on its Series A Shares, which were re-measured

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

2 unchanged sentences

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)

Securrency – Convertible Note

In April 2022, the Company participated in a convertible note financing, making a $ 5,000 investment in Securrency.

In consideration for its investment, the Company was issued a 7 % Convertible Promissory Note maturing on April 21, 2023 .

The note is convertible into either Securrency’s common stock or the class of securities convertible into, exchangeable for, or conferring the right to purchase Securrency’s common stock that is issued in the event of a future equity financing at a conversion price equal to a discount

of 25 % (or, if applicable, a greater discount offered to other holders of convertible securities in such future equity financing round) to the lowest price paid per equity share issued in the future equity financing round.

The note is redeemable upon the occurrence of a corporate transaction for an amount which 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 common stock immediately prior to the occurrence of the corporate transaction.

At maturity, redemption or conversion may occur upon the election by the holders of a majority-in-interest of the aggregate principal amount of outstanding notes.

If no such election is made, Securrency may elect to pay or convert the notes in its sole discretion.

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.

During the three and six months ended June 30, 2022, the Company recognized a gain of

$ 279 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 future equity financing

of note upon a corporate transaction

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 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 convertible into equity shares in the event of a future financing round 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 future financing round and (ii) an amount paid per share subject to a pre-money valuation cap.

Mandatory conversion may occur on or after the maturity date or, if earlier, in the event a future financing round has not been completed within a specified time from an initial closing of such financing round (“Long Stop Date”), upon the approval of holders of at least 75 % of the outstanding notes.

The note is also convertible, at the option of the Company, following the earlier of the maturity date or such Long Stop Date.

The note is redeemable upon the occurrence of a change of control for an amount which 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 on or after maturity or prior to maturity upon approval by holders of at

st 50 % and 75

%, respectively, of the outstanding notes, or in connection with bankruptcy or other liquidation events.

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.

Fair value is determined by the Company using the PWERM and 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

During the three and six months ended June 30, 2022, the Company recognized a loss of $ 163 and $ 430 , respectively, 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

Conversion of note upon a future financing roun d

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.

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

Onramp Invest, Inc.

– Preferred Stock

In June 2021, the Company invested $ 250

in Onramp Invest, Inc.

(“Onramp”), a technology company that provides access to crypto

assets for registered investment advisers.

In consideration for its investment, the Company was issued a Simple Agreement for Future Equity (“SAFE”), which provided 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

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.

In May 2022, in connection with a Series A financing by Onramp, the Company’s SAFE was converted into shares of Series A-4

Preferred Stock, representing a small ownership interest in Onramp.

The investment is accounted for under the measurement alternative prescribed in ASU 2016-01,

2 unchanged sentences

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

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

During the three and six months ended June 30, 2022, the Company recognized a gain of $ 62 i

connection with the conversion of the SAFE into

Preferred Stock of Onramp

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

Fixed Assets, net

The following table summarizes fixed assets:

accumulated depreciation and amortization

accumulated depreciation

Deferred Consideration

5 unchanged sentences

(a physically backed gold ETP issuer) if the Company fails to remit any amounts due.

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

The Company determined the present value of the deferred consideration of $ 242,767 and $ 228,062 at June 30, 2022 and December 31, 2021 using the following assumptions:

Forward-looking gold price (low) – per ounce

3 unchanged sentences

Perpetual growth rate

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 forward-looking gold prices at June 30, 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.

1 unchanged sentence

An increase in spot gold prices, forward-looking gold prices and the perpetual growth rate would result in an increase in deferred consideration, whereas an increase in the discount rate would reduce the fair value.

Current amounts payable were $ 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:

Current amounts payable were $ 16,626 and $ 16,739 and long-term amounts payable were $ 226,141 and $ 211,323 , respectively, at June 30, 2022 and December 31, 2021, respectively.

During the three and six months ended June 30, 2022 and 2021, the Company recognized the following in respect of deferred consideration:

Three Months Ended

Six Months Ended

Contractual gold payments

Contractual gold payments – gold ounces paid

(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.

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.

Convertible Notes

18 unchanged sentences

(i) if the last reported sale price of the Company’s common stock for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

(ii) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sales price of the Company’s common stock and the conversion rate on each such trading day;

(ii) during the five business d a y period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sales price of the Company’s common stock and the conversion rate on each such trading day;

(iii) upon a notice of redemption delivered by the Company in accordance with the terms of the indentures but only with respect to the Convertible Notes called (or deemed called) for redemption;

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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 March 31, 2022 and December 31, 2021:

March 31, 2022

The indentures contain customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25 % in aggregate principal amount of the Convertible Notes outstanding may declare the entire principal amount of all the Convertible Notes to be repurchased, plus any accrued special interest, if any, to be immediately due and payable.

The following table provides a summary of the carrying value of the Convertible Notes at June 30, 2022 and December 31, 2021:

June 30, 2022

December 31, 2021

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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 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.

Interest expense on the Convertible Notes was $ 3,733 and $ 7,465 , respectively, during the three and six months ended June 30, 2022, and $ 2,567 and $ 4,863 , respectively, during the comparable periods in 2021.

Interest payable of $ 605 and $ 590 at June 30, 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 $ 322,311 and $ 360,571 at June 30, 2022 and December 31, 2021, respectively.

The if-converted

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

value of the 2020 Notes did not exceed the principal amount at June 30, 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.

value of the 2021 Notes did not exceed the principal amount at June 30, 2022 and December 31, 2021.

Preferred Shares

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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 $ 81,207 and $ 90,741 at March 31, 2022 and December 31, 2021, respectively.

The redemption value of the Preferred Shares was $ 81,970 and $ 90,741 at June 30, 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.

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

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

The Company has no finance leases.

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

Three Months Ended

Three Months Ended June 30,

Six Months Ended June 30,

Operating lease cost

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Other information:

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

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

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.

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

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

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

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:

The following table discloses future minimum lease payments at June 30, 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 March 31, 2022 to the operating lease liabilities recognized in the Consolidated Balance Sheets:

The following table reconciles the future minimum lease payments (disclosed above) at June 30, 2022 to the operating lease liabilities recognized in the Consolidated Balance Sheets:

Amounts recognized in the Consolidated Balance Sheets

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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.

Investors had filed actions seeking damages 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.

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.

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 damages resulting from the closure of 3OIL.

In March 2022, WMAI and WTUK were served with writs of summons to appear before the Court of Turin and the Court of Milan by additional investors seeking damages.

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

Total damages sought by all investors are approximately € 15,800 ($ 16,600 ) at June 30, 2022.

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.

An accrual has not been made with respect to these matters at June 30, 2022 and December 31, 2021.

Variable Interest Entities

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Preferred stock – Series B Shares

Convertible note

Subtotal – Securrency

Carrying Amount – Assets (Fnality International Limited)

Carrying Amount – Assets (Fnality)

Convertible note

Carrying Amount – Assets (Onramp)

Preferred stock

Total (Note 7)

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Revenues from Contracts with Customers

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

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

Three Months Ended

Six Months Ended

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 custome r.

Substantially all the Company’s revenues from contracts with customers are derived primarily from investment advisory agreements with related parties (Note 16).

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Geographic Distribution of Revenue

The following table presents the Company’s total revenues geographically as determined by where the respective management companies reside:

The following table presents the Company’s total revenues geographically as determined by where the respective management companies

Three Months Ended

Six Months Ended

Revenues from contracts with customers:

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Three Months Ended

Six Months Ended

Advisory services provided to WTT

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See Note 2 for additional information.

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.

The Company also has investments in certain WisdomTree ETFs of approximately $ 12,841 and $ 18,526 at June 30, 2022 and December 31, 2021, respectively.

Net gains and losses related to trading WisdomTree ETFs were ($ 313 ) and ($ 1,119 ), respectively, during the three and six months ended June 30, 2022, and $ 167 and ($ 217 ), respectively, during the comparable periods in 2021.

Such gains and losses are recorded in other losses and gains, net in the Consolidated Statements of Operations.

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.

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 %

of the target number of PRSUs granted, as follows:

The number of PRSUs vesting ranges from 0 % to 200 % of the target number of PRSUs granted, as follows:

If the relative TSR is below the 25 th

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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.

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

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

Stock-based compensation expense was $ 2,432 and $ 5,368 , respectively, during the three and six months ended June 30, 2022, and $ 2,121 and $ 5,264 , respectively, during the comparable periods in 2021.

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

March 31, 2022

Unrecognized Stock-

Vesting Period (Years)

June 30, 2022

Vesting Period

Employees and directors

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

A summary of stock-based compensation award activity (shares) during the three months ended June 30, 2022 is as follows:

Balance at April 1, 2022

Exercised/vested

Balance at March 31, 2022

The payout on PRSUs vesting in January 2022 was zero.

Balance at June 30, 2022

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.

Pursuant to the terms of the Rights Agreement, the Board of Directors declared a dividend distribution of one Preferred Stock Purchase Right (a “Right”) for each outstanding share of the Company’s common stock and 1,000 Rights for each outstanding share of the Company’s Series A Non-Voting

Convertible Preferred Stock to stockholders of record as of the close of business on March 25, 2022 (the “Record Date”).

In addition, one Right would automatically attach to each share of common stock and

Rights would automatically attach to each share of Series A Non-Voting Convertible Preferred Stock, in each case, issued between the Record Date and the earlier of the Distribution Date (as defined in the Rights Agreement) and the expiration date of the Rights.

Each Right entitled 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

per share, of the Company at a cash exercise price

per Unit, subject to adjustment, under certain conditions specified in the Rights Agreement.

On May 25, 2022, the Company entered into a cooperation agreement (the “Cooperation Agreement”) with ETFS Capital, Graham Tuckwell, Lion Point Capital, LP, Lion Point Capital Holdings GP, LLC and Didric Cederholm.

Also, on May 25, 2022, in connection with the Cooperation Agreement, the Company and the Rights Agent entered into Amendment No.

1 (the “Amendment”) to the Rights Agreement.

Pursuant to the Amendment, effective as of the Close of Business (as defined in the Rights Agreement) on June 2, 2022, the Rights expired and no longer remain outstanding, and the Rights Agreement, as amended by the Amendment, terminated.

Earnings Per Share

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Three Months Ended

Basic (Loss)/Earnings per Share

Net (loss)/income

Six Months Ended

Basic Earnings/(Loss) per Share

Net income/(loss)

Income distributed to participating securities

Undistributed income allocable to participating securities

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

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

Weighted average common shares (in thousands)

Basic (loss)/earnings per share

Basic earnings/(loss) per share

Three Months Ended

Diluted (Loss)/Earnings per Share

Net (loss)/income available to common stockholders

Six Months Ended

Diluted Earnings/(Loss) per Share

Net income/(loss) available to common stockholders

Undistributed income allocable to participating securities

Reallocation of undistributed income allocable to participating securities considered potentially dilutive

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

Net income/(loss) 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 (loss)/earnings per share

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

Diluted earnings/(loss) per share

Diluted earnings/(loss) 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 months ended March 31, 2022, there were no dilutive common stock equivalents as the Company reported a net loss for the period.

During the six months ended June 30, 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 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:

common stock equivalents were 303 and 300 , respectively, during the three and six months ended June 30, 2022, and 55 and 130 , respectively, during the comparable periods in 2021 (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 and six months ended June 30, 2022 as the Company’s average stock price during those respective periods was lower than the conversion price.

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

The following table reconciles weighted average diluted shares as reported in the Consolidated Statements of Operations for the three and six months ended June 30, 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

Six Months Ended

Reconciliation of Weighted Average Diluted Shares (in thousands)

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

Weighted average diluted shares as disclosed on the consolidated statements of operations

Participating securities

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Potentially dilutive restricted stock awards

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

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

Excludes 15,486 participating securities and 356 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.

common stock equivalents for the six months ended June 30, 2022 as the Company reported a net loss for the period (shares herein are reported in thousands).

Effective Income Tax Rate – Three and Six Months Ended June 30, 2022

The Company’s effective income tax rate during the three months ended June 30, 2022 of 25.0 % resulted in income tax expense of $ 2,673 .

The effective income tax rate differs from the federal statutory tax rate of 21 % primarily due a valuation allowance on losses recognized on securities owned and non-deductible

executive compensation.

These items were partly offset by a non-taxable

gain on revaluation of deferred consideration and a lower tax rate on foreign earnings.

The Company’s effective income tax rate benefit

during the six months ended June 30, 2022 of 86.2 % resulted in an income tax benefit of $ 14,040 .

The Company’s 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) and a lower tax rate on foreign earnings.

These items were partly offset by a non-taxable

loss on revaluation of deferred consideration and an increase in the deferred tax asset valuation allowance on losses recognized on securities owned.

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

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

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

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

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

gain on revaluation of deferred consideration.

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

Deferred Tax Assets

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

A summary of the components of the Company’s deferred tax assets at June 30, 2022 and December 31, 2021 are as follows:

Deferred tax assets:

Capital losses

NOLs – Foreign

Unrealized losses

Accrued expenses

Unrealized losses

NOLs – Foreign

Goodwill and intangible assets

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Stock-based compensation

Foreign currency translation adjustment

Outside basis differences

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Unremitted earnings – International subsidiaries

Unrealized gains

Foreign currency translation adjustment

4 unchanged sentences

Net Operating and Capital Losses – U.S.

The Company’s tax effected net operating losses (“NOLs”) at March 31, 2022 were $ 255 , which expire in 2024 .

The Company’s tax effected net operating losses (“NOLs”) at June 30, 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 at March 31, 2022 were

The Company’s tax effected capital losses at June 30, 2022 were $ 16,953 .

These capital losses expire between the years 2023 and 2027.

1 unchanged sentence

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.

These tax effected NOLs, all of which are carried forward indefinitely, were $ 1,677 at June 30, 2022.

Valuation Allowance

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

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.

12 unchanged sentences

Balance at March 31, 2022

Foreign currency translation (2)

Balance at June 30, 2022

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 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 and gains, 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 and gains, net.

The gross unrecognized tax benefits were accrued in British pounds.

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

The gross unrecognized tax benefits and interest and penalties totaling $ 1,351 at June 30, 2022 are included in other non-current

liabilities in the Consolidated Balance Sheets.

1 unchanged sentence

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.

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

1 unchanged sentence

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.

As of June 30, 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.

2 unchanged sentences

, 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 $ 146 and $ 118 at March 31, 2022 and December 31, 2021, respectively.

The Company repatriates earnings of its foreign subsidiaries and therefore has recognized a deferred tax liability of $

2022 and December

2021 , respectively.

Shares Repurchased

5 unchanged sentences

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

During the three 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.

The Company repurchased 588,694 shares of its common stock under this program during the three and six months ended June 30, 2022, and 4,630,733 and 5,120,496

shares, respectively, during the comparable periods in 2021.

The aggregate cost of the shares repurchased during the three and six months ended June

30, 2022 was $

3,394 and the aggregate cost of the shares repurchased during the comparable periods in 2021 was $

34,506 , respectively.

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

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

As of June 30, 2022, $ 100,000 remained under this program for future purchases.

Goodwill and Intangible Assets

1 unchanged sentence

Balance at January 1, 2022

Balance at March 31, 2022

Balance at June 30, 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.

1 unchanged sentence

tax purposes.

Intangible Assets (Indefinite-Lived)

The table below sets forth the Company’s intangible assets which are tested annually for impairment on November 30 th

Balance at January 1, 2022

Balance at March 31, 2022

Intangible Assets

ETFS acquisition

Software development

Balance at June 30, 2022

ETFS Acquisition (Indefinite-Lived)

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.

The intangible assets were determined to have indefinite useful lives and are not deductible for tax purposes.

These intangible assets were determined to have indefinite useful lives and are not deductible for tax purposes.

The Company’s tests these indefinite-lived intangible assets annually for impairment on November 30 th

Software Development (Finite-Lived)

Internally-developed software is amortized over a useful life of three years .

As of June 30, 2022, the assets were not subject to amortization, as none of the related projects have completed the software development stage.

As of June 30, 2022, expected amortization expense for the unamortized finite-lived intangible assets for the next five years and thereafter is as follows:

Remainder of 2022

2027 and thereafter

Total expected amortization expense

The weighted-average remaining useful life of the finite-lived intangible assets is 3.0 years.

Contingent Payments

AdvisorEngine – Sale of Financial Interests

On May 4, 2020, the Company closed a transaction to exit its investment in AdvisorEngine.

The fair value of upfront consideration paid to the Company was $ 9,592 .

On May 4, 2020, the Company closed a transaction to exit its investment in AdvisorEngine Inc.

The fair value of upfront consideration paid to the Company

was $ 9,592 .

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 March 31, 2022 and December 31, 2021 and no contingent payments were

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

No value has been ascribed to these contingent payments at June 30, 2022 and December 31, 2021 and no contingent payments were received during the three and six months ended June 30, 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 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

On February 19, 2020, the Company completed the sale of all the outstanding shares of WisdomTree Asset Management Canada, Inc., the operating entity of the Company’s prior Canadian ETF business, to CI Financial Corp.

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.

1 unchanged sentence

anniversary of the closing date.

No value has been ascribed to these contingent payments at June 30, 2022 and December 31, 2021 and no contingent payments were received during the three and six months ended June 30, 2022 and 2021.

Subsequent Events

The Company evaluated subsequent events through the date of issuance of the accompanying consolidated financial statements.

There were no events requiring disclosure.

Increase in Authorized Shares of Common Stock

On July 15, 2022, stockholders of the Company approved an amendment to Article IV of the Company’s Amended and Restated Certificate of Incorporation to increase the Company’s authorized common stock from 250,000,000 shares to 400,000,000 shares and the corresponding increase in the total number of authorized shares of capital stock the Company may issue from 252,000,000 shares to 402,000,000 shares.

The increase in the Company’s authorized common stock has no impact on shares currently outstanding.

Approval of 2022 Equity Plan

On July 15, 2022, the Company’s stockholders approved the 2022 Equity Plan under which the Company may issue up

to 16,000,000 s

hares of common stock (less one share for every share granted under the 2016 Equity Plan since March 31, 2022 and inclusive of shares available under the 2016 Equity Plan as of March 31, 2022) in the form of stock options and other stock-based awards.

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