WisdomTree, Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures As of December 31, 2022, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b) promulgated under the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2022, our disclosure controls and procedures were effective at a reasonable assurance level in ensuring that material information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules, regulations and forms of the SEC, including ensuring that such material information is accumulated by and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Changes in Internal Control over Financial Reporting During the quarter ended December 31, 2022, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Report of Management on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. In order to evaluate the effectiveness of internal control over financial reporting, management has conducted an assessment, including testing, using the criteria in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (the COSO criteria). Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. 66 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Based on the assessment, management has concluded that the Company maintained effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria. The effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report, which is included herein. ITEM 9B. OTHER INFORMATION The information included in this Item 9B is provided in lieu of filing such information on a Current Report on Form 8-K under Item 5.02 “Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensation Arrangements of Certain Officers.” Executive Severance Plan and Employee Confidentiality, Assignment and Restrictive Covenant Agreement On February 23, 2023, the Compensation Committee (the “Committee”) of our Board of Directors adopted the WisdomTree, Inc. Executive Severance Plan (the “Severance Plan”), pursuant to which, effective immediately, Bryan Edmiston, our Chief Financial Officer, and William Peck, our Head of Digital Assets, and, effective March 1, 2023, David Yates, our Chief Information Officer, may be eligible for severance benefits as “eligible participants” (as defined in the Severance Plan) under the Severance Plan. In connection with becoming an eligible participant under the Severance Plan, each eligible participant will enter into an Employee Confidentiality, Assignment and Restrictive Covenant Agreement (“Restrictive Covenant Agreement”), which contains employee confidentiality, assignment of inventions and non-solicitation of employees provisions, as well as non-competition provisions which are applicable as described below. In addition, the Committee authorized us to amend the employment agreement of Alexis Marinof, our Head of Europe, to provide for the same benefits as provided under the Severance Plan and to contain the provisions of the Restrictive Covenant Agreement, in each case as may be applicable and permitted under the laws of the United Kingdom. A summary of the material terms of the severance benefits provided under the Severance Plan follows: Termination for Any Reason . The Severance Plan provides that if we terminate an eligible participant’s employment for any reason, we will pay the eligible participant his or her accrued but unpaid base salary and, if applicable, accrued but unused vacation, through the termination date and, except in the case of (i) a resignation by the eligible participant for “good reason” (as defined in the Severance Plan), (ii) a termination of the eligible participant’s employment by us for “cause” (as defined in the Severance Plan) or (iii) the eligible participant having already received payment, prior to the termination date, of his or her incentive compensation for the prior year, a pro rata portion of an amount equal to 50% of the incentive compensation that the eligible participant would have received in respect of the year prior to the year of termination, based upon our performance. Termination Without Cause or Resignation for Good Reason . If (i) we terminate the eligible participant’s employment other than due to the eligible participant’s death or “disability” (as defined in the Severance Plan) or for cause or (ii) the eligible participant resigns for good reason (either of (i) or (ii), an “Involuntary Termination”) and the eligible participant (A) enters into a fully effective release agreement and complies with such release and (B) complies with the terms of the Restrictive Covenant Agreement, including a three-month non-competition covenant from the date of termination, we will pay the eligible participant: • one year’s base salary (“Annual Base Salary”); • a pro rata portion of an amount equal to 50% of the average incentive compensation that the eligible participant received in the preceding three fiscal years, multiplied by our budgeted incentive compensation pool funding percentage in the year of termination (“Termination Year Cash Incentive Compensation”); and • 50% of the average incentive compensation paid to the eligible participant in the preceding three fiscal years (“Average Cash Incentive Compensation”). The Termination Year Cash Incentive Compensation will be paid when we pay incentive compensation for the termination year to non-terminated senior executives. The Annual Base Salary and Average Cash Incentive Compensation will be paid in substantially equal installments over a 12-month period. The eligible participant also may elect to have us pay for COBRA insurance coverage for up to one-year following the date of termination. In addition, any equity award that would have vested in the 12-month period that immediately follows the date of termination will accelerate and vest, and any remaining unvested awards will remain outstanding for 12 months following the date of termination and, if a “change of control” (as defined in the Severance Plan) occurs within 12 months after the date of termination, the eligible participant will be entitled to any accelerated vesting with respect to the equity awards that the eligible participant would have been entitled to if he or she had remained employed through the date of the change of control. 67 Table of Contents Involuntary Termination Within 18 Months After a Change of Control . In the event of the eligible participant’s Involuntary Termination within 18 months after a change of control, if the eligible participant (i) enters into a fully effective release agreement and complies with such release and (ii) complies with the Restrictive Covenant Agreement, including a 12-month non-competition covenant from the date of termination, in lieu of the payments and benefits described above under the heading “Termination Without Cause or Resignation for Good Reason,” we will pay the eligible participant: • an amount equal to 1.75 times the Annual Base Salary; • a pro rata portion of the Average Cash Incentive Compensation based on the number of days the eligible participant was employed during the year of termination; and • an amount equal to 1.75 times the Average Cash Incentive Compensation. Such amounts will be paid in one lump sum. The eligible participant also may elect to have us pay for COBRA insurance coverage for up to 21-months following the date of termination. In addition, any equity awards subject solely to time-based vesting that would have vested in the 21-month period that immediately follows the date of termination will accelerate and vest. Equity awards subject to performance-based vesting will vest in accordance with the terms of the applicable award agreement. Termination for Cause or Voluntary Resignation Without Good Reason . If we terminate the eligible participant’s employment for cause or the eligible participant voluntarily resigns without good reason, we may elect to enforce a three-month non-competition covenant as provided in the Restrictive Covenant Agreement in consideration for which we will pay the eligible participant: (i) 25% of the Annual Base Salary; (ii) an amount equal to 12.5% of the average incentive compensation paid to the eligible participant in the preceding three fiscal years; and (iii) an amount equal to 25% of the value of any equity awards subject solely to time-based vesting that would have vested in the one-year period following the date of termination if no termination had occurred. Such amounts will be paid in substantially equal installments over a three-month period. The eligible participant also may elect to have us pay for COBRA insurance coverage for up to three-months following the date of termination, subject to the eligible participant’s continued compliance with the three-month non-competition covenant. The benefits of the Severance Plan summarized above are generally subject to the eligible participant’s continuing compliance with any obligations relating to confidentiality, assignment of inventions, or other restrictive covenants (including the non-competition covenants described above) in the Restrictive Covenant Agreement, as applicable. If we make payments to an eligible participant as described under “Involuntary Termination Within 18 Months After a Change of Control,” and there is a breach by the eligible participant of the 12-month non-competition covenant, we have a right to recover payments made during such period of non-compliance. Amendment to Executive Employment Agreements for each of Jonathan Steinberg, Peter M. Ziemba, R. Jarrett Lilien and Marci Frankenthaler On February 23, 2023, the Committee approved an amendment (the “Amendment”) to the executive employment agreements (the “Executive Employment Agreements”) for each of Jonathan Steinberg, our Chief Executive Officer, R. Jarrett Lilien, our President and Chief Operating Officer, Peter M. Ziemba, our Chief Administrative Officer, and Marci Frankenthaler, our Chief Legal Officer. The Amendment modifies each of the Executive Employment Agreements to provide for the below changes, which align with the terms of the Severance Plan and the Restrictive Covenant Agreement: • to replace the employee confidentiality, assignment of inventions, non-solicitation of employees and non-competition provisions, primarily to include expanded definitions applicable to the three-month non-competition covenant and the 12-month non-competition covenant described above; and • to expand the definition of a “change of control” as currently defined in the Executive Employment Agreements to include a “Change in Control Event” within the meaning of the WisdomTree Investments, Inc. 2022 Equity Plan. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 68 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by Item 401 of Regulation S-K regarding directors and officers will be contained in our definitive proxy statement to be filed pursuant to Regulation 14A for our 2023 Annual Meeting of Stockholders, expected to be filed within 120 days of our fiscal year end, or in an amendment to this Form 10-K, and is incorporated herein by reference. The information required by Item 405 of Regulation S-K will be contained in our definitive proxy statement or in an amendment to this Form 10-K and is incorporated herein by reference. We have adopted a Code of Business Conduct and Ethics that applies to all of our directors, officers and employees, including our principal executive officer and principal financial and accounting officer. The Code of Business Conduct and Ethics is posted on our website at https://ir.wisdomtree.com/corporate-governance /governance-documents . We will post any amendments to, or waivers from, a provision of the Code of Business Conduct and Ethics by posting such information on our website, at the address and location specified above. The information required by Item 407(c)(3), (d)(4) and (d)(5) of Regulation S-K will be contained in our definitive proxy statement or in an amendment to this Form 10-K and is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION The information required by Item 402 and Item 407(e)(4) and (e)(5) of Regulation S-K will be contained in our definitive proxy statement or in an amendment to this Form 10-K and is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by Item 201(d) and Item 403 of Regulation S-K will be contained in our definitive proxy statement or in an amendment to this Form 10-K and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by Item 404 and Item 407(a) of Regulation S-K will be contained in our definitive proxy statement or in an amendment to this Form 10-K and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Our independent public accounting firm is Ernst & Young LLP, NewYork, New York, PCAOB Auditor ID 42 . The information required by Item 9(e) of Schedule 14A will be contained in our definitive proxy statement or in an amendment to this Form 10-K and is incorporated herein by reference. 69 Table of Contents PART IV ITEM 15. EXHIBITS; FINANCIAL STATEMENT SCHEDULES (a). The following are filed as part of this Report: 1. Consolidated Financial Statements : The consolidated financial statements and reports of independent registered public accounting firm required by this item are included beginning on page F-1. 2. Financial Statement Schedules : None. All other schedules are omitted because they are not applicable or not required, or because the required information is shown either in the consolidated financial statements or in the notes thereto. (b). Exhibits: The list of exhibits in the Exhibit Index immediately preceding the exhibits to this Report is incorporated herein by reference in response to this item. ITEM 16. FORM 10-K SUMMARY None. 70 Table of Contents WISDOMTREE, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements Reports of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of December 31, 2022 and 2021 F-6 Consolidated Statements of Operations for the Years Ended December 31, 2022, 2021 and 2020 F-7 Consolidated Statements of Comprehensive Income/(Loss) for the Years Ended December 31, 2022, 2021 and 2020 F-8 Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2022, 2021 and 2020 F-9 Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021 and 2020 F-10 Notes to Consolidated Financial Statements F-1 1 F-1 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of WisdomTree, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of WisdomTree, Inc. and Subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income/(loss), changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 28, 2023 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Valuation of Deferred Consideration Description of the Matter At December 31, 2022, Company recorded a current deferred consideration liability of $16,796,000 and a long-term deferred consideration liability of $183,494,000 and for the year ended December 31, 2022, the Company recorded a gain on the revaluation of deferred consideration of $27,765,000. As more fully described in Notes 2, 5 and 10 to the consolidated financial statements, deferred consideration represents an obligation of the Company for fixed payments of physical gold bullion to a third party into perpetuity that is carried at fair value. The Company values deferred consideration using a discounted cash flow model and the significant unobservable inputs used are the discount rate, the perpetual growth rate and the extrapolated forward-looking gold prices. Auditing the Company’s valuation of deferred consideration was complex due to the significant estimation required in determining the fair value of the current and long-term liability. In particular, the fair value estimate was sensitive to the significant unobservable inputs described above which are affected by future economic and market conditions and thus require significant judgment. F-2 Table of Contents How we addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s deferred consideration fair value process. This included controls over management’s review of the significant unobservable inputs described above and the completeness and accuracy of the inputs to the valuation model. To test the estimated fair value of the deferred consideration liability, our audit procedures included, among others, reading the terms of the gold royalty agreement to make gold payments, evaluating the Company’s selection of its fair value methodology, testing the significant unobservable inputs used in the model, evaluating the clerical accuracy of the valuation model and testing the completeness and accuracy of the underlying data used by the Company to determine fair value. For example, we agreed underlying data used in management’s valuation model to source documents and/or publicly available data such as the gold royalty agreement and third-party gold price projections. In addition, we involved our valuation specialists to assist in our evaluation of the Company’s valuation model, the discount rate, the perpetual growth rate and forward looking gold prices used by the Company, to calculate an independent estimate of the fair value of the Company’s deferred consideration liability which we compared to the Company’s fair value estimate. ETFS Indefinite-Lived Intangible Assets – Assessment of Carrying Value Description of the Matter At December 31, 2022, the Company held indefinite-lived intangible assets related to the right to manage assets under management through customary advisory agreements, which have no expiration date, in connection with the ETFS acquisition, with an aggregate carrying value of $601,247,000. As described in Notes 2 and 24 to the consolidated financial statements, these assets were assessed for impairment based upon a quantitative test. Indefinite-lived intangible assets are impaired if their estimated fair values are less than their carrying values. The Company determined the fair value of its ETFS intangible assets using an income approach (discounted cash flow analysis) with significant unobservable inputs that included the weighted average cost of capital and projected revenue growth rates. Auditing the Company’s quantitative impairment assessment for its ETFS indefinite-lived intangible assets was complex due to the significant unobservable inputs required in determining fair value. In particular, the fair value estimate of the ETFS indefinite-lived intangible assets was sensitive to the significant unobservable inputs described above which are affected by future economic and market conditions and thus require significant judgment. How we addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s indefinite-lived intangible asset impairment assessment process. This included controls around management’s review of the significant unobservable inputs described above and the completeness and accuracy of the inputs to the valuation model. To test the Company’s quantitative impairment assessment of ETFS indefinite-lived intangible assets, our audit procedures included, among others, evaluating the Company’s selection of its fair value methodology, testing the significant unobservable inputs used in the valuation model, evaluating the clerical accuracy of the valuation model and testing the completeness and accuracy of the underlying data used by the Company to determine fair value. For example, we agreed certain inputs used to calculate the weighted average cost of capital to market data. We compared the projected revenue growth rates to the Company’s historical results, to those of other guideline public companies in the same industry, and to historical returns for the underlying asset classes. In addition, we assessed the accuracy of the Company’s historical projections by comparing them to actual operating results. We involved our valuation specialists to assist in our evaluation of the Company’s valuation model, the weighted average cost of capital used by the Company and the comparability of the F-3 Table of Contents guideline public companies selected by the Company and to calculate an independent estimate of the indefinite-lived intangible assets which we compared to the Company’s fair value estimate. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2010. New York, NY February 28, 2023 F-4 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of WisdomTree, Inc. Opinion on Internal Control Over Financial Reporting We have audited WisdomTree, Inc. and Subsidiaries’ internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, WisdomTree, Inc. and Subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria . We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2022 consolidated financial statements of the Company and our report dated February 28, 2023 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP New York, NY February 28 , 2023 F-5 Table of Contents WisdomTree, Inc. and Subsidiaries Consolidated Balance Sheets (In Thousands, Except Per Share Amounts) December 31, 2022 December 31, 2021 Assets Current assets: Cash and cash equivalents $ 132,101 $ 140,709 Financial instruments owned, at fair value (including $ 25,283 and $ 18,526 invested in WisdomTree products at December 31, 2022 and 2021, respectively) 126,239 127,166 Accounts receivable (including $ 24,139 and $ 25,628 due from related parties at December 31, 2022 and 2021, respectively) 30,549 31,864 Prepaid expenses 4,684 3,952 Other current assets 390 276 Total current assets 293,963 303,967 Fixed assets, net 544 557 Indemnification receivable (Note 22) 1,353 21,925 Securities held-to-maturity 259 308 Deferred tax assets, net 10,536 8,881 Investments (Note 8) 35,721 14,238 Right of use assets—operating leases (Note 14) 1,449 520 Goodwill (Note 24) 85,856 85,856 Intangible assets, net (Note 24) 603,567 601,247 Other noncurrent assets 571 361 Total assets $ 1,033,819 $ 1,037,860 Liabilities and stockholders’ equity Liabilities Current liabilities: Convertible notes—current (Notes 12 and 27) $ 59,197 $ — Fund management and administration payable 36,521 20,661 Compensation and benefits payable 24,121 32,782 Deferred consideration—gold payments (Note 10) 16,796 16,739 Income taxes payable 1,599 3,979 Operating lease liabilities (Note 14) 1,125 209 Accounts payable and other liabilities 9,075 9,297 Total current liabilities 148,434 83,667 Convertible notes (Notes 12 and 27) 262,019 318,624 Deferred consideration—gold payments (Note 10) 183,494 211,323 Operating lease liabilities (Note 14) 339 328 Other noncurrent liabilities (Note 22) 1,353 21,925 Total liabilities 595,639 635,867 Preferred stock—Series A Non-Voting Convertible, par value $ 0.01 ; 14.750 shares authorized, issued and outstanding; redemption value of $ 77,969 and $ 90,741 at December 31, 2022 and 2021, respectively) (Note 13 ) 132,569 132,569 Contingencies (Note 15 ) Stockholders’ equity Preferred stock, par value $ 0.01 ; 2,000 shares authorized: — — Common stock, par value $ 0.01 ; 400,000 shares authorized; issued and outstanding: 146,517 and 145,107 at December 31, 2022 and 2021, respectively 1,465 1,451 Additional paid-in capital 291,847 289,736 Accumulated other comprehensive (loss)/income ( 1,420 ) 682 Retained earnings/(accumulated deficit) 13,719 ( 22,445 ) Total stockholders’ equity 305,611 269,424 Total liabilities and stockholders’ equity $ 1,033,819 $ 1,037,860 The accompanying notes are an integral part of these consolidated financial statements F-6 Table of Contents WisdomTree, Inc. and Subsidiaries Consolidated Statements of Operations (In Thousands, Except Per Share Amounts) Year Ended December 31, 2022 2021 2020 Operating Revenues: Advisory fees $ 293,632 $ 298,052 $ 246,395 Other income 7,713 6,266 3,517 Total revenues 301,345 304,318 249,912 Operating Expenses: Compensation and benefits 97,897 88,163 74,675 Fund management and administration 64,761 58,912 56,728 Marketing and advertising 15,302 14,090 11,128 Sales and business development 11,871 9,907 10,579 Contractual gold payments (Note 10 ) 17,108 17,096 16,811 Professional fees 13,800 7,616 4,902 Occupancy, communications and equipment 3,898 4,629 6,427 Depreciation and amortization 262 738 1,021 Third-party distribution fees 7,656 7,176 5,219 Acquisition and disposition-related costs — — 416 Other 8,705 6,933 6,924 Total operating expenses 241,260 215,260 194,830 Operating income 60,085 89,058 55,082 Other Income/(Expenses): Interest expense ( 14,935 ) ( 12,332 ) ( 9,668 ) Gain/(loss) on revaluation of deferred consideration—gold payments (Note 10 ) 27,765 2,018 ( 56,821 ) Interest income 3,320 2,009 744 Impairments (Note 26 ) — ( 16,156 ) ( 22,752 ) Loss on extinguishment of debt (Note 11 ) — — ( 2,387 ) Other losses and gains, net ( 36,285 ) ( 7,926 ) 580 Income/(loss) before income taxes 39,950 56,671 ( 35,222 ) Income tax (benefit)/expense ( 10,734 ) 6,874 433 Net income/(loss) $ 50,684 $ 49,797 $ ( 35,655 ) Earnings/(loss) per share—basic $ 0.31 $ 0.31 $ ( 0.25 ) Earnings/(loss) per share—diluted $ 0.31 $ 0.31 $ ( 0.25 ) Weighted-average common shares—basic 143,020 143,847 148,682 Weighted-average common shares—diluted 158,914 161,263 148,682 Cash dividends declared per common share $ 0.12 $ 0.12 $ 0.12 The accompanying notes are an integral part of these consolidated financial statements F-7 Table of Contents WisdomTree, Inc. and Subsidiaries Consolidated Statements of Comprehensive Income/(Loss) (In Thousands) Year Ended December 31, 2022 2021 2020 Net income/(loss) $ 50,684 $ 49,797 $ ( 35,655 ) 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”) — — ( 167 ) Foreign currency translation adjustment, net of income taxes ( 2,102 ) ( 420 ) 324 Other comprehensive (loss)/income ( 2,102 ) ( 420 ) 157 Comprehensive income/(loss) $ 48,582 $ 49,377 $ ( 35,498 ) The accompanying notes are an integral part of these consolidated financial statements F-8 Table of Contents WisdomTree, Inc. and Subsidiaries Consolidated Statements of Changes in Stockholders’ Equity (In Thousands) Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income/(Loss) Retained Earnings/ (Accumulated Deficit) Total Shares Issued Par Value Balance—January 1, 2020 155,264 $ 1,553 $ 352,658 $ 945 $ ( 17,744 ) $ 337,412 Restricted stock issued and vesting of restricted stock units, net 1,569 15 ( 15 ) — — — Shares repurchased ( 8,234 ) ( 82 ) ( 31,115 ) — — ( 31,197 ) Exercise of stock options, net 117 1 291 — — 292 Stock-based compensation — — 11,706 — — 11,706 Allocation of equity component related to convertible notes, net of issuance costs of $ 157 and deferred taxes of $ 1,239 — — 3,663 — — 3,663 Other comprehensive income — — — 157 — 157 Dividends — — ( 20,113 ) — — ( 20,113 ) Net loss — — — — ( 35,655 ) ( 35,655 ) Balance—December 31, 2020 148,716 $ 1,487 $ 317,075 $ 1,102 $ ( 53,399 ) $ 266,265 Reclassification of equity component related to convertible notes, net of deferred taxes of $ 1,022 , upon the implementation of Accounting Standards Update 2020-06 (Note 12) — — ( 3,682 ) — 616 ( 3,066 ) Balance—January 1, 2021 (as adjusted) 148,716 $ 1,487 $ 313,393 $ 1,102 $ ( 52,783 ) $ 263,199 Restricted stock issued and vesting of restricted stock units, net 1,369 13 ( 13 ) — — — Shares repurchased ( 5,121 ) ( 51 ) ( 34,455 ) — — ( 34,506 ) Exercise of stock options, net 143 2 813 — — 815 Stock-based compensation — — 9,998 — — 9,998 Other comprehensive loss — — — ( 420 ) — ( 420 ) Dividends — — — — ( 19,459 ) ( 19,459 ) Net income — — — — 49,797 49,797 Balance—December 31, 2021 145,107 $ 1,451 $ 289,736 $ 682 $ ( 22,445 ) $ 269,424 Restricted stock issued and vesting of restricted stock units, net 2,003 20 ( 20 ) — — — Shares repurchased ( 593 ) ( 6 ) ( 3,412 ) — — ( 3,418 ) Stock-based compensation — — 10,385 — — 10,385 Other comprehensive loss — — — ( 2,102 ) — ( 2,102 ) Dividends — — ( 4,842 ) — ( 14,520 ) ( 19,362 ) Net income — — — — 50,684 50,684 Balance—December 31, 2022 146,517 $ 1,465 $ 291,847 $ ( 1,420 ) $ 13,719 $ 305,611 The accompanying notes are an integral part of these consolidated financial statements F-9 Table of Contents WisdomTree, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In Thousands) Year Ended December 31, 2022 2021 2020 Cash flows from operating activities: Net income/(loss) $ 50,684 $ 49,797 $ ( 35,655 ) Adjustments to reconcile net income/(loss) to net cash provided by operating activities: Advisory fees received in gold and other precious metals ( 57,290 ) ( 74,970 ) ( 62,416 ) Contractual gold payments 17,108 17,096 16,811 Losses/(gains) on financial instruments owned, at fair value 16,516 3,715 ( 14 ) Stock-based compensation 10,385 9,998 11,706 (Gain)/loss on revaluation of deferred consideration—gold payments ( 27,765 ) ( 2,018 ) 56,821 Amortization of issuance costs—convertible notes 2,592 2,187 1,710 Deferred income taxes ( 1,296 ) 316 ( 2,192 ) Amortization of right of use asset 963 1,950 3,182 Depreciation and amortization 262 738 1,021 Impairments — 16,156 22,752 Gain on sale—Canadian ETF business, including remeasurement of contingent consideration — ( 787 ) ( 2,877 ) Loss on extinguishment of debt — — 2,387 Amortization of issuance costs—former credit facility — — 1,328 Other 386 ( 272 ) ( 990 ) Changes in operating assets and liabilities: Accounts receivable ( 720 ) ( 3,506 ) ( 193 ) Prepaid expenses ( 808 ) ( 139 ) ( 159 ) Gold and other precious metals 41,847 57,417 45,087 Other assets ( 309 ) ( 394 ) 107 Intangibles—software development ( 2,370 ) — — Fund management and administration payable 3,723 1,348 ( 2,264 ) Compensation and benefits payable 4,485 10,242 ( 3,804 ) Income taxes payable ( 2,308 ) 3,101 ( 2,441 ) Financial instruments sold, but not yet purchased, at fair value — — ( 582 ) Operating lease liabilities ( 965 ) ( 15,560 ) ( 3,517 ) Accounts payable and other liabilities ( 33 ) ( 1,097 ) 1,328 Net cash provided by operating activities 55,087 75,318 47,136 Cash flows from investing activities: Purchase of financial instruments owned, at fair value ( 67,734 ) ( 115,526 ) ( 36,444 ) Purchase of investments ( 21,863 ) ( 5,750 ) — Purchase of fixed assets ( 220 ) ( 293 ) ( 472 ) Proceeds from the sale of financial instruments owned, at fair value 52,115 19,441 18,703 Proceeds from the sale of Canadian ETF business, net, including receipt of contingent consideration — 2,360 2,774 Proceeds from held-to-maturity securities maturing or called prior to maturity 45 136 16,488 Proceeds from the sale of the Company’s financial interests in AdvisorEngine Inc. — — 9,592 Net cash (used in)/provided by investing activities ( 37,657 ) ( 99,632 ) 10,641 Cash flows from financing activities: Dividends paid $ ( 19,362 ) $ ( 19,459 ) $ ( 20,113 ) Shares repurchased ( 3,418 ) ( 34,506 ) ( 31,197 ) Convertible notes issuance costs — ( 4,297 ) ( 5,411 ) Repayment of debt — — ( 179,000 ) Proceeds from the issuance of convertible notes (Note 12 ) — 150,000 175,250 Proceeds from exercise of stock options — 815 292 Net cash (used in)/provided by financing activities ( 22,780 ) 92,553 ( 60,179 ) (Decrease)/increase in cash flow due to changes in foreign exchange rate ( 3,258 ) ( 955 ) 855 Net (decrease)/increase in cash and cash equivalents ( 8,608 ) 67,284 ( 1,547 ) Cash and cash equivalents—beginning of year 140,709 73,425 74,972 Cash and cash equivalents—end of year $ 132,101 $ 140,709 $ 73,425 Supplemental disclosure of cash flow information: Cash paid for income taxes $ 12,500 $ 8,456 $ 10,131 Cash paid for interest $ 12,313 $ 9,898 $ 7,088 NON-CASH ACTIVITIES 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 (Note 12). The accompanying notes are an integral part of these consolidated financial statements F-1 0 Table of Contents WisdomTree, Inc. and Subsidiaries Notes to Consolidated Financial Statements (In Thousands, Except Share and Per Share Amounts) 1. Organization and Description of Business WisdomTree, Inc., through its global subsidiaries (collectively, “WisdomTree” or the “Company”), is a global financial innovator, offering a well-diversified suite of exchange-traded products (“ETPs”), models and solutions. Building on its heritage of innovation, the Company is also developing next-generation digital products and structures, including digital or blockchain-enabled mutual funds (“Digital Funds”) and tokenized assets, as well as its blockchain-native digital wallet, WisdomTree Prime ™ . The Company has the following wholly-owned operating subsidiaries: • WisdomTree Asset Management, Inc. is a New York based investment adviser registered with the SEC, providing investment advisory and other management services to the WisdomTree Trust (“WTT”) and WisdomTree exchange-traded funds (“ETFs”). The WisdomTree ETFs are issued in the U.S. by WTT. WTT is a non-consolidated Delaware statutory trust registered with the SEC as an open-end management investment company. The Company has licensed to WTT the use of certain of its own indexes on an exclusive basis for the WisdomTree ETFs in the U.S. • WisdomTree Management Jersey Limited (“ManJer”) is a Jersey based management company providing management services to seven issuers (the “ManJer Issuers”) in respect of the ETPs issued and listed by the ManJer Issuers covering commodity, currency, cryptocurrency and leveraged-and-inverse strategies. • WisdomTree Multi Asset Management Limited (“WTMAML”) is a Jersey based management company providing management services to WisdomTree Multi Asset Issuer PLC (“WMAI”) in respect of the ETPs issued by WMAI. WMAI is a non-consolidated public limited company domiciled in Ireland. • WisdomTree Management Limited (“WML”) is an Ireland based management company providing management services to WisdomTree Issuer ICAV (“WTICAV”) in respect of the WisdomTree UCITS ETFs issued by WTICAV. WTICAV is a non-consolidated public limited company domiciled in Ireland. • WisdomTree UK Limited (“WTUK”) is a U.K. based company registered with the Financial Conduct Authority currently providing distribution and support services to ManJer, WTMAML and WML. • WisdomTree Europe Limited is a U.K. based company which is the legacy distributor of the WMAI ETPs and WisdomTree UCITS ETFs. These services are now provided directly by WTUK. WisdomTree Europe Limited is no longer regulated and does not provide any regulated services. • WisdomTree Ireland Limited is an Ireland based company authorized by the Central Bank of Ireland providing distribution services to ManJer, WTMAML and WML. • WisdomTree 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 investment adviser registered with the SEC, providing investment advisory and other management services to the WisdomTree Digital Trust (“WTDT”) and WisdomTree Digital Funds. The WisdomTree Digital Funds are issued in the U.S. by WTDT. WTDT is a Delaware statutory trust registered with the SEC as an open-end management investment company. Each Digital Fund will use blockchain technology to maintain a secondary record of its shares on one or more blockchains (e.g., Stellar or Ethereum), but will not directly or indirectly invest in any assets that rely on blockchain technology, such as cryptocurrencies. • WisdomTree Digital Movement, Inc . is a New York based company operating as a money services business registered with the Financial Crimes Enforcement Network (“FinCEN”) and seeking state money transmitter licenses to operate a platform for the purchase, sale and exchange of digital assets, while also providing digital wallet services through WisdomTree Prime ™ to facilitate such activity. • WisdomTree Securities, Inc . is a New York based limited purpose broker-dealer (i.e., mutual fund retailer), facilitating transactions in WisdomTree Digital Funds. 2. Significant Accounting Policies Basis of Presentation These consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and in the opinion of management reflect all adjustments, consisting of only normal recurring adjustments, necessary F-1 1 Table of Contents for a fair statement of financial condition, results of operations, and cash flows for the periods presented. The consolidated financial statements include the accounts of the Company’s wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Consolidation The Company consolidates entities in which it has a controlling financial interest. The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity (“VOE”) or a variable interest entity (“VIE”). The usual condition for a controlling financial interest in a VOE is ownership of a majority voting interest. If the Company has a majority voting interest in a VOE, the entity is consolidated. The Company has a controlling financial interest in a VIE when the Company has a variable interest that provides it with (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company reassesses its evaluation of whether an entity is a VOE or VIE when certain reconsideration events occur. Segment and Geographic Information The Company, through its subsidiaries in the U.S. and Europe, conducts business as a single operating segment as an ETP sponsor and asset manager which is based upon the Company’s current organizational and management structure, as well as information used by the chief operating decision maker to allocate resources and other factors. Foreign Currency Translation Assets and liabilities of subsidiaries whose functional currency is not the U.S. dollar are translated based on the end of period exchange rates from local currency to U.S. dollars. Results of operations are translated at the average exchange rates in effect during the period. The impact of the foreign currency translation adjustment is included in the Consolidated Statements of Comprehensive Income/(Loss) as a component of other comprehensive (loss)/income. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet dates and the reported amounts of revenues and expenses for the periods presented. Actual results could differ materially from those estimates. Revenue Recognition The Company earns substantially all of its revenue in the form of advisory fees from its ETPs and recognizes this revenue over time, as the performance obligation is satisfied. Advisory fees are based on a percentage of the ETPs’ average daily net assets. Progress is measured using the practical expedient under the output method resulting in the recognition of revenue in the amount for which the Company has a right to invoice. Contractual Gold Payments Contractual gold payments are measured and paid monthly based upon the average daily spot price of gold (Note 10 ). Marketing and Advertising Marketing and advertising costs, including media advertising and production costs, are expensed when incurred. 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: Equipment 3 to 5 years Internally-developed software 3 years The assets listed above are recorded at cost less accumulated depreciation and amortization. Stock-Based Awards Accounting for stock-based compensation requires the measurement and recognition of compensation expense for all equity awards based on estimated fair values. Stock-based compensation is measured based on the grant-date fair value of the award and is amortized over the relevant service period. Forfeitures are recognized when they occur. Third-Party Distribution Fees The Company pays a percentage of its advisory fee revenues based on incremental growth in assets under management (“AUM”), subject to caps or minimums, to marketing agents to sell WisdomTree ETFs and for including WisdomTree ETFs on third-party customer platforms and recognizes these expenses as incurred. F-12 Table of Contents Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of 90 days or less at the time of purchase to be classified as cash equivalents. The Company maintains deposits with financial institutions in an amount that is in excess of federally insured limits. Accounts Receivable Accounts receivable are customer and other obligations due under normal trade terms. The Company measures credit losses, if any, by applying historical loss rates, adjusted for current conditions and reasonable and supportable forecasts to amounts outstanding using the aging method. Impairment of Long-Lived Assets The Company performs a review for the impairment of long-lived assets when events or changes in circumstances indicate that the estimated undiscounted future cash flows expected to be generated by the assets are less than their carrying amounts or when other events occur which may indicate that the carrying amount of an asset may not be recoverable. Financial Instruments Owned and Financial Instruments Sold, but Not yet Purchased (at Fair Value) Financial instruments owned and financial instruments sold, but not yet purchased are financial instruments classified as either trading or available-for-sale (“AFS”). These financial instruments are recorded on their trade date and are measured at fair value. All equity instruments that have readily determinable fair values are classified by the Company as trading. Debt instruments are classified based primarily on the Company’s intent to hold or sell the instrument. Changes in the fair value of debt instruments classified as trading and AFS are reported in other income/(expenses) and other comprehensive income, respectively, in the period the change occurs. Debt instruments classified as AFS are assessed for impairment on a quarterly basis and an estimate for credit loss is provided when the fair value of the AFS debt instrument is below its amortized cost basis. Credit-related impairments are recognized in earnings with a corresponding adjustment to the instrument’s amortized cost basis if the Company intends to sell the impaired AFS debt instrument or it is more likely than not the Company will be required to sell the instrument before recovering its amortized cost basis. Other credit-related impairments are recognized as an allowance with a corresponding adjustment to earnings. Impairments resulting from noncredit-related factors are recognized in other comprehensive income. Amounts recorded in other comprehensive income are reclassified into earnings upon sale of the AFS debt instrument using the specific identification method. Securities Held-to-Maturity The Company accounts for certain of its securities as held-to-maturity on a trade date basis, which are recorded at amortized cost. For held-to-maturity securities, the Company has the intent and ability to hold these securities to maturity and it is not more-likely-than-not that the Company will be required to sell these securities before recovery of their amortized cost bases, which may be maturity. Held-to-maturity securities are placed on non-accrual status when the Company is in receipt of information indicating collection of interest is doubtful. Cash received on held-to-maturity securities placed on non-accrual status is recognized on a cash basis as interest income if and when received. The Company reviews its portfolio of held-to-maturity securities for impairment on a quarterly basis, recognizing an allowance, if any, by applying an estimated loss rate after consideration for the nature of collateral securing the financial asset as well as potential future changes in collateral values and historical loss information for financial assets secured with similar collateral. Investments in pass-through government-sponsored enterprises (“GSEs”) are determined to have an estimated loss rate of zero due to an implicit U.S. government guarantee. Investments 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. In addition, income is recognized when dividends are received only to the extent they are distributed from net accumulated earnings of the investee. Otherwise, such distributions are considered returns of investment and are recorded as a reduction of the cost of the investment. Inve stments in debt instruments are accounted for at fair value, with changes in fair value reported in other income/(expenses). Goodwill Goodwill is the excess of the purchase price over the fair values of the identifiable net assets at the acquisition date. The Company tests goodwill for impairment at least annually and at the time of a triggering event requiring re-evaluation, if one were F-13 Table of Contents to occur. Goodwill is considered impaired when the estimated fair value of the reporting unit that was allocated the goodwill is less than its carrying value. If the estimated fair value of such reporting unit is less than its carrying value, goodwill impairment is recognized based on that difference, not to exceed the carrying amount of goodwill. A reporting unit is an operating segment or a component of an operating segment provided that the component constitutes a business for which discrete financial information is available and management regularly reviews the operating results of that component. Goodwill is allocated to the Company’s U.S. business and European business components. For impairment testing purposes, these components are aggregated as a single reporting unit as they fall under the same operating segment and have similar economic characteristics. Goodwill is assessed for impairment annually on November 30 th . When performing its goodwill impairment test, the Company considers a qualitative assessment, when appropriate, and a quantitative assessment using the market approach and its market capitalization when determining the fair value of the reporting unit. Intangible Assets Indefinite-lived intangible assets are tested for impairment at least annually and are also reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Indefinite-lived intangible assets are impaired if their estimated fair values are less than their carrying values. Finite-lived intangible assets, if any, are amortized over their estimated useful life, which is the period over which the assets are expected to contribute directly or indirectly to the future cash flows of the Company. These intangible assets are tested for impairment at the time of a triggering event, if one were to occur. Finite-lived intangible assets may be impaired when the estimated undiscounted future cash flows generated from the assets are less than their carrying amounts. The Company may rely on a qualitative assessment when performing its intangible asset impairment test. Otherwise, the impairment evaluation is performed at the lowest level of reasonably identifiable cash flows independent of other assets. The annual impairment testing date for all of the Company’s intangible assets is November 30 th . 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 and are included in intangible assets, net in the Consolidated Balance Sheets. Such 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. Leases The Company accounts for its lease obligations in accordance with ASC Topic 842 , Leases (“ASC 842 ”), which requires the recognition of both (i) a lease liability equal to the present value of the remaining lease payments and (ii) an offsetting right-of-use asset. The remaining lease payments are discounted using the rate implicit in the lease, if known, or otherwise the Company’s incremental borrowing rate. After lease commencement, right-of-use assets are assessed for impairment and otherwise are amortized over the remaining lease term on a straight-line basis. These recognition requirements are not applied to short-term leases which are those with a lease term of 12 months or less. Instead, lease payments associated with short-term leases are recognized as an expense on a straight-line basis over the lease term. ASC 842 also provides a practical expedient which allows for consideration in a contract to be accounted for as a single lease component rather than allocated between lease and non-lease components. The Company has elected to apply this practical expedient to all lease contracts, where applicable. Deferred Consideration—Gold Payments Deferred consideration represents the present value of an obligation to pay gold to a third party into perpetuity and is measured using forward-looking gold prices observed on the CMX exchange, a selected discount rate and perpetual growth rate (Note 10). Changes in the fair value of this obligation are reported as gain/(loss) 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. In accordance with Accounting Standards Update (“ASU”) 2020-06, Debt – Debt with Conversion and Other Options , 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. F-14 Table of Contents Contingencies The Company may be subject to reviews, inspections and investigations by regulatory authorities as well as legal proceedings arising in the ordinary course of business. The Company evaluates the likelihood of an unfavorable outcome of all legal or regulatory proceedings to which it is a party and accrues a loss contingency when the loss is probable and reasonably estimable. Contingent Payments The Company recognizes a gain on contingent payments when the contingency is resolved and the gain is realized. Earnings per Share Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Net income available to common stockholders represents net income of the Company reduced by an allocation of earnings to participating securities. The Series A non-voting convertible preferred stock (Note 13) and unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of EPS pursuant to the two-class method. Share-based payment awards that do not contain such rights are not deemed participating securities and are included in diluted shares outstanding (if dilutive). Diluted EPS is calculated under the treasury stock method and the two-class method. The calculation that results in the lowest diluted EPS amount for the common stock is reported in the Company’s consolidated financial statements. The treasury stock method includes the dilutive effect of potential common shares including unvested stock-based awards, the Series A non-voting convertible preferred stock and the convertible notes, if any. Potential common shares associated with the Series A non-voting convertible preferred stock and the convertible notes are computed under the if-converted method. Potential common shares associated with the conversion option embedded in the convertible notes are dilutive when the Company’s average stock price exceeds the conversion price. Income Taxes The Company accounts for income taxes using the liability method, which requires the determination of deferred tax assets and liabilities based on the differences between the financial and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more-likely-than-not that some portion or all the deferred tax assets will not be realized. Tax positions are evaluated utilizing a two-step process. The Company first determines whether any of its tax positions are more-likely-than-not to be sustained upon examination, based solely on the technical merits of the position. Once it is determined that a position meets this recognition threshold, the position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company records interest expense and penalties related to tax expenses as income tax expense. The Global Intangible Low-Taxed Income (“GILTI”) provisions of the Tax Reform Act requires the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. An accounting policy election is available to either account for the tax effects of GILTI in the period that is subject to such taxes or to provide deferred taxes for book and tax basis differences that upon reversal may be subject to such taxes. The Company accounts for the tax effects of these provisions in the period that is subject to such tax. Non-income based taxes are recorded as part of other liabilities and other expenses. Recently 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 and $ 1,680 for the year ended December 31, 2021 (Note 12) and the impact on earnings per share was negligible. 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 F-15 Table of Contents the f ollowing exceptions: (1) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items (for example, discontinued operations or other comprehensive income); (2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; (3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; and (4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The standard also simplifies the accounting for income taxes by enacting the following: (a) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount as a non-income-based tax; (b) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered as a separate transaction; (c) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements; and (d) requiring that an entity reflect the enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The Company has determined that the adoption of this standard did not have a material impact on its financial statements. 3. Exit Activities Exit Activities The following table summarizes operating losses recognized by the Company’s wholly-owned subsidiaries that have either been sold or liquidated during reporting periods covered by its consolidated financial statements: Years Ended December 31, 2022 2021 2020 WTAMC $ — $ — $ 428 Disposition-Related Costs During the year ended December 31, 2020, the Company incurred disposition-related costs of $ 416 , in connection with the sale of WTAMC. 4. Cash and Cash Equivalents Of the total cash and cash equivalents of $ 132,101 and $ 140,709 at December 31, 2022 and 2021, $ 131,104 and $ 127,328 were held at two financial institutions at December 31, 2022 and 2021, respectively. At December 31, 2022 and 2021, cash equivalents were approximately $ 930 and $ 11,488 , respectively. Certain of the Company’s subsidiaries are required to maintain a minimum level of regulatory capital, which was $ 25,988 and $ 12,320 at December 31, 2022 and 2021, respectively. These requirements are generally satisfied by cash on hand. 5. Fair Value Measurements The fair value of financial instruments is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., “the exit price”) in an orderly transaction between market participants at the measurement date. ASC 820, Fair Value Measurement , establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs reflect assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the transparency of inputs as follows: Level 1 – Quoted prices for identical instruments in active markets. Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 – Instruments whose significant drivers are unobservable. The availability of observable inputs can vary from product to product and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by management F-16 Table of Contents in determining fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The tables below summarize the categorization of the Company’s assets and liabilities measured at fair value. During the years ended December 31, 2022 and 2021, there were no transfers between Levels 2 and 3. December 31, 2022 Total Level 1 Level 2 Level 3 Assets: Recurring fair value measurements: Cash equivalents $ 930 $ 930 $ — $ — Financial instruments owned, at fair value ETFs 23,772 23,772 — — U.S. treasuries 2,980 2,980 — — Pass-through GSEs 96,837 23,290 73,547 — Corporate bonds 885 — 885 — Other assets—seed capital 1,765 — 1,765 — Investments in Convertible Notes Securrency, Inc.—convertible note (Note 8) 14,500 — — 14,500 Fnality International Limited—convertible note (Note 8) 6,921 — — 6,921 Total $ 148,590 $ 50,972 $ 76,197 $ 21,421 Non-recurring fair value measurements: Other investments (1) $ 312 $ — $ — $ 312 Liabilities: Recurring fair value measurements: Deferred consideration (Note 10) $ 200,290 $ — $ — $ 200,290 (1) Fair value determined on May 10, 2022. December 31, 2021 Total Level 1 Level 2 Level 3 Assets: Recurring fair value measurements: Cash equivalents $ 11,488 $ 11,488 $ — $ — Financial instruments owned, at fair value ETFs 18,812 18,812 — — Pass-through GSEs 106,245 24,720 81,525 — Corporate bonds 2,109 — 2,109 — Total $ 138,654 $ 55,020 $ 83,634 $ — Non-recurring fair value measurements: Securrency, Inc.—Series A convertible preferred stock (1) $ 8,488 $ — $ — $ 8,488 Liabilities: Recurring fair value measurements: Deferred consideration (Note 10) $ 228,062 $ — $ — $ 228,062 (1) Fair value of $ 8,488 and $ 8,349 determined on June 9, 2021 and March 8, 2021, respectively (Note 8 ). Recurring Fair Value Measurements - Methodology Cash Equivalents (Note 4) – These financial assets represent cash invested in highly liquid investments with original maturities of less th an 90 days. These investments are valued at par, which approximates fair value, and are classified as Level 1 in the fair value hierarchy. Financial instruments owned (Note 6) – Financial instruments owned are investments in ETFs, pass-through GSEs, U.S. treasuries, corporate bonds and other assets. ETFs and U.S. treasuries are generally traded in active, quoted and highly liquid F-17 Table of Contents markets and are therefore classified as Level 1 in the fair value hierarchy. Pricing of pass-through GSEs and corporate bonds include consideration given to collateral characteristics and market assumptions related to yields, credit risk and timing of prepayments and are therefore generally classified as Level 2. Pass-through GSE positions invested in through a fund structure with a quoted market price on an exchange are generally classified as Level 1. Pricing of other assets includes consideration given to the underlying assets and the risks associated with them and are therefore generally classified as Level 2. Fair Value Measurements classified as Level 3 – The following table presents a reconciliation of beginning and ending balances of recurring fair value measurements classified as Level 3: Years Ended December 31, 2022 2021 Investments in Convertible Notes (Note 8) Beginning balance $ — $ — Purchases 21,863 — Net unrealized losses (1) ( 442 ) — Ending balance $ 21,421 $ — Deferred Consideration (Note 10) Beginning balance $ 228,062 $ 230,137 Net realized losses (2) 17,108 17,096 Net unrealized gains (3) ( 27,765 ) ( 2,018 ) Settlements ( 17,115 ) ( 17,153 ) Ending balance $ 200,290 $ 228,062 ( 1) Recorded in other losses and gains, net in the Consolidated Statements of Operations. (2) Recorded as contractual gold payments expense in the Consolidated Statements of Operations. (3) Recorded as gain on revaluation of deferred consideration—gold payments in the Consolidated Statements of Operations. 6. Financial instruments owned These instruments consist of the following: December 31, 2022 December 31, 2021 Financial instruments owned Trading securities $ 124,474 $ 127,166 Other assets—seed capital 1,765 — $ 126,239 $ 127,166 The Company recognized net trading losses on financial instruments owned that were still held at the reporting dates of $ 12,721 and $ 2,762 during the years ended December 31, 2022 and 2021, respectively, which were recorded in other losses and gains, net, in the Consolidated Statements of Operations. 7. Securities Held-to-Maturity The following table is a summary of the Company’s securities held-to-maturity: December 31, 2022 December 31, 2021 Debt instruments: Pass-through GSEs (amortized cost) $ 259 $ 308 During the years ended December 31, 2022 and 2021, the Company received proceeds of $ 45 and $ 136 , respectively, from held-to-maturity securities maturing or being called prior to maturity. F-18 Table of Contents The following table summarizes unrealized gains, losses, and fair value (classified as Level 2 within the fair value hierarchy) of securities held-to-maturity: December 31, 2022 2021 Cost/amortized cost $ 259 $ 308 Gross unrealized losses ( 20 ) — Gross unrealized gains — 13 Fair value $ 239 $ 321 An allowance for credit losses was not provided on the Company’s held-to-maturity securities as all securities are investments in pass-through GSEs which are determined to have an estimated loss rate of zero due to an implicit U.S. government guarantee. The following table sets forth the maturity profile of the securities held-to-maturity; however, these securities may be called prior to maturity date: December 31, 2022 2021 Due within one year $ — $ — Due one year through five years — — Due five years through ten years 27 — Due over ten years 232 308 Total $ 259 $ 308 8. Investments The following table sets forth the Company’s investments: December 31, 2022 December 31, 2021 Carrying Value Cost Carrying Value Cost Securrency, Inc.—Series A convertible preferred stock $ 8,488 $ 8,112 $ 8,488 $ 8,112 Securrency, Inc.—Series B convertible preferred stock 5,500 5,500 5,500 5,500 Securrency, Inc.—convertible note 14,500 15,000 — — Subtotal—Securrency, Inc. $ 28,488 $ 28,612 $ 13,988 $ 13,612 Fnality International Limited—convertible note 6,921 6,863 — — Other investments 312 250 250 250 $ 35,721 $ 35,725 $ 14,238 $ 13,862 Securrency, Inc. – Preferred Stock 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 2019 and 2,004,665 shares of Series B convertible preferred stock (“Series B Shares”) in March 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 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). These investments are accounted for under the measurement alternative prescribed in ASC 321, as they do not have a readily determinable fair value and are not considered to be in-substance common stock. The investments are assessed for impairment and similar observable transactions on a quarterly basis. There was no impairment recognized during the years ended December 31, 2022 and 2021 based upon a qualitative assessment. F- 19 Table of Contents During the year ended December 31, 2021, the Company recognized a gain of $ 376 on its Series A Shares, which were re-measured to fair value upon the issuance of Securrency’s Series B Shares. Fair value was determined using the backsolve method, a valuation approach that determines the value of shares for companies with complex capital structures based upon the price paid for shares recently issued. Fair value is allocated across the capital structure using the Black-Scholes option pricing model. The table below presents the inputs used in the backsolve valuation approach (classified as Level 3 in the fair value hierarchy): Inputs June 9, 2021 March 8, 2021 Expected volatility 50 % 55 % Time to exit (in years) 4.75 5.00 Securrency – Convertible Note In April and November 2022, the Company participated in a convertible note financing, making an aggregate investment of $ 15,000 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 year ended December 31, 2022, the Company recognized an unrealized loss of $ 500 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) and the time to exit: December 31, 2022 Conversion of note upon a future equity financing 60 % Redemption of note upon a corporate transaction 25 % Default 15 % Time to potential outcome (in years) 0.33 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 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 F-20 Table of Contents upon approval by holders of at least 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 PWERM and is also remeasured for changes in the British pound and U.S. dollar exchange rate. During the year ended December 31, 2022, the Company recognized a gain of $ 58 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) and the time to exit: December 31, 2022 Conversion of note upon a future financing round 85 % Redemption of note upon a change of control 10 % Default 5 % Time to potential outcome (in years) 0.25 9. Fixed Assets, net The following table summarizes fixed assets: December 31, 2022 2021 Equipment $ 962 $ 784 Less: accumulated depreciation ( 418 ) ( 227 ) Total $ 544 $ 557 During the year ended December 31, 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 14 and 26 for additional information. 10. Deferred Consideration Deferred consideration represents an obligation the Company assumed in connection with its acquisition of the European exchange-traded commodity, currency and leveraged-and-inverse business of ETFS Capital Limited (“ETFS Capital”) which occurred on April 11, 2018 (“ETFS Acquisition”). The obligation is for fixed payments to ETFS Capital of physical gold bullion equating to 9,500 ounces of gold per year through March 31, 2058 and then subsequently reduced to 6,333 ounces of gold continuing into perpetuity (“Contractual Gold Payments”). The Contractual Gold Payments are paid from advisory fee income generated by any Company-sponsored financial product backed by physical gold and are subject to adjustment and reduction for declines in advisory fee income generated by such products, with any reduction remaining due and payable until paid in full. ETFS Capital’s recourse is limited to such advisory fee income and it has no recourse back to the Company for any unpaid amounts that exceed advisory fees earned. ETFS Capital ultimately has the right to claw back Gold Bullion Securities Ltd. (a physically backed gold ETP issuer) if the Company fails to remit any amounts due. The Company determined the present value of the deferred consideration of $ 200,290 and $ 228,062 at December 31, 2022 and 2021 using the following assumptions: December 31, 2022 December 31, 2021 Forward-looking gold price (low)—per ounce $ 1,858 $ 1,833 Forward-looking gold price (high)—per ounce $ 3,126 $ 2,705 Forward-looking gold price (weighted average)—per ounce $ 2,237 $ 2,106 Discount rate 11.0 % 9.0 % Perpetual growth rate 1.3 % 1.0 % The forward-looking gold prices at December 31, 2022 were extrapolated from the last observable CMX exchange price (beyond 2028) and the weighted-average price per ounce was derived from the relative present values of the annual payment obligations. The perpetual growth rate at December 31, 2022 was determined based upon the increase in observable forward-looking gold prices through 2028. This obligation is classified as Level 3 as the discount rate, the extrapolated forward-looking F-21 Table of Contents 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 $ 16,796 and $ 16,739 and long-term amounts payable were $ 183,494 and $ 211,323 at December 31, 2022 and 2021, respectively. During the years ended December 31, 2022 and 2021, the Company recognized the following in respect of deferred consideration: Years Ended December 31, 2022 2021 2020 Contractual gold payments $ 17,108 $ 17,096 $ 16,811 Contractual gold payments—gold ounces paid 9,500 9,500 9,500 Gain/(loss) on revaluation of deferred consideration—gold payments (1) $ 27,765 $ 2,018 $ ( 56,821 ) (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. 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. 11. 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 year ended December 31, 2020, which represented the write-off of the remaining unamortized issuance costs. Interest expense recognized on the former credit facility during the year ended December 31, 2020 was $ 4,086 . 12. Convertible Notes On June 14, 2021, the Company issued and sold $ 150,000 i n aggregate principal amount of 3.25 % C onvertible Senior Notes due 2026 (the “2021 Notes”) pursuant to an indenture dated June 14, 2021, between the Company and U.S. Bank National Association, as trustee (or its successor in interest, the “Trustee”), in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (“Rule 144A”). On June 16, 2020, the Company issued and sold $ 150,000 in aggregate principal amount of 4.25 % Convertible Senior Notes due 2023 (the “June 2020 Notes”) pursuant to an indenture dated June 16, 2020, between the Company and the Trustee, in a private offering to qualified institutional buyers pursuant to Rule 144A. On August 13, 2020, the Company issued and sold $ 25,000 in aggregate principal amount of 4.25 % Convertible Senior Notes due 2023 at a price equal to 101% of the principal amount thereof, plus interest deemed to have accrued since June 16, 2020, and constitute a further issuance of, and form a single series with, the Company’s June 2020 Notes (the “August 2020 Notes” and together with the June 2020 Notes, the “2020 Notes”). After the issuance of the 2021 Notes (and together with the 2020 Notes, the “Convertible Notes”), the Company had $ 325,000 a g gregate principal amount of Convertible Notes outstanding. Key terms of the Convertible Notes are as follows: 2021 Notes 2020 Notes Maturity date (unless earlier converted, repurchased or redeemed) June 15, 2026 June 15, 2023 Interest rate 3.25 % 4.25 % Conversion price $ 11.04 $ 5.92 Conversion rate 90.5797 168.9189 Redemption price $ 14.35 $ 7.70 • Interest rate: Payable semiannually in arrears on June 15 and December 15 of each year. • Conversion price: Convertible at an initial conversion rate into shares of the Company’s common stock, per $1,000 principal amount of notes (equivalent to an initial conversion price as disclosed in the table above) . • Conversion: Holders may convert at their option at any time prior to the close of business on the business day immediately preceding March 15, 2026 and March 15, 2023 in respect of the 2021 Notes and 2020 Notes, respectively, F-2 2 Table of Contents only under the following circumstances: (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; (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; or (iv) upon the occurrence of specified corporate events. On or after March 15, 2026 and March 15, 2023 in respect of the 2021 Notes and 2020 Notes, respectively, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Convertible Notes at any time, regardless of the foregoing circumstances. • Cash settlement of principal amount: Upon conversion, the Company will pay cash up to the aggregate principal amount of the Convertible Notes to be converted. At its election, the Company will also settle its conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted in either cash, shares of its common stock or a combination of cash and shares of its common stock. • Redemption price: The Company may redeem for cash all or any portion of the notes, at its option, on or after June 20, 2023 and June 20, 2021 in respect of the 2021 Notes and 2020 Notes, respectively, and on or prior to the 55th scheduled trading day immediately preceding the maturity date, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days, including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100 % of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding the redemption date. No sinking fund is provided for the Convertible Notes. • Limited investor put rights: Holders of the Convertible Notes have the right to require the Company to repurchase for cash all or a portion of their notes at 100 % of their principal amount, plus any accrued and unpaid interest, upon the occurrence of certain change of control transactions or liquidation, dissolution or common stock delisting events. • Conversion rate increase in certain customary circumstances: In certain circumstances, conversions in connection with a “make-whole fundamental change” (as defined in the indentures) or conversions of Convertible Notes called (or deemed called) for redemption may result in an increase to the conversion rate, provided that the conversion rate will not exceed 144.9275 shares and 270.2702 shares of the Company’s common stock per $1,000 principal amount of the 2021 Notes and 2020 Notes, respectively (the equivalent of 69,036,410 shares of the Company’s common stock), subject to adjustment. • Seniority and Security: The 2021 Notes and 2020 Notes rank equal in right of payment, and are the Company’s senior unsecured obligations, but are subordinated in right of payment to the Company’s obligations to make certain redemption payments (if and when due) in respect of its Series A Non-Voting Convertible Preferred Stock (Note 13 ). 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 December 31, 2022 and 2021: December 31, 2022 December 31, 2021 2021 Notes 2020 Notes Total 2021 Notes 2020 Notes Total Principal amount $ 150,000 $ 175,000 $ 325,000 $ 150,000 $ 175,000 $ 325,000 Plus: Premium — 250 250 — 250 250 Gross proceeds 150,000 175,250 325,250 150,000 175,250 325,250 Less: Unamortized issuance costs (1) ( 2,981 ) ( 1,053 ) ( 4,034 ) ( 3,833 ) ( 2,793 ) ( 6,626 ) Carrying amount $ 147,019 $ 174,197 $ 321,216 $ 146,167 $ 172,457 $ 318,624 Effective interest rate (2) 3.83 % 5.26 % 4.60 % 3.83 % 5.26 % 4.60 % (1) Unamortized issuance costs increased by $ 119 upon the early adoption of ASU 2020-06 on January 1, 2021 and are reported net of the unamortized premium. (2) Includes amortization of the issuance costs and premium. F-23 Table of Contents On January 1, 2021, the Company early adopted ASU 2020-06, which simplified the accounting for convertible instruments by providing for such instruments being reported as a single liability (applicable to the Convertible Notes) or equity with no separate accounting for the 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, convertible instruments were required to be separated into their liability and equity components by allocating the issuance proceeds to each of those components. 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 years ended December 31, 2022 and 2021 was $ 14,935 and $ 12,332 , respectively. Interest expense on the 2020 Notes during the year ended December 31, 2020 was $ 5,582 . Interest payable of $ 621 and $ 590 at December 31, 2022 and 2021, respectively, is included in accounts payable and other liabilities on the Consolidated Balance Sheets. The fair value of the Convertible Notes (classified as Level 2 in the fair value hierarchy) was $ 320,513 and $ 360,571 at December 31, 2022 and 2021, respectively. The if-converted value of the 2020 Notes did not exceed the principal amount at December 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 December 31, 2022 and 2021. 13. Preferred Shares On April 10, 2018, the Company filed a Certificate of Designations of Series A Non-Voting Convertible Preferred Stock with the Secretary of State of the State of Delaware establishing the rights, preferences, privileges, qualifications, restrictions, and limitations relating to the Preferred Shares (defined below). The Preferred Shares are intended to provide ETFS Capital with economic rights equivalent to the Company’s common stock on an as-converted basis. The Preferred Shares have no voting rights, are not transferable and have the same priority with regard to dividends, distributions and payments as the common stock. As described in the Certificate of Designations, the Company will not issue, and ETFS Capital does not have the right to require the Company to issue, any shares of common stock upon conversion of the Preferred Shares, if, as a result of such conversion, ETFS Capital (together with certain attribution parties) would beneficially own more than 9.99% of the Company’s outstanding common stock immediately after giving effect to such conversion. In connection with the completion of the ETFS Acquisition, the Company issued 14,750 shares of Series A Non-Voting Convertible Preferred Stock (the “Preferred Shares”), which are convertible into an aggregate of 14,750,000 shares of common stock. The fair value of this consideration was $ 132,750 , based on the closing price of the Company’s common stock on April 10, 2018 of $ 9.00 per share, the trading day prior to the closing of the acquisition. The following is a summary of the Preferred Share balance: December 31, 2022 December 31, 2021 Issuance of Preferred Shares $ 132,750 $ 132,750 Less: Issuance costs ( 181 ) ( 181 ) 2 Preferred Shares—carrying value $ 132,569 $ 132,569 2 Cash dividends declared per share (quarterly) $ 0.03 $ 0.03 Temporary equity classification is required for redeemable instruments for which redemption triggers are outside of the issuer’s control. ETFS Capital has the right to redeem all the Preferred Shares specified to be converted during the period of time specified in the Certificate of Designations in the event that: (a) the number of shares of the Company’s common stock authorized by its certificate of incorporation is insufficient to permit the Company to convert all of the Preferred Shares requested by ETFS Capital to be converted; or (b) ETFS Capital does not, upon completion of a change of control of the Company, receive the same amount per Preferred Share as it would have received had each outstanding Preferred Share been converted into common stock immediately prior to the change of control. However, the Company will not be obligated to make any such redemption payments to the extent such payments would be a breach of any covenant or obligation the Company owes to any of its secured creditors or is otherwise prohibited by applicable law. Any such redemption will be at a price per Preferred Share equal to the dollar volume-weighted average price for a share of common stock for the 30-trading day period ending on the date of such attempted conversion or change of control, as applicable, multiplied by 1,000. Such redemption payment will be made in one payment no later than 10 business days following the last day of the Company’s first fiscal quarter that begins on a date following the date ETFS Capital exercises such redemption right. The redemption value of the Preferred Shares was $ 77,969 and $ 90,741 at December 31, 2022 and 2021, respectively. F-24 Table of Contents The carrying amount of the Preferred Shares was not adjusted as it was not probable that the Preferred Shares would become redeemable. 14. Leases The Company has entered into operating leases for its corporate headquarters office facilities, financial data terminals and equipment. The Company has no finance leases. The following table provides additional information regarding the Company’s leases: Years Ended December 31, 2022 2021 Lease cost: Operating lease cost $ 963 $ 1,950 Short-term lease cost 223 205 Total lease cost $ 1,186 $ 2,155 Other information: Cash paid for amounts included in the measurement of operating liabilities (operating leases) $ 965 $ 15,560 Right-of-use assets obtained in exchange for new operating lease liabilities n/a n/a Weighted-average remaining lease term (in years)—operating leases 1.2 1.5 Weighted-average discount rate—operating leases 6.4 % 4.4 % 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 $ 12,725 . As a result, the Company recognized a loss on the termination of a lease of $ 9,277 during the year ended December 31, 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 26 ). Additionally, the Company recognized an impairment loss of $ 303 resulting from the derecognition of a right-of-use asset upon exiting its London office in February 2021, as well as costs incurred to restore the office space to its original condition. The 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 December 31, 2022 with respect to the Company’s operating lease liabilities: 2023 $ 1,125 2024 398 2025 — 2026 — 2027 — 2028 and thereafter — Total future minimum lease payments (undiscounted) $ 1,523 F- 25 Table of Contents The following table reconciles the future minimum lease payments (disclosed above) at December 31, 2022 to the operating lease liabilities recognized in the Company’s Consolidated Balance Sheets: Amounts recognized in the Company’s Consolidated Balance Sheets Lease liability—short term $ 1,125 Lease liability—long term 339 Subtotal 1,464 Difference between undiscounted and discounted cash flows 59 Total future minimum lease payments (undiscounted) $ 1,523 15. Contingencies The Company may be subject to reviews, inspections and investigations by regulatory authorities as well as legal proceedings arising in the ordinary course of business. Closure of the WisdomTree WTI Crude Oil 3x Daily Leveraged ETP In December 2020, WMAI, WTMAML, WTUK and Wi sdomTre e 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 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 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 ($ 16,870 ) at December 31, 2022. The Company is currently assessing these claims with its external counsel. An accrual has not been made with respect to these matters at December 31, 2022 and 2021. 16. Variable Interest Entities VIEs are entities with any of the following characteristics: (i) the entity does not have enough equity to finance its activities without additional financial support; (ii) the equity holders, as a group, lack the characteristics of a controlling financial interest; or (iii) the entity is structured with non-substantive voting rights. Consolidation of a VIE is required for the party deemed to be the primary beneficiary, if any. The primary beneficiary is the party who has both (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity. The Company is not the primary beneficiary of any entities in which it has a variable interest as it does not have the power to direct the activities that most significantly impact the entities’ economic performance. Such power is conveyed through the entities’ boards of directors and the Company does not have control over the boards. F- 26 Table of Contents The following table presents information about the Company’s variable interests in non-consolidated VIEs: December 31, 2022 December 31, 2021 Carrying Amount—Assets (Securrency): Preferred stock—Series A Shares $ 8,488 $ 8,488 Preferred stock—Series B Shares 5,500 5,500 Convertible note 14,500 — Subtotal—Securrency $ 28,488 $ 13,988 Carrying Amount—Assets (Fnality): Convertible note 6,921 — Carrying Amount—Assets (Other investments): 312 250 Total (Note 8) $ 35,721 $ 14,238 Maximum exposure to loss $ 35,721 $ 14,238 17. Revenues from Contracts with Customers The following table presents the Company’s total revenues from contracts with customers: Years Ended December 31, 2022 2021 2020 Revenues from contracts with customers: Advisory fees $ 293,632 $ 298,052 $ 246,395 Other 7,713 6,266 3,517 Total operating revenues $ 301,345 $ 304,318 $ 249,912 The Company recognizes revenues from contracts with customers when the performance obligation is satisfied, which is when the promised services are transferred to the customer. A service is considered to be transferred when the customer obtains control, which is represented by the transfer of rights with regard to the service. Transfer of control happens either over time or at a point in time. When a performance obligation is satisfied over time, an entity is required to select a single method of measuring progress for each performance obligation that depicts the entity’s performance in transferring control of 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 18 ). These advisory fees are recognized over time, are earned from the Company’s ETPs and are calculated based on a percentage of the ETPs’ average daily net assets. There is no significant judgment in calculating amounts due which are invoiced monthly in arrears and are not subject to any potential reversal. Progress is measured using the practical expedient under the output method resulting in the recognition of revenue in the amount for which the Company has a right to invoice. There are no contract assets or liabilities that arise in connection with the recognition of advisory fee revenue. In addition, there are no costs incurred to obtain or fulfill the contracts with customers, all of which are investment advisory agreements with related parties. Geographic Distribution of Revenue The following table presents the Company’s total revenues geographically as determined by where the respective management companies reside: Years Ended December 31, 2022 2021 2020 Revenues from contracts with customers: United States $ 184,036 $ 179,016 $ 142,074 Jersey 103,692 114,623 103,061 Ireland 13,617 10,679 4,412 Canada (Note 3) — — 365 Total operating revenues $ 301,345 $ 304,318 $ 249,912 F-27 Table of Contents 18. Related Party Transactions The Company’s revenues are derived primarily from investment advisory agreements with related parties. Under these agreements, the Company has licensed to related parties the use of certain of its own indexes for the U.S. WisdomTree ETFs and WisdomTree UCITS ETFs. The Board of Trustees and Board of Directors (including certain officers of the Company) of the related parties are primarily responsible for overseeing the management and affairs of the entities for the benefit of their stakeholders and have contracted with the Company to provide for general management and administration services. The Company is also responsible for certain expenses of the related parties, including the cost of transfer agency, custody, fund administration and accounting, legal, audit, and other non-distribution services, excluding extraordinary expenses, taxes and certain other expenses, which 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. A majority of the independent members of the Board of Trustees are required to annually approve the advisory agreements of the U.S. 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 in the Consolidated Balance Sheets: December 31, 2022 2021 Receivable from WTT $ 16,399 $ 15,987 Receivable from ManJer Issuers 4,485 6,460 Receivable from WMAI and WTICAV 3,255 3,181 Total $ 24,139 $ 25,628 The allowance for credit losses on accounts receivable from related parties is insignificant when applying historical loss rates, adjusted for current conditions and supportable forecasts, to the amounts outstanding in the table above. Amounts outstanding are all invoiced in arrears, are less than 30 days aged and are collected shortly after the applicable reporting period. The following table summarizes revenues from advisory services provided to related parties: Years Ended December 31, 2022 2021 2020 Advisory services provided to WTT $ 183,409 $ 178,511 $ 141,079 Advisory services provided to ManJer Issuers 96,606 108,862 94,199 Advisory services provided to WMAI and WTICAV 13,617 10,679 10,124 Advisory services provided to WTCS — — 628 Advisory services provided to WTAMC — — 365 Total $ 293,632 $ 298,052 $ 246,395 Pursuant to a license agreement between WisdomTree, Inc. (“WTI”) and WML to provide indices for a number of the sub-funds of WTICAV, WTI earned revenue amounting to € 642 ($ 671 ), € 612 ($ 710 ) and € 313 ($ 429 ) for the years ended December 31, 2022, 2021 and 2020, respectively, which has been eliminated in consolidation. No other revenue was earned by WTI from license agreements to provide indices for use in the European Union during 2022, 2021 or 2020. The Company also has investments in certain WisdomTree products of approximately $ 25,283 and $ 18,526 at December 31, 2022 and 2021, respectively. Net unrealized and realized losses and gains related to trading WisdomTree products during the years ended December 31, 2022, 2021 and 2020 w ere $( 107 ), ($ 451 ) and $ 63 , respectively, which are recorded in other losses and gains, net on the Consolidated Statements of Operations. 19. Stock-Based Awards On July 15, 2022, the Company’s stockholders approved the 2022 Equity Plan under which the Company may issue up to 16,000,000 shares 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. F-28 Table of Contents The Company grants equity awards to employees and directors which include restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”) and stock options. Certain awards described below are subject to acceleration under certain conditions. Stock options: Generally issued for terms of ten years and may vest after at least one year of service and have an exercise price equal to the Company’s stock price on the grant date. The Company estimates the fair value of stock options (when granted) using the Black-Scholes option pricing model. RSAs/RSUs: Awards are valued based on the Company’s stock price on grant date and generally vest ratably, on an annual basis, over three years. PRSUs: These awards cliff vest three years from the grant date and contain a market condition whereby the number of PRSUs ultimately vesting is tied to how the Company’s total shareholder return (“TSR”) compares to a peer group of other publicly traded asset managers over the three-year period. A Monte Carlo simulation is used to value these awards. The number of PRSUs vesting ranges from 0 % to 200 % of the target number of PRSUs granted, as follows: •  If the relative TSR is below the 25 th percentile, then 0 % of the target number of PRSUs granted will vest; •  If the relative TSR is at the 25th percentile, then 50 % of the target number of PRSUs granted will vest; •  If the relative TSR is above the 25th percentile, then linear scaling is applied such that the percent of the target number of PRSUs vesting is 100 % at the 50th percentile and capped at 200 % of the target number of PRSUs granted for performance at the 85th percentile (or 100th percentile for grants made during 2019 and 2020) ; and •  If the Company’s TSR is negative, the target number of PRSUs vesting is capped at 100% regardless of the relative TSR percentile. Durin g the years ended December 31, 2022, 2021 and 2020, total stock-based compensation expense was $ 10,385 , $ 9,998 and $ 11,706 , respectively, and the related tax benefit recognized on the Consolidated Statements of Operations was $ 2,371 , $ 2,327 and $ 2,739 , respectively. The actual tax benefit realized for the tax deductions for share-based compensation was $ 1,548 , $ 2,032 and $ 833 during the years ended December 31, 2022, 2021 and 2020, respectively. A summary of unrecognized stock-based compensation expense and average remaining vesting period is as follows: December 31, 2022 Unrecognized Stock- Based Compensation Weighted-Average Remaining Vesting Period (Years) Employees and directors $ 12,536 1.38 Stock Options A summary of option activity is as follows: Options Weighted-Average Exercise Price Outstanding January 1, 2020 485,536 $ 4.80 Forfeitures/expirations ( 63,536 ) 2.49 Exercised ( 117,000 ) 4.81 Outstanding at December 31, 2020 305,000 $ 5.68 Forfeitures/expirations ( 162,500 ) 5.72 Exercised ( 142,500 ) 5.64 Outstanding at December 31, 2021 — $ — There was no option activity during the year ended December 31, 2022. The total intrinsic value of options exercised during the years ended December 31 , 2021 and 2020 was $ 51 and $ 168 , respectively. Cash received from option exercises during the years ended December 31 , 2021 and 2020 was $ 815 and $ 292 , respectively. F-29 Table of Contents RSAs, RSUs and PRSUs The aggregate fair value of RSAs, RSUs and PRSUs that vested during the years ended December 31, 2022, 2021 and 2020 was $ 9,466 , $ 10,940 and $ 4,783 , respectively. A summary of activity is as follows: RSA RSU PRSU (1) Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Unvested Balance at January 1, 2020 3,244,558 $ 7.29 39,278 $ 7.20 232,610 $ 6.24 Granted 1,653,186 3.80 32,901 3.82 117,013 (2) 3.11 Vested ( 1,206,879 ) 8.13 ( 27,130 ) 7.45 — — Forfeited ( 110,122 ) 4.79 ( 5,641 ) 5.39 ( 8,311 ) 6.24 Unvested Balance at December 31, 2020 3,580,743 $ 5.38 39,408 $ 4.46 341,312 $ 5.17 Granted 1,642,266 5.46 31,170 5.43 257,043 (2) 6.49 Vested ( 1,897,699 ) 5.78 ( 15,136 ) 4.73 — — Forfeited ( 288,405 ) 5.11 ( 452 ) 5.37 ( 47,669 ) 5.74 Unvested Balance at December 31, 2021 3,036,905 $ 5.20 54,990 $ 4.93 550,686 $ 5.73 Granted 2,170,432 5.71 116,247 5.18 319,838 (2) 6.80 Vested ( 1,621,201 ) 5.31 ( 27,894 ) 5.10 ( 202,336 ) 6.24 Forfeited ( 195,054 ) 5.43 ( 1,380 ) 5.73 — — Unvested Balance at December 31, 2022 3,391,082 $ 5.46 141,963 $ 5.09 668,188 $ 6.09 (1) Represents the target number of PRSUs granted and outstanding. The number of PRSUs that ultimately vest ranges from 0 % to 200 % of this amount. (2) A Monte Carlo simulation was used to value these awards using the following assumptions for the Company and the peer group: (i) beginning 90-day average stock prices; (ii) valuation date stock prices; (iii) correlation coefficients based upon the price data used to calculate the historical volatilities; and (iv) the following additional assumptions: Granted in 2022 Granted in 2021 Granted in 2020 Historical stock price volatility (low) 33 % 34 % 21 % Historical stock price volatility (high) 57 % 57 % 36 % Historical stock price volatility (average) 44 % 44 % 26 % Risk free interest rate 1.28 % 0.17 % 1.47 % Expected dividend yield 0.00 % 0.00 % 0.00 % 20. Employee Benefit Plans The Company has a 401(k) savings plan covering all eligible employees in which the Company can make discretionary contributions from its profits. The amounts included in the table below are recorded in compensation expense in the Consolidated Statements of Operations. A summary of discretionary contributions made by the Company is as follows: Years Ended December 31, 2022 2021 2020 $ 1,342 $ 1,080 $ 974 F-3 0 Table of Contents 21. Earnings Per Share The following tables set forth reconciliations of the basic and diluted earnings/(loss) per share computations for the periods presented: Years Ended December 31, 2022 2021 2020 Basic Earnings/(Loss) per Share Net income/(loss) $ 50,684 $ 49,797 $ ( 35,655 ) Less: Income distributed to participating securities ( 2,186 ) ( 2,168 ) ( 2,216 ) Less: Undistributed income allocable to participating securities ( 3,528 ) ( 3,378 ) — Net income/(loss) available to common stockholders—Basic EPS $ 44,970 $ 44,251 $ ( 37,871 ) Weighted average common shares (in thousands) 143,020 143,847 148,682 Basic income/(loss) per share $ 0.31 $ 0.31 $ ( 0.25 ) Years Ended December 31, 2022 2021 2020 Diluted Earnings/(Loss) per Share Net income/(loss) available to common stockholders $ 44,970 $ 44,251 $ ( 37,871 ) Add back: Undistributed income allocable to participating securities 3,528 3,378 — Less: Reallocation of undistributed income allocable to participating securities considered potentially dilutive ( 3,522 ) ( 3,353 ) — Net income/(loss) available to common stockholders—Diluted EPS $ 44,976 $ 44,276 $ ( 37,871 ) Weighted Average Diluted Shares (in thousands): Weighted average common shares 143,020 143,847 148,682 Dilutive effect of common stock equivalents, excluding participating securities 275 1,208 — Weighted average diluted shares, excluding participating securities (in thousands) 143,295 145,055 148,682 Diluted income/(loss) per share $ 0.31 $ 0.31 $ ( 0.25 ) 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. Total antidilutive non-participating common stock equivalents were 405 , 132 and 315 during the years ended December 31 , 2022 , 2021 and 2020 , respectively (shares herein are reported in thousands). During the year ended December 31 , 2020 , there were no dilutive common stock equivalents as the Company reported a net loss for the period. There were no potential common shares associated with the conversion option embedded in the Convertible Notes included in weighted average diluted shares for the year ended December 31, 2022 and 2020 as the Company’s average stock price was lower than the conversion price. Potential common shares associated with the conversion option embedded in the Convertible Notes for the year ended December 31, 2021 were 1,186 (shares herein are reported in thousands). F-3 1 Table of Contents The following table reconciles weighted average diluted shares as reported on the Company’s Consolidated Statements of Operations for the years ended December 31, 2022, 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: Years Ended December 31, 2022 2021 2020 Reconciliation of Weighted Average Diluted Shares (in thousands) Weighted average diluted shares as disclosed on the Consolidated Statements of Operations 158,914 161,263 148,682 (1) Less: Participating securities: Weighted average shares of common stock issuable upon conversion of the Preferred Shares (Note 13) ( 14,750 ) ( 14,750 ) — Potentially dilutive restricted stock awards ( 869 ) ( 1,458 ) — Weighted average diluted shares used to calculate diluted earnings/(loss) per share as disclosed in the table above 143,295 145,055 148,682 (1) (1) Excludes 15,122 participating securities for the year ended December 31, 2020 and 6 potentially dilutive common stock equivalents as the Company reported a net loss for the period (shares herein are reported in thousands). 22. Income Taxes Income/(loss ) before Income Tax Expense – Domestic and Foreign The U.S. and foreign components of income/(loss) before income tax expense for the years ended December 31, 2022, 2021 and 2020 are as follows: Year Ended December 31, 2022 2021 2020 U.S. $ ( 4,067 ) $ 15,986 $ ( 5,187 ) Foreign 44,017 40,685 ( 30,035 ) Total $ 39,950 $ 56,671 $ ( 35,222 ) Income Tax Expense/(Benefit) – By Jurisdiction The components of current and deferred income tax expense included in the Consolidated Statement of Operations for years ended December 31, 2022, 2021 and 2020 are as follows: Years Ended December 31, 2022 2021 2020 Current: Federal $ 4,685 $ 5,857 $ 3,670 State and local 1,415 1,538 832 Foreign ( 15,538 ) ( 837 ) ( 1,877 ) $ ( 9,438 ) $ 6,558 $ 2,625 Deferred: Federal $ ( 6 ) $ ( 1,217 ) $ 60 State and local ( 1 ) ( 251 ) 13 Foreign ( 1,289 ) 1,784 ( 2,265 ) $ ( 1,296 ) $ 316 $ ( 2,192 ) Income tax expense/(benefit) $ ( 10,734 ) $ 6,874 $ 433 F-32 Table of Contents Reconciliation of Statutory Federal Income Tax Rate to the Effective Income Tax Rate A reconciliation of the statutory federal income tax expense and the Company’s total income tax expense is as follows: Years Ended December 31, 2022 2021 2020 U.S. federal statutory income tax $ 8,386 $ 11,901 $ ( 7,397 ) Decrease in unrecognized tax benefits, net ( 19,871 ) ( 4,998 ) ( 5,661 ) Change in valuation allowance – Capital losses 4,761 5 4,448 Change in tax-related indemnification assets, net 4,173 1,053 1,189 Foreign operations ( 2,919 ) ( 3,211 ) ( 3,342 ) Change in valuation allowance—Foreign net operating losses (“NOLs”) and interest carryforwards ( 1,609 ) — ( 2,018 ) (Gain)/loss on revaluation of deferred consideration (1) ( 5,842 ) ( 424 ) 11,929 GILTI 499 — — Non-deductible executive compensation 789 881 399 Stock-based compensation tax shortfalls 507 647 1,485 Blended state income tax rate, net of federal benefit ( 134 ) 526 ( 171 ) Non-taxable gain on sale—Canadian ETF business — — ( 740 ) Other differences, net 526 494 312 Income tax expense/(benefit) $ ( 10,734 ) $ 6,874 $ 433 (1) The (gain)/loss on revaluation of deferred consideration is not adjusted for income taxes as the obligation was assumed by a wholly-owned subsidiary that is based in Jersey, a jurisdiction where the Company is subject to a zero percent tax rate. Income Tax Payments A summary of income taxes paid by jurisdiction for the years ended December 31, 2022, 2021 and 2020 is as follows: Years Ended December 31, 2022 2021 2020 Federal $ 6,424 $ 4,258 $ 4,470 State and local 1,431 1,020 1,353 Foreign 4,645 3,178 4,308 $ 12,500 $ 8,456 $ 10,131 F- 33 Table of Contents Deferred Tax Assets A summary of the components of the Company’s deferred tax assets at December 31, 2022 and 2021 is as follows: 2022 2021 Deferred tax assets: Capital losses $ 17,541 $ 16,601 Accrued expenses 6,030 4,993 Unrealized losses 3,821 614 NOLs—Foreign 1,609 1,934 Stock-based compensation 1,526 1,359 Goodwill and intangible assets 1,085 1,276 Operating lease liabilities 313 — NOLs—U.S. 255 382 Foreign currency translation adjustment 173 — Outside basis differences 122 122 Interest carryforwards — 437 Other 341 376 Deferred tax assets 32,816 28,094 Deferred tax liabilities: Fixed assets and prepaid assets 278 257 Foreign currency translation adjustment — 181 Unremitted earnings—European subsidiaries 205 118 Right of use assets—operating leases 313 — Deferred tax liabilities 796 556 Total deferred tax assets less deferred tax liabilities 32,020 27,538 Less: Valuation allowance ( 21,484 ) ( 18,657 ) Deferred tax assets, net $ 10,536 $ 8,881 Net Operating and Capital Losses – U.S. The Company’s tax effected net operating losses (“NOLs”) at December 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 at December 31, 2022 were $ 17,541 . These capital losses expire between the years 2023 and 2027. Net Operating Losses – Europe 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 $ 1,609 at December 31, 2022. Valuation Allowance The Company’s valuation allowance has been established on its net capital losses, unrealized losses and outside basis differences, as it is more-likely-than-not that these deferred tax assets will not be realized. During the year ended December 31, 2022, the Company released the valuation allowance on its European net operating losses of $ 1,609 as it is more-likely-than-not that these deferred tax assets will be realized. Uncertain Tax Positions Tax positions are evaluated utilizing a two-step process. The Company first determines whether any of its tax positions are more-likely-than-not to be sustained upon examination, based solely on the technical merits of the position. Once it is determined that a position meets this recognition threshold, the position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. In connection with the ETFS Acquisition, the Company accrued a liability for uncertain tax positions and interest and penalties at the acquisition date. The Company also recorded an offsetting indemnification asset provided by ETFS Capital as part F-34 Table of Contents 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: Total Unrecognized Tax Benefits Interest and Penalties Balance at January 1, 2021 $ 27,016 $ 21,850 $ 5,166 Decrease—Lapse of statute of limitations (1) ( 5,171 ) ( 3,559 ) ( 1,612 ) Increases 173 — 173 Foreign currency translation (2) ( 93 ) ( 73 ) ( 20 ) Balance at December 31, 2021 $ 21,925 $ 18,218 $ 3,707 Decrease—Settlements (1) ( 13,052 ) ( 11,865 ) ( 1,187 ) Decrease—Lapse of statute of limitations (1) ( 6,845 ) ( 4,825 ) ( 2,020 ) Increases 26 — 26 Foreign currency translation (2) ( 701 ) ( 571 ) ( 130 ) Balance at December 31, 2022 $ 1,353 $ 957 $ 396 (1) 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 year ended December 31, 2022 was recorded as an income tax benefit along with an equal and offsetting amount recorded in other losses and gains, net, to recognize a reduction in the indemnification asset. During the year ended December 31, 2021, an income tax benefit of $ 5,171 was recorded upon the lapse of the statute of limitations with an equal and offsetting amount in other losses and gains, net. (2) The gross unrecognized tax benefits were accrued in British pounds. The gross unrecognized tax benefits and interest and penalties totaling $ 1,353 and $ 21,925 at December 31, 2022 and 2021, respectively, are included in other non-current liabilities on the Consolidated Balance Sheets. It is reasonably possible that the remaining amount of 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. As of December 31, 2022, with few exceptions, the Company was no longer subject to income tax examinations by any taxing authority for the years before 2018. 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. In addition, the Company’s tax returns were previously under review by the State of Michigan for the years ended 2017 through 2020. In August 2022, the audit was resolved in favor of the Company. Undistributed Earnings of Foreign Subsidiaries ASC 740-30 Income Taxes provides guidance that US companies do not need to recognize tax effects on foreign earnings that are indefinitely reinvested. The Company repatriates earnings of its foreign subsidiaries and therefore has recognized a deferred tax liability of $ 205 and $ 118 at December 31, 2022 and 2021, respectively. 23. Shares Repurchased 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. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements and priorities. The repurchase program may be suspended or terminated at any time without prior notice. Shares repurchased under this program are returned to the status of authorized and unissued on the Company’s books and records. During the years ended December 31, 2022, 2021 and 2020, the Company repurchased 593,261 , 5,120,496 and 8,234,324 shares of its common stock, respectively, under this program for an aggregate cost of $ 3,418 , $ 34,506 and $ 31,197 , respectively. F-35 Table of Contents Shares repurchased under this program were returned to the status of authorized and unissued on the Company’s books and records. As of December 31, 2022, $ 99,976 remained under this program for future purchases. 24. Goodwill and Intangible Assets Goodwill The table below sets forth goodwill which is tested annually for impairment on November 30 th : Total Balance at January 1, 2022 $ 85,856 Changes — Balance at December 31, 2022 $ 85,856 Goodwill was tested for impairment on November 30, 2022. The quantitative impairment test was performed using a market approach, whereby the market capitalization of the Company (a single reporting unit) was compared to its carrying value. The market capitalization was derived from the Company’s publicly traded stock price plus a reasonable control premium. The fair value of the reporting unit exceeded its carrying value and therefore no impairment was recognized. Goodwill arising from the ETFS Acquisition of $ 84,057 is not deductible for tax purposes as the acquisition was structured as a stock acquisition occurring in the U.K . The remainder of the goodwill is deductible for U.S. tax purposes. Intangible Assets The table below sets forth the Company’s intangible assets which are tested annually for impairment on November 30 th : Item Gross Asset Accumulated Amortization Net Asset ETFS acquisition $ 601,247 $ — $ 601,247 Software development 2,370 ( 50 ) 2,320 Balance at December 31, 2022 $ 603,617 $ ( 50 ) $ 603,567 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. These intangible assets were determined to have indefinite useful lives and are not deductible for tax purposes. The Company performed its indefinite-lived intangible asset impairment test related to its ETFS customary advisory agreements on November 30, 2022. The results of this analysis identified no indicators of impairment to be recognized based upon a quantitative assessment (discounted cash flow analysis) which relied upon significant unobservable inputs including projected revenue growth rates ranging from 3 % to 8 % ( 5 % weighted average) and a weighted average cost of capital of 11.0 %. Software Development (Finite-Lived) Internally-developed software is amortized over a useful life of three years . During the year ended December 31, 2022, the Company recognized amortization expense on internally-developed software of $ 50 . As of December 31, 2022, expected amortization expense for the unamortized finite-lived intangible assets for the next five years and thereafter is as follows: 2023 $ 700 2024 790 2025 740 2026 90 2027 — 2028 and thereafter — Total expected amortization expense $ 2,320 The weighted-average remaining useful life of the finite-lived intangible assets is 2.9 years. F-36 Table of Contents 25. 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 . 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 December 31, 2022 and 2021 and no contingent payments have been received during the last three years. 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 on the 18-month anniversary of the closing date. 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. No value has been ascribed to these contingent payments at December 31, 2022 and 2021. In connection with this sale, the Company recognized a gain of $ 2,877 during the year ended December 31, 2020. 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. A gain of $ 787 was recognized during the year ended December 31, 2021, from remeasuring the contingent payment to its realizable value. These gains were recorded in other losses and gains, net. 26. Impairments The following table summarizes impairments recognized by the Company: Years Ended December 31, 2022 2021 2020 Lease termination–New York office (Note 14 ) $ — $ 9,277 $ — Fixed assets–New York office (Note 9 ) — 6,576 — Lease termination–London office (Note 14 ) — 303 — AdvisorEngine–Financial interests — — 19,672 Thesys–Series Y Preferred — — 3,080 Total $ — $ 16,156 $ 22,752 AdvisorEngine During the year ended December 31, 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. Fair value was subsequently adjusted during the year ended December 31, 2020 by recognizing a gain of $ 1,093 in other losses and gains, net. These fair value adjustments were based upon the final sale terms as disclosed above (Note 25 ). Thesys During the year ended December 31, 2020, the Company recognized an impairment of $ 3,080 on its Series Y Preferred shares in Thesys, as the investment had underperformed financially when assessed against prior expectations, resulting in a carrying value of $ 0 at December 31, 2020. 27. Subsequent Events The Company evaluated subsequent events through the date of issuance of the accompanying consolidated financial statements. On February 1 4 , 2023, the Company issued and sold $ 130,000 in aggregate principal amount of 5.75 % Convertible Senior Notes due 2028 (the “2023 Notes”) pursuant to an indenture dated February 14, 2023, between the Company and U.S. Bank Trust Company, National Association, in a private offering to qualified institutional buyers pursuant to Rule 144A. The sale of the 2023 Notes resulted in approximately $ 126,375 in net proceeds to the Company after deducting the initial purchaser’s discount and estimated offering expenses. In connection with the issuance, the Company repurchased $ 115,000 of aggregate principal amount of its 2020 Notes for $ 125,118 . As a result of this repurchase, the Company recognized a loss on extinguishment of approximately $ 9,721 during the three months ended March 31, 2023 . F-37 Table of Contents Key terms of the 2023 Notes are as follows: Maturity date (unless earlier converted, repurchased or redeemed) August 15, 2028 Interest rate 5.75 % Conversion price $ 9.54 Conversion rate 104.8658 Redemption price $ 12.40 • Interest rate: Payable semiannually in arrears on February 15 and August 15 of each year , beginning on August 15, 2023 . • Conversion price: Convertible at an initial conversion rate into shares of the Company’s common stock, per $1,000 principal amount of notes (equivalent to an initial conversion price as disclosed in the table above), subject to adjustment. • Conversion: Holders may convert at their option at any time prior to the close of business on the business day immediately preceding May 15, 2028 only under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on June 30, 2023 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the i mmediately 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 2023 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 indenture but only with respect to the 2023 Notes called (or deemed called) for redemption; or (iv) upon the occurrence of specified corporate events. On or after May 15, 2028, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2023 Notes at any time, regardless of the foregoing circumstances. • Cash settlement: Upon conversion, the Company will pay cash up to the aggregate principal amount of the 2023 Notes to be converted. At its election, the Company will also settle its conversion obligation in excess of the aggregate principal amount of the 2023 Notes being converted in either cash, shares of its common stock or a combination of cash and shares of its common stock. • Redemption price: The Company may redeem for cash all or any portion of the notes, at its option, on or after August 20, 2025 and on or prior to the 55th 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 (whether or not consecutive), 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 2023 Notes to be redeemed, plus accrued and unpaid interest to, but excluding the redemption date . No sinking fund is provided for the 2023 Notes. • Limited investor put rights: Holders of the 2023 Notes will have the right to require the Company to repurchase for cash all or a portion of their notes at 100 % of their principal amount, plus any accrued and unpaid interest, upon the occurrence of certain change of control transactions or liquidation, dissolution or common stock delisting events. • Conversion rate increase in certain customary circumstances: In certain circumstances, conversions in connection with a “make-whole fundamental change” (as defined in the indenture ) or conversions of the 2023 Notes called (or deemed called) for redemption may result in an increase to the conversion rate, provided that the conversion rate will not exceed 167.7853 shares of the Company’s common stock per $1,000 principal amount of the 2023 Notes (the equivalent of 21,812,089 shares of the Company’s common stock), subject to adjustment. • Seniority and Security: The 2023 Notes will be the Company’s senior unsecured obligations, and will rank equal in right of payment to the 2021 Notes and 2020 Notes, but will be subordinated in right of payment to the Company’s obligations to make certain redemption payments (if and when due) in respect of its Preferred Shares. F- 38 Table of Contents EXHIBIT INDEX Exhibit Number Description 3.1 Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 3.2 Certificate of Amendment to the Amended and Restated Certificate of Incorporation (Name Change) (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, filed with the SEC on November 7, 2022) 3.3 Certificate of Amendment to the Amended and Restated Certificate of Incorporation (Declassification of Board of Directors) (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, filed with the SEC on July 20, 2022). 3.4 Certificate of Amendment to the Amended and Restated Certificate of Incorporation (Increase in Authorized Shares) (incorporated by reference to Exhibit 3.2 of the Registrant’s Current Report on Form 8-K, filed with the SEC on July 20, 2022). 3.5 Certificate of Designations of Series A Non-Voting Convertible Preferred Stock of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on April 13, 2018) 3.6 Fourth Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 of the Registrant’s Current Report on Form 8-K, filed with the SEC on November 7, 2022) 4.1 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 4.2 Amended and Restated Stockholders Agreement among the Registrant and certain investors dated December 21, 2006 (incorporated by reference to Exhibit 4.2 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 4.3 Securities Purchase Agreement among the Registrant and certain investors dated December 21, 2006 (incorporated by reference to Exhibit 4.3 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 4.4 Securities Purchase Agreement among the Registrant and certain investors dated October 15, 2009 (incorporated by reference to Exhibit 4.4 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 4.5 Third Amended and Restated Registration Rights Agreement dated October 15, 2009 (incorporated by reference to Exhibit 4.5 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 4.6 Investor Rights Agreement, dated April 11, 2018, between the Registrant and ETFS Capital (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on April 13, 2018) 4.7 Indenture, dated as of June 16, 2020, by and between the Registrant and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on June 17, 2020) 4.8 Form of Global Note, representing the Registrant’s 4.25% Convertible Senior Notes due 2023 (included as Exhibit A to the Indenture filed as Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on June 17, 2020) 4.9 Indenture, dated as of June 14, 2021, by and between the Registrant and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on June 14, 2021) 4.10 Form of Global Note, representing the Registrant’s 3.25% Convertible Senior Notes due 2026 (incorporated by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 8-K filed with the SEC on June 14, 2021) 4.11 Indenture, dated as of February 14, 2023, by and between the Registrant and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on February 14, 2023) 4.12 Form of Global Note, representing the Registrant’s 5.75% Convertible Senior Notes due 2028 (incorporated by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 8-K filed with the SEC on February 14, 2023) 10.1 Representative Form of Advisory Agreement between WisdomTree Asset Management, Inc. and WisdomTree Trust (incorporated by reference to Exhibit 10.1 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) Table of Contents Exhibit Number Description 10.2 Form of Proprietary Rights and Confidentiality Agreement (incorporated by reference to Exhibit 10.34 of the Registrant’s Registration Statement on Form 10, filed with the SEC on March 31, 2011) 10.3 Form of Indemnification Agreement for Officers and Directors (incorporated by reference to Exhibit 10.35 of the Registrant’s Amendment to Registration Statement on Form 10, filed with the SEC on May 26, 2011) 10.4 Amended and Restated License Agreement between the Registrant and WisdomTree Trust dated March 1, 2012 (incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 14, 2012) 10.5 WisdomTree Investments, Inc. 2016 Equity Plan (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 9, 2016) 10.6 Form of Employment Agreement for Executive Officers dated December 22, 2016 (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on December 23, 2016) 10.7(a) Appendix A to Employment Agreement between the Registrant and Jonathan Steinberg, dated December 22, 2016 (incorporated by reference to Exhibit 10.1(A) of the Registrant’s Current Report on Form 8-K filed with the SEC on December 23, 2016) 10.7(b) Appendix A to Employment Agreement between the Registrant and Peter M. Ziemba, dated December 22, 2016 (incorporated by reference to Exhibit 10.1(E) of the Registrant’s Current Report on Form 8-K filed with the SEC on December 23, 2016) 10.8 Form of Amendment, dated May 5, 2017, to Form of Employment Agreement for Executive Officers, dated December 22, 2016 (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 8, 2017) 10.9 Employment Agreement between the Registrant and R. Jarrett Lilien, dated November 27, 2017 (incorporated by reference to Exhibit 10.19 of the Registrant’s Annual Report on Form 10-K filed with the SEC on March 1, 2018) 10.10 Share Sale Agreement among the Registrant, WisdomTree International and ETFS Capital dated November 13, 2017 (incorporated by reference to Exhibit 4.6 of the Registrant’s Annual Report on Form 10-K filed with the SEC on March 1, 2018) 10.11 Waiver and Variation Agreement, dated April 11, 2018, by and among the Registrant, WisdomTree International and ETFS Capital (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed with the SEC on April 13, 2018) 10.12 Form of Restricted Stock Agreement for Executive Officers (2016 Equity Plan) (incorporated by reference to Exhibit 10.15 of the Registrant’s Annual Report on Form 10-K filed with the SEC on March 1, 2019) 10.13 Employment Agreement between the Registrant and Marci Frankenthaler, dated November 5, 2020 (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 6, 2020) 10.14 Employment Agreement between the Registrant and Alexis Marinof, dated June 8, 2017 (incorporated by reference to Exhibit 10.21 of Amendment No. 1 to the Registrant’s Annual Report on Form 10-K on Form 10-K/A filed with the SEC on April 30, 2021) 10.15 Amendment to Employment Agreement between the Registrant and Alexis Marinof, dated July 20, 2017 (incorporated by reference to Exhibit 10.22 of Amendment No. 1 to the Registrant’s Annual Report on Form 10-K on Form 10-K/A filed with the SEC on April 30, 2021) 10.16 Form of Performance-Based Restricted Stock Unit Award Agreement for U.S. Executive Officers (2016 Equity Plan) (incorporated by reference to Exhibit 10.23 of Amendment No. 1 to the Registrant’s Annual Report on Form 10-K on Form 10-K/A filed with the SEC on April 30, 2021) 10.17 Form of Performance-Based Restricted Stock Unit Award Agreement for U.K. Executive Officers (2016 Equity Plan) (incorporated by reference to Exhibit 10.24 of Amendment No. 1 to the Registrant’s Annual Report on Form 10-K on Form 10-K/A filed with the SEC on April 30, 2021) 10.18 Cooperation Agreement, dated May 25, 2022, by and among the Investor Group and the Registrant (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on May 26, 2022) 10.19 Letter Agreement, dated as of May 25, 2022, by and between the Registrant and Deborah A. Fuhr (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on May 26, 2022 ) Table of Contents Exhibit Number Description 10.20 WisdomTree Investments, Inc. 2022 Equity Plan (incorporated by reference to Exhibit 99.1 of the Registrant’s Registration Statement on Form S-8 filed with the SEC on July 25, 2022) 10.21 Form of Restricted Stock Agreement for Non-Employee Directors (2022 Equity Plan) (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 4, 2022) 10.22 Form of Restricted Stock Unit Award Agreement (Deferred) for Non-Employee Directors (2022 Equity Plan) (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 4, 2022) 10.23 Form of Restricted Stock Agreement for Executive Officers (2022 Equity Plan) (filed herewith) 10.24 Form of Performance-Based Restricted Stock Unit Award Agreement for U.S. Executive Officers (2022 Equity Plan) (filed herewith) 10.25 Form of Performance-Based Restricted Stock Unit Award Agreement for U.K. Executive Officers (2022 Equity Plan) (filed herewith) 10.26 Non-Employee Director Deferred Compensation Program (filed herewith) 21.1 Subsidiaries of the Registrant (filed herewith) 23.1 Consent of Ernst & Young LLP, independent registered public accounting firm (filed herewith) 31.1 Rule 13a-14(a) / 15d—14(a) Certification (filed herewith) 31.2 Rule 13a-14(a) / 15d—14(a) Certification (filed herewith) 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith) 101 Financial Statements from the Annual Report on Form 10-K of the Company are attached to this report, formatted in XBRL pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets at December 31, 2022 and December 31, 2021; (ii) Consolidated Statements of Operations for the years ended December 31, 2022, December 31, 2021 and December 31, 2020; (iii) Consolidated Statements of Comprehensive Income/(Loss) for the years ended December 31, 2022, December 31, 2021 and December 31, 2020; (iv) Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2022, December 31, 2021 and December 31, 2020; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2022, December 31, 2021 and December 31, 2020 and (vi) Notes to the Consolidated Financial Statements. 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 (1) Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. WISDOMTREE, INC. By: /s/ J ONATHAN S TEINBERG Jonathan Steinberg February 28, 2023 Chief Executive Officer and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated below on the 28 th day of February, 2023. Signature Title /s/ Jonathan Steinberg Jonathan Steinberg Chief Executive Officer and Director (Principal Executive Officer) /s/ Bryan Edmiston Bryan Edmiston Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) /s/ Frank Salerno Non-Executive Chair of the Board Frank Salerno /s/ Lynn S. Blake Director Lynn S. Blake /s/ Anthony Bossone Director Anthony Bossone /s/ Smita Conjeevaram Director Smita Conjeevaram /s/ Deborah Fuhr Director Deborah Fuhr /s/ Daniela Mielke Director Daniela Mielke /s/ Win Neuger Director Win Neuger /s/ Harold Singleton III Director Harold Singleton III