What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-09 compared with 2022-11-04 · 340 added, 404 removed, 664 unchanged (53% of the section changed)

FINANCIAL STATEMENTS

WisdomTree Investments, Inc.

WisdomTree, Inc.

and Subsidiaries

1 unchanged sentence

(In Thousands, Except Per Share Amounts)

September 30,

Current assets:

Cash and cash equivalents

Securities owned, at fair value (including $ 12,387 and $ 18,526 invested in WisdomTree ETFs at September 30, 2022 and December 31, 2021, respectively)

Accounts receivable (including $ 21,222 and $ 25,628 due from related parties at September 30, 2022 and December 31, 2021, respectively)

Cash and cash equivalents (Note 3)

Financial instruments owned, at fair value (including $ 45,214 and $ 25,283 invested in WisdomTree products at March 31, 2023 and December 31, 2022, respectively) (Note 5)

Accounts receivable (including $ 32,446 and $ 24,139 due from related parties at March 31, 2023 and December 31, 2022, respectively)

Prepaid expenses

Income taxes receivable

Other current assets

3 unchanged sentences

Securities held-to-maturity

Deferred tax assets, net

Deferred tax assets, net (Note 20)

Investments (Note 7)

1 unchanged sentence

Goodwill (Note 22)

Intangible assets (Note 21)

Intangible assets, net (Note 22)

Other noncurrent assets

3 unchanged sentences

Fund management and administration payable

Compensation and benefits payable

Deferred consideration—gold payments (Note 9)

Operating lease liabilities (Note 12)

Compensation and benefits payable

Income taxes payable

Operating lease liabilities (Note 12)

Accounts payable and other liabilities

Total current liabilities

Convertible notes—long term (Note 10)

Convertible notes (Note 10)

Deferred consideration—gold payments (Note 9)

5 unchanged sentences

14.750 shares authorized, issued and outstanding;

redemption value of $ 73,594 and $ 90,741 at September 30, 2022 and December 31, 2021, respectively) (Note 11)

redemption value of $ 86,638 and $ 77,969 at March 31, 2023 and December 31, 2022, respectively) (Note 11)

Contingencies (Note 13)

5 unchanged sentences

issued and outstanding:

146,520 and 145,107 at September 30, 2022 and December 31, 2021, respectively

149,291 and 146,517 at March 31, 2023 and December 31, 2022, respectively

Additional paid-in

Accumulated other comprehensive (loss) income

Retained earnings/(accumulated deficit)

Accumulated other comprehensive loss

Retained earnings

Total stockholders’ equity

1 unchanged sentence

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

WisdomTree Investments, Inc.

WisdomTree, Inc.

and Subsidiaries

2 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Operating Revenues:

15 unchanged sentences

Interest expense

Gain on revaluation of deferred consideration—gold payments (Note 9)

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

Interest income

Impairments (Notes 8, 12 and 23)

Impairments (Note 7)

Loss on extinguishment of convertible notes (Note 10)

Other losses, net

Income before income taxes

Income/(loss) before income taxes

Income tax expense/(benefit)

Earnings per share—basic

Earnings per share—diluted

Net income/(loss)

Earnings/(loss) per share—basic

Earnings/(loss) per share—diluted

Weighted-average common shares—basic

2 unchanged sentences

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

WisdomTree Investments, Inc.

WisdomTree, Inc.

and Subsidiaries

Consolidated Statements of Comprehensive Income

Consolidated Statements of Comprehensive Income/(Loss)

(In Thousands)

Three Months Ended

September 30,

Nine Months Ended

September 30,

Other comprehensive loss

Net income/(loss)

Other comprehensive income/(loss)

Foreign currency translation adjustment, net of income taxes

Other comprehensive loss

Comprehensive income

Other comprehensive income/(loss)

Comprehensive income/(loss)

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

WisdomTree Investments, Inc.

WisdomTree, Inc.

and Subsidiaries

1 unchanged sentence

(In Thousands)

For the Three Months Ended September 30, 2022

Comprehensive

Deficit)/Retained

Balance—July 1, 2022

Restricted stock issued and vesting of restricted stock units,

Shares repurchased

Stock-based compensation

Other comprehensive loss

Balance—September 30, 2022

For the Three Months Ended September 30, 2021

Comprehensive

Balance—July 1, 2021

Restricted stock issued and vesting of restricted stock units,

Stock-based compensation

Other comprehensive loss

Balance—September 30, 2021

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

WisdomTree Investments, Inc.

and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (Continued)

(In Thousands)

For the Nine Months Ended September 30, 2022

For the Three Months Ended March 31, 2023

Comprehensive

Deficit)/Retained

Balance—January 1, 2023

2 unchanged sentences

Stock-based compensation

Other comprehensive loss

Balance—September 30, 2022

For the Nine Months Ended September 30, 2021

Other comprehensive income

Balance—March 31, 2023

For the Three Months Ended March 31, 2022

Comprehensive

Balance—January 1, 2022

Reclassification of equity component related to convertible

notes, net deferred taxes of $ 1,022 , upon the implementation

of Accounting Standards Update 2020-06

Balance—January 1, 2021 (as adjusted)

Restricted stock issued and vesting of restricted stock units, net

Shares repurchased

Exercise of stock options, net

Stock-based compensation

Other comprehensive loss

Balance—September 30, 2021

Balance—March 31, 2022

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

WisdomTree Investments, Inc.

WisdomTree, Inc.

and Subsidiaries

1 unchanged sentence

(In Thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Gain on revaluation of deferred consideration—gold payments

Net income/(loss)

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

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

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

Losses on securities owned, at fair value

Contractual gold payments

Stock-based compensation

Loss on extinguishment of convertible notes

Deferred income taxes

Stock-based compensation

Contractual gold payments

Losses on investments

(Gains)/losses on financial instruments owned, at fair value

Amortization of issuance costs—convertible notes

1 unchanged sentence

Depreciation and amortization

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

Changes in operating assets and liabilities:

8 unchanged sentences

Accounts payable and other liabilities

Net cash provided by operating activities

Net cash used in operating activities

Cash flows from investing activities:

Purchase of securities owned, at fair value

Purchase of financial instruments owned, at fair value

Purchase of investments

Purchase of fixed assets

Proceeds from the sale of securities owned, at fair value

Proceeds from the sale of financial instruments owned, at fair value

Proceeds from held-to-maturity

2 unchanged sentences

Cash flows from financing activities:

Repurchase of convertible notes (See Note 10)

Dividends paid

1 unchanged sentence

Convertible notes issuance costs

Proceeds from the issuance of convertible notes

Proceeds from exercise of stock options

Net cash (used in)/provided by financing activities

Decrease in cash flow due to changes in foreign exchange rate

Net (decrease)/increase in cash and cash equivalents

Proceeds from the issuance of convertible notes (Note 10)

Net cash used in financing activities

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

Net decrease in cash and cash equivalents

Cash and cash equivalents—beginning of year

3 unchanged sentences

Cash paid for interest

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

Debt – Debt with Conversion and Other Options

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

WisdomTree Investments, Inc.

WisdomTree, Inc.

and Subsidiaries

2 unchanged sentences

Organization and Description of Business

WisdomTree Investments, Inc., through its global subsidiaries (collectively, “WisdomTree” or the “Company”), is an exchange-traded product (“ETP”) sponsor and asset manager headquartered in New York.

WisdomTree offers ETPs covering equity, commodity, fixed income, leveraged and inverse, currency, cryptocurrency and alternative strategies.

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:

13 unchanged sentences

WisdomTree Management Limited

(“WML”) is an Ireland based management company providing management services to WisdomTree Issuer ICAV (“WTI”) in respect of the WisdomTree UCITS ETFs issued by WTI.

WTI is a non-consolidated

(“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.

11 unchanged sentences

WisdomTree Digital Management, Inc.

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

investment adviser and will provide investment advisory and other management services to blockchain-enabled mutual funds whose shares are secondarily recorded on a blockchain.

(“WT Digital Management”) 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.

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

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

is a New York based limited purpose broker-dealer (i.e., mutual fund retailer), facilitating transactions in WisdomTree Digital Funds.

Significant Accounting Policies

18 unchanged sentences

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 as a component of other comprehensive loss.

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

Use of Estimates

28 unchanged sentences

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.

Securities Owned and Securities Sold, but not yet Purchased (at fair value)

Securities owned and securities sold, but not yet purchased are securities classified as either trading or available-for-sale

These securities are recorded on their trade date and are measured at fair value.

All equity securities that have readily determinable fair values are classified by the Company as trading.

Debt securities are classified based primarily on the Company’s intent to hold or sell the security.

Changes in the fair value of debt securities classified as trading and AFS are reported in other income/(expenses) and other comprehensive income, respectively, in the period the change occurs.

Debt securities classified as AFS are assessed for impairment on a quarterly basis and an estimate for credit loss is provided when the fair value of the AFS debt security is below its amortized cost basis.

Credit-related impairments are recognized in earnings with a corresponding adjustment to the security’s amortized cost basis if the Company intends to sell the impaired AFS debt security or it is more likely than not the Company will be required to sell the security before recovering its amortized cost basis.

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

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 security using the specific identification method.

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

42 unchanged sentences

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

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

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

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.

10 unchanged sentences

Deferred consideration represents the present value of an obligation to pay gold to a third party into perpetuity and is measured using forward-looking gold prices observed on the CMX exchange, a selected discount rate and perpetual growth rate (Note 9).

Changes in the fair value of this obligation are reported as gain on revaluation of deferred consideration—gold payments in the Consolidated Statements of Operations.

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

38 unchanged sentences

Cash and Cash Equivalents

Of the total cash and cash equivalents of $ 132,700 and $ 140,709 at September 30, 2022 and December 31, 2021, respectively, $ 132,348 and $ 127,328 were held at two financial institutions.

At September 30, 2022 and December 31, 2021, cash equivalents were approximately $ 284 and $ 11,488 , respectively.

Certain of the Company’s international subsidiaries are required to maintain a minimum level of regulatory capital, which was $ 23,144 and $ 12,320 at September 30, 2022 and December 31, 2021, respectively.

Of the total cash and cash equivalents of $ 119,099 and $ 132,101 at March 31, 2023 and December 31, 2022, $ 118,306 and $ 131,104 , respectively, were held at two financial institutions.

At March 31, 2023 and December 31, 2022, cash equivalents were approximately $ 336 and $ 930 , respectively.

Certain of the Company’s subsidiaries are required to maintain a minimum level of regulatory capital, which was $ 28,726 and $ 25,988 at March 31, 2023 and December 31, 2022, respectively.

These requirements are generally satisfied by cash on hand.

6 unchanged sentences

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 instruments in active markets.

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.

Instruments whose significant drivers are unobservable.

The availability of observable inputs can vary from product to product and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new and not yet established in the marketplace, and other characteristics particular to the transaction.

4 unchanged sentences

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

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

September 30, 2022

During the three months ended March 31, 2023 and 2022, there were no transfers between Levels 2 and 3.

March 31, 2023

Recurring fair value measurements:

Cash equivalents

Securities owned, at fair value

Financial instruments owned, at fair value

Pass-through GSEs

Corporate bonds

Other assets—seed capital (WisdomTree blockchain-enabled funds)

Investments in Convertible Notes

Securrency, Inc.—convertible note

Securrency, Inc.—convertible note (Note 7)

Fnality International Limited—convertible note (Note 7)

March 31, 2023

Non-recurring

fair value measurements:

Onramp Invest, Inc.—preferred stock (Note 7) (1)

Securrency, Inc.—Series A convertible preferred stock (1)

Recurring fair value measurements:

Deferred consideration (Note 9)

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

December 31, 2022

1 unchanged sentence

Cash equivalents

Securities owned, at fair value

Financial instruments owned, at fair value

Pass-through GSEs

Corporate bonds

Other assets—seed capital (WisdomTree blockchain-enabled funds)

Investments in Convertible Notes

Securrency, Inc.—convertible note (Note 7)

Fnality International Limited—convertible note (Note 7)

Non-recurring

fair value measurements:

Securrency, Inc.—Series A convertible preferred stock

Other investments (2)

Recurring fair value measurements:

Deferred consideration (Note 9)

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

Fair value determined on March 31, 2023.

Fair value determined on May 10, 2022.

Recurring Fair Value Measurements—Methodology

2 unchanged sentences

These investments are valued at par, which approximates fair value, and are classified as Level 1 in the fair value hierarchy.

Securities Owned (Note

– Securities owned are investments in ETFs, pass-through GSEs, U.S.

treasuries and corporate bonds.

ETFs and U.S.

treasuries are generally traded in active, quoted and highly liquid markets and are therefore classified as Level 1 in the fair value hierarchy.

Pricing of pass-through GSEs and corporate bonds include consideration given to collateral characteristics and market assumptions related to yields, credit risk and timing of prepayments and are therefore generally classified as Level 2.

Financial instruments owned (Note 5)

– Financial instruments owned are investments in ETFs, U.S.

treasuries, pass-through GSEs, corporate bonds, equities, fixed income and other assets.

treasuries and equities are generally traded in active, quoted and highly liquid markets and are therefore classified as Level 1 in the fair value hierarchy.

Pricing of pass-through GSEs, corporate bonds and fixed income 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.

2 unchanged sentences

Three Months Ended,

September 30,

Nine Months Ended

September 30,

Investments in Convertible Notes (Note 7)

Beginning balance

Net unrealized gains (1)

Net unrealized losses (1)

Ending balance

2 unchanged sentences

Net realized losses (2)

Net unrealized gains (3)

Net unrealized (gains)/losses (3)

Ending balance

1 unchanged sentence

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

Recorded as gain on revaluation of deferred consideration—gold payments in the Consolidated Statements of Operations

Securities Owned

These securities consist of the following:

Securities Owned

September 30,

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

Financial instruments owned

These instruments consist of the following:

Financial instruments owned

Trading securities

The Company recognized net trading losses on securities owned that were still held at the reporting dates of $ 6,010 and $ 1,323 during the three months ended September 30, 2022 and 2021, respectively, and $ 13,922 and $ 2,156 during the nine months ended September 30, 2022 and 2021, respectively, which were recorded in other losses, net, in the Consolidated Statements of Operations.

Other assets—seed capital (WisdomTree blockchain-enabled funds)

The Company recognized net trading gains/(losses) on financial instruments owned that were still held at the reporting dates of $ 4,722 and ($ 4,316 ) during the three months ended March 31, 2023 and 2022, respectively, which were recorded in other losses, net, in the Consolidated Statements of Operations.

Securities Held-to-Maturity

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

September 30,

Debt instruments:

Pass-through GSEs (amortized cost)

During the nine months ended September 30, 2022 and 2021, the Company received proceeds of $ 38 and $ 114 , respectively, from held-to-maturity

During the three months ended March 31, 2023 and 2022, the Company received proceeds of $ 6 and $ 18 , respectively, from held-to-maturity

securities maturing or being called prior to maturity.

The following table summarizes unrealized gains, losses and fair value (classified as Level 2 within the fair value hierarchy) of securities held-to-maturity:

September 30,

The following table summarizes unrealized losses, gains and fair value (classified as Level 2 within the fair value hierarchy) of securities held-to-maturity:

Cost/amortized cost

Gross unrealized gains

Gross unrealized losses

Gross unrealized gains

An allowance for credit losses was not provided on the Company’s held-to-maturity

2 unchanged sentences

The following table sets forth the maturity profile of the securities held-to-maturity;

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

September 30,

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

Due within one year

3 unchanged sentences

The following table sets forth the Company’s investments:

September 30, 2022

March 31, 2023

December 31, 2022

4 unchanged sentences

Fnality International Limited—convertible note

Onramp Invest, Inc.—Series A-4

preferred stock

Other investments

Securrency, Inc.

2 unchanged sentences

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

In consideration of such investments, the Company received 5,178,488 shares of Series A convertible preferred stock (“Series A Shares”) in December of 2019 and 2,004,665 shares of Series B convertible preferred stock (“Series B Shares”) in March of 2021.

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

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

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

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

2019 and 2,004,665 shares of Series B convertible preferred stock (“Securrency Series B Shares”) in March 2021.

The Securrency 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 Securrency Series B Shares except that they have limited voting rights) and senior to that of the holders of the Securrency Series A Shares, which are senior to the holders of common stock.

Otherwise, the Securrency Series A Shares and Securrency 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

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 values and are not considered to be in-substance

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

60 % of the Securrency

Series A Shares (at any time on or after December 31, 2029) and

of the Securrency 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 three and nine months ended September 30, 2022 and the three months ended September 30, 2021 based upon a qualitative assessment.

During the nine months ended September 30, 2021, the Company recognized a gain of $ 376 on its Series A Shares, which 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):

Expected volatility

Time to exit (in years)

During the three months ending March, 31, 2023, the Company recognized an impairment of $ 4,900 on its Securrency Series A Shares to reduce the carrying value of its investment to fair value.

Fair value was determined using the probability-weighted expected return method (“PWERM”), a valuation approach that estimates fair value assuming various outcomes.

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

Conversion of Securrency Series A Shares upon a future equity financing

Redemption of Securrency Series A Shares upon a corporate transaction

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

Securrency – Convertible Note

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

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

The note is convertible into either Securrency’s common stock or the class of securities convertible into, exchangeable for, or conferring the right to purchase Securrency’s common stock that is issued in the event of a future equity financing at a conversion price equal to a discount of 25 % (or, if applicable, a greater discount offered to other holders of convertible securities in such future equity financing round) to the lowest price paid per equity share issued in the future equity financing round.

The note is redeemable upon the occurrence of a corporate transaction for an amount which is the greater of (i) the principal amount and all accrued interest and (ii) the amount that would be received had the note been converted to common stock immediately prior to the occurrence of the corporate transaction.

In April and November 2022, the Company participated in a convertible note financing, making an aggregate investment of $ 15,000 in convertible notes of Securrency.

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

October 20, 2023 .

The notes are convertible into either common stock or a 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 of Securrency.

The notes will convert 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 notes are 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, in accordance with the terms of the notes, 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

1 unchanged sentence

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

The note is accounted for at fair value.

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

During the three and nine months ended September 30, 2022, the Company recognized a gain of $ 565 and $ 844 , respectively, when re-measuring

The notes are accounted for at fair value.

Fair value is determined by the Company using PWERM.

During the three months ended March 31, 2023, the Company recognized an unrealized loss of $ 4,449 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:

September 30,

Conversion of note upon a future equity financing

2 unchanged sentences

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

In February 2022, the Company participated in a convertible note financing, making an investment of £ 5,000 ($ 6,863 ) in convertible notes of 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

The note is convertible into equity shares in the event of a future equity financing of Fnality.

The note will convert 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.

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dollar exchange rate.

During the three and nine months ended September 30, 2022, the Company recognized a loss of $ 238 and $ 668 , respectively, when re-measuring

During the three months ended March 31, 2023, the Company recognized a gain of $ 530 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:

September 30,

Conversion of note upon a future financing round

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Time to potential outcome (in years)

Onramp Invest, Inc.

– Preferred Stock

In June 2021, the Company invested $ 250 in Onramp Invest, Inc.

(“Onramp”), a technology company that provides access to crypto assets for registered investment advisers.

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

valuation cap.

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

Preferred Stock, representing a small ownership interest in Onramp.

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

as it does not have a readily determinable fair value and is not considered to be in-substance

common stock.

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

During the three and nine months ended September 30, 2022, the Company recognized a gain of $ 0 and $ 62 , respectively, in connection with the conversion of the SAFE into Series A-4

Preferred Stock of Onramp.

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

Fixed Assets, net

The following table summarizes fixed assets:

September 30,

accumulated depreciation

During the three and nine months ended September 30, 2021, the Company recognized an impairment charge of $ 6,576 , representing the write-off

of leasehold improvements and fixed assets in connection with the termination of the lease for its principal executive office at 245 Park Avenue, New York, New York.

See Notes 12 and 23 for additional information.

Deferred Consideration

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

The obligation is for fixed payments to ETFS Capital of physical gold bullion equating to 9,500 ounces of gold per year through March 31, 2058 and then subsequently reduced to 6,333 ounces of gold continuing into perpetuity (“Contractual Gold Payments”).

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 per year 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.

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

The Company determined the present value of the deferred consideration of $ 164,757 and $ 228,062 at September 30, 2022 and December 31, 2021 using the following assumptions:

September 30,

The Company determined the present value of the deferred consideration of $ 179,831 and $ 200,290 at March 31, 2023 and December 31, 2022 using the following assumptions:

Forward-looking gold price (low)—per ounce

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Perpetual growth rate

The forward-looking gold prices at September 30, 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 was determined based upon the increase in observable forward-looking gold prices through 2027.

Fair value as of March 31, 2023 was determined using an equal weighting of a discounted cash flow approach and market approach.

The forward-looking gold prices at March 31, 2023 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 March 31, 2023 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 gold prices and perpetual growth rate are significant unobservable inputs.

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

Current amounts payable were $ 15,162 and $ 16,739 and long-term amounts payable were $ 149,595 and $ 211,323 , respectively, at September 30, 2022 and December 31, 2021, respectively.

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

Current amounts payable were $ 17,984 and $ 16,796 and long-term amounts payable were $ 161,847 and $ 183,494 at March 31, 2023 and December 31, 2022, respectively.

During the three months ended March 31, 2023 and 2022, the Company recognized the following in respect of deferred consideration:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Contractual Gold Payments

Contractual Gold Payments—gold ounces paid

Gain on revaluation of deferred consideration—gold payments (1)

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

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

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.

Convertible Notes

On June 14, 2021, the Company issued and sold $ 150,000 in aggregate principal amount of 3.25 % Convertible 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 (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 February 14, 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, 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 aggregate principal amount of Convertible Notes outstanding.

In connection with the issuance of the 2023 Notes, the Company repurchased $ 115,000 in aggregate principal amount of the 2020 Notes.

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.

After the issuance of the 2023 Notes (and together with the remaining 2020 Notes and the 2021 Notes, the “Convertible Notes”), the Company had $ 340,000 in aggregate principal amount of Convertible Notes outstanding.

Key terms of the Convertible Notes are as follows:

Principal outstanding

Maturity date (unless earlier converted, repurchased or redeemed)

August 15, 2028

June 15, 2026

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Interest rate:

Payable semiannually in arrears on June 15 and December 15 of each year.

Payable semiannually in arrears on February 15 and August 15 of each year for the 2023 Notes (beginning on August 15, 2023) and June 15 and December 15 of each year for the 2020 Notes and the 2021 Notes.

Conversion price:

Convertible at an initial conversion rate 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).

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, 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;

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 set forth in the table above), subject to adjustment.

Holders may convert at their option at any time prior to the close of business on the business day immediately preceding May 15, 2028, March 15, 2026 and March 15, 2023 for the 2023 Notes, 2021 Notes and 2020 Notes, respectively, only under the following circumstances:

(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;

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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.

On or after May 15, 2028, March 15, 2026 and March 15, 2023 in respect of the 2023 Notes, 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:

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Redemption price:

The Company may redeem for cash all or any portion of the notes, at its option, on or after June 20, 2023 and June 20, 2021 in respect of the 2021 Notes and 2020 Notes, respectively, and on or prior to the 55 th

scheduled trading day immediately preceding the maturity date, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days, including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100 % of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding the redemption date.

The Company may redeem for cash all or any portion of the Convertible Notes, at its option, on or after August 20, 2025, June 20, 2023 and June 20, 2021 in respect of the 2023 Notes, 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 for the respective

Convertible Notes then in effect for at least 20 trading days, including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100 % of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding the redemption date.

No sinking fund is provided for the Convertible Notes.

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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.

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 167.7853 shares, 144.9275 shares and 270.2702 shares of the Company’s common stock per $1,000 principal amount of the 2023 Notes, 2021 Notes and 2020 Notes, respectively (the equivalent of 59,767,426 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

The Convertible 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 11).

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

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

September 30, 2022

The following table provides a summary of the carrying value of the Convertible Notes at March 31, 2023 and December 31, 2022:

March 31, 2023

December 31, 2022

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Includes amortization of the issuance costs and premium.

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 was $ 3,734 and $ 11,199 , respectively, during the three and nine months ended September 30, 2022, and $ 3,729 and $ 8,592 , respectively, during the comparable periods in 2021.

Interest payable of $ 3,691 and $ 590 at September 30, 2022 and December 31, 2021 is included in accounts payable and other liabilities in the Consolidated Balance Sheets.

The fair value of the Convertible Notes (classified as Level 2 in the fair value hierarchy) was $ 310,890 and $ 360,571 at September 30, 2022 and December 31, 2021, respectively.

The if-converted

value of the 2020 Notes did not exceed the principal amount at September 30, 2022 and was $ 180,912 at December 31, 2021.

Interest expense on the Convertible Notes during the three months ended March 31, 2023 and 2022 was $ 4,002 and $ 3,732 , respectively.

Interest payable of $ 3,243 and $ 621 at March 31, 2023 and December 31, 2022, 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 $ 331,766 and $ 320,513 at March 31, 2023 and December 31, 2022, respectively.

The if-converted

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

Preferred Shares

value of the Convertible Notes did not exceed the principal amount at March 31, 2023 and December 31, 2022.

Series A Preferred Stock

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

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.

Convertible Preferred Stock (the “Series A Certificate of Designations”) with the Delaware Secretary of State establishing the rights, preferences, privileges, qualifications, restrictions, and limitations relating to the Series A Preferred Stock (defined below).

The Series A Preferred Stock is intended to provide ETFS Capital with economic rights equivalent to the Company’s common stock on an as-converted

The Series A Preferred Stock has no voting rights, is not transferable and has the same priority with regard to dividends, distributions and payments as the common stock.

As described in the Series A 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 Series A Preferred Stock, 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.

Convertible Preferred Stock (the “Series A Preferred Stock”), 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:

September 30,

Issuance of Preferred Shares

The following is a summary of the Series A Preferred Stock balance:

Issuance of Series A Preferred Stock

Issuance costs

Preferred Shares—carrying value

Cash dividends declared per share

Series A Preferred Stock—carrying value

Cash dividends declared per share (quarterly)

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.

ETFS Capital has the right to redeem all the Series A Preferred Stock specified to be converted during the period of time specified in the Series A 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 Series A Preferred Stock 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 Series A Preferred Stock as it would have received had each outstanding Series A Preferred Stock 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

Any such redemption will be at a price per Series A Preferred Stock 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 $ 73,594 and $ 90,741 at September 30, 2022 and December 31, 2021, respectively.

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

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

The redemption value of the Series A Preferred Stock was $ 86,638 and $ 77,969 at March 31, 2023 and December 31, 2022, respectively.

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

The Company has entered into operating leases for its office facilities (including its corporate headquarters) and equipment.

The Company has no finance leases.

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Three Months Ended

September 30,

Nine Months Ended

September 30,

Operating lease cost

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None of the Company’s leases include variable payments, residual value guarantees or any restrictions or covenants relating to the Company’s ability to pay dividends or incur additional financing obligations.

During the three and nine months ended September 30, 2021, the Company recognized an impairment charge of $ 9,277 and $ 9,580 , respectively, resulting from the derecognition of right-of-use

assets upon exiting its New York and London offices in September 2021 and February 2021, respectively, as well as costs incurred to restore the office spaces to their original condition.

These losses are included in impairments in the Company’s Consolidated Statements of Operations (Note 23).

The following table discloses future minimum lease payments at September 30, 2022 with respect to the Company’s operating lease liabilities:

The following table discloses future minimum lease payments at March 31, 2023 with respect to the Company’s operating lease liabilities:

Remainder of 2023

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Total future minimum lease payments (undiscounted)

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

Amounts recognized in the Consolidated Balance Sheets

The following table reconciles the future minimum lease payments (disclosed above) at March 31, 2023 to the operating lease liabilities recognized in the Company’s Consolidated Balance Sheets:

Amounts recognized in the Company’s Consolidated Balance Sheets

Lease liability—short term

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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 ($ 15,378 ) at September 30, 2022.

Total damages sought by all investors are approximately € 15,800 ($ 17,186 ) at March 31, 2023.

The Company is currently assessing these claims with its external counsel.

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

An accrual has not been made with respect to these matters at March 31, 2023 and December 31, 2022.

Variable Interest Entities

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

September 30,

Carrying Amount

— Assets (Securrency)

Carrying Amount—Assets (Securrency):

Preferred stock—Series A Shares

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Subtotal—Securrency

Carrying Amount

— Assets (Fnality)

Carrying Amount—Assets (Fnality):

Convertible note

Carrying Amount

— Assets (Onramp)

Preferred stock

Carrying Amount—Assets (Other investments):

Total (Note 7)

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

Three Months Ended

September 30,

Nine Months Ended

September 30,

Three Months Ended March 31,

Revenues from contracts with customers:

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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.

Other income includes revenues the Company earns

from swap providers associated with certain of the Company’s European-listed ETPs, the nature of which are either based on a percentage of the ETPs’ average daily net assets or flows associated with certain products.

There is no significant judgment in calculating amounts due ,

which are invoiced monthly or quarterly 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.

Geographic Distribution of Revenue

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

Three Months Ended

September 30,

Nine Months Ended

September 30,

Three Months Ended March 31,

Revenues from contracts with customers:

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

September 30,

Receivable from WTT

Receivable from ManJer Issuers

Receivable from WMAI and WTI

Receivable from WMAI and WTICAV

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.

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The following table summarizes revenues from advisory services provided to related parties:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Three Months Ended March 31,

Advisory services provided to WTT

Advisory services provided to ManJer Issuers

Advisory services provided to WMAI and WTI

The Company also has investments in certain WisdomTree ETFs of approximately $ 12,387 and $ 18,526 at September 30, 2022 and December 31, 2021, respectively.

Net gain and (losses) related to trading WisdomTree ETFs were ($ 489 ) and ($ 1,608 ), respectively, during the three and nine months ended September 30, 2022, and ($ 92 ) and $ 75 , respectively, during the comparable periods in 2021.

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

Advisory services provided to WMAI and WTICAV

The Company also has investments in certain WisdomTree products of approximately $ 45,214 and $ 25,283 at March 31, 2023 and December 31, 2022, respectively.

This includes $ 12,413 and $ 1,765 , respectively, of investments in certain consolidated affiliated blockchain-enabled funds advised by WT Digital Management, referred to herein as “other assets–seed capital.” Net unrealized and realized gains/(losses) related to trading WisdomTree products during the three months ended March 31, 2023 and 2022

were $ 422 and ($ 806 ), respectively, which are recorded in other losses, net on the Consolidated Statements of Operations.

Stock-Based Awards

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The Company estimates the fair value of stock options (when granted) using the Black-Scholes option pricing model.

Awards are valued based on the Company’s stock price on grant date and generally vest ratably over three years.

Awards are valued based on the Company’s stock price on grant date and generally vest ratably, on an annual basis, over three years.

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.

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percentile, then 0 % of the target number of PRSUs granted will vest;

• If the relative TSR is at the 25 th

percentile, then 50 % of the target number of PRSUs granted will vest;

• If the relative TSR is above the 25 th

percentile, then linear scaling is applied such that the percent of the target number of PRSUs vesting is 100 % at the 50 th

percentile and capped at 200 % of the target number of PRSUs granted for performance at the 85 th

percentile (or 100 th

percentile for grants made during 2019 and 2020).

• 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 in 2020);

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

Stock-based compensation expense was $ 2,454 and $ 7,822 , respectively, during the three and nine months ended September 30, 2022, and $ 2,397 and $ 7,661 , respectively, during the comparable periods in 2021.

Stock-based compensation expense during the three months ended March 31, 2023 and 2022 was $ 4,536 and $ 2,936 , respectively.

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

September 30, 2022

March 31, 2023

Unrecognized Stock-

Weighted-Average

Vesting Period (Years)

Employees and directors

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

Balance at July 1, 2022

Exercised/vested

Balance at September 30, 2022

Earnings Per Share

The following tables set forth reconciliations of the basic and diluted earnings per share computations for the periods presented:

A summary of stock-based compensation award activity (shares) during the three months ended March 31, 2023 is as follows:

Balance at January 1, 2023

Balance at March 31, 2023

Represents the target number of PRSUs granted and outstanding.

The number of PRSUs that ultimately vest ranges from 0 % to 200 % of this amount.

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) historical stock price volatilities ranging from 37 % to 56 % (average 47 %);

(iv) correlation coefficients based upon the price data used to calculate the historical volatilities;

(v) a risk free interest rate of 3.8 %;

and (vi) an expected dividend yield of 0 %.

The payout on PRSUs vesting in January 2023 was 77 %.

The remainder of the awards were forfeited.

Stockholder Rights Plan

On March 17, 2023, the Board of Directors of the Company adopted a stockholder rights plan, as set forth in the Stockholder Rights Agreement, dated March 17, 2023, between the Company and Continental Stock Transfer & Trust Company, as Rights Agent (the “Stockholder Rights Agreement”).

Pursuant to the terms of the Stockholder Rights Agreement, the Board of Directors declared a dividend distribution of (i) one Right (as defined below) for each outstanding share of common stock, par value $ 0.01 per share, of the Company’s common stock and (ii) 1,000 Rights for each outstanding share of Series A Preferred Stock”, to stockholders of record as of the close of business on March 28, 2023 (the “Record Date”).

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

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

of a share (a “Unit”) of Series B Junior Participating Cumulative Preferred Stock, par value $ 0.01 per share, of the Company (the “Series B Preferred Stock”) at a cash exercise price of $ 32.00 per Unit (the “Exercise Price”), subject to adjustment, under certain conditions specified in the Stockholder Rights Agreement and summarized below.

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

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

or Rule 13d-1(c)

of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, as in effect at the time of the first public announcement of the declaration of the Rights dividend with respect to the shares of common stock beneficially owned by such person or group) or more of the outstanding shares of common stock, other than as a result of repurchases of stock by the Company or certain inadvertent actions by a stockholder (the date of such announcement being referred to as the “Stock Acquisition Date”), or (ii) the close of business on the tenth business day (or such later day as the Board of Directors may determine) following the commencement of a tender offer or exchange offer that could result upon its consummation in a person or group becoming an Acquiring Person (the earlier of such dates being herein referred to as the “Distribution Date”).

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

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

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

In the event that a Stock Acquisition Date occurs, proper provision will be made so that each holder of a Right (other than an Acquiring Person or its associates or affiliates, whose Rights shall become null and void) will thereafter have the right to receive upon exercise, in lieu of a number of shares of Series B

Preferred Stock, that number of shares of common stock of the Company (or, in certain circumstances, including if there are insufficient shares of common stock to permit the exercise in full of the Rights, Units of Series B

Preferred Stock, other securities, cash or property, or any combination of the foregoing) having a market value of two times the Exercise Price of the Right (such right being referred to as the “Subscription Right”).

In the event that, at any time following the Stock Acquisition Date, (i) the Company consolidates with, or merges with and into, any other person, and the Company is not the continuing or surviving corporation, (ii) any person consolidates with the Company, or merges with and into the Company and the Company is the continuing or surviving corporation of such merger and, in connection with such merger, all or part of the shares of common stock are changed into or exchanged for stock or other securities of any other person or cash or any other property, or (iii) 50 % or more of the Company’s assets or earning power is sold, mortgaged or otherwise transferred, each holder of a Right (other than an Acquiring Person or its associates or affiliates, whose Rights shall become null and void) will thereafter have the right to receive, upon exercise, common stock of the acquiring company having a market value equal to two times the Exercise Price of the Right (such right being referred to as the “Merger Right”).

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

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

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

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

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

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

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

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

The Rights are not exercisable until the Distribution Date and will expire at the close of business on March 16, 2024;

provided that if the Company’s stockholders have not ratified the Stockholder Rights Agreement by the close of business on the first day after the Company’s 2023 annual meeting of stockholders (including any adjournments or postponements thereof), the Rights will expire at such time, in each case, unless previously redeemed or exchanged by the Company.

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

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

Among those characteristics are that it be:

(i) a fully financed all-cash

tender offer or an exchange offer offering shares of common stock of the offeror, or a combination thereof, for any and all of the common stock;

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

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

Pursuant to the Stockholder Rights Agreement, if the Company receives a Qualifying Offer and the Board of Directors

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

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

Earnings/(Loss) Per Share

The following tables set forth reconciliations of the basic and diluted earnings/(loss) per share computations for the periods presented:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Basic Earnings per Share

Basic Earnings/(Loss) per Share

Net income/(loss)

Income distributed to participating securities

Undistributed income allocable to participating securities

Net income available to common stockholders—Basic EPS

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

Weighted average common shares (in thousands)

Basic earnings per share

Basic earnings/(loss) per share

Three Months Ended

September 30,

Nine Months Ended

September 30,

Diluted Earnings per Share

Net income available to common stockholders

Diluted Earnings/(Loss) per Share

Net earnings/(loss) available to common stockholders

Undistributed income allocable to participating securities

Reallocation of undistributed income allocable to participating securities considered potentially dilutive

Net income available to common stockholders—Diluted EPS

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

Weighted Average Diluted Shares (in thousands)

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

Diluted earnings per share

Diluted earnings per share presented above is calculated using the two-class

Diluted earnings/(loss) per share

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

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

During the three months ended March 31, 2022, there were no dilutive common stock equivalents as the Company reported a net loss for the period.

Total antidilutive non-participating

common stock equivalents were 483 and 410 , respectively, during the three and nine months ended September 30, 2022, and 48 and 130 , respectively, during the comparable periods in 2021 (shares herein are reported in thousands).

Potential common shares associated with the conversion option embedded in the Convertible Notes were excluded from the computation for the three and nine months ended September 30, 2022 as the Company’s average stock price during those respective periods was lower than the conversion price.

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

The following table reconciles weighted average diluted shares as reported in the Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021, which are determined pursuant to the treasury stock method, to the weighted average diluted shares used to calculate diluted earnings/(loss) per share as disclosed in the table above:

common stock equivalents were 695 and 509 for the three months ended March 31, 2023 and 2022, respectively.

There were no potential common shares associated with the conversion options embedded in the Convertible Notes included in weighted average diluted shares for the three months ended March 31, 2023 and 2022 as the Company’s average stock price was lower than the conversion price.

The following table reconciles weighted average diluted shares as reported on the Company’s Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022, which are determined pursuant to the treasury stock method, to the weighted average diluted shares used to calculate diluted earnings/(loss) per share as disclosed in the table above:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Reconciliation of Weighted Average Diluted Shares (in

Reconciliation of Weighted Average Diluted Shares (in thousands)

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

Participating securities:

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

Weighted average shares of common stock issuable upon conversion of the Series A Preferred Stock (Note 11)

Potentially dilutive restricted stock awards

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

Effective Income Tax Rate – Three and nine months ended September 30, 2022

The Company’s effective income tax rate during the three months ended September 30, 2022 of 3.9 % resulted in income tax expense of $ 3,327 .

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

gain on revaluation of deferred consideration.

This was partly offset an increase in the deferred tax asset valuation allowance on losses recognized on securities owned.

The Company’s effective income tax rate during the nine months ended September 30, 2022 of negative 15.7 % resulted in an income tax benefit of $ 10,713 .

The effective income tax rate differs from the federal statutory tax rate of 21 % primarily due to a $ 19,897 reduction in unrecognized tax benefits (including interest and penalties), a non-taxable

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

These items were partly offset by an increase in the deferred tax asset valuation allowance on losses recognized on securities owned.

Effective Income Tax Rate – Three and nine months ended September 30, 2021

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

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

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

compensation.

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

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

gain on revaluation of deferred consideration.

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

executive compensation.

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

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

Effective Income Tax Rate – Three Months Ended March 31, 2023 and March 31, 2022

The Company’s effective income tax rate during the three months ended March 31, 2023 was 7.9 % resulting in income tax expense of $ 1,383 .

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

gain on revaluation of deferred consideration and a $ 1,353 reduction in unrecognized tax benefits (including interest and penalties).

These items were partly offset by a non-deductible

loss on extinguishment of our convertible notes and an increase in the deferred tax asset valuation allowance on losses recognized on the Company’s investments.

The Company’s effective income tax rate during the three months ended March 31, 2022 of 62.0 % resulted in an income tax benefit of $ 16,713 .

The effective income tax rate differs from the federal statutory tax rate of 21 % primarily due to a $ 19,897 reduction in unrecognized tax benefits (including interest and penalties), a lower tax rate on foreign earnings and tax windfalls associated with the vesting of stock-based compensation awards.

These items were partly offset by a non-taxable

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

Deferred Tax Assets

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

September 30,

A summary of the components of the Company’s deferred tax assets at March 31, 2023 and December 31, 2022 is as follows:

Deferred tax assets:

Capital losses

Accrued expenses

Unrealized losses

Accrued expenses

Goodwill and intangible assets

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Interest carryforwards

Operating lease liabilities

Foreign currency translation adjustment

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Fixed assets and prepaid assets

Unremitted earnings—International subsidiaries

Foreign currency translation adjustment

Unremitted earnings—European subsidiaries

Right of use assets—operating leases

Deferred tax liabilities

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Net Operating and Capital Losses—U.S.

The Company’s tax effected net operating losses (“NOLs”) at September 30, 2022 were $ 255 , which expire in 2024 .

The Company’s tax effected net operating losses (“NOLs”) at March 31, 2023 were $ 127 , 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 September 30, 2022 were $ 17,033 .

The Company’s tax effected capital losses at March 31, 2023 were $ 17,740 .

These capital losses expire between the years 2023 and 2028.

Net Operating Losses—International

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 $ 1,607 at September 30, 2022.

These tax effected NOLs, all of which are carried forward indefinitely, were $ 1,625 at March 31, 2023.

Valuation Allowance

The Company’s valuation allowance has been established on its net capital losses, international net operating losses, unrealized losses and outside basis differences, as it is more-likely-than-not

The Company’s valuation allowance has been established on its net capital losses, unrealized losses and outside basis differences, as it is more-likely-than-not

that these deferred tax assets will not be realized.

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

Unrecognized Tax

Balance on January 1, 2022

Decrease—Settlements (1)

Balance at January 1, 2023

Decrease—Lapse of statute of limitations

Foreign currency translation (2)

Balance at March 31, 2023

Foreign currency translation (2)

Balance at June 30, 2022

Foreign currency translation (2)

Balance at September 30, 2022

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

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

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

The gross unrecognized tax benefits were accrued in British pounds.

The gross unrecognized tax benefits and interest and penalties totaling $ 1,220 at September 30, 2022 are included in other non-current

liabilities in the Consolidated Balance Sheets.

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

If recognized, these unrecognized tax benefits would impact the effective tax rate.

The recognition of any unrecognized tax benefits would result in an equal and offsetting adjustment to the indemnification asset which would be recorded in income before taxes due to the indemnity for any potential claims.

Income Tax Examinations

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

As of September 30, 2022, with few exceptions, the Company was no longer subject to income tax examinations by any taxing authority for the years before 2017.

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

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.

As of March 31, 2023, with few exceptions, the Company was no longer subject to income tax examinations by any taxing authority for the years before 2018.

Undistributed Earnings of Foreign Subsidiaries

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 $ 198 and $ 118 at September 30, 2022 and December 31, 2021, respectively.

The Company repatriates earnings of its foreign subsidiaries and therefore has recognized a deferred tax liability of $ 246 and $ 205 at March 31, 2023 and December 31, 2022, respectively.

Shares Repurchased

5 unchanged sentences

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

During the three and nine months ended September 30, 2022, the Company repurchased 4,567 and 593,261 shares of its common stock, respectively, for aggregate consideration of $ 24 and $ 3,418 , respectively.

During the three and nine months ended September 30, 2021, the Company repurchased zero shares and 5,120,496 shares of its common stock, respectively for aggregate consideration of zero and $ 34,506 , respectively.

During the three months ended March 31, 2023 and 2022, the Company repurchased 604,505 and 588,694 shares of its common stock, respectively, under this program for an aggregate cost of $ 3,384 and $ 3,394 , respectively.

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

As of September 30, 2022, $ 99,976 remained under this program for future purchases.

As of March 31, 2023, $ 96,591,597 remained under this program for future purchases.

Goodwill and Intangible Assets

1 unchanged sentence

Balance at January 1, 2023

Balance at September 30, 2022

Goodwill arising from the ETFS Acquisition of $ 84,057 is not deductible for tax purposes as the acquisition was structured as a stock acquisition occurring in the United Kingdom.

Balance at March 31, 2023

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.

1 unchanged sentence

Intangible Assets

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

Balance at March 31, 2023

ETFS acquisition

Software development

Balance at September 30, 2022

Balance at March 31, 2023

Balance at December 31, 2022

ETFS acquisition

Software development

Balance at December 31, 2022

ETFS Acquisition (Indefinite-Lived)

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

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

Software Development (Finite-Lived)

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

During the three and nine months ended September 30, 2022, the Company recognized amortization expense on internally-developed software of $ 1 .

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

Remainder of 2022

During the three-month period ended March 31, 2023, the Company recognized amortization expense on internally-developed software of $ 51 .

As of March 31, 2023, expected amortization expense for the unamortized finite-lived intangible assets for the next five years and thereafter is as follows:

Remained of 2023

2028 and thereafter

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Contingent Payments

AdvisorEngine – Sale of Financial Interests

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

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

Consideration also included contingent payments totaling up to $ 10,408 which will be payable only upon AdvisorEngine achieving certain revenue milestones during the first through fourth anniversaries of such exit.

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

Sale of Canadian ETF Business

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

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

anniversary of the closing date.

The Company may receive additional cash consideration of CDN $ 0 to $ 4,000 depending on the achievement of certain AUM growth targets as determined on the 36-month

anniversary of the closing date.

The following table summarizes impairments recognized by the Company:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Lease termination—New York office (Note 12)

Fixed assets—New York office (Note 8)

Lease termination—London office (Note 12)

On February 19, 2020, the Company completed the sale of all the outstanding shares of WisdomTree Asset Management Canada, Inc.

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 ) and CDN $ 2,000 (USD $ 1,477 ) of additional cash consideration based upon the achievement of certain AUM growth targets as determined on the 18-month

and the 36-month

anniversaries of the closing date, respectively.

A gain of $ 1,477 was recognized during the three months ended March 31, 2023, from remeasuring the contingent payment to its realizable value.

These gains were recorded in other losses, net.

Subsequent Events

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

What changed 10-Q

Item 1. Financial Statements