WT filing — read by section

Item 1. Financial Statements

ITEM 1.

 FINANCIAL STATEMENTS 

 WisdomTree, Inc. and Subsidiaries 

 Consolidated Balance Sheets 
 (In Thousands, Except Per Share Amounts) 

 March 31, 

 2023

 December 31, 
 2022

 (unaudited)

 Assets

 Current assets:
 
 Cash and cash equivalents (Note 3)
 
 $ 
 119,099 
 
 $ 
 132,101 
 
 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)
 
 130,180 
 
 126,239 
 
 Accounts receivable (including $ 32,446 and $ 24,139 due from related parties at March 31, 2023 and December 31, 2022, respectively)
 
 35,496 
 
 30,549 
 
 Prepaid expenses
 
 5,877 
 
 4,684 
 
 Income taxes receivable
 
 1,799 
 
 — 
 
 Other current assets
 
 291 
 
 390 
 
 Total current assets
 
 292,742 
 
 293,963 
 
 Fixed assets, net
 
 515 
 
 544 
 
 Indemnification receivable (Note 20)
 
 — 
 
 1,353 
 
 Securities held-to-maturity

 253 
 
 259 
 
 Deferred tax assets, net (Note 20)
 
 5,871 
 
 10,536 
 
 Investments (Note 7)
 
 26,902 
 
 35,721 
 
 Right of use assets—operating leases (Note 12)
 
 1,153 
 
 1,449 
 
 Goodwill (Note 22)
 
 85,856 
 
 85,856 
 
 Intangible assets, net (Note 22)
 
 603,968 
 
 603,567 
 
 Other noncurrent assets
 
 507 
 
 571 
 
 Total assets
 
 $ 
 1,017,767 
 
 $ 
 1,033,819 
 
 Liabilities and stockholders’ equity

 Liabilities

 Current liabilities:
 
 Convertible notes—current (Note 10)
 
 $ 
 59,884 
 
 $ 
 59,197 
 
 Fund management and administration payable
 
 27,830 
 
 36,521 
 
 Deferred consideration—gold payments (Note 9)
 
 17,984 
 
 16,796 
 
 Compensation and benefits payable
 
 9,341 
 
 24,121 
 
 Income taxes payable
 
 — 
 
 1,599 
 
 Operating lease liabilities (Note 12)
 
 1,041 
 
 1,125 
 
 Accounts payable and other liabilities
 
 14,846 
 
 9,075 
 
 Total current liabilities
 
 130,926 
 
 148,434 
 
 Convertible notes (Note 10)
 
 273,767 
 
 262,019 
 
 Deferred consideration—gold payments (Note 9)
 
 161,847 
 
 183,494 
 
 Operating lease liabilities (Note 12)
 
 120 
 
 339 
 
 Other noncurrent liabilities (Note 20)
 
 — 
 
 1,353 
 
 Total liabilities
 
 566,660 
 
 595,639 
 
 Preferred stock—Series A Non-Voting
 Convertible, par value $ 0.01 ; 14.750 shares authorized, issued and outstanding; redemption value of $ 86,638 and $ 77,969 at March 31, 2023 and December 31, 2022, respectively) (Note 11)
 
 132,569 
 
 132,569 
 
 Contingencies (Note 13)

 Stockholders’ equity

 Preferred stock, par value $ 0.01 ; 2,000 shares authorized:
 
 — 
 
 — 
 
 Common stock, par value $ 0.01 ; 400,000 shares authorized; issued and outstanding: 149,291 and 146,517 at March 31, 2023 and December 31, 2022, respectively
 
 1,493 
 
 1,465 
 
 Additional paid-in
 capital
 
 292,971 
 
 291,847 
 
 Accumulated other comprehensive loss
 
 ( 954 ) 
 
 ( 1,420 ) 
 
 Retained earnings
 
 25,028 
 
 13,719 
 
 Total stockholders’ equity
 
 318,538 
 
 305,611 
 
 Total liabilities and stockholders’ equity
 
 $ 
 1,017,767 
 
 $ 
 1,033,819 
 
 The accompanying notes are an integral part of these consolidated financial statements 

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 Table of Contents 

 WisdomTree, Inc. and Subsidiaries 

 Consolidated Statements of Operations 
 (In Thousands, Except Per Share Amounts) 

 (Unaudited) 

 Three Months Ended

 March 31,

 2023

 2022

 Operating Revenues:

 Advisory fees
 
 $ 
 77,637 
 
 $ 
 76,517 
 
 Other income
 
 4,407 
 
 1,851 
 
 Total revenues
 
 82,044 
 
 78,368 
 
 Operating Expenses:

 Compensation and benefits
 
 27,398 
 
 24,787 
 
 Fund management and administration
 
 17,153 
 
 15,494 
 
 Marketing and advertising
 
 4,007 
 
 4,023 
 
 Sales and business development
 
 2,994 
 
 2,609 
 
 Contractual gold payments (Note 9)
 
 4,486 
 
 4,450 
 
 Professional fees
 
 3,715 
 
 4,459 
 
 Occupancy, communications and equipment
 
 1,101 
 
 753 
 
 Depreciation and amortization
 
 109 
 
 47 
 
 Third-party distribution fees
 
 2,253 
 
 2,212 
 
 Other
 
 2,257 
 
 1,845 
 
 Total operating expenses
 
 65,473 
 
 60,679 
 
 Operating income
 
 16,571 
 
 17,689 
 
 Other Income/(Expenses):

 Interest expense
 
 ( 4,002 
 ) 
 
 ( 3,732 
 ) 

 Gain/(loss) on revaluation of deferred consideration—gold payments (Note 9)
 
 20,592 
 
 ( 17,018 
 ) 

 Interest income
 
 1,083 
 
 794 
 
 Impairments (Note 7)
 
 ( 4,900 
 ) 
 
 — 
 
 Loss on extinguishment of convertible notes (Note 10)
 
 ( 9,721 
 ) 
 
 — 
 
 Other losses, net
 
 ( 2,007 
 ) 
 
 ( 24,707 
 ) 

 Income/(loss) before income taxes
 
 17,616 
 
 ( 26,974 
 ) 

 Income tax expense/(benefit)
 
 1,383 
 
 ( 16,713 
 ) 

 Net income/(loss)

 $ 
 16,233 
 
 $ 
 ( 10,261 
 ) 

 Earnings/(loss) per share—basic
 
 $ 
 0.10 
 
 $ 
 ( 0.08 
 ) 

 Earnings/(loss) per share—diluted
 
 $ 
 0.10 
 
 $ 
 ( 0.08 
 ) 

 Weighted-average common shares—basic
 
 143,862 
 
 142,782 
 
 Weighted-average common shares—diluted
 
 159,887 
 
 142,782 
 
 Cash dividends declared per common share
 
 $ 
 0.03 
 
 $ 
 0.03 
 
 The accompanying notes are an integral part of these consolidated financial statements 

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 Table of Contents 
 
 WisdomTree, Inc. and Subsidiaries 

 Consolidated Statements of Comprehensive Income/(Loss) 
 (In Thousands) 

 (Unaudited) 

 Three Months Ended

 March 31,

 2023

 2022

 Net income/(loss)

 $ 
 16,233 
 
 $ 
 ( 10,261 ) 
 
 Other comprehensive income/(loss)

 Foreign currency translation adjustment, net of income taxes
 
 466 
 
 ( 486 ) 
 
 Other comprehensive income/(loss)
 
 466 
 
 ( 486 ) 
 
 Comprehensive income/(loss)

 $ 
 16,699 
 
 $ 
 ( 10,747 ) 
 
 The accompanying notes are an integral part of these consolidated financial statements 

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 Table of Contents 
 
 WisdomTree, Inc. and Subsidiaries 

 Consolidated Statements of Changes in Stockholders’ Equity 
 (In Thousands) 

 (Unaudited) 

 For the Three Months Ended March 31, 2023

 Common Stock

 Additional
 Paid-In

 Capital

 Accumulated

 Other

 Comprehensive
 Loss

 Retained

 Earnings/

 (Accumulated
 Deficit)

 Total

 Shares
 Issued

 Par
 Value

 Balance—January 1, 2023
 
 146,517 
 
 $ 
 1,465 
 
 $ 
 291,847 
 
 $ 
 ( 1,420 
 ) 
 
 $ 
 13,719 
 
 $ 
 305,611 
 
 Restricted stock issued and vesting of restricted stock units, net
 
 3,379 
 
 34 
 
 ( 34 
 ) 
 
 — 
 
 — 
 
 — 
 
 Shares repurchased
 
 ( 605 
 ) 
 
 ( 6 
 ) 
 
 ( 3,378 
 ) 
 
 — 
 
 — 
 
 ( 3,384 
 ) 

 Stock-based compensation
 
 — 
 
 — 
 
 4,536 
 
 — 
 
 — 
 
 4,536 
 
 Other comprehensive income
 
 — 
 
 — 
 
 — 
 
 466 
 
 — 
 
 466 
 
 Dividends
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 4,924 
 ) 
 
 ( 4,924 
 ) 

 Net income
 
 — 
 
 — 
 
 — 
 
 — 
 
 16,233 
 
 16,233 
 
 Balance—March 31, 2023
 
 149,291 
 
 $ 
 1,493 
 
 $ 
 292,971 
 
 $ 
 ( 954 
 ) 
 
 $ 
 25,028 
 
 $ 
 318,538 
 
 For the Three Months Ended March 31, 2022

 Common Stock

 Additional
 Paid-In

 Capital

 Accumulated

 Other

 Comprehensive
 Income

 Accumulated

 Deficit

 Total

 Shares
 Issued

 Par
 Value

 Balance—January 1, 2022
 
 145,107 
 
 $ 
 1,451 
 
 $ 
 289,736 
 
 $ 
 682 
 
 $ 
 ( 22,445 
 ) 
 
 $ 
 269,424 
 
 Restricted stock issued and vesting of restricted stock units, net
 
 2,042 
 
 21 
 
 ( 21 
 ) 
 
 — 
 
 — 
 
 — 
 
 Shares repurchased
 
 ( 589 
 ) 
 
 ( 6 
 ) 
 
 ( 3,388 
 ) 
 
 — 
 
 — 
 
 ( 3,394 
 ) 

 Stock-based compensation
 
 — 
 
 — 
 
 2,936 
 
 — 
 
 — 
 
 2,936 
 
 Other comprehensive loss
 
 — 
 
 — 
 
 — 
 
 ( 486 
 ) 
 
 — 
 
 ( 486 
 ) 

 Dividends
 
 — 
 
 — 
 
 ( 4,842 
 ) 
 
 — 
 
 — 
 
 ( 4,842 
 ) 

 Net loss
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 10,261 
 ) 
 
 ( 10,261 
 ) 

 Balance—March 31, 2022
 
 146,560 
 
 $ 
 1,466 
 
 $ 
 284,421 
 
 $ 
 196 
 
 $ 
 ( 32,706 
 ) 
 
 $ 
 253,377 
 
 The accompanying notes are an integral part of these consolidated financial statements 

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 Table of Contents 

 WisdomTree, Inc. and Subsidiaries 

 Consolidated Statements of Cash Flows 
 (In Thousands) 

 (Unaudited) 

 Three Months Ended

 March 31,

 2023 

 2022 

 Cash flows from operating activities:

 Net income/(loss)
 
 $ 
 16,233 
 
 $ 
 ( 10,261 
 ) 

 Adjustments to reconcile net income/(loss) to net cash used in operating activities:
 
 (Gain)/loss on revaluation of deferred consideration—gold payments
 
 ( 20,592 
 ) 
 
 17,018 
 
 Advisory and license fees paid in gold, other precious metals and cryptocurrency
 
 ( 12,760 
 ) 
 
 ( 16,052 
 ) 

 Loss on extinguishment of convertible notes
 
 9,721 
 
 — 
 
 Impairments
 
 4,900 
 
 — 
 
 Deferred income taxes
 
 4,783 
 
 5,273 
 
 Stock-based compensation
 
 4,536 
 
 2,936 
 
 Contractual gold payments
 
 4,486 
 
 4,450 
 
 Losses on investments
 
 3,919 
 
 163 
 
 (Gains)/losses on financial instruments owned, at fair value
 
 ( 1,954 
 ) 
 
 5,142 
 
 Amortization of issuance costs—convertible notes
 
 579 
 
 645 
 
 Amortization of right of use asset
 
 319 
 
 89 
 
 Depreciation and amortization
 
 109 
 
 47 
 
 Changes in operating assets and liabilities:
 
 Accounts receivable
 
 ( 4,791 
 ) 
 
 ( 3,710 
 ) 

 Prepaid expenses
 
 ( 1,161 
 ) 
 
 ( 2,264 
 ) 

 Gold and other precious metals
 
 8,332 
 
 11,959 
 
 Other assets
 
 167 
 
 ( 52 
 ) 

 Intangibles—software development
 
 ( 452 
 ) 
 
 — 
 
 Fund management and administration payable
 
 3,638 
 
 3,199 
 
 Compensation and benefits payable
 
 ( 27,271 
 ) 
 
 ( 23,690 
 ) 

 Income taxes payable
 
 ( 3,418 
 ) 
 
 ( 4,228 
 ) 

 Operating lease liabilities
 
 ( 326 
 ) 
 
 ( 97 
 ) 

 Accounts payable and other liabilities
 
 5,606 
 
 6,741 
 
 Net cash used in operating activities
 
 ( 5,397 
 ) 
 
 ( 2,692 
 ) 

 Cash flows from investing activities:

 Purchase of financial instruments owned, at fair value
 
 ( 20,278 
 ) 
 
 ( 25,461 
 ) 

 Purchase of investments
 
 — 
 
 ( 6,863 
 ) 

 Purchase of fixed assets
 
 ( 26 
 ) 
 
 ( 54 
 ) 

 Proceeds from the sale of financial instruments owned, at fair value
 
 18,290 
 
 13,639 
 
 Proceeds from held-to-maturity

 securities maturing or called prior to maturity
 
 6 
 
 18 
 
 Net cash used in investing activities
 
 ( 2,008 
 ) 
 
 ( 18,721 
 ) 

 Cash flows from financing activities:

 Repurchase of convertible notes (See Note 10)
 
 ( 124,317 
 ) 
 
 — 
 
 Dividends paid
 
 ( 4,821 
 ) 
 
 ( 4,842 
 ) 

 Shares repurchased
 
 ( 3,384 
 ) 
 
 ( 3,394 
 ) 

 Convertible notes issuance costs
 
 ( 3,548 
 ) 
 
 — 
 
 Proceeds from the issuance of convertible notes (Note 10)
 
 130,000 
 
 — 
 
 Net cash used in financing activities
 
 ( 6,070 
 ) 
 
 ( 8,236 
 ) 

 Increase/(decrease) in cash flow due to changes in foreign exchange rate
 
 473 
 
 ( 665 
 ) 

 Net decrease in cash and cash equivalents
 
 ( 13,002 
 ) 
 
 ( 30,314 
 ) 

 Cash and cash equivalents—beginning of year
 
 132,101 
 
 140,709 
 
 Cash and cash equivalents—end of period
 
 $ 
 119,099 
 
 $ 
 110,395 
 
 Supplemental disclosure of cash flow information:

 Cash paid for income taxes
 
 $ 
 1,422 
 
 $ 
 2,123 
 
 Cash paid for interest
 
 $ 
 801 
 
 $ 
 — 
 
 The accompanying notes are an integral part of these consolidated financial statements 

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 Table of Contents 
 
 WisdomTree, Inc. and Subsidiaries 

 Notes to Consolidated Financial Statements 
 (In Thousands, Except Share and Per Share Amounts) 

 1. Organization and Description of Business 

 WisdomTree, Inc., through its global subsidiaries (collectively, “WisdomTree” or the “Company”), is a global financial innovator, offering a well-diversified suite of exchange-traded products (“ETPs”), models and solutions. Building on its heritage of innovation, the Company is also developing next-generation digital products and structures, including digital or blockchain-enabled mutual funds (“Digital Funds”) and tokenized assets, as well as its blockchain-native digital wallet, WisdomTree Prime ™
. The Company has the following wholly-owned operating subsidiaries: 
 
 • 
 
 WisdomTree Asset Management, Inc.

 is a New York based investment adviser registered with the SEC, providing investment advisory and other management services to the WisdomTree Trust (“WTT”) and WisdomTree exchange-traded funds (“ETFs”). The WisdomTree ETFs are issued in the U.S. by WTT. WTT is a non-consolidated
 Delaware statutory trust registered with the SEC as an open-end
 management investment company. The Company has licensed to WTT the use of certain of its own indexes on an exclusive basis for the WisdomTree ETFs in the U.S. 
 
 • 
 
 WisdomTree Management Jersey Limited 

(“ManJer”) is a Jersey based management company providing management services to seven issuers (the “ManJer Issuers”) in respect of the ETPs issued and listed by the ManJer Issuers covering commodity, currency, cryptocurrency and leveraged-and-inverse

 strategies. 
 
 • 
 
 WisdomTree Multi Asset Management Limited

 (“WTMAML”) is a Jersey based management company providing management services to WisdomTree Multi Asset Issuer PLC (“WMAI”) in respect of the ETPs issued by WMAI. WMAI is a non-consolidated
 public limited company domiciled in Ireland. 
 
 • 
 
 WisdomTree Management Limited

 (“WML”) is an Ireland based management company providing management services to WisdomTree Issuer ICAV (“WTICAV”) in respect of the WisdomTree UCITS ETFs issued by WTICAV. WTICAV is a non-consolidated
 public limited company domiciled in Ireland. 
 
 • 
 
 WisdomTree UK Limited

 (“WTUK”) is a U.K. based company registered with the Financial Conduct Authority currently providing distribution and support services to ManJer, WTMAML and WML. 
 
 • 
 
 WisdomTree Europe Limited

 is a U.K. based company which is the legacy distributor of the WMAI ETPs and WisdomTree UCITS ETFs. These services are now provided directly by WTUK. WisdomTree Europe Limited is no longer regulated and does not provide any regulated services. 
 
 • 
 
 WisdomTree Ireland Limited

 is an Ireland based company authorized by the Central Bank of Ireland providing distribution services to ManJer, WTMAML and WML. 
 
 • 
 
 WisdomTree Digital Commodity Services, LLC

 is a New York based company that has been formed to serve as the sponsor of the WisdomTree Bitcoin Trust and WisdomTree Ethereum Trust, each an ETF currently under review with the SEC. 
 
 • 
 
 WisdomTree Digital Management, Inc. (“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. by WTDT. WTDT is a Delaware statutory trust registered with the SEC as an open-end management investment company. Each Digital Fund will use blockchain technology to maintain a secondary record of its shares on one or more blockchains (e.g., Stellar or Ethereum), but will not directly or indirectly invest in any assets that rely on blockchain technology, such as cryptocurrencies. 

 • 
 
 WisdomTree Digital Movement, Inc

. is a New York based company operating as a money services business registered with the Financial Crimes Enforcement Network (“FinCEN”) and seeking state money transmitter licenses to operate a platform for the purchase, sale and exchange of digital assets, while also providing digital wallet services through WisdomTree Prime ™
 to facilitate such activity. 
 
 • 
 
 WisdomTree Securities, Inc

. is a New York based limited purpose broker-dealer (i.e., mutual fund retailer), facilitating transactions in WisdomTree Digital Funds. 
 
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 Table of Contents 
 2. Significant Accounting Policies 

 Basis of Presentation 

 These consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and in the opinion of management reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of financial condition, results of operations, and cash flows for the periods presented. The consolidated financial statements include the accounts of the Company’s wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. 
 Consolidation 

 The Company consolidates entities in which it has a controlling financial interest. The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity (“VOE”) or a variable interest entity (“VIE”). The usual condition for a controlling financial interest in a VOE is ownership of a majority voting interest. If the Company has a majority voting interest in a VOE, the entity is consolidated. The Company has a controlling financial interest in a VIE when the Company has a variable interest that provides it with (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. 
 The Company reassesses its evaluation of whether an entity is a VOE or VIE when certain reconsideration events occur. 
 Segment and Geographic Information 

 The Company, through its subsidiaries in the U.S. and Europe, conducts business as a single operating segment as an ETP sponsor and asset manager which is based upon the Company’s current organizational and management structure, as well as information used by the chief operating decision maker to allocate resources and other factors. 
 Foreign Currency Translation 

 Assets and liabilities of subsidiaries whose functional currency is not the U.S. dollar are translated based on the end of period exchange rates from local currency to U.S. dollars. Results of operations are translated at the average exchange rates in effect during the period. The impact of the foreign currency translation adjustment is included in the Consolidated Statements of Comprehensive Income/(Loss) as a component of other comprehensive (loss)/income. 
 Use of Estimates 

 The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet dates and the reported amounts of revenues and expenses for the periods presented. Actual results could differ materially from those estimates. 
 Revenue Recognition 

 The Company earns substantially all of its revenue in the form of advisory fees from its ETPs and recognizes this revenue over time, as the performance obligation is satisfied. Advisory fees are based on a percentage of the ETPs’ average daily net assets. Progress is measured using the practical expedient under the output method resulting in the recognition of revenue in the amount for which the Company has a right to invoice. 
 Contractual Gold Payments 

 Contractual gold payments are measured and paid monthly based upon the average daily spot price of gold (Note 9). 
 Marketing and Advertising 

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

 Depreciation and amortization is provided for using the straight-line method over the estimated useful lives of the related assets as follows: 
 
 Equipment
 
 3 to 5 years 
 
 Internally-developed software
 
 3 years 
 
 The assets listed above are recorded at cost less accumulated depreciation and amortization. 
 
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 Stock-Based Awards 

 Accounting for stock-based compensation requires the measurement and recognition of compensation expense for all equity awards based on estimated fair values. Stock-based compensation is measured based on the grant-date fair value of the award and is amortized over the relevant service period. Forfeitures are recognized when they occur. 
 Third-Party Distribution Fees 

 The Company pays a percentage of its advisory fee revenues based on incremental growth in assets under management (“AUM”), subject to caps or minimums, to marketing agents to sell WisdomTree ETFs and for including WisdomTree ETFs on third-party customer platforms and recognizes these expenses as incurred. 
 Cash and Cash Equivalents 

 The Company considers all highly liquid investments with an original maturity of 90 days or less at the time of purchase to be classified as cash equivalents. The Company maintains deposits with financial institutions in an amount that is in excess of federally insured limits. 
 Accounts Receivable 

 Accounts receivable are customer and other obligations due under normal trade terms. The Company measures credit losses, if any, by applying historical loss rates, adjusted for current conditions and reasonable and supportable forecasts to amounts outstanding using the aging method. 
 Impairment of Long-Lived Assets 

 The Company performs a review for the impairment of long-lived assets when events or changes in circumstances indicate that the estimated undiscounted future cash flows expected to be generated by the assets are less than their carrying amounts or when other events occur which may indicate that the carrying amount of an asset may not be recoverable. 
 Financial Instruments Owned and Financial Instruments Sold, but Not yet Purchased (at Fair Value) 

 Financial instruments owned and financial instruments sold, but not yet purchased are financial instruments classified as either trading or available-for-sale

 (“AFS”). These financial instruments are recorded on their trade date and are measured at fair value. All equity instruments that have readily determinable fair values are classified by the Company as trading. Debt instruments are classified based primarily on the Company’s intent to hold or sell the instrument. Changes in the fair value of debt instruments classified as trading and AFS are reported in other income/(expenses) and other comprehensive income, respectively, in the period the change occurs. Debt instruments classified as AFS are assessed for impairment on a quarterly basis and an estimate for credit loss is provided when the fair value of the AFS debt instrument is below its amortized cost basis. Credit-related impairments are recognized in earnings with a corresponding adjustment to the instrument’s amortized cost basis if the Company intends to sell the impaired AFS debt instrument or it is more likely than not the Company will be required to sell the instrument before recovering its amortized cost basis. Other credit-related impairments are recognized as an allowance with a corresponding adjustment to earnings. Impairments resulting from noncredit-related factors are recognized in other comprehensive income. Amounts recorded in other comprehensive income are reclassified into earnings upon sale of the AFS debt instrument using the specific identification method. 
 Securities Held-to-Maturity

 The Company accounts for certain of its securities as held-to-maturity

 on a trade date basis, which are recorded at amortized cost. For held-to-maturity

 securities, the Company has the intent and ability to hold these securities to maturity and it is not more-likely-than-not
 that the Company will be required to sell these securities before recovery of their amortized cost bases, which may be maturity. Held-to-maturity

 securities are placed on non-accrual
 status when the Company is in receipt of information indicating collection of interest is doubtful. Cash received on held-to-maturity

 securities placed on non-accrual
 status is recognized on a cash basis as interest income if and when received. 
 The Company reviews its portfolio of held-to-maturity

 securities for impairment on a quarterly basis, recognizing an allowance, if any, by applying an estimated loss rate after consideration for the nature of collateral securing the financial asset as well as potential future changes in collateral values and historical loss information for financial assets secured with similar collateral. 
 Investments in pass-through government-sponsored enterprises (“GSEs”) are determined to have an estimated loss rate of zero due to an implicit U.S. government guarantee. 
 
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 Investments 

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

(“ASC 321”), to the extent such investments are not subject to consolidation or the equity method. Under the measurement alternative, these financial instruments are carried at cost, less any impairment (assessed quarterly), plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. In addition, income is recognized when dividends are received only to the extent they are distributed from net accumulated earnings of the investee. Otherwise, such distributions are considered returns of investment and are recorded as a reduction of the cost of the investment. 
 Investments in debt instruments are accounted for at fair value, with changes in fair value reported in other income/(expenses). 
 Goodwill 

 Goodwill is the excess of the purchase price over the fair values of the identifiable net assets at the acquisition date. The Company tests goodwill for impairment at least annually and at the time of a triggering event requiring re-evaluation,
 if one were to occur. Goodwill is considered impaired when the estimated fair value of the reporting unit that was allocated the goodwill is less than its carrying value. If the estimated fair value of such reporting unit is less than its carrying value, goodwill impairment is recognized based on that difference, not to exceed the carrying amount of goodwill. A reporting unit is an operating segment or a component of an operating segment provided that the component constitutes a business for which discrete financial information is available and management regularly reviews the operating results of that component. 
 Goodwill is allocated to the Company’s U.S. business and European business components. For impairment testing purposes, these components are aggregated as a single reporting unit as they fall under the same operating segment and have similar economic characteristics. 
 Goodwill is assessed for impairment annually on November 30 th
. When performing its goodwill impairment test, the Company considers a qualitative assessment, when appropriate, and a quantitative assessment using the market approach and its market capitalization when determining the fair value of the reporting unit. 
 Intangible Assets 

 Indefinite-lived intangible assets are tested for impairment at least annually and are also reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Indefinite-lived intangible assets are impaired if their estimated fair values are less than their carrying values. 
 Finite-lived intangible assets, if any, are amortized over their estimated useful life, which is the period over which the assets are expected to contribute directly or indirectly to the future cash flows of the Company. These intangible assets are tested for impairment at the time of a triggering event, if one were to occur. Finite-lived intangible assets may be impaired when the estimated undiscounted future cash flows generated from the assets are less than their carrying amounts. 
 The Company may rely on a qualitative assessment when performing its intangible asset impairment test. Otherwise, the impairment evaluation is performed at the lowest level of reasonably identifiable cash flows independent of other assets. The annual impairment testing date for all of the Company’s intangible assets is November 30 th
. 
 Software Development Costs 

 Software development costs incurred after the preliminary project stage is complete are capitalized if it is probable that the project will be completed and the software will be used as intended. Capitalized costs consist of employee compensation costs and fees paid to third parties who are directly involved in the application development efforts and are included in intangible assets, net in the Consolidated Balance Sheets. Such costs are amortized over the estimated useful life of the software on a straight-line basis and are included in depreciation and amortization in the Consolidated Statements of Operations. Once the application development stage is complete, additional costs are expensed as incurred. 
 Leases 

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

(“ASC 842”), which requires the recognition of both (i) a lease liability equal to the present value of the remaining lease payments and (ii) an offsetting right-of-use

 asset. The remaining lease payments are discounted using the rate implicit in the lease, if known, or otherwise the Company’s incremental borrowing rate. After lease commencement, right-of-use

 assets are assessed for impairment and otherwise are amortized over the remaining lease term on a straight-line basis. These recognition requirements are not applied to short-term leases which are those with a lease term of 12 months or less. Instead, lease payments associated with short-term leases are recognized as an expense on a straight-line basis over the lease term. 
 ASC 842 also provides a practical expedient which allows for consideration in a contract to be accounted for as a single lease component rather than allocated between lease and non-lease
 components. The Company has elected to apply this practical expedient to all lease contracts, where applicable. 
 
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 Table of Contents 
 
 Deferred Consideration—Gold Payments 

 Deferred consideration represents the present value of an obligation to pay gold to a third party into perpetuity and is measured using forward-looking gold prices observed on the CMX exchange, a selected discount rate and perpetual growth rate (Note 9). Changes in the fair value of this obligation are reported as gain/(loss) on revaluation of deferred consideration—gold payments in the Consolidated Statements of Operations. 
 Convertible Notes 

 Convertible notes are carried at amortized cost, net of issuance costs. In accordance with Accounting Standards Update (“ASU”) 2020-06,
 Debt – Debt with Conversion and Other Options

, the Company accounts for convertible instruments as a single liability (applicable to the convertible notes) or equity with no separate accounting for embedded conversion features unless the conversion feature meets the criteria for accounting under the substantial premium model or does not qualify for a derivative scope exception. Interest expense is recognized using the effective interest method and includes amortization of issuance costs over the life of the debt. 
 Contingencies 

 The Company may be subject to reviews, inspections and investigations by regulatory authorities as well as legal proceedings arising in the ordinary course of business. The Company evaluates the likelihood of an unfavorable outcome of all legal or regulatory proceedings to which it is a party and accrues a loss contingency when the loss is probable and reasonably estimable. 
 Contingent Payments 

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

 Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Net income available to common stockholders represents net income of the Company reduced by an allocation of earnings to participating securities. The Series A non-voting
 convertible preferred stock (Note 11) and unvested share-based payment awards that contain non-forfeitable
 rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of EPS pursuant to the two-class
 method. Share-based payment awards that do not contain such rights are not deemed participating securities and are included in diluted shares outstanding (if dilutive). 
 Diluted EPS is calculated under the treasury stock method and the two-class
 method. The calculation that results in the lowest diluted EPS amount for the common stock is reported in the Company’s consolidated financial statements. The treasury stock method includes the dilutive effect of potential common shares including unvested stock-based awards, the Series A non-voting
 convertible preferred stock and the convertible notes, if any. Potential common shares associated with the Series A non-voting
 convertible preferred stock and the convertible notes are computed under the if-converted
 method. Potential common shares associated with the conversion option embedded in the convertible notes are dilutive when the Company’s average stock price exceeds the conversion price. 
 Income Taxes 

 The Company accounts for income taxes using the liability method, which requires the determination of deferred tax assets and liabilities based on the differences between the financial and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more-likely-than-not
 that some portion or all the deferred tax assets will not be realized. 
 Tax positions are evaluated utilizing a two-step
 process. The Company first determines whether any of its tax positions are more-likely-than-not
 to be sustained upon examination, based solely on the technical merits of the position. Once it is determined that a position meets this recognition threshold, the position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company records interest expense and penalties related to tax expenses as income tax expense. 
 The Global Intangible Low-Taxed
 Income (“GILTI”) provisions of the Tax Reform Act requires the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. An accounting policy election is available to either account for the tax effects of GILTI in the period that is subject to such taxes or to provide deferred taxes for book and tax basis differences that upon reversal may be subject to such taxes. The Company accounts for the tax effects of these provisions in the period that is subject to such tax. 
 Non-income
 based taxes are recorded as part of other liabilities and other expenses. 
 
 13 

 Table of Contents 
 3. Cash and Cash Equivalents 

 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. 
 4. Fair Value Measurements 

 The fair value of financial instruments is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., “the exit price”) in an orderly transaction between market participants at the measurement date. ASC 820, Fair Value Measurement

, establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs reflect assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the transparency of inputs as follows: 
 
 Level 1 
 
 – 
 
 Quoted prices for identical instruments in active markets. 

 Level 2 
 
 – 
 
 Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. 

 Level 3 
 
 – 
 
 Instruments whose significant drivers are unobservable. 

 The availability of observable inputs can vary from product to product and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by management in determining fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. 
 The tables below summarize the categorization of the Company’s assets and liabilities measured at fair value. During the three months ended March 31, 2023 and 2022, there were no transfers between Levels 2 and 3. 
 
 March 31, 2023

 Total

 Level 1

 Level 2

 Level 3

 Assets:

 Recurring fair value measurements:
 
 Cash equivalents
 
 $
 
 336 
 
 $
 
 336 
 
 $
 
 — 
 
 $
 
 — 
 
 Financial instruments owned, at fair value
 
 ETFs
 
 33,728 
 
 33,728 
 
 — 
 
 — 
 
 U.S. treasuries
 
 2,993 
 
 2,993 
 
 — 
 
 — 
 
 Pass-through GSEs
 
 81,046 
 
 23,352 
 
 57,694 
 
 — 
 
 Other assets—seed capital (WisdomTree blockchain-enabled funds)
 
 U.S. treasuries
 
 4,901 
 
 4,901 
 
 — 
 
 — 
 
 Equities
 
 4,937 
 
 4,937 
 
 — 
 
 — 
 
 Fixed income
 
 1,915 
 
 — 
 
 1,915 
 
 — 
 
 Other
 
 660 
 
 — 
 
 660 
 
 — 
 
 Investments in Convertible Notes
 
 Securrency, Inc.—convertible note (Note 7)
 
 10,051 
 
 — 
 
 — 
 
 10,051 
 
 Fnality International Limited—convertible note (Note 7)
 
 7,451 
 
 — 
 
 — 
 
 7,451 
 
 Total
 
 $
 
 148,018 
 
 $
 
 70,247 
 
 $
 
 60,269 
 
 $
 
 17,502 
 
 14 
 
 Table of Contents 
 
 March 31, 2023

 Total

 Level 1

 Level 2

 Level 3

 Non-recurring
 fair value measurements:
 
 Securrency, Inc.—Series A convertible preferred stock (1)

 $
 
 3,588 
 
 $
 
 — 
 
 $
 
 — 
 
 $
 
 3,588 
 
 Liabilities:

 Recurring fair value measurements:
 
 Deferred consideration (Note 9)
 
 $
 
 179,831 
 
 $
 
 — 
 
 $
 
 — 
 
 $
 
 179,831 
 
 December 31, 2022

 Total

 Level 1

 Level 2

 Level 3

 Assets:

 Recurring fair value measurements:
 
 Cash equivalents
 
 $
 
 930 
 
 $
 
 930 
 
 $
 
 — 
 
 $
 
 — 
 
 Financial instruments owned, at fair value
 
 ETFs
 
 23,772 
 
 23,772 
 
 — 
 
 — 
 
 U.S. treasuries
 
 2,980 
 
 2,980 
 
 — 
 
 — 
 
 Pass-through GSEs
 
 96,837 
 
 23,290 
 
 73,547 
 
 — 
 
 Corporate bonds
 
 885 
 
 — 
 
 885 
 
 — 
 
 Other assets—seed capital (WisdomTree blockchain-enabled funds)
 
 1,765 
 
 — 
 
 1,765 
 
 — 
 
 Investments in Convertible Notes
 
 Securrency, Inc.—convertible note (Note 7)
 
 14,500 
 
 — 
 
 — 
 
 14,500 
 
 Fnality International Limited—convertible note (Note 7)
 
 6,921 
 
 — 
 
 — 
 
 6,921 
 
 Total
 
 $
 
 148,590 
 
 $
 
 50,972 
 
 $
 
 76,197 
 
 $
 
 21,421 
 
 Non-recurring
 fair value measurements:
 
 Other investments (2)

 $
 
 312 
 
 $
 
 — 
 
 $
 
 — 
 
 $
 
 312 
 
 Liabilities:

 Recurring fair value measurements:
 
 Deferred consideration (Note 9)
 
 $
 
 200,290 
 
 $
 
 — 
 
 $
 
 — 
 
 $
 
 200,290 
 
 (1)
 Fair value determined on March 31, 2023. 
 (2)
 Fair value determined on May 10, 2022. 
 Recurring Fair Value Measurements—Methodology 

 Cash Equivalents (Note 3) 

– These financial assets represent cash invested in highly liquid investments with original maturities of less than 90 days. These investments are valued at par, which approximates fair value, and are classified as Level 1 in the fair value hierarchy. 
 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. ETFs, U.S. 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. 
 
 15 
 
 Table of Contents 
 Fair Value Measurements classified as Level

 3

 – The following table presents a reconciliation of beginning and ending balances of recurring fair value measurements classified as Level 3: 
 
 Three Months Ended,

 March 31,

 2023

 2022

 Investments in Convertible Notes (Note 7)

 Beginning balance
 
 $ 
 21,421 
 
 $ 
 — 
 
 Purchases
 
 — 
 
 6,863 
 
 Net unrealized losses (1)

 ( 3,919 
 ) 
 
 ( 163 
 ) 

 Ending balance
 
 $ 
 17,502 
 
 $ 
 6,700 
 
 Deferred Consideration (Note 9)

 Beginning balance
 
 $ 
 200,290 
 
 $ 
 228,062 
 
 Net realized losses (2)

 4,486 
 
 4,450 
 
 Net unrealized (gains)/losses (3)

 ( 20,592 
 ) 
 
 17,018 
 
 Settlements
 
 ( 4,353 
 ) 
 
 ( 4,353 
 ) 

 Ending balance
 
 $ 
 179,831 
 
 $ 
 245,177 
 
 (1)
 Recorded in other losses, net in the Consolidated Statements of Operations. 
 (2)
 Recorded as contractual gold payments expense in the Consolidated Statements of Operations. 
 (3)
 Recorded as gain/(loss) on revaluation of deferred consideration—gold payments in the Consolidated Statements of Operations. 
 5. Financial instruments owned 

 These instruments consist of the following: 
 
 March 31, 

 2023

 December 31, 
 2022

 Financial instruments owned

 Trading securities
 
 $ 
 117,767 
 
 $ 
 124,474 
 
 Other assets—seed capital (WisdomTree blockchain-enabled funds)
 
 12,413 
 
 1,765 
 
 $ 
 130,180 
 
 $ 
 126,239 
 
 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. 
 6. Securities Held-to-Maturity

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

 March 31, 

 2023

 December 31, 

 2022

 Debt instruments: Pass-through GSEs (amortized cost)
 
 $ 
 253 
 
 $ 
 259 
 
 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 losses, gains and fair value (classified as Level 2 within the fair value hierarchy) of securities held-to-maturity:

 March 31, 

 2023

 December 31, 
 2022

 Cost/amortized cost
 
 $ 
 253 
 
 $ 
 259 
 
 Gross unrealized losses
 
 ( 17 
 ) 
 
 ( 20 
 ) 

 Gross unrealized gains
 
 — 
 
 — 
 
 Fair value
 
 $ 
 236 
 
 $ 
 239 
 
 An allowance for credit losses was not provided on the Company’s held-to-maturity

 securities as all securities are investments in pass-through GSEs which are determined to have an estimated loss rate of zero due to an implicit U.S. government guarantee. 
 
 16 
 
 Table of Contents 
 
 The following table sets forth the maturity profile of the securities held-to-maturity;

 however, these securities may be called prior to the maturity date: 
 
 March 31, 

 2023

 December 31, 

 2022

 Due within one year
 
 $ 
 — 
 
 $ 
 — 
 
 Due one year through five years
 
 — 
 
 — 
 
 Due five years through ten years
 
 26 
 
 27 
 
 Due over ten years
 
 227 
 
 232 
 
 Total
 
 $ 
 253 
 
 $ 
 259 
 
 7. Investments 

 The following table sets forth the Company’s investments: 
 
 March 31, 2023 

 December 31, 2022 

 Carrying

 Value

 Cost

 Carrying

 Value

 Cost

 Securrency, Inc.—Series A convertible preferred stock
 
 $ 
 3,588 
 
 $ 
 8,112 
 
 $ 
 8,488 
 
 $ 
 8,112 
 
 Securrency, Inc.—Series B convertible preferred stock
 
 5,500 
 
 5,500 
 
 5,500 
 
 5,500 
 
 Securrency, Inc.—convertible note
 
 10,051 
 
 15,000 
 
 14,500 
 
 15,000 
 
 Subtotal—Securrency, Inc.
 
 $ 
 19,139 
 
 $ 
 28,612 
 
 $ 
 28,488 
 
 $ 
 28,612 
 
 Fnality International Limited—convertible note
 
 7,451 
 
 6,863 
 
 6,921 
 
 6,863 
 
 Other investments
 
 312 
 
 250 
 
 312 
 
 250 
 
 $ 
 26,902 
 
 $ 
 35,725 
 
 $ 
 35,721 
 
 $ 
 35,725 
 
 Securrency, Inc. – Preferred Stock 

 The Company owns approximately 22 % (or 17 % on a fully-diluted basis) of the capital stock of Securrency, Inc. (“Securrency”), a developer of institutional-grade blockchain-based financial and regulatory technology, issued as a result of strategic investments totaling $ 13,612 . In consideration of such investments, the Company received 5,178,488 shares of Series A convertible preferred stock (“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 

 6.0 % 
 dividend, payable if and when declared by the board of directors of Securrency. In addition, the Securrency Series A Shares and Securrency Series B Shares (together with the Securrency 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 Securrency 
Series A Shares (at any time on or after December 31, 2029) and 
 90 % 
 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. 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): 
 
 March 31,

 2023

 Conversion of Securrency Series A Shares upon a future equity financing
 
 33.3 % 
 
 Redemption of Securrency Series A Shares upon a corporate transaction
 
 33.3 % 
 
 Default
 
 33.4 % 
 
 There was no impairment recognized during the three months ended March 31, 2022 based upon a qualitative assessment. 
 
 17 
 
 Table of Contents 
 Securrency – Convertible Note 

 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

 of the aggregate principal amount of outstanding notes. If no such election is made, Securrency may elect to pay or convert the notes in its sole discretion. 
 The 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: 
 
 March 31, 

 2023

 December 31, 

 2022

 Conversion of note upon a future equity financing
 
 33.3 % 
 
 60 % 

 Redemption of note upon a corporate transaction
 
 33.3 % 
 
 25 % 

 Default
 
 33.4 % 
 
 15 % 

 Time to potential outcome (in years)
 
 0.56 
 
 0.33 
 
 Fnality International Limited – Convertible Note 

 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 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. Mandatory conversion may occur on or after the maturity date or, if earlier, in the event a future financing round has not been completed within a specified time from an initial closing of such financing round (“Long Stop Date”), upon the approval of holders of at least 75 % of the outstanding notes. The note is also convertible, at the option of the Company, following the earlier of the maturity date or such Long Stop Date. 
 The note is redeemable upon the occurrence of a change of control for an amount which is the greater of (i) the principal amount and all accrued interest and (ii) the amount that would be received had the note been converted to equity shares immediately prior to the occurrence of the change of control. Redemption may also occur on or after maturity or prior to maturity upon approval by holders of at least 50 % and 75 %, respectively, of the outstanding notes, or in connection with bankruptcy or other liquidation events. 
 The note is accounted for at fair value. Fair value is determined by the Company using the PWERM and is also remeasured for changes in the British pound and U.S. dollar exchange rate. During the 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: 
 
 March 31, 

 2023

 December 31, 

 2022

 Conversion of note upon a future financing round
 
 85 % 
 
 85 % 

 Redemption of note upon a change of control
 
 10 % 
 
 10 % 

 Default
 
 5 % 
 
 5 % 

 Time to potential outcome (in years)
 
 0.08 
 
 0.25 
 
 18 
 
 Table of Contents
 
 8. Fixed Assets, net 

 The following table summarizes fixed assets: 
 
 March 31,

 2023

 December 31,
 2022

 Equipment
 
 $ 
 997 
 
 $ 
 962 
 
 Less: accumulated depreciation
 
 ( 482 ) 
 
 ( 418 ) 
 
 Total
 
 $ 
 515 
 
 $ 
 544 
 
 9. 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 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. ETFS Capital’s recourse is limited to such advisory fee income and it has no recourse back to the Company for any unpaid amounts that exceed advisory fees earned. ETFS Capital ultimately has the right to claw back Gold Bullion Securities Ltd. (a physically backed gold ETP issuer) if the Company fails to remit any amounts due. 
 The Company determined the present value of the deferred consideration of $ 179,831 and $ 200,290 at March 31, 2023 and December 31, 2022 using the following assumptions: 
 
 March 31,
 2023

 December 31,
 2022

 Forward-looking gold price (low)—per ounce
 
 $ 
 1,999 
 
 $ 
 1,858 
 
 Forward-looking gold price (high)—per ounce
 
 $ 
 3,567 
 
 $ 
 3,126 
 
 Forward-looking gold price (weighted average)—per ounce
 
 $ 
 2,401 
 
 $ 
 2,237 
 
 Discount rate
 
 13.3 % 
 
 11.0 % 
 
 Perpetual growth rate
 
 1.5 % 
 
 1.3 % 
 
 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 $ 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

 March 31,

 2023

 2022

 Contractual Gold Payments
 
 $ 
 4,486 
 
 $ 
 4,450 
 
 Contractual Gold Payments—gold ounces paid
 
 2,375 
 
 2,375 
 
 Gain/(loss) on revaluation of deferred consideration—gold payments (1)

 $ 
 20,592 
 
 $ 
 ( 17,018 ) 
 
 (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. 
 
 19 

 Table of Contents 
 10. Convertible Notes 

 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 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 the Trustee, in a private offering to qualified institutional buyers pursuant to 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”). 
 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: 
 
 2023 Notes 

 2021 Notes 

 2020 Notes 

 Principal outstanding
 
 $ 130.0 
 
 $ 150.0 
 
 $ 60.0 
 
 Maturity date (unless earlier converted, repurchased or redeemed)
 
 August 15, 2028 
 
 June 15, 2026 
 
 June 15, 2023 
 
 Interest rate
 
 5.75 % 
 
 3.25 % 
 
 4.25 % 
 
 Conversion price
 
 $ 9.54 
 
 $ 11.04 
 
 $ 5.92 
 
 Conversion rate
 
 104.8658 
 
 90.5797 
 
 168.9189 
 
 Redemption price
 
 $ 12.40 
 
 $ 14.35 
 
 $ 7.70 
 
 • 
 
 Interest rate:

 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 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. 
 
 • 
 
 Conversion:

 Holders may convert at their option at any time prior to the close of business on the business day immediately preceding May 15, 2028, March 15, 2026 and March 15, 2023 for the 2023 Notes, 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 for the respective Convertible Notes on each applicable trading day; (ii) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sales price of the Company’s common stock and the conversion rate on each such trading day; (iii) upon a notice of redemption delivered by the Company in accordance with the terms of the indentures but only with respect to the Convertible Notes called (or deemed called) for redemption; or (iv) upon the occurrence of specified corporate events. On or after 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:

 Upon conversion, the Company will pay cash up to the aggregate principal amount of the Convertible Notes to be converted. At its election, the Company will also settle its conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted in either cash, shares of its common stock or a combination of cash and shares of its common stock. 
 
 • 
 
 Redemption price: 

The Company may redeem for cash all or any portion of the 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 
 
 20 
 
 Table of Contents 
 
 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. 
 
 • 
 
 Limited investor put rights:

 Holders of the Convertible Notes have the right to require the Company to repurchase for cash all or a portion of their notes at 100 % of their principal amount, plus any accrued and unpaid interest, upon the occurrence of certain change of control transactions or liquidation, dissolution or common stock delisting events. 
 
 • 
 
 Conversion rate increase in certain customary circumstances:

 In certain circumstances, conversions in connection with a “make-whole fundamental change” (as defined in the indentures) or conversions of Convertible Notes called (or deemed called) for redemption may result in an increase to the conversion rate, provided that the conversion rate will not exceed 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 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 March 31, 2023 and December 31, 2022: 
 
 March 31, 2023

 December 31, 2022

 2023
 Notes

 2021
 Notes

 2020 Notes

 Total

 2021 Notes

 2020 Notes

 Total

 Principal amount
 
 $ 
 130,000 
 
 $ 
 150,000 
 
 $ 
 60,000 
 
 $ 
 340,000 
 
 $ 
 150,000 
 
 $ 
 175,000 
 
 $ 
 325,000 
 
 Plus: Premium
 
 — 
 
 — 
 
 250 
 
 250 
 
 — 
 
 250 
 
 250 
 
 Gross proceeds
 
 130,000 
 
 150,000 
 
 60,250 
 
 340,250 
 
 150,000 
 
 175,250 
 
 325,250 
 
 Less: Unamortized issuance costs
 
 ( 3,465 ) 
 
 ( 2,768 ) 
 
 ( 366 ) 
 
 ( 6,599 ) 
 
 ( 2,981 ) 
 
 ( 1,053 ) 
 
 ( 4,034 ) 
 
 Carrying amount
 
 126,535 
 
 $ 
 147,232 
 
 $ 
 59,884 
 
 $ 
 333,651 
 
 $ 
 147,019 
 
 $ 
 174,197 
 
 $ 
 321,216 
 
 Effective interest rate (1)

 6.25 % 
 
 3.83 % 
 
 5.18 % 
 
 5.00 % 
 
 3.83 % 
 
 5.26 % 
 
 4.60 % 
 
 (1)
 Includes amortization of the issuance costs and premium. 
 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 Convertible Notes did not exceed the principal amount at March 31, 2023 and December 31, 2022. 
 11. Series A Preferred Stock 

 On April 10, 2018, the Company filed a Certificate of Designations of Series A Non-Voting
 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
 basis. 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. 

 21 
 
 Table of Contents 
 In connection with the completion of the ETFS Acquisition, the Company issued 14,750 shares of Series A Non-Voting
 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 Series A Preferred Stock balance: 
 
 March 31,

 2023

 December 31,
 2022

 Issuance of Series A Preferred Stock
 
 $ 
 132,750 
 
 $ 
 132,750 
 
 Less: Issuance costs
 
 ( 181 
 ) 
 
 ( 181 
 ) 

 Series A Preferred Stock—carrying value
 
 $ 
 132,569 
 
 $ 
 132,569 
 
 Cash dividends declared per share (quarterly)
 
 $ 
 0.03 
 
 $ 
 0.03 
 
 Temporary equity classification is required for redeemable instruments for which redemption triggers are outside of the issuer’s control. ETFS Capital has the right to redeem all the 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 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 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.
 12. Leases 

 The Company has entered into operating leases for its office facilities (including its corporate headquarters) and equipment. The Company has no finance leases. 
 The following table provides additional information regarding the Company’s leases: 
 
 Three Months Ended

 March 31,

 2023 

 2022 

 Lease cost:

 Operating lease cost
 
 $ 
 319 
 
 $ 
 89 
 
 Short-term lease cost
 
 56 
 
 276 
 
 Total lease cost
 
 $ 
 375 
 
 $ 
 365 
 
 Other information:

 Cash paid for amounts included in the measurement of operating liabilities (operating leases)
 
 $ 
 326 
 
 $ 
 97 
 
 Right-of-use

 assets obtained in exchange for new operating lease liabilities
 
 n/a 
 
 n/a 
 
 Weighted-average remaining lease term (in years)—operating leases
 
 1.0 
 
 1.3 
 
 Weighted-average discount rate—operating leases
 
 6.5 % 
 
 4.4 % 
 
 None of the Company’s leases include variable payments, residual value guarantees or any restrictions or covenants relating to the Company’s ability to pay dividends or incur additional financing obligations. 
 
 22 
 
 Table of Contents 
 
 The following table discloses future minimum lease payments at March 31, 2023 with respect to the Company’s operating lease liabilities: 

 Remainder of 2023
 
 $ 
 803 
 
 2024
 
 397 
 
 2025
 
 — 
 
 2026
 
 — 
 
 2027
 
 — 
 
 2028 and thereafter
 
 — 
 
 Total future minimum lease payments (undiscounted)
 
 $ 
 1,200 
 
 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
 
 $ 
 1,041 
 
 Lease liability—long term
 
 120 
 
 Subtotal
 
 1,161 
 
 Difference between undiscounted and discounted cash flows
 
 39 
 
 Total future minimum lease payments (undiscounted)
 
 $ 
 1,200 
 
 13. Contingencies 

 The Company may be subject to reviews, inspections and investigations by regulatory authorities as well as legal proceedings arising in the ordinary course of business. 
 Closure of the WisdomTree WTI Crude Oil 3x Daily Leveraged ETP 

 In December 2020, WMAI, WTMAML, WTUK and WisdomTree Ireland Limited (“WT Ireland”) were served with a writ of summons to appear before the Court of Milan, Italy. In January 2021, WTUK was served with a writ of summons to appear before the Court of Udine, Italy. Investors had filed actions seeking damages resulting from the closure of the WisdomTree WTI Crude Oil 3x Daily Leveraged ETP (“3OIL”) in March 2020. The product was dependent on the receipt of payments from a swap provider to satisfy payment obligations to the investors. Due to an extreme adverse move in oil futures relative to the oil futures’ closing price, the swap contract underlying 3OIL was terminated by the swap provider, which resulted in the compulsory redemption of 3OIL, all in accordance with the prospectus. 
 In February 2022, the Court of Udine ruled in the Company’s favor. Also in February 2022, WMAI, WTMAML, WTUK and WT Ireland were served with another writ of summons to appear before the Court of Milan by additional investors seeking damages resulting from the closure of 3OIL. 
 In March 2022, WMAI and WTUK were served with writs of summons to appear before the Court of Turin and the Court of Milan by additional investors seeking damages. These writs also were served on the intermediary brokers for the respective claimants, with the claimants alleging joint and several liability of WMAI, WTUK and such intermediary brokers. 
 Total damages sought by all investors are approximately € 15,800 ($ 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 March 31, 2023 and December 31, 2022. 
 14. Variable Interest Entities 

 VIEs are entities with any of the following characteristics: (i) the entity does not have enough equity to finance its activities without additional financial support; (ii) the equity holders, as a group, lack the characteristics of a controlling financial interest; or (iii) the entity is structured with non-substantive
 voting rights. 
 Consolidation of a VIE is required for the party deemed to be the primary beneficiary, if any. The primary beneficiary is the party who has both (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity. The Company is not the primary beneficiary of any entities in which it has a variable interest as it does not have the power to direct the activities that most significantly impact the entities’ economic performance. Such power is conveyed through the entities’ boards of directors and the Company does not have control over the boards. 
 
 23 
 
 Table of Contents 
 The following table presents information about the Company’s variable interests in non-consolidated
 VIEs: 
 
 March 31, 

 2023

 December 31, 

 2022

 Carrying Amount—Assets (Securrency):
 
 Preferred stock—Series A Shares
 
 $ 
 3,588 
 
 $ 
 8,488 
 
 Preferred stock—Series B Shares
 
 5,500 
 
 5,500 
 
 Convertible note
 
 10,051 
 
 14,500 
 
 Subtotal—Securrency
 
 $ 
 19,139 
 
 $ 
 28,488 
 
 Carrying Amount—Assets (Fnality):
 
 Convertible note
 
 7,451 
 
 6,921 
 
 Carrying Amount—Assets (Other investments):
 
 312 
 
 312 
 
 Total (Note 7)
 
 $ 
 26,902 
 
 $ 
 35,721 
 
 Maximum exposure to loss
 
 $ 
 26,902 
 
 $ 
 35,721 
 
 15. Revenues from Contracts with Customers 

 The following table presents the Company’s total revenues from contracts with customers: 
 
 Three Months Ended March 31,

 2023

 2022

 Revenues from contracts with customers:
 
 Advisory fees
 
 $ 
 77,637 
 
 $ 
 76,517 
 
 Other
 
 4,407 
 
 1,851 
 
 Total operating revenues
 
 $ 
 82,044 
 
 $ 
 78,368 
 
 The Company recognizes revenues from contracts with customers when the performance obligation is satisfied, which is when the promised services are transferred to the customer. A service is considered to be transferred when the customer obtains control, which is represented by the transfer of rights with regard to the service. Transfer of control happens either over time or at a point in time. When a performance obligation is satisfied over time, an entity is required to select a single method of measuring progress for each performance obligation that depicts the entity’s performance in transferring control of services to the customer. 
 Substantially all the Company’s revenues from contracts with customers are derived primarily from investment advisory agreements with related parties (Note 16). These advisory fees are recognized over time, are earned from the Company’s ETPs and are calculated based on a percentage of the ETPs’ average daily net assets. There is no significant judgment in calculating amounts due which are invoiced monthly in arrears and are not subject to any potential reversal. Progress is measured using the practical expedient under the output method resulting in the recognition of revenue in the amount for which the Company has a right to invoice. 
 There are no contract assets or liabilities that arise in connection with the recognition of advisory fee revenue. In addition, there are no costs incurred to obtain or fulfill the contracts with customers, all of which are investment advisory agreements with related parties. 
 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 March 31,

 2023

 2022

 Revenues from contracts with customers:
 
 United States
 
 $ 
 49,681 
 
 $ 
 46,229 
 
 Jersey
 
 29,053 
 
 28,598 
 
 Ireland
 
 3,310 
 
 3,541 
 
 Total operating revenues
 
 $ 
 82,044 
 
 $ 
 78,368 
 
 24 
 
 Table of Contents 
 
 16. Related Party Transactions 

 The Company’s revenues are derived primarily from investment advisory agreements with related parties. Under these agreements, the Company has licensed to related parties the use of certain of its own indexes for the U.S. WisdomTree ETFs and WisdomTree UCITS ETFs. The Board of Trustees and Board of Directors (including certain officers of the Company) of the related parties are primarily responsible for overseeing the management and affairs of the entities for the benefit of their stakeholders and have contracted with the Company to provide for general management and administration services. The Company is also responsible for certain expenses of the related parties, including the cost of transfer agency, custody, fund administration and accounting, legal, audit, and other non-distribution
 services, excluding extraordinary expenses, taxes and certain other expenses, which are included in fund management and administration in the Consolidated Statements of Operations. In exchange, the Company receives fees based on a percentage of the ETPs’ average daily net assets. A majority of the independent members of the Board of Trustees are required to annually approve the advisory agreements of the U.S. WisdomTree ETFs and these agreements may be terminated by the Board of Trustees upon notice. 
 The following table summarizes accounts receivable from related parties which are included as a component of accounts receivable in the Consolidated Balance Sheets: 
 
 March 31,

 2023

 December 31,

 2022

 Receivable from WTT
 
 $ 
 17,124 
 
 $ 
 16,399 
 
 Receivable from ManJer Issuers
 
 12,790 
 
 4,485 
 
 Receivable from WMAI and WTICAV
 
 2,532 
 
 3,255 
 
 Total
 
 $ 
 32,446 
 
 $ 
 24,139 
 
 The allowance for credit losses on accounts receivable from related parties is insignificant when applying historical loss rates, adjusted for current conditions and supportable forecasts, to the amounts outstanding in the table above. Amounts outstanding are all invoiced in arrears, are less than 30 days aged and are collected shortly after the applicable reporting period. 
 The following table summarizes revenues from advisory services provided to related parties: 
 
 Three Months Ended March 31,

 2023

 2022

 Advisory services provided to WTT
 
 $ 
 49,487 
 
 $ 
 46,070 
 
 Advisory services provided to ManJer Issuers
 
 24,840 
 
 26,905 
 
 Advisory services provided to WMAI and WTICAV
 
 3,310 
 
 3,542 
 
 Total
 
 $ 
 77,637 
 
 $ 
 76,517 
 
 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. 
 17. Stock-Based Awards 

 On July 15, 2022, the Company’s stockholders approved the 2022 Equity Plan under which the Company may issue up to 16,000,000 shares of common stock (less one share for every share granted under the 2016 Equity Plan since March 31, 2022 and inclusive of shares available under the 2016 Equity Plan as of March 31, 2022) in the form of stock options and other stock-based awards. 
 The Company grants equity awards to employees and directors which include restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”) and stock options. Certain awards described below are subject to acceleration under certain conditions. 
 
 Stock options:
 
 Generally issued for terms of ten years and may vest after at least one year of service and have an exercise price equal to the Company’s stock price on the grant date. The Company estimates the fair value of stock options (when granted) using the Black-Scholes option pricing model.
 
 RSAs/RSUs:
 
 Awards are valued based on the Company’s stock price on grant date and generally vest ratably, on an annual basis, over three years.
 
 25 
 
 Table of Contents 
 
 PRSUs: 
 
 These awards cliff vest three years from the grant date and contain a market condition whereby the number of PRSUs ultimately vesting is tied to how the Company’s total shareholder return (“TSR”) compares to a peer group of other publicly traded asset managers over the three-year period. A Monte Carlo simulation is used to value these awards. 

 The number of PRSUs vesting ranges from 0 % to 200 % of the target number of PRSUs granted, as follows:
 
 •   If the relative TSR is below the 25 th
 percentile, then 0 % of the target number of PRSUs granted will vest;
 
 •   If the relative TSR is at the 25th percentile, then 50 % of the target number of PRSUs granted will vest;
 
 •   If the relative TSR is above the 25th percentile, then linear scaling is applied such that the percent of the target number of PRSUs vesting is 100 % at the 50th percentile and capped at 200 % of the target number of PRSUs granted for performance at the 85th percentile (or 100th percentile for grants made in 2020); and
 
 •   If the Company’s TSR is negative, the target number of PRSUs vesting is capped at 100 % regardless of the relative TSR percentile.
 
 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: 
 
 March 31, 2023

 Unrecognized Stock-
 Based

 Compensation

 Weighted-Average

 Remaining
 Vesting Period (Years) 

 Employees and directors
 
 $ 
 30,415 
 
 2.10 
 
 A summary of stock-based compensation award activity (shares) during the three months ended March 31, 2023 is as follows: 
 
 RSA

 RSU

 PRSU

 Balance at January 1, 2023
 
 3,391,082 
 
 141,963 
 
 668,188 
 
 Granted
 
 3,273,263 
 
 73,855 
 
 576,240 
 (1)
 
 Vested
 
 ( 1,498,171 
 ) 
 
 ( 26,837 
 ) 
 
 ( 83,158 
 ) (2)
 
 Forfeited
 
 ( 11,885 
 ) 
 
 ( 233 
 ) 
 
 ( 24,955 
 ) (2)
 
 Balance at March 31, 2023
 
 5,154,289 
 
 188,748 
 
 1,136,315 
 
 (1)
 
 Represents the target number of PRSUs granted and outstanding. The number of PRSUs that ultimately vest ranges from 0 % to 200 % of this amount. 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 %. 
 
 (2)
 
 The payout on PRSUs vesting in January 2023 was 77 %. The remainder of the awards were forfeited. 
 
 18. 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. 
 
 26 
 
 Table of Contents 
 
 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. 
 
 27 
 
 Table of Contents 
 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. 
 19. 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

 March 31,

 Basic Earnings/(Loss) per Share

 2023 

 2022 

 Net income/(loss)
 
 $ 
 16,233 
 
 $ 
 ( 10,261 
 ) 

 Less: Income distributed to participating securities
 
 ( 498 
 ) 
 
 ( 549 
 ) 

 Less: Undistributed income allocable to participating securities
 
 ( 1,206 
 ) 
 
 — 
 
 Net income/(loss) available to common stockholders—Basic EPS
 
 $ 
 14,529 
 
 $ 
 ( 10,810 
 ) 

 Weighted average common shares (in thousands)
 
 143,862 
 
 142,782 
 
 Basic earnings/(loss) per share
 
 $ 
 0.10 
 
 $ 
 ( 0.08 
 ) 

 Three Months Ended

 March 31,

 Diluted Earnings/(Loss) per Share

 2023 

 2022 

 Net earnings/(loss) available to common stockholders
 
 $ 
 14,529 
 
 $ 
 ( 10,810 
 ) 

 Add back: Undistributed income allocable to participating securities
 
 1,206 
 
 — 
 
 Less: Reallocation of undistributed income allocable to participating securities considered potentially dilutive
 
 ( 1,202 
 ) 
 
 — 
 
 Net income/(loss) available to common stockholders—Diluted EPS
 
 $ 
 14,533 
 
 $ 
 ( 10,810 
 ) 

 Weighted Average Diluted Shares (in thousands)
:
 
 Weighted average common shares
 
 143,862 
 
 142,782 
 
 Dilutive effect of common stock equivalents, excluding participating securities
 
 569 
 
 — 
 
 Weighted average diluted shares, excluding participating securities (in thousands)
 
 144,431 
 
 142,782 
 
 Diluted earnings/(loss) per share
 
 $ 
 0.10 
 
 $ 
 ( 0.08 
 ) 

 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 695 and 509 for the three months ended March 31, 2023 and 2022, respectively. 
 
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 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

 March 31,

 Reconciliation of Weighted Average Diluted Shares (in thousands)

 2023

 2022

 Weighted average diluted shares as disclosed on the Consolidated Statements of Operations
 
 159,887 
 
 142,782 
 (1)
 
 Less: Participating securities:
 
 Weighted average shares of common stock issuable upon conversion of the Series A Preferred Stock (Note 11)
 
 ( 14,750 
 ) 
 
 — 
 
 Potentially dilutive restricted stock awards
 
 ( 706 
 ) 
 
 — 
 
 Weighted average diluted shares used to calculate diluted earnings/(loss) per share as disclosed in the table above
 
 144,431 
 
 142,782 
 
 (1)
 
 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). 
 
 20. Income Taxes 

 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 March 31, 2023 and December 31, 2022 is as follows: 
 
 March 31,

 2023

 December 31,

 2022

 Deferred tax assets:
 
 Capital losses
 
 $ 
 17,740 
 
 $ 
 17,541 
 
 Unrealized losses
 
 4,781 
 
 3,821 
 
 NOLs—Foreign
 
 1,625 
 
 1,609 
 
 Accrued expenses
 
 1,527 
 
 6,030 
 
 Goodwill and intangible assets
 
 1,038 
 
 1,085 
 
 Stock-based compensation
 
 865 
 
 1,526 
 
 Interest carryforwards
 
 476 
 
 — 
 
 Operating lease liabilities
 
 260 
 
 313 
 
 Foreign currency translation adjustment
 
 254 
 
 173 
 
 NOLs—U.S.
 
 127 
 
 255 
 
 Outside basis differences
 
 122 
 
 122 
 
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 March 31,

 2023

 December 31,
 2022

 Other
 
 355 
 
 341 
 
 Deferred tax assets
 
 29,170 
 
 32,816 
 
 Deferred tax liabilities:
 
 Fixed assets and prepaid assets
 
 150 
 
 278 
 
 Unremitted earnings—European subsidiaries
 
 246 
 
 205 
 
 Right of use assets—operating leases
 
 260 
 
 313 
 
 Deferred tax liabilities
 
 656 
 
 796 
 
 Total deferred tax assets less deferred tax liabilities
 
 28,514 
 
 32,020 
 
 Less: Valuation allowance
 
 ( 22,643 ) 
 
 ( 21,484 ) 
 
 Deferred tax assets, net
 
 $ 
 5,871 
 
 $ 
 10,536 
 
 Net Operating and Capital Losses—U.S. 

 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 March 31, 2023 were $ 17,740 . These capital losses expire between the years 2023 and 2028. 
 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 $ 1,625 at March 31, 2023. 
 Valuation Allowance 

 The Company’s valuation allowance has been established on its net capital losses, unrealized losses and outside basis differences, as it is more-likely-than-not
 that these deferred tax assets will not be realized. 
 Uncertain Tax Positions 

 Tax positions are evaluated utilizing a two-step
 process. The Company first determines whether any of its tax positions are more-likely-than-not
 to be sustained upon examination, based solely on the technical merits of the position. Once it is determined that a position meets this recognition threshold, the position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. 
 In connection with the ETFS Acquisition, the Company accrued a liability for uncertain tax positions and interest and penalties at the acquisition date. The Company also recorded an offsetting indemnification asset provided by ETFS Capital as part of its agreement to indemnify the Company for any potential claims. The table below sets forth the aggregate changes in the balance of these gross unrecognized tax benefits: 
 
 Total

 Unrecognized
 Tax Benefits

 Interest and
 Penalties

 Balance at January 1, 2023
 
 $ 
 1,353 
 
 $ 
 957 
 
 $ 
 396 
 
 Decrease—Lapse of statute of limitations
 
 ( 1,353 
 ) 
 
 ( 957 
 ) 
 
 ( 396 
 ) 

 Balance at March 31, 2023
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 — 
 
 (1)
 
 The gross unrecognized tax benefits were accrued in British pounds. 
 
 Income Tax Examinations 

 The Company is subject to U.S. federal income tax as well as income tax of multiple state, local and certain foreign jurisdictions. As of 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 

 ASC 740-30
 Income Taxes provides guidance that US companies do not need to recognize tax effects on foreign earnings that are indefinitely reinvested. The Company repatriates earnings of its foreign subsidiaries and therefore has recognized a deferred tax liability of $ 246 and $ 205 at March 31, 2023 and December 31, 2022, respectively. 
 
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 21. Shares Repurchased 

 On February 22, 2022, the Company’s Board of Directors approved an increase of $ 85,709 to the Company’s share repurchase program to $ 100,000 and extended the term for three years through April 27, 2025 . Included under the Company’s share repurchase program are purchases to offset future equity grants made under the Company’s equity plans and purchases made in open market or privately negotiated transactions. This authority may be exercised from time to time, subject to regulatory considerations. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements and priorities. The repurchase program may be suspended or terminated at any time without prior notice. Shares repurchased under this program are returned to the status of authorized and unissued on the Company’s books and records. 
 During the 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 March 31, 2023, $ 96,591,597 remained under this program for future purchases. 
 22. Goodwill and Intangible Assets 

 Goodwill 

 The table below sets forth goodwill which is tested annually for impairment on November 30 th
: 
 
 Total

 Balance at January 1, 2023
 
 $ 
 85,856 
 
 Changes
 
 — 
 
 Balance at March 31, 2023
 
 $ 
 85,856 
 
 Goodwill arising from the ETFS Acquisition of $ 84,057 is not deductible for tax purposes as the acquisition was structured as a stock acquisition occurring in the U.K. The remainder of the goodwill is deductible for U.S. tax purposes. 
 Intangible Assets 

 The table below sets forth the Company’s intangible assets which are tested annually for impairment on November 30 th
: 
 
 Balance at March 31, 2023

 Item

 Gross Asset

 Accumulated
 Amortization

 Net Asset

 ETFS acquisition
 
 $ 
 601,247 
 
 $ 
 — 
 
 $ 
 601,247 
 
 Software development
 
 2,822 
 
 ( 101 ) 
 
 2,721 
 
 Balance at March 31, 2023
 
 $ 
 604,069 
 
 $ 
 ( 101 ) 
 
 $ 
 603,968 
 
 Balance at December 31, 2022

 Item

 Gross Asset

 Accumulated
 Amortization

 Net Asset

 ETFS acquisition
 
 $ 
 601,247 
 
 $ 
 — 
 
 $ 
 601,247 
 
 Software development
 
 2,370 
 
 ( 50 ) 
 
 2,320 
 
 Balance at December 31, 2022
 
 $ 
 603,617 
 
 $ 
 ( 50 ) 
 
 $ 
 603,567 
 
 ETFS Acquisition (Indefinite-Lived) 

 In connection with the ETFS Acquisition, which was completed on April 11, 2018 , the Company identified intangible assets valued at $ 601,247 related to the right to manage AUM through customary advisory agreements. These intangible assets were determined to have indefinite useful lives and are not deductible for tax purposes. 
 Software Development (Finite-Lived) 

 Internally-developed software is amortized over a useful life of three years . During the three-month period ended March 31, 2023, the Company recognized amortization expense on internally-developed software of $ 51 . 
 
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 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
 
 $ 
 656 
 
 2024
 
 940 
 
 2025
 
 891 
 
 2026
 
 234 
 
 2027
 
 — 
 
 2028 and thereafter
 
 — 
 
 Total expected amortization expense
 
 $ 
 2,721 
 
 The weighted-average remaining useful life of the finite-lived intangible assets is 2.9 years. 
 23. Contingent Payments 

 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.
 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. 
 24. Subsequent Events 

 The Company evaluated subsequent events through the date of issuance of the accompanying consolidated financial statements. There were no events requiring disclosure. 

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 Table of Contents
WisdomTree, Inc. 10-Q

Item 1. Financial Statements
