What changed in this filing

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Item 1. Financial Statements

2024-08-02 compared with 2024-05-07 · 517 added, 426 removed, 1040 unchanged (48% of the section changed)

5 unchanged sentences

Current assets:

Cash, cash equivalents and restricted cash (including $ 5,061 and $ 5,007 invested in the WisdomTree Government Money Market Digital Fund at March 31, 2024 and December 31, 2023, respectively) (Note 3)

Financial instruments owned, at fair value (including $ 48,353 and $ 47,559 invested in WisdomTree products at March 31, 2024 and December 31, 2023, respectively) (Note 5)

Accounts receivable (including $31,178 and $28,511 due from related parties at March 31, 2024 and December 31, 2023, respectively)

Cash, cash equivalents and restricted cash (including $ 5,125 and $ 5,007 invested in the WisdomTree Government Money Market Digital Fund at June 30, 2024 and December 31, 2023, respectively)

Financial instruments owned, at fair value (including $ 59,889

and $ 47,559 invested in WisdomTree products at June 30, 2024 and December 31, 2023, respectively) (Note 5)

Accounts receivable (including $32,890 and $28,511 due from related parties at June 30, 2024 and December 31, 2023, respectively)

Prepaid expenses

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Compensation and benefits payable

Payable to Gold Bullion Holdings (Jersey) Limited (“GBH”) (Note 12)

Payable to Gold Bullion Holdings (Jersey) Limited (“GBH”)

Income taxes payable

5 unchanged sentences

Total liabilities

Preferred stock—Series A Non-Voting Convertible, par value $ 0.01 ;

Preferred stock—Series A Non-Voting

Convertible, par value $ 0.01 ;

14.750 shares authorized, issued and outstanding;

redemption value of $ 123,108 and $ 96,869 at March 31, 2024 and December 31, 2023, respectively) (Note 11)

redemption value of $ 144,220 and $ 96,869 at June 30,

2024 and December 31, 2023, respectively) (Note 11)

Contingencies (Note 14)

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issued and outstanding:

151,819 and 150,330 at March 31, 2024 and December 31, 2023, respectively

151,857 and 150,330 at June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

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Three Months Ended

Six Months Ended

Operating Revenues:

Advisory fees

Other revenues

Total revenues

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Interest expense

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

Gain on revaluation/termination of deferred consideration—gold

payments (Note 9)

Interest income

1 unchanged sentence

Loss on extinguishment of convertible notes (Note 10)

Other gains and losses, net

Other losses and gains, net

Income before income taxes

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Three Months Ended

Six Months Ended

Other comprehensive (loss)/income

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(In Thousands)

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Preferred Stock

Comprehensive

Balance—April 1, 2024

Restricted stock issued and vesting of restricted stock units, net

Stock-based compensation

Other comprehensive loss

Balance—June 30, 2024

Three Months Ended June 30, 2023

Preferred Stock

Comprehensive

Balance—April 1, 2023

Shares issued in connection with termination of deferred

consideration—gold payments obligation, net of issuance costs (Note 9)

Restricted stock issued and vesting of restricted stock units, net

Shares issued in connection with convertible notes that matured

on June 15, 2023 (Note 10)

Shares repurchased

Stock-based compensation

Other comprehensive income

Balance—June 30, 2023

The accompanying notes are an integral part

of these consolidated financial statements.

WisdomTree, Inc.

and Subsidiaries

Consolidated Statements of Changes in Stockholders’

(In Thousands)

Six Months Ended June 30, 2024

Preferred Stock

Comprehensive

Balance—January 1, 2024

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Other comprehensive loss

Balance—March 31, 2024

Three Months Ended March 31, 2023

Balance—June 30, 2024

Six Months Ended June 30, 2023

Preferred Stock

Comprehensive

Balance—January 1, 2023

Shares issued in connection with termination

of deferred consideration—gold payments obligation, net of issuance costs (Note 9)

Restricted stock issued and vesting of restricted stock units, net

Shares issued in connection with convertible

notes that matured on June 15, 2023 (Note 10)

Shares repurchased

1 unchanged sentence

Other comprehensive income

Balance—March 31, 2023

Balance—June 30, 2023

The accompanying notes are an integral part

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(In Thousands)

Three Months Ended

Cash flows from operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Adjustments to reconcile net income

to net cash provided by operating activities:

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

Deferred income taxes

Stock-based compensation

Deferred income taxes

Gains on financial instruments owned, at fair value

Imputed interest on payable to GBH

Losses on investments

Depreciation and amortization

1 unchanged sentence

Amortization of right of use asset

Gains on investments

Gain on revaluation/termination of deferred consideration—gold payments

1 unchanged sentence

Contractual gold payments

Changes in operating assets and liabilities:

Changes in operating assets and

Accounts receivable

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Accounts payable and other liabilities

Net cash used in operating activities

Cash flows from investing activities:

Net cash provided by operating activities

Cash flows from

investing activities:

Purchase of financial instruments owned, at fair value

Purchase of investments

Cash paid—software development

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

Proceeds from the exit from investment in Securrency, Inc.

Proceeds from held-to-maturity securities maturing or called prior to maturity

Net cash provided by/(used in) investing activities

Cash flows from financing activities:

Receipt of contingent consideration—Sale of Canadian ETF business

Acquisition of Securrency Transfers, Inc.

(net of cash acquired)

Net cash (used in)/provided by investing activities

Cash flows from

financing activities:

Dividends paid

Shares repurchased

Repurchase of convertible notes (Note 10)

Issuance costs—convertible notes

Repurchase and maturity of convertible notes (Note 10)

Proceeds from the issuance of convertible notes (Note 10)

Termination of deferred consideration—gold payments

Issuance costs—convertible notes

Issuance costs—Series C Preferred Stock

Net cash used in financing activities

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

Net decrease in cash, cash equivalents and restricted cash

Net increase/(decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash—beginning of year

Cash, cash equivalents and restricted cash—end of period

Supplemental disclosure of cash flow information:

disclosure of cash flow information:

Cash paid for income taxes

Cash paid for interest

WisdomTree, Inc.

and Subsidiaries

Consolidated Statements of Cash Flows (Continued)

(In Thousands)

NON-CASH INVESTING AND FINANCING ACTIVITIES

On May 10, 2023, the Company issued

13.087 shares of Series C Non-Voting Convertible Preferred Stock (valued at $86,898) in connection with the termination of its deferred

consideration—gold payments obligation.

See Note 9 for additional information.

On June 15, 2023, the Company issued 1,037

shares of common stock (as the conversion option was in the money) in connection with the maturity of $60,000 aggregate principal amount

of 4.25% Convertible Senior Notes.

The accompanying notes

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Building on its heritage

of innovation, the Company is also developing and has launched next-generation digital products, services and structures, including digital

of innovation, the Company is developing and has launched next-generation digital products, services and structures, including digital

or blockchain-enabled mutual funds (“Digital Funds”) and tokenized assets, as well as its blockchain-native digital wallet,

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reconciles the official record with the secondary record of ownership of shares on one or more blockchains.

● WisdomTree Digital Trust Company, LLC is a New York based limited liability trust company chartered by the

New York State Department of Financial Services to provide certain digital asset products and services (e.g., custody) via the WisdomTree

Prime mobile application.

● WisdomTree Digital Trust Company, LLC is a New York based limited liability trust company chartered by the New York State Department

of Financial Services to provide certain digital asset products and services (e.g., custody) via WisdomTree Prime.

Significant Accounting Policies

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Contractual Gold Payments

Contractual gold payments were measured and paid

monthly based upon the average daily spot price of gold.

The Company’s obligation to continue making these payments terminated on

May 10, 2023.

Contractual gold payments were measured and

paid monthly based upon the average daily spot price of gold.

The Company’s obligation to continue making these payments terminated

on May 10, 2023.

Marketing and Advertising

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Cash, Cash Equivalents and Restricted Cash

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.

Restricted cash is required to be maintained in a separate account

with withdrawal and usage restrictions.

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.

Restricted cash is required to be maintained

in a separate account with withdrawal and usage restrictions.

Accounts Receivable

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on the CMX exchange, a selected discount rate and perpetual growth rate (Note 9).

Changes in the fair value of this obligation were reported

as gain on revaluation/termination of deferred consideration—gold payments in the Consolidated Statements of Operations.

Changes in the fair value and settlement of this obligation

were reported as gain on revaluation/termination of deferred consideration—gold payments in the Consolidated Statements of Operations.

Convertible Notes

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Net income available to common stockholders represents net income of the Company reduced by an allocation of earnings to participating

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).

The Series A non-voting convertible preferred stock and Series C non-voting convertible preferred stock (Notes 9 and 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

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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.

common shares associated with the Series A non-voting convertible preferred stock and the convertible notes are computed under the if-converted

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.

including unvested stock-based awards, the Series A non-voting convertible preferred stock, the Series C non-voting convertible preferred

stock and the convertible notes, if any.

Potential common shares associated with the Series A non-voting convertible preferred stock,

the Series C 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.

The Company accounts for income taxes using

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Recently Issued Accounting Pronouncements

On December 14, 2023, the Financial Accounting Standards Board (“FASB”)

issued ASU 2023-09, Improvements to Income Tax Disclosures , which establishes new income tax disclosure requirements

in addition to modifying and eliminating certain existing requirements.

Under the new guidance, entities must consistently categorize

and provide greater disaggregation of information in the rate reconciliation.

They must also further disaggregate income taxes paid.

standard is intended to benefit stockholders by providing more detailed income tax disclosures that would be useful in making capital

allocation decisions.

The guidance applies to all entities subject to income taxes and is effective for annual periods beginning after

December 15, 2024.

On December 14, 2023, the Financial Accounting

Standards Board (“FASB”) issued ASU 2023-09, Improvements to Income Tax Disclosures , which establishes new

income tax disclosure requirements in addition to modifying and eliminating certain existing requirements.

Under the new guidance, entities

must consistently categorize and provide greater disaggregation of information in the rate reconciliation.

They must also further disaggregate

income taxes paid.

The standard is intended to benefit stockholders by providing more detailed income tax disclosures that would be useful

in making capital allocation decisions.

The guidance applies to all entities subject to income taxes and is effective for annual periods

beginning after December 15, 2024.

The guidance will be applied on a prospective basis with the option to apply the standard retrospectively.

Early adoption

is permitted.

The Company is considering early adoption of this standard in connection with the filing of its Annual Report on Form 10-K

for the year ending December 31, 2024.

Early adoption is permitted.

The Company is considering early adoption of this standard in connection with the filing of its Annual Report

on Form 10-K for the year ending December 31, 2024.

Recently Adopted Accounting Pronouncements

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26 for additional information.

On January 1, 2024, the Company early

adopted ASU 2023-08, Accounting for and Disclosure of Crypto Assets , which contains final guidance requiring all entities to

measure certain crypto assets at fair value each reporting period and to reflect changes from remeasurement in net income.

are required to present crypto assets measured at fair value separately from other intangible assets on the balance sheet and

present changes from the remeasurement of crypto assets separately from changes in the carrying amounts of other intangible assets

in the income statement.

Entities are required to provide interim and annual disclosures about the types of crypto assets they hold

and any changes in their holdings of crypto assets.

The guidance is effective for fiscal years beginning after December 15, 2024,

including interim periods within those fiscal years.

The adoption of this standard did not have a material impact on the

Company’s financial statements.

On January 1, 2024, the Company early adopted

ASU 2023-08, Accounting for and Disclosure of Crypto Assets , which contains final guidance requiring all entities to measure certain

crypto assets at fair value each reporting period and to reflect changes from remeasurement in net income.

Entities are required to present

crypto assets measured at fair value separately from other intangible assets on the balance sheet and present changes from the remeasurement

of crypto assets separately from changes in the carrying amounts of other intangible assets in the income statement.

Entities are required

to provide interim and annual disclosures about the types of crypto assets they hold and any changes in their holdings of crypto assets.

The guidance is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years.

adoption of this standard did not have a material impact on the Company’s financial statements.

Cash, Cash Equivalents and Restricted Cash

Of the total cash, cash equivalents and

restricted cash of $ 116,926

and $ 129,305

at March 31, 2024 and December 31, 2023, respectively, $ 107,956

and $ 116,895

were held at three financial institutions.

At March 31, 2024 and December 31, 2023, cash equivalents were approximately

and $ 50,226 ,

respectively.

Certain of the Company’s

subsidiaries are required to maintain a minimum level of regulatory capital, generally satisfied by cash on hand, which was $ 42,058

at March 31, 2024 and December 31, 2023, respectively.

Of these amounts, $ 13,083 and $ 0 , at March 31, 2024 and December 31, 2023, respectively, was restricted cash,

which is required to be maintained in a separate account with withdrawal and usage restrictions in compliance with regulatory obligations.

Of the total cash, cash equivalents and restricted

cash of $ 132,459 and $ 129,305 at June 30, 2024 and December 31, 2023, respectively, $ 124,363 and $ 116,895 were held at three financial

institutions.

At June 30, 2024 and December 31, 2023, cash equivalents were approximately $ 12,972 and $ 50,226 , respectively.

Certain of the Company’s subsidiaries

are required to maintain a minimum level of regulatory capital, generally satisfied by cash on hand, which was $ 36,964 and $ 29,156 at

June 30, 2024 and December 31, 2023, respectively.

Of these amounts, $ 13,472 and $ 0 , at June 30, 2024 and December 31, 2023, respectively,

was restricted cash, which is required to be maintained in a separate account with withdrawal and usage restrictions in compliance with

regulatory obligations.

Fair Value Measurements

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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.

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

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of the Company’s assets and liabilities measured at fair value.

During the three months ended March 31, 2024 and 2023, there were

no transfers between Levels 2 and 3.

During the three and six months ended June 30, 2024 and 2023, there

were no transfers between Levels 2 and 3.

June 30, 2024

Recurring fair value measurements:

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Other assets—seed capital (WisdomTree Digital Funds):

Non-recurring fair value measurements:

Fnality International Limited—Series

B-1 Preference Shares (1)

_____________________________

Fair value determined on June 17, 2024.

December 31, 2023

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Non-recurring fair value measurements:

Fnality International Limited—Series B-1 Preference

Shares 0F (1 )

Other investments ( 1F1F 2 )

Fnality International Limited—Series B-1 Preference Shares (1)

Other investments (2)

_____________________________

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treasuries, equities and fixed income.

ETFs and equities

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

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

Pricing of U.S.

treasuries, pass-through GSEs and fixed income includes consideration given to date of issuance, collateral characteristics

and market assumptions related to yields, credit risk and timing of prepayments and may be classified as either Level 1 or Level 2.

treasuries, pass-through GSEs and fixed income includes consideration given to date of issuance, collateral

characteristics and market assumptions related to yields, credit risk and timing of prepayments and may be classified as either Level

1 or Level 2.

Financial instruments owned

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Other assets—seed capital (WisdomTree Digital Funds)

The Company recognized net trading gains on

financial instruments owned that were still held at the reporting dates of $ 1,904 and $ 4,722 during the three months ended March 31, 2024

and 2023, respectively, which were recorded in other gains and losses, net, in the Consolidated Statements of Operations.

The Company recognized net trading

(losses)/gains on financial instruments owned that were still held at the reporting dates of ($ 67 ) and ($ 222 ) during the three

months ended June 30, 2024 and 2023, respectively, and $ 1,837 and $ 1,309 during the six months ended June 30, 2024 and 2023, respectively,

which were recorded in other losses and gains, net, in the Consolidated Statements of Operations.

Securities Held-to-Maturity

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Pass-through GSEs (amortized cost)

During each of the three months ended

March 31, 2024 and 2023, the Company received proceeds of $ 6

from held-to-maturity securities maturing or being called prior to maturity.

During the six months ended June 30, 2024 and

2023, the Company received proceeds of $ 12 and $ 14 , 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:

and fair value (classified as Level 2 within the fair value hierarchy) of securities held-to-maturity:

Cost/amortized cost

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The following table sets forth the Company’s

March 31, 2024

June 30, 2024

December 31, 2023

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Fnality’s qualified equity financing which occurred in October 2023.

The Series B-1 Preference Shares carry a 1.0x liquidation

preference, are convertible into ordinary shares at the option of the Company and contain various rights and protections.

The Series B-1 Preference Shares carry a 1.0x liquidation preference,

are convertible into ordinary shares at the option of the Company and contain various rights and protections.

This investment is accounted for under the measurement

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During the three months

ended March 31, 2024, the Company recognized a loss of $ 78 due to changes in the British pound to U.S.

ended June 30, 2024, the Company recognized a loss of $ 1,318 on its investment in Fnality, which is recorded in other losses and gains,

net on the Consolidated Statements of Operations.

This investment was re-measured to fair value upon the conversion of Fnality’s

Series B-2 Preference Shares held by other investors into Series B-1 Preference Shares, which occurred in June 2024.

Fair value was determined

using the backsolve method, a valuation approach that determines the value of shares for companies with complex capital structures based

upon the price paid for shares recently issued.

Fair value was allocated across the capital structure using the Black-Scholes option pricing

The change in fair value also includes the impact of changes in the British pound to U.S.

dollar exchange rate.

impairment recognized on this investment during the three months ended March 31, 2024 based upon a qualitative assessment.

During the three months ended March 31, 2023,

the Company recognized a gain of $ 530 when re-measuring its previously held convertible notes to fair value.

The table below presents the inputs used in

the backsolve valuation approach (classified as Level 3 in the fair value hierarchy):

Expected volatility 60 % 60 %

Time to exit (in years) 4.35 5.00

Probability that Series B-2 Preference Shares convert into Series B-1 Preference Shares N/A

During the six months ended June 30, 2024, the

Company recognized a loss of $ 1,396 , inclusive of changes in the British pound to U.S.

dollar exchange rate, which is recorded in other

losses and gains, net on the Consolidated Statements of Operations.

There was no impairment recognized on this investment during the three

and six months ended June 30, 2024 based upon a qualitative assessment.

Fixed Assets, net

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and Rodber Investments Limited (“RIL”), an entity controlled by GT, who is also the Chairman of ETFS Capital.

On May 10, 2023, the Company terminated its

contractual gold payments obligation for aggregate consideration totaling $ 136,903 pursuant to a Sale, Purchase and Assignment Deed (the

“SPA Agreement”) with WisdomTree International Holdings Ltd, Electra Target HoldCo Limited, ETFS Capital, WGC, GBH, GT and

On May 10, 2023, the Company terminated

its contractual gold payments obligation for aggregate consideration totaling $ 136,903 pursuant to a Sale, Purchase and Assignment Deed

(the “SPA Agreement”) with WisdomTree International Holdings Ltd, Electra Target HoldCo Limited, ETFS Capital, WGC, GBH,

Under the terms of the transaction, GBH received approximately $ 4,371 in cash and 13,087 shares of Series C Non-Voting Convertible

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Note 12 for additional information), and RIL received approximately $ 45,634 in cash.

During the three months ended March 31, 2024

and 2023, the Company recognized the following in respect of deferred consideration—gold payments:

Three Months Ended

During the three and six months ended June 30,

2023, the Company recognized the following in respect of deferred consideration—gold payments:

Contractual gold payments

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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.

The remainder of the 2020 Notes matured

on June 15, 2023 and were settled for $ 59,955 in cash and 1,037,288 shares of common stock, as the conversion option was in the money.

After the repurchase and settlement

at maturity of the 2020 Notes and the issuance of the 2023 Notes (and together with the 2021 Notes, the “Convertible

Notes”), the Company had $ 280,000

in aggregate principal amount of Convertible Notes outstanding.

a loss on extinguishment of approximately $ 9,721 during the six months ended June 30, 2023.

The remainder of the 2020 Notes matured on

June 15, 2023 and were settled for $ 59,955 in cash and 1,037,288 shares of common stock, as the conversion option was in the money.

After the repurchase and settlement at maturity

of the 2020 Notes and the issuance of the 2023 Notes (and together with the 2021 Notes, the “Convertible Notes”), the Company

had $ 280,000 in aggregate principal amount of Convertible Notes outstanding.

Key terms of the Convertible Notes are as follows:

2023 Notes 2021 Notes

Principal outstanding $ 130,000 $ 150,000

Maturity date (unless earlier converted, repurchased or redeemed)

August 15, 2028

June 15, 2026

Maturity date (unless earlier converted, repurchased or redeemed) August 15, 2028 June 15, 2026

Interest rate 5.75 % 3.25 %

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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 and 144.9275 shares of

the Company’s common stock per $ 1,000 principal amount of the 2023 Notes and the 2021 Notes, respectively (the equivalent of 43,551,214

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 and 144.9275 shares

of the Company’s common stock per $ 1,000 principal amount of the 2023 Notes and the 2021 Notes, respectively (the equivalent of

43,551,214 shares of the Company’s common stock), subject to adjustment.

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The following table provides a summary of the

Convertible Notes at March 31, 2024 and December 31, 2023:

March 31, 2024

Convertible Notes at June 30, 2024 and December 31, 2023:

June 30, 2024

December 31, 2023

Principal amount

Gross proceeds

Unamortized issuance costs

Carrying amount

Effective interest rate ( 5F 1 )

Effective interest

______________________________

Includes amortization of the issuance costs and premium.

Interest expense on the Convertible Notes during

the three months ended March 31, 2024 and 2023 was $ 3,462 and $ 4,002 , respectively.

Interest payable of $ 2,391 and $ 3,041 at March 31,

2024 and December 31, 2023, respectively, is included in accounts payable and other liabilities on the Consolidated Balance Sheets.

Interest expense on the Convertible Notes was

$ 3,463 and $ 6,926 respectively, during the three and six months ended June 30, 2024 and $ 4,021 and $ 8,023 , respectively, during the comparable

periods in 2023.

Interest payable of $ 3,041 at June 30, 2024 and December 31, 2023, 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 $ 308,487 and $ 281,897 at March 31, 2024 and December 31, 2023, respectively.

as Level 2 in the fair value hierarchy) was $ 321,894 and $ 281,897 at June 30, 2024 and December 31, 2023, respectively.

The if-converted

value of the Convertible Notes did not exceed the principal amount at March 31, 2024 and December 31, 2023.

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 Secretary of State

of the State of Delaware 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.

value of the 2023 Notes was $ 135,042 at June 30, 2024.

The if-converted value of the 2021 Notes at June 30, 2024 and the Convertible

Notes at December 31, 2023 did not exceed the principal amount.

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 Secretary of State of the State of Delaware 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

In connection with the completion of the acquisition

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Cash dividends declared per share (quarterly)

Temporary equity classification is required for redeemable instruments

for which redemption triggers are outside of the issuer’s control.

ETFS Capital has the right to redeem all the 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:

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 share of Series A Preferred Stock as it would have received had each

outstanding share of Series A Preferred Stock been converted into common stock immediately prior to the change of control.

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 share of 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 $ 123,108 and $ 96,869 at March

31, 2024 and December 31, 2023, respectively.

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;

Capital does not, upon completion of a change of control of the Company, receive the same amount per share of Series A Preferred Stock

as it would have received had each outstanding share of 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 share

of 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 $ 144,220

and $ 96,869 at June 30, 2024 and December 31, 2023, respectively.

The carrying amount of the Series A Preferred

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with certain rights and obligations with respect to the shares, including registration rights, was terminated in this transaction.

GAAP, the obligation was recorded

at its present value utilizing a market rate of interest on the closing date of 7.0 % and the corresponding discount is being amortized

as interest expense pursuant to the effective interest method of accounting over the life of the obligation.

The aggregate consideration

payable was valued at $ 38,835 on the closing date and the carrying value of this obligation is as follows:

Interest expense recognized during the

three months ended March 31, 2024 and 2023 was $ 666

respectively, and is included as a component of total interest expense recognized on the Consolidated Statements of Operations.

The Company has entered into operating leases

for its office facilities (including its corporate headquarters) and equipment.

GAAP, the obligation was recorded at its present value utilizing a market rate of interest on the closing date of 7.0 % and the corresponding

discount is being amortized as interest expense pursuant to the effective interest method of accounting over the life of the obligation.

The aggregate consideration payable was valued at $ 38,835 on the closing date and the carrying value of this obligation is as follows:

Interest expense recognized was $ 677 and $ 1,342 ,

respectively, during the three and six months ended June 30, 2024 and $0 during the comparable periods in 2023 and is included as a component

of total interest expense recognized on the Consolidated Statements of Operations.

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:

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

Three Months Ended

Six Months Ended

2024 2023 2024 2023

Operating lease cost $ 323 $ 321 $ 647 $ 640

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Other information:

Cash paid for amounts included in the measurement of operating

liabilities (operating leases)

Right-of-use assets obtained in exchange for new operating lease

Cash paid for amounts included in the measurement of operating liabilities (operating leases) $ 331 $ 326 $ 662 $ 652

Right-of-use assets obtained in exchange for new operating lease liabilities n/a

Weighted-average remaining lease term (in years) — operating leases 0.9 0.8 0.9 0.8

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The following table discloses future minimum

lease payments at March 31, 2024 with respect to the Company’s operating lease liabilities:

lease payments at June 30, 2024 with respect to the Company’s operating lease liabilities:

Remainder of 2024

2025 and thereafter

Total future minimum lease payments (undiscounted)

The following table reconciles the future minimum

lease payments (disclosed above) at March 31, 2024 to the operating lease liabilities recognized in the Company’s Consolidated Balance

lease payments (disclosed above) at June 30, 2024 to the operating lease liabilities recognized in the Company’s Consolidated Balance

Amounts recognized in the Company’s Consolidated Balance Sheets

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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.

Ireland Limited (“WT Ireland”) were served with a writ of summons to appear before the Court of Milan, Italy (the “December

2020 Claim”).

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

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.

the Company’s favor, which is not subject to an appeal.

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

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and several liability of WMAI, WTUK and such intermediary brokers.

In July 2023, the Court of Milan ruled in favor of WMAI and WTUK in

respect of one of these claims.

In March 2024, the Court of Milan ruled in the Company’s favor

and rejected the claim brought against WTMAI, WTMAML, WTUK and WT Ireland in December 2020 for total damages of € 9,300 ($ 10,039 ) (the “Rejected Claim”).

The Rejected Claim remains subject to an appeal.

Total damages sought by all investors related to the claims described

above, including the Rejected Claim, were approximately € 15,200 ($ 16,408 ) at March 31, 2024.

With respect to these two Court of Milan claims:

(1) in July 2023,

the Court ruled in favor of WMAI and WTUK and against the intermediary broker, and the intermediary broker has appealed the ruling against

it and (2) in June 2024, the Court ruled in favor of WMAI, WTUK and the intermediary broker, which is not subject to an appeal.

In March 2024, the Court of Milan ruled in the

Company’s favor in the December 2020 Claim brought against WTMAI, WTMAML, WTUK and WT Ireland for total damages of € 9,300 ($ 9,965 ).

The December 2020 Claim remains subject to an appeal.

Total damages sought by all investors related

to the open claims described above, including the December 2020 Claim, were approximately € 14,435 ($ 15,466 ) at June 30, 2024.

Additionally, in July 2023, WT Ireland received

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The claim is in its preliminary stages and a writ of summons has not been served.

The Company is currently assessing these claims

The Company continues to assess the open claims

with its external counsel.

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less a $ 500 deductible.

An accrual has not been made with respect to these matters at March 31, 2024 and December 31, 2023.

An accrual has not been made with respect to these matters at June 30, 2024 and December 31, 2023.

Variable Interest Entities

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Fnality Series B-1 Preference Shares (Note 7)

Maximum exposure to loss

exposure to loss

Revenues from Contracts with Customers

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total revenues from contracts with customers:

Three Months Ended

Revenues from contracts with customers:

Advisory fees

Other revenues

Total operating revenues

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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.

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

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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

Other revenues includes revenues the Company

earns from swap providers associated with certain of the Company’s European listed ETPs, the nature of which are based on a percentage

of the ETPs’ average daily net assets.

The Company also earns transaction-based income on flows associated with certain European

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 Revenues

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total revenues geographically as determined by where the respective management companies reside:

Three Months Ended

Revenues from contracts with customers:

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to initially and annually (after the first two years) approve the advisory agreements of the U.S.

WisdomTree ETFs and the WisdomTree Digital

Funds and these agreements may be terminated by such board of trustees or board of directors 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:

WisdomTree ETFs and the WisdomTree

Digital Funds and these agreements may be terminated by such board of trustees or board of directors 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:

Receivable from WTT

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advisory services provided to related parties:

Three Months Ended

Advisory services provided to WTT

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The Company also has investments in certain

WisdomTree products of approximately $ 53,414 and $ 52,566 at March 31, 2024 and December 31, 2023, respectively.

This includes $ 19,356

and $ 18,308 , respectively, of investments in certain affiliated Digital Funds advised by WT Digital Management, referred to herein as

“other assets–seed capital.” Net unrealized and realized gains related to trading WisdomTree products were $ 1,945 and

$ 422 , respectively, during the three months ended March 31, 2024 and 2023.

Such gains are recorded in other gains and losses, net on the

Consolidated Statements of Operations.

WisdomTree products of approximately $ 65,014 and $ 52,566 at June 30, 2024 and December 31, 2023, respectively.

This includes $ 19,890 and

$ 18,308 , respectively, of investments in certain affiliated Digital Funds advised by WT Digital Management, referred to herein as “other

assets–seed capital.” Net unrealized and realized (losses)/gains related to trading WisdomTree products were ($ 161 ) and $ 1,784 ,

respectively, during the three and six months ended June 30, 2024 and $ 419 and $ 841 , respectively, during the comparable periods in 2023.

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

Stock-Based Awards

4 unchanged sentences

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

and directors, which include restricted stock awards (“RSAs”), restricted stock units (“RSUs”), including deferred

RSUs to non-employee directors, performance-based restricted stock units (“PRSUs”) and stock options.

Certain awards described

below are subject to acceleration under certain conditions.

Stock options:

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

For non-employee directors, such awards generally vest on the one-year anniversary of the grant date.

Deferred RSUs:

Awards are valued based

on the Company’s stock price on grant date and generally vest on the one-year anniversary of the grant date.

The awards are issued

pursuant to the Company’s Non-Employee Director Deferred Compensation Program, and are settled based on timing elected by the recipient

These awards cliff vest three years from the grant date and contain a market condition whereby the number of PRSUs ultimately vesting

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target number of PRSUs granted, as follows:

relative TSR is below the 25 th percentile, then 0% of the target number of PRSUs granted will vest;

relative TSR is at the 25 th percentile, then 50% of the target number of PRSUs granted will vest;

relative TSR is above the 25 th percentile, then linear scaling is applied such that the percent of the target number of PRSUs

vesting is 100% at the 50 th percentile and capped at 200% of the target number of PRSUs granted for performance at the 85 th

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

the relative TSR is below the 25 th percentile, then 0% of the target number of PRSUs granted

the relative TSR is at the 25 th percentile, then 50% of the target number of PRSUs granted

the relative TSR is above the 25 th percentile, then linear scaling is applied such that

the percent of the target number of PRSUs vesting is 100% at the 50 th percentile and capped

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

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

Stock-based compensation expense was $ 5,592

and $ 4,536 , respectively, during the three months ended March 31, 2024 and 2023.

and $ 10,755 , respectively, during the three and six months ended June 30, 2024 and $ 3,970 and $ 8,506 , respectively, during the comparable

periods in 2023.

A summary of unrecognized stock-based compensation

expense and average remaining vesting period is as follows:

March 31, 2024

June 30, 2024

Weighted-Average

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A summary of stock-based compensation award

activity (shares) during the three months ended March 31, 2024 is as follows:

Balance at January 1, 2024

727,238 (1) ‍

( 2,123,830 )

Balance at March 31, 2024

227,451 (3) ‍

activity (shares) during the three months ended June 30, 2024 is as follows:

Balance at April 1, 2024

Balance at June 30, 2024

_____________________________

Represents the target number of PRSUs granted and outstanding.

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

A Monte-Carlo simulation was used to value these awards using the following assumptions for the Company and the peer group:

beginning 90-day average stock prices;

(ii) valuation date stock prices;

(iii) historical stock price volatilities ranging from 27.57 %

to 37.91 % (average 33.53 %);

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

a risk free interest rate of 4.08 %;

and (vi) an expected dividend yield of 0.00 %.

The payout on PRSUs vesting in January 2024 was 200 %.

(3) Includes 58,012 deferred

RSUs that have vested.

(1) Includes 102,908 deferred RSUs that have vested.

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, as amended by Amendment No.

1 thereto, dated May 4, 2023 (“Amendment No.

1”), Amendment

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, as amended by Amendment No.

1 thereto, dated May 4, 2023 (“Amendment

1”), Amendment No.

2 thereto, dated May 10, 2023 (“Amendment No.

2”), Amendment No.

3 thereto, dated March 18, 2024

(“Amendment No.

3”), Amendment No.

4 thereto, dated March 25, 2024 (“Amendment No.

4”), and Amendment No.

4 thereto, dated March 25, 2024 (“Amendment No.

4”) (as amended, the “Stockholder Rights

At the Company’s 2023 annual meeting of stockholders held on June 16, 2023, the Company’s stockholders

ratified the adoption by the Board of Directors of the original Stockholder Rights Agreement, as amended by Amendment No.

1 and Amendment

On March 18, 2024, the Company entered into Amendment No.

which extends the Stockholder Rights Agreement, such that the Rights will now expire on the close of business on March 17, 2025;

that if the Company’s stockholders have not ratified the extension of the Stockholder Rights Agreement by the close of business

on the first day after the Company’s 2024 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.

dated April 30, 2024 (“Amendment No.

5”) (as amended, the “Stockholder Rights Agreement”).

At the Company’s

2024 annual meeting of stockholders held on June 12, 2024, the Company’s stockholders ratified the adoption by the Board of Directors

of the extension of the Stockholder Rights Agreement.

On March 18, 2024, the Company entered into

Amendment No.

3 also changes

the definition of “Exercise Price” in the Stockholder Rights Agreement from $ 32.00 to $ 45.00 per Unit (as defined below) to

account for the difference in share price between when the Stockholder Rights Agreement was originally adopted and when it was extended.

3, which extended the Stockholder Rights Agreement, such that the Rights will now expire on the close of business on March

Amendment No.

3 also changed the definition of “Exercise Price” in the Stockholder Rights Agreement from $ 32.00

to $ 45.00 per Unit (as defined below) to account for the difference in share price between when the Stockholder Rights Agreement was originally

adopted and when it was extended.

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 the Company’s

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 $ 45.00 per Unit (the “Exercise Price”), subject to adjustment, under certain conditions specified in

the Stockholder Rights Agreement and summarized below.

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 the

Company’s Series A Preferred Stock, to stockholders of record as of the close of business on March 28, 2023 (the “Record

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 $ 45.00 per

Unit (the “Exercise Price”), subject to adjustment, under certain conditions specified in the Stockholder Rights Agreement

and summarized below.

Initially, the Rights are not exercisable and

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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 passive stockholders or “13G Investors,”

as defined in the Stockholder Rights Agreement) 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 13G Investors) 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 13G Investors) 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.

associated persons (an “Acquiring Person”) has acquired beneficial ownership of 10 % (or 20 % in the case of passive stockholders

or “13G Investors,” as defined in the Stockholder Rights Agreement) 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

A person or group who beneficially owned 10 % or more (or 20 % or more in the case of 13G Investors) 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 13G Investors) 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

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.

Pursuant to Amendment No.

1, beneficial ownership

did not include the right to vote pursuant to any agreement, arrangement or understanding with respect to voting on the proposal to

approve and ratify the Stockholder Rights Agreement presented to the Company’s stockholders at the Company’s 2023 annual

meeting of stockholders.

1, beneficial ownership did not include the right to vote pursuant

to any agreement, arrangement or understanding with respect to voting on the proposal to approve and ratify the Stockholder Rights Agreement

presented to the Company’s stockholders at the Company’s 2023 annual meeting of stockholders.

Pursuant to Amendment No.

2, the parties to the SPA Agreement are not deemed to be “Acquiring

Persons” solely by virtue of, or as a result of, the parties’ entry into the SPA Agreement, the issuance of the Series C

Preferred Stock to GBH, and the performance or consummation of any of the other transactions contemplated by the SPA Agreement,

among other conditions, under the terms and conditions set forth in Amendment No.

the parties to the SPA Agreement are not deemed to be “Acquiring Persons” solely by virtue of, or as a result of, the parties’

entry into the SPA Agreement, the issuance of the Series C Preferred Stock to GBH, and the performance or consummation of any of the other

transactions contemplated by the SPA Agreement, among other conditions, under the terms and conditions set forth in Amendment No.

to Amendment No.

4, beneficial ownership excludes the right to vote pursuant to any agreement, arrangement or understanding with respect

to voting (i) arising solely from a revocable proxy or consent given in response to a public proxy or consent solicitation, or exempt

solicitation, made pursuant to a written proxy or consent solicitation statement filed with the SEC and that is not also then reportable

on Schedule 13D under the Exchange Act, or (ii) on a proposal to approve and ratify the Stockholder Rights Agreement (as amended from

time to time), including any amendment thereto or extension thereof, presented to the Company’s stockholders at any annual or special

meeting of the Company’s stockholders (including any adjournments or postponements thereof).

Pursuant to Amendment No.

4, beneficial ownership excludes the right to vote pursuant to any agreement, arrangement

or understanding with respect to voting (i) arising solely from a revocable proxy or consent given in response to a public proxy or consent

solicitation, or exempt solicitation, made pursuant to a written proxy or consent solicitation statement filed with the SEC and that is

not also then reportable on Schedule 13D under the Exchange Act, or (ii) on a proposal to approve and ratify the Stockholder Rights Agreement

(as amended from time to time), including any amendment thereto or extension thereof, presented to the Company’s stockholders at

any annual or special meeting of the Company’s stockholders (including any adjournments or postponements thereof).

5, the Stockholder

Rights Agreement was amended to (a) remove language stating that (i) the Company has the “exclusive” power and authority to

administer the Stockholder Rights Agreement and (ii) all actions, calculations, interpretations and determinations necessary or advisable

for the administration of the Stockholder Rights Agreement done or made by the Board of Directors of the Company in good faith are final,

conclusive and binding on all parties, and (b) provide that nothing in the Stockholder Rights Agreement shall be deemed to limit or eliminate

the fiduciary duties of the Board of Directors under applicable law.

In the event that a Stock Acquisition Date occurs,

46 unchanged sentences

Offer,” including if the consideration offered in a proposed transaction is stock of the acquiror.

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 90 th 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 10 th business day thereafter.

Pursuant to the Stockholder Rights Agreement,

if the Company receives a Qualifying Offer and the Board of Directors has not redeemed the outstanding Rights or exempted such Qualifying

Offer from the terms of the Stockholder Rights Agreement or called a special meeting of stockholders (the “Special Meeting”)

for the purpose of voting on whether to exempt such Qualifying Offer from the terms of the Stockholder Rights Agreement, in each case

by the end of the 90 business day period following the commencement of such Qualifying Offer, provided such offer remains a Qualifying

Offer during such period, the holders of 10 % of the common stock may request that the Board call a Special Meeting to vote on a resolution

authorizing the exemption of the Qualifying Offer from the terms of the Stockholder Rights Agreement.

If such a Special Meeting is not

held by the 90th business day following the receipt of such a request from stockholders to call a Special Meeting, the Qualifying Offer

will be deemed exempt from the terms of the Stockholder Rights Agreement on the 10th business day thereafter.

Earnings Per Share

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Three Months Ended

Six Months Ended

Basic Earnings per Share

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Three Months Ended

Six Months Ended

Diluted Earnings per Share

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Diluted earnings per share

Diluted earnings per share presented above is

calculated using the two-class method as this method results in the lowest diluted earnings per share amount for common stock.

no antidilutive non-participating common stock equivalents for the three months ended March 31, 2024.

Total antidilutive non-participating

common stock equivalents were 695 for the three months ended March 31, 2023 (shares herein are reported in thousands).

Diluted earnings per share presented above

is calculated using the two-class method as this method results in the lowest diluted earnings per share amount for common stock.

were 16 and 8 antidilutive non-participating common stock equivalents for the three and six months ended June 30, 2024, respectively.

Total antidilutive non-participating common stock equivalents were 157 and 208 , respectively for the three and six months ended June

30, 2023 (shares herein are reported in thousands).

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, 2024 and 2023 as the Company’s average stock price was lower than the conversion price.

with the conversion options embedded in the Convertible Notes included in weighted average diluted shares for the three and six months

ended June 30, 2024 and 2023 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, 2024 and

2023, 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:

diluted shares as reported on the Company’s Consolidated Statements of Operations for the three and six months ended June 30, 2024

and 2023, which are determined pursuant to the treasury stock method, to the weighted average diluted shares used to calculate diluted

earnings per share as disclosed in the table above:

Three Months Ended

Six Months Ended

Reconciliation of Weighted Average Diluted Shares (in thousands)

Weighted average diluted shares as disclosed on the

Consolidated Statements of Operations

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

Participating securities

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

Weighted average shares of common stock issuable upon conversion of the Series

A Preferred Stock (Note 11)

Weighted average shares of common stock issuable upon conversion of the Series

C Preferred Stock (Note 9)

Potentially dilutive restricted stock awards

Weighted average diluted shares

used to calculate diluted earnings per share as disclosed in the table above

Effective Income Tax Rate – Three months ended March

31, 2024 and 2023

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

Effective Income Tax Rate – Three and Six Months Ended

June 30, 2024

The Company’s effective income tax rate

during the three months ended March 31, 2024 was 20.5 %, resulting in income tax expense of $ 5,701 .

during the three months ended June 30, 2024 was 26.3 %, resulting in income tax expense of $ 7,767 .

The effective income tax rate differs

from the federal statutory tax rate of 21 % primarily due to the decrease in the deferred tax asset valuation allowance on losses recognized

on the Company’s financial instruments owned, tax windfalls associated with the vesting of stock-based compensation awards and a

lower tax rate on foreign earnings.

These items were partly offset by state and local income taxes.

from the federal statutory tax rate of 21 % primarily due to non-deductible executive compensation, an increase in the deferred tax asset

valuation allowance on losses recognized on the Company’s investments and state and local income taxes.

These items were partly

offset by a lower tax rate on foreign earnings.

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 .

during the six months ended June 30, 2024 was 23.5 % resulting in income tax expense of $ 13,468 .

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.

from the federal statutory tax rate of 21 % primarily due to non-deductible executive compensation and state and local income taxes.

items were partly offset by a lower tax rate on foreign earnings and tax windfalls associated with the vesting of stock-based compensation

Effective Income Tax Rate – Three and Six Months Ended

June 30, 2023

The Company’s effective income tax rate

during the three months ended June 30, 2023 was 6.1 %, resulting in income tax expense of $ 3,555 .

The effective income tax rate differs

from the federal statutory tax rate of 21 % primarily due to a non-taxable gain on revaluation/termination of deferred consideration—gold

payments and a decrease in the deferred tax asset valuation allowance on losses recognized on the Company’s investments.

were partly offset by non-deductible executive compensation.

The Company’s effective income tax rate

during the six months ended June 30, 2023 was 6.5 %, resulting in income tax expense of $ 4,938 .

The effective income tax rate differs from

the federal statutory tax rate of 21 % primarily due to a non-taxable gain on revaluation/termination of deferred consideration—gold

payments, a $ 1,353 reduction in unrecognized tax benefits (including interest and penalties) and a lower tax rate on foreign earnings.

These items were partly offset by a non-deductible loss on extinguishment of our convertible notes, non-deductible executive compensation

and an increase in the deferred tax asset valuation allowance on losses recognized on our investments.

Deferred Tax Assets

A summary of the components of the Company’s

deferred tax assets at March 31, 2024 and December 31, 2023 is as follows:

deferred tax assets at June 30, 2024 and December 31, 2023 is as follows:

Deferred tax assets:

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Goodwill and intangible assets

Interest carryforwards

Unrealized losses

Foreign currency translation adjustment

Operating lease liabilities

Unrealized losses

Software capitalization

Total deferred tax assets

Deferred tax liabilities:

Unrealized gains

Fixed assets and prepaid assets

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The Company’s tax effected capital losses

at March 31, 2024 were $ 22,349 .

at June 30, 2024 were $ 22,380 .

These capital losses expire between the years 2024 and 2029.

Net Operating Losses – Europe

One of the Company’s European subsidiaries generated net operating

losses (“NOLs”) outside the U.S.

These tax effected NOLs, all of which are carried forward indefinitely, were $ 1,422 at March 31, 2024.

One of the Company’s European subsidiaries

generated net operating losses (“NOLs”) outside the U.S.

These tax effected NOLs, all of which are carried forward indefinitely,

were $ 1,327 at June 30, 2024.

Valuation Allowance

The Company’s valuation allowance has been established on its

net capital losses, as it is more-likely-than-not that these deferred tax assets will not be realized.

The Company’s valuation allowance has

been established on its net capital losses, as it is more-likely-than-not that these deferred tax assets will not be realized.

Income Tax Examinations

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

As of March 31, 2024, with few exceptions, the Company

As of June 30, 2024, with few exceptions, the Company

was no longer subject to income tax examinations by any taxing authority for the years before 2019.

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The Company repatriates earnings

of its foreign subsidiaries and therefore has recognized a deferred tax liability of $ 183 and $ 186 at March 31, 2024 and December 31,

of its foreign subsidiaries and therefore has recognized a deferred tax liability of $ 181 and $ 186 at June 30, 2024 and December 31, 2023,

respectively.

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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

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.

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

During the three months ended March 31, 2024

and 2023, the Company repurchased 1,096,278 and 604,505 shares of its common stock under this program for an aggregate cost of $ 7,820

and $ 3,384 , 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, 2024, $ 88,585 remained under

The Company repurchased zero and 1,096,278 shares,

respectively, of its common stock under this program during the three and six months ended June 30, 2024 and 26,582 and 631,087 shares,

respectively, during the comparable periods in 2023.

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

June 30, 2024 was $ 0 and $ 7,820 , respectively, and the aggregate cost of the shares repurchased during the comparable periods in 2023

was $ 156 and $ 3,540 , respectively.

Shares repurchased under this program were returned to the status of authorized and unissued on the

Company’s books and records.

As of June 30, 2024, $ 88,585 remained under

this program for future purchases.

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Balance at January 1, 2024

Balance at March 31, 2024

Of the total goodwill of $ 86,841 at March 31,

Balance at June 30, 2024

Of the total goodwill of $ 86,841 at June 30,

2024, $ 85,042 is not deductible for tax purposes as the acquisitions that gave rise to the goodwill were structured as stock acquisitions.

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intangible assets which are tested annually for impairment on November 30 th :

Balance at March 31, 2024

Balance at June 30, 2024

ETFS Acquisition

Software development

Balance at March 31, 2024

Balance at June 30, 2024

Balance at December 31, 2023

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Software Development (Finite-Lived)

Internally-developed software is amortized over

a useful life of three years .

During the three months ended March 31, 2024 and 2023, the Company recognized amortization expense on internally-developed

software of $ 327 and $ 51 , respectively.

As of March 31, 2024, expected amortization

expense for the unamortized finite-lived intangible assets for the next five years and thereafter is as follows:

Internally-developed software is amortized

over a useful life of three years .

The Company recognized amortization expense on internally-developed software of $ 359 and $ 686 , respectively,

during the three and six months ended June 30, 2024 and $ 106 and $ 156 , respectively, during the comparable periods in 2023.

As of June 30, 2024, expected amortization expense

for the unamortized finite-lived intangible assets for the next five years and thereafter is as follows:

Remainder of 2024

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Sale of Canadian ETF Business

During the three months ended March 31, 2023,

the Company recognized a gain of $ 1,477 from remeasuring a contingent payment to its realizable value.

This gain was recorded in other

gains and losses, net.

During the three months ending March, 31, 2023,

the Company recognized an impairment of $ 4,900 on its investment in Securrency, Inc.

to reduce the carrying value of

its investment to fair value.

During the three and six months ended June 30,

2023, the Company recognized a gain of $0 and $ 1,477 , respectively, from remeasuring a contingent payment to its realizable value.

gain was recorded in other losses and gains, net.

During the three and six months ending June,

30, 2023, the Company recognized an impairment of $ 0 and $ 4,900 , respectively, on its investment in Securrency, Inc.

to reduce the carrying

value of its investment to fair value.

Segment Information

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Three Months Ended

Six Months Ended

Operating revenues

4 unchanged sentences

Adjusted operating income margin

The CODM also uses net income, as reported on the Consolidated Statements

of Operations, as an additional measure when determining investments for growth initiatives and the Company’s ability to pay dividends.

Assets provided to the CODM are consistent with those reported on the Consolidated Balance Sheets with particular emphasis on the Company’s

available liquidity, including its cash, cash equivalents and restricted cash, financial instruments owned, accounts receivable and securities

held-to-maturity, reduced by current liabilities, seed capital and regulatory capital requirements.

There are no intra-entity sales or transfers and no significant expense

categories regularly provided to the CODM beyond those disclosed in the Consolidated Statements of Operations.

The CODM manages the business

using consolidated expense information, adjusted for items that are non-recurring or not core to the Company’s operating business

as disclosed in the table above, as well as regularly provided budgeted or forecasted expense information for the single operating segment.

Information related to the Company’s products

and services and geographical distribution of revenues is disclosed in Note 16.

The CODM also uses net income, as reported on

the Consolidated Statements of Operations, as an additional measure when determining investments for growth initiatives and the Company’s

ability to pay dividends.

Assets provided to the CODM are consistent with those reported on the Consolidated Balance Sheets with particular

emphasis on the Company’s available liquidity, including its cash, cash equivalents and restricted cash, financial instruments owned,

accounts receivable and securities held-to-maturity, reduced by current liabilities, seed capital and regulatory capital requirements.

There are no intra-entity sales or transfers

and no significant expense categories regularly provided to the CODM beyond those disclosed in the Consolidated Statements of Operations.

The CODM manages the business using consolidated expense information, adjusted for items that are non-recurring or not core to the Company’s

operating business as disclosed in the table above, as well as regularly provided budgeted or forecasted expense information for the single

operating segment.

Information related to the Company’s

products and services and geographical distribution of revenues is disclosed in Note 16.

Subsequent Events

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

What changed 10-Q

Item 1. Financial Statements