QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) | |
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(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
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The |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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Page Number |
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36 |
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59 |
• | anticipated trends, conditions and investor sentiment in the global markets and exchange traded products, or ETPs; |
• | anticipated levels of inflows into and outflows out of our ETPs; |
• | our ability to deliver favorable rates of return to investors; |
• | competition in our business; |
• | our ability to develop new products and services; |
• | our ability to maintain current vendors or find new vendors to provide services to us at favorable costs; |
• | our ability to successfully operate and expand our business in non-U.S. markets; and |
• | the effect of laws and regulations that apply to our business. |
ITEM 1. |
FINANCIAL STATEMENTS |
June 30, 2019 |
December 31, 2018 |
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(Unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ | |
$ | |
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Securities owned, at fair value |
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Accounts receivable |
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Income taxes receivable |
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Prepaid expenses |
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Other current assets |
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Total current assets |
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Fixed assets, net |
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Notes receivable, net (Note 8) |
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Indemnification receivable (Note 21) |
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Securities held-to-maturity |
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Deferred tax assets, net |
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Investments, carried at cost (Note 9) |
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Right of use assets – operating leases (Note 14) |
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— |
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Goodwill (Note 23) |
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Intangible assets (Note 23) |
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Other noncurrent assets |
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Total assets |
$ | |
$ | |
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Liabilities and stockholders’ equity |
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Liabilities |
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Current liabilities: |
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Fund management and administration payable |
$ | |
$ | |
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Compensation and benefits payable |
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Deferred consideration – gold payments (Note 11) |
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Securities sold, but not yet purchased, at fair value |
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Operating lease liabilities (Note 14) |
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— |
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Accounts payable and other liabilities |
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Total current liabilities |
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Long-term debt (Note 12) |
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Deferred consideration – gold payments (Note 11) |
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Operating lease liabilities (Note 14) |
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— |
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Deferred rent payable |
— |
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Other noncurrent liabilities (Note 21) |
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Total liabilities |
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Preferred stock – Series A Non-Voting Convertible, par value $ |
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Contingencies (Note ) |
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Stockholders’ equity |
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Preferred stock, par value $ |
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Common stock, par value $ |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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Accumulated deficit |
( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
$ | |
$ | |
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Three Months Ended June 30, |
Six Months Ended June 30, |
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2019 |
2018 |
2019 |
2018 |
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Operating Revenues: |
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Advisory fees |
$ | |
$ | |
$ | |
$ | |
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Other income |
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Total revenues |
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Operating Expenses: |
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Compensation and benefits |
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Fund management and administration |
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Marketing and advertising |
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Sales and business development |
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Contractual gold payments (Note 11) |
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Professional and consulting fees |
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Occupancy, communications and equipment |
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Depreciation and amortization |
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Third-party distribution fees |
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Acquisition-related costs (Note 3) |
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Other |
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Total expenses |
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Operating income |
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Other Income/(Expenses): |
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Interest expense |
( |
) | ( |
) | ( |
) | ( |
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(Loss)/gain on revaluation of deferred consideration – gold payments (Note 11) |
( |
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Interest income |
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Impairment (Note 14) |
— |
— |
( |
) | — |
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Other gains and losses, net |
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( |
) | ( |
) | ( |
) | |||||||||
Income before income taxes |
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Income tax expense |
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Net income |
$ | |
$ | |
$ | |
$ | |
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Earnings per share—basic |
$ | |
$ | |
$ | |
$ | |
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Earnings per share—diluted |
$ | |
$ | |
$ | |
$ | |
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Weighted-average common shares—basic |
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Weighted-average common shares—diluted |
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Cash dividends declared per common share |
$ | |
$ | |
$ | |
$ | |
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Three Months Ended June 30, |
Six Months Ended June 30, |
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2019 |
2018 |
2019 |
2018 |
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Net income |
$ | |
$ | |
$ | |
$ | |
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Other comprehensive (loss)/income |
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Change in unrealized gains on available-for-sale debt securities, net of tax |
— |
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— |
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Foreign currency translation adjustment |
( |
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) | |
( |
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Other comprehensive (loss)/income |
( |
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Comprehensive income |
$ | |
$ | |
$ | |
$ | |
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For the Three Months Ended June 30, 2019 |
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Common Stock |
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Accumulated |
Accumulated Deficit |
Total |
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Shares Issued |
Par Value |
Additional Paid-In Capital |
Other Comprehensive Income |
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Balance—April 1, 2019 |
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$ | |
$ | |
$ | |
$ | ( |
) | $ | |
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Restricted stock issued and vesting of restricted stock units, net |
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— |
— |
— |
— |
— |
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Shares repurchased |
( |
) | — |
( |
) | — |
— |
( |
) | ||||||||||||||||
Stock-based compensation |
— |
— |
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— |
— |
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Other comprehensive loss |
— |
— |
— |
( |
) | — |
( |
) | |||||||||||||||||
Dividends |
— |
— |
— |
— |
( |
) | ( |
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Net income |
— |
— |
— |
— |
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Balance—June 30, 2019 |
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$ | |
$ | |
$ | |
$ | ( |
) | $ | |
For the Three Months Ended June 30, 2018 |
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Common Stock |
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Accumulated |
Accumulated Deficit |
Total |
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Shares Issued |
Par Value |
Additional Paid-In Capital |
Other Comprehensive Income |
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Balance—April 1, 2018 |
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$ | |
$ | |
$ | |
$ | ( |
) | $ | |
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Common stock issued (Note 3) |
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— |
— |
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Restricted stock issued and vesting of restricted stock units, net |
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— |
— |
— |
— |
— |
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Shares repurchased |
( |
) | — |
( |
) | — |
— |
( |
) | ||||||||||||||||
Exercise of stock options, net |
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— |
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— |
— |
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Stock-based compensation |
— |
— |
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— |
— |
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Reclassification of stock issuance costs to temporary equity |
— |
— |
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— |
— |
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Other comprehensive loss |
— |
— |
— |
( |
) | — |
( |
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Dividends |
— |
— |
— |
— |
( |
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) | |||||||||||||||||
Net income |
— |
— |
— |
— |
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Balance—June 30, 2018 |
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$ | |
$ | |
$ | |
$ | ( |
) | $ | |
For the Six Months Ended June 30, 2019 |
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Common Stock |
Additional |
Accumulated Other |
Accumulated Deficit |
Total |
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Shares Issued |
Par Value |
Paid-In Capital |
Comprehensive Income |
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Balance—January 1, 2019 |
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$ | |
$ | |
$ | |
$ | ( |
) | $ | |
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Restricted stock issued and vesting of restricted stock units, net |
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( |
) | — |
— |
— |
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Shares repurchased |
( |
) | ( |
) | ( |
) | — |
— |
( |
) | |||||||||||||||
Exercise of stock options, net |
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— |
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— |
— |
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Stock-based compensation |
— |
— |
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— |
— |
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Other comprehensive income |
— |
— |
— |
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— |
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Dividends |
— |
— |
— |
— |
( |
) | ( |
) | |||||||||||||||||
Net income |
— |
— |
— |
— |
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Balance—June 30, 2019 |
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$ | |
$ | |
$ | |
$ | ( |
) | $ | |
For the Six Months Ended June 30, 2018 |
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Common Stock |
Additional |
Accumulated Other |
Accumulated Deficit |
Total |
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Shares Issued |
Par Value |
Paid-In Capital |
Comprehensive Income |
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Balance—January 1, 2018 |
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$ | |
$ | |
$ | |
$ | ( |
) | $ | |
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Common stock issued (Note 3) |
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— |
— |
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Restricted stock issued and vesting of restricted stock units, net |
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( |
) | — |
— |
— |
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Shares repurchased |
( |
) | — |
( |
) | — |
— |
( |
) | ||||||||||||||||
Exercise of stock options, net |
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— |
— |
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Stock-based compensation |
— |
— |
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— |
— |
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Other comprehensive income |
— |
— |
— |
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— |
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Dividends |
— |
— |
— |
— |
( |
) | ( |
) | |||||||||||||||||
Net income |
— |
— |
— |
— |
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Balance—June 30, 2018 |
|
$ | |
$ | |
$ | |
$ | ( |
) | $ | |
Six Months Ended June 30, |
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2019 |
2018 |
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Cash flows from operating activities: |
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Net income |
$ | |
$ | |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Advisory fees received in gold and other precious metals |
( |
) | ( |
) | ||||
Contractual gold payments |
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Stock-based compensation |
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Deferred income taxes |
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( |
) | |||||
Amortization of right of use asset |
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— |
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Amortization of credit facility issuance costs |
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Paid-in-kind interest income (Note 8) |
( |
) | ( |
) | ||||
Impairment |
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— |
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Depreciation and amortization |
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Gain on revaluation of deferred consideration – gold payments |
( |
) | ( |
) | ||||
Other |
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Changes in operating assets and liabilities: |
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Securities owned, at fair value |
( |
) | ( |
) | ||||
Accounts receivable |
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Income taxes receivable/payable |
( |
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Prepaid expenses |
( |
) | ( |
) | ||||
Gold and other precious metals |
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Other assets |
( |
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Fund management and administration payable |
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( |
) | |||||
Compensation and benefits payable |
( |
) | ( |
) | ||||
Securities sold, but not yet purchased, at fair value |
( |
) | |
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Payable to ETFS Capital Limited |
— |
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Operating lease liabilities |
( |
) | — |
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Accounts payable and other liabilities |
( |
) | ( |
) | ||||
Net cash provided by operating activities |
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Cash flows from investing activities: |
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Purchase of fixed assets |
( |
) | ( |
) | ||||
Funding of AdvisorEngine notes receivable (Note 8) |
( |
) | ( |
) | ||||
Proceeds from held-to-maturity securities maturing or called prior to maturity |
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Proceeds from sales and maturities of debt securities available-for-sale |
— |
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Cash paid – ETFS Acquisition, net of cash acquired (Note 3) |
— |
( |
) | |||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
Cash flows from financing activities: |
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Dividends paid |
( |
) | ( |
) | ||||
Shares repurchased |
( |
) | ( |
) | ||||
Credit facility issuance costs |
— |
( |
) | |||||
Preferred stock issuance costs |
— |
( |
) | |||||
Proceeds from the issuance of long-term debt (Note 12) |
— |
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Proceeds from exercise of stock options |
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