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 |
Delaware |
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(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
th Floor | | |
(Address of principal executive offices) |
(Zip Code) |
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☒ |
Accelerated filer |
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Non-accelerated filer |
☐ |
Smaller reporting company |
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Emerging growth company |
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
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The |
Page Number |
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4 | ||||
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33 | ||||
52 | ||||
53 | ||||
53 | ||||
53 | ||||
53 | ||||
54 | ||||
54 | ||||
54 | ||||
54 | ||||
55 |
• | the ultimate duration of the COVID-19 pandemic and its short-term and long-term impact on our business and the global economy; |
• | 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, 2020 |
December 31, 2019 |
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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 (including $ |
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Accounts receivable (including $ |
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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 22) |
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Securities held-to-maturity |
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Deferred tax assets, net |
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Investments (Note 9) |
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Right of use assets – operating leases (Note 15) |
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Goodwill (Note 24) |
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Intangible assets (Note 24) |
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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 15) |
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Income taxes payable |
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Accounts payable and other liabilities |
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Total current liabilities |
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Convertible notes (Note 13) |
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— |
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Debt (Note 12) |
— |
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Deferred consideration – gold payments (Note 11) |
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Operating lease liabilities (Note 15) |
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Other noncurrent liabilities (Note 22) |
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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 |
( |
) | ( |
) | ||||
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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2020 |
2019 |
2020 |
2019 |
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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 and disposition-related costs |
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Other |
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Total operating expenses |
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Operating income |
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Other Income/(Expenses): |
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Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
(Loss)/gain on revaluation of deferred consideration – gold payments (Note 11) |
( |
) | ( |
) | ( |
) | |
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Interest income |
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Impairments (Note 7 and 25) |
— |
— |
( |
) | ( |
) | ||||||||||
Loss on extinguishment of debt (Note 12) |
( |
) | — |
( |
) | — |
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Other gains and losses, net |
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( |
) | ( |
) | ||||||||||
(Loss)/income before income taxes |
( |
) | |
( |
) | |
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Income tax (benefit)/expense |
( |
) | |
( |
) | |
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Net (loss)/income |
$ | ( |
) | $ | |
$ | ( |
) | $ | |
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(Loss)/earnings per share – basic |
$ | ( |
) | $ | |
$ | ( |
) | $ | |
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(Loss)/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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2020 |
2019 |
2020 |
2019 |
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Net (loss)/income |
$ | ( |
) | $ | |
$ | ( |
) | $ | |
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Other comprehensive income/(loss) |
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Reclassification of foreign currency translation adjustment to other gains and losses, net, upon the sale of WisdomTree Asset Management Canada, Inc. (“WTAMC” or “Canadian ETF business”) (Note 25) |
— |
— |
( |
) | — |
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Foreign currency translation adjustment |
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( |
) | ( |
) | |
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Other comprehensive income/(loss) |
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( |
) | ( |
) | |
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Comprehensive (loss)/income |
$ | ( |
) | $ | |
$ | ( |
) | $ | |
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For the Three Months Ended June 30, 2020 |
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Common Stock |
Additional Paid-In Capital |
Accumulated Other |
Accumulated Deficit |
Total |
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Shares Issued |
Par Value |
Comprehensive Income |
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Balance – April 1, 2020 |
|
$ | |
$ | |
$ | |
$ | ( |
$ | |
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Restricted stock issued and vesting of restricted stock units, net |
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|
( |
) | — |
— |
— |
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Shares repurchased |
( |
) | ( |
) | ( |
) | — |
— |
( |
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Stock-based compensation |
— |
— |
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— |
— |
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Allocation of equity component related to convertible notes, net of issuance costs of $ |
— |
— |
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— |
— |
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Other comprehensive income |
— |
— |
— |
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— |
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Dividends |
— |
— |
( |
) | — |
— |
( |
) | ||||||||||||||||
Net loss |
— |
— |
— |
— |
( |
) | ( |
) | ||||||||||||||||
Balance – June 30, 2020 |
|
$ | |
$ | |
$ | |
$ | ( |
) | $ | |
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For the Three Months Ended June 30, 2019 |
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Common Stock |
Additional Paid-In Capital |
Accumulated Other |
Accumulated Deficit |
Total |
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Shares Issued |
Par Value |
Comprehensive Income |
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Balance – April 1, 2019 |
|
$ | |
$ | |
$ | |
$ | ( |
) | $ | |
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Restricted stock issued and vesting of restricted stock units, net |
|
— |
— |
— |
— |
— |
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Shares repurchased |
( |
) | — |
( |
) | — |
— |
( |
) | |||||||||||||||
Stock-based compensation |
— |
— |
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— |
— |
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Other comprehensive loss |
— |
— |
— |
( |
) | — |
( |
) | ||||||||||||||||
Dividends |
— |
— |
— |
— |
( |
) | ( |
) | ||||||||||||||||
Net income |
— |
— |
— |
— |
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Balance – June 30, 2019 |
|
$ | |
$ | |
$ | |
$ | ( |
) | $ | |
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For the Six Months Ended June 30, 2020 |
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Common Stock |
Additional Paid-In Capital |
Accumulated Other |
Accumulated Deficit |
Total |
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Shares Issued |
Par Value |
Comprehensive Income |
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Balance – January 1, 2020 |
|
$ | |
$ | |
$ | |
$ | ( |
) | $ | |
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Restricted stock issued and vesting of restricted stock units, net |
|
|
( |
) | — |
— |
— |
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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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Allocation of equity component related to convertible notes, net of issuance costs of $ |
— |
— |
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— |
— |
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Other comprehensive loss |
— |
— |
— |
( |
) | — |
( |
) | ||||||||||||||||
Dividends |
— |
— |
( |
) | — |
— |
( |
) | ||||||||||||||||
Net loss |
— |
— |
— |
— |
( |
) | ( |
) | ||||||||||||||||
Balance – June 30, 2020 |
|
$ | |
$ | |
$ | |
$ | ( |
) | $ | |
||||||||||||
For the Six Months Ended June 30, 2019 |
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Common Stock |
Additional Paid-In Capital |
Accumulated Other |
Accumulated Deficit |
Total |
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Shares Issued |
Par Value |
Comprehensive Income |
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Balance – January 1, 2019 |
|
$ | |
$ | |
$ | |
$ | ( |
) | $ | |
||||||||||||
Restricted stock issued and vesting of restricted stock units, net |
|
|
( |
) | — |
— |
— |
|||||||||||||||||
Shares repurchased |
( |
) | ( |
) | ( |
) | — |
— |
( |
) | ||||||||||||||
Exercise of stock options, net |
|
— |
|
— |
— |
|
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Stock-based compensation |
— |
— |
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— |
— |
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Other comprehensive income |
— |
— |
— |
|
— |
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Dividends |
— |
— |
— |
— |
( |
) | ( |
) | ||||||||||||||||
Net income |
— |
— |
— |
— |
|
|
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Balance – June 30, 2019 |
|
$ | |
$ | |
$ | |
$ | ( |
) | $ | |
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Six Months Ended June 30, |
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2020 |
2019 |
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Cash flows from operating activities: |
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Net (loss)/income |
$ | ( |
) | $ | |
|||
Adjustments to reconcile net (loss)/income to net cash provided by operating activities: |
||||||||
Advisory fees received in gold and other precious metals |
( |
) | ( |
) | ||||
Loss/(gain) on revaluation of deferred consideration – gold payments | |
( |
) | |||||
Impairments |
|
|
||||||
Contractual gold payments |
|
|
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Stock-based compensation |
|
|
||||||
Gain on sale – Canadian ETF business |
( |
) | — |
|||||
Loss on extinguishment of debt |
|
— |
||||||
Amortization of right of use asset |
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|
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Amortization of issuance costs – former credit facility |
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|
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Deferred income taxes |
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Depreciation and amortization |
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|
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Amortization of issuance costs – convertible notes |
|
— |
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Paid-in-kind interest income |
— |
( |
) | |||||
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 payable |
( |
) | ( |
) | ||||
Prepaid expenses |
( |
) | ( |
) | ||||
Gold and other precious metals |
|
|
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Other assets |
( |
) | ( |
) | ||||
Fund management and administration payable |
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|
||||||
Compensation and benefits payable |
( |
) | ( |
) | ||||
Securities sold, but not yet purchased, at fair value |
( |
) | ( |
) | ||||
Operating lease liabilities |
( |
) | ( |
) | ||||
Accounts payable and other liabilities |
|
( |
) | |||||
Net cash provided by operating activities |
|
|
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|
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Cash flows from investing activities: |
||||||||
Purchase of fixed assets |
( |
) | ( |
) | ||||
Funding of notes receivable |
— |
( |
) | |||||
Proceeds from held-to-maturity securities maturing or called prior to maturity |
|
|
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Proceeds from the sale of the Company’s financial interests in AdvisorEngine Inc. |
|
— |
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Proceeds from sale of Canadian ETF business, net |
|
|
|
— |
| |||
Net cash provided by/(used in) investing activities |
|
( |
) | |||||
Cash flows from financing activities: |
||||||||
Repayment of debt |
( |
) | — |
|||||
Shares repurchased |
( |
) | ( |
) | ||||
Dividends paid |
( |
) | ( |
) | ||||
Convertible notes issuance costs |
( |
) | — |
|||||
Proceeds from the issuance of convertible notes (Note 13) |
|
— |
||||||
Proceeds from exercise of stock options |
|
|
||||||
Net cash used in financing activities |
( |
) | ( |
) | ||||
(Decrease)/increase in cash flow due to changes in foreign exchange rate |
( |
) | |
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(Decrease)/increase in cash and cash equivalents |
( |
) | |
|||||
Cash and cash equivalents – beginning of period |
|
|
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Cash and cash equivalents – end of period |
$ | |
$ | |
||||
Supplemental disclosure of cash flow information: |
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Cash paid for taxes |
$ | |
$ | |
||||
Cash paid for interest |
$ | |
$ | |
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• |
WisdomTree Asset Management, Inc. non-consolidated third party, is a Delaware statutory trust registered with the SEC as an open-end management investment company. The Company has licensed to WTT the use of certain of its own indexes on an exclusive basis for the WisdomTree ETFs in the U.S. |
• |
WisdomTree Management Jersey Limited leveraged-and-inverse |
• |
WisdomTree Multi Asset Management Limited non-consolidated third party, is a public limited company domiciled in Ireland. |
• |
WisdomTree Management Limited non-consolidated third party, is a public limited company domiciled in Ireland. |
• |
WisdomTree UK Limited |
• |
WisdomTree Europe Limited |
• |
WisdomTree Ireland Limited |
• |
WisdomTree Commodity Services, LLC |
Equipment |
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Furniture and fixtures |