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 |
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) | |
th Streetrd Floor |
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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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☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer |
☐ | Smaller reporting company | ||||
Emerging growth company |
PART I: |
4 |
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ITEM 1. |
4 |
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ITEM 2. |
34 |
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ITEM 3. |
52 |
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ITEM 4. |
53 |
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PART II: |
53 |
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ITEM 1. |
53 |
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ITEM 1A. |
53 |
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ITEM 2. |
53 |
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ITEM 3. |
54 |
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ITEM 4. |
54 |
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ITEM 5. |
54 |
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ITEM 6. |
56 |
• |
the ultimate duration of the COVID-19 pandemic, or the war in Ukraine, and their 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; |
• |
whether we will experience future growth; |
• |
our ability to develop new products and services and their success; |
• |
our ability to maintain current vendors or find new vendors to provide services to us at favorable costs; |
• |
our ability to successfully implement our digital assets strategy, including WisdomTree Prime ™ , and achieve its objectives; |
• |
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, 2022 |
December 31, 2021 |
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(unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Securities owned, at fair value (including $ December 31, 2021, respectively) |
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Accounts receivable (including $ 2021, respectively) |
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Prepaid expenses |
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Income taxes receivable |
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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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Indemnification receivable (Note 20 ) |
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Securities held-to-maturity |
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Deferred tax assets, net |
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Investments (Note 7 ) |
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Right of use assets—operating leases (Note 12 ) |
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Goodwill (Note 22 ) |
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Intangible assets (Note 22 ) |
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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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Convertible notes—current (Note 10) |
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$ |
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$ |
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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 9 ) |
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Operating lease liabilities (Note 1 2 ) |
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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—long term (Note 10 ) |
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Deferred consideration—gold payments (Note 9 ) |
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Operating lease liabilities (Note 12 ) |
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Other noncurrent liabilities (Note 20 ) |
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Total liabilities |
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Preferred stock – Series A Non-Voting Convertible, par value $11 ) |
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Contingencies (Note 13) |
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Stockholders’ equity |
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Preferred stock, par value $ |
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Common stock, par value $ 2022 and December 31, 2021, respectively |
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Additional paid-in capital |
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Accumulated other comprehensive (loss) income |
( |
) | ||||||
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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2022 |
2021 |
2022 |
2021 |
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Operating Revenues: |
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Advisory fees |
$ | $ | $ | $ | ||||||||||||
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 9 ) |
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Professional 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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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 |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Gain/(loss) on revaluation of deferred consideration–gold payments (Note 9 ) |
( |
) | ||||||||||||||
Interest income |
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Impairments (Note 12 ) |
( |
) | ||||||||||||||
Other losses and gains, net |
( |
) | ( |
) | ( |
) | ||||||||||
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Income/(loss) before income taxes |
( |
) | ||||||||||||||
Income tax expense/(benefit) |
( |
) | ||||||||||||||
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Net income/(loss) |
$ | $ | $ | ( |
) | $ | ||||||||||
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Earnings/(loss) per share—basic |
$ | $ | $ | ( |
) | $ | ||||||||||
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Earnings/(loss) 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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2022 |
2021 |
2022 |
2021 |
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Net income/(loss) |
$ | $ | $ | ( |
) | $ | ||||||||||
Other comprehensive (loss)/income |
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Foreign currency translation adjustment, net of income taxes |
( |
) | ( |
) | ||||||||||||
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Other comprehensive (loss)/income |
( |
) | ( |
) | ||||||||||||
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Comprehensive income/(loss) |
$ | $ | $ | ( |
) | $ | ||||||||||
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For the Three Months Ended June 30, 2022 |
||||||||||||||||||||||||
Common Stock |
Additional Paid-In Capital |
Accumulated Other |
Accumulated Deficit |
Total |
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Shares Issued |
Par Value |
Comprehensive Income |
||||||||||||||||||||||
Balance—April 1, 2022 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Restricted stock issued and vesting of restricted stock units, net |
( |
) | ( |
) | ||||||||||||||||||||
Stock-based compensation |
— | |||||||||||||||||||||||
Other comprehensive loss |
— | ( |
) | ( |
) | |||||||||||||||||||
Dividends |
— | ( |
) | ( |
) | |||||||||||||||||||
Net income |
— | |||||||||||||||||||||||
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Balance—June 30, 2022 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
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For the Three Months Ended June 30, 2021 |
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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 |
||||||||||||||||||||||
Balance—April 1, 2021 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Restricted stock issued and vesting of restricted stock units, net |
( |
) | ( |
) | ||||||||||||||||||||
Shares repurchased |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Exercise of stock options, net |
||||||||||||||||||||||||
Stock-based compensation |
— | |||||||||||||||||||||||
Other comprehensive loss |
— | |||||||||||||||||||||||
Dividends |
— | ( |
) | ( |
) | |||||||||||||||||||
Net income |
— | |||||||||||||||||||||||
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Balance—June 30, 2021 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
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For the Six Months Ended June 30, 2022 |
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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 |
||||||||||||||||||||||
Balance—January 1, 2022 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Restricted stock issued and vesting of restricted stock units, net |
( |
) | ||||||||||||||||||||||
Shares repurchased |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Stock-based compensation |
— | |||||||||||||||||||||||
Other comprehensive loss |
— | ( |
) | ( |
) | |||||||||||||||||||
Dividends |
— | ( |
) | ( |
) | |||||||||||||||||||
Net loss |
— | ( |
) | ( |
) | |||||||||||||||||||
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|
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Balance—June 30, 2022 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
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|
|
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|
|
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|
For the Six Months Ended June 30, 2021 |
||||||||||||||||||||||||
Common Stock |
Additional Paid-In Capital |
Accumulated Other |
Accumulated Deficit |
Total |
||||||||||||||||||||
Shares Issued |
Par Value |
Comprehensive Income |
||||||||||||||||||||||
Balance—January 1, 2021 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Reclassification of equity component related to convertible notes, net deferred taxes of $ 2020-06 (Note 10 ) |
— | ( |
) | ( |
) | |||||||||||||||||||
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Balance—January 1, 2021 (as adjusted) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Restricted stock issued and vesting of restricted stock units, net |
( |
) | ||||||||||||||||||||||
Shares repurchased |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Exercise of stock options, net |
||||||||||||||||||||||||
Stock-based compensation |
— | |||||||||||||||||||||||
Other comprehensive income |
— | |||||||||||||||||||||||
Dividends |
— | ( |
) | ( |
) | |||||||||||||||||||
Net income |
— | |||||||||||||||||||||||
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Balance—June 30, 2021 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
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|
Six Months Ended June 30, |
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2022 |
2021 |
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Cash flows from operating activities: |
||||||||
Net (loss)/income |
$ | ( |
) | $ | ||||
Adjustments to reconcile net (loss)/income to net cash provided by operating activities: |
||||||||
Loss/(gain) on revaluation of deferred consideration—gold payments |
( |
) | ||||||
Advisory and license fees paid in gold, other precious metals and cryptocurrency |
( |
) | ( |
) | ||||
Deferred income taxes |
||||||||
Losses on securities owned, at fair value |
||||||||
Contractual gold payments |
||||||||
Stock-based compensation |
||||||||
Amortization of issuance costs—convertible notes |
||||||||
Amortization of right of use asset |
||||||||
Depreciation and amortization |
||||||||
Impairments |
||||||||
Other |
( |
) | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
( |
) | ( |
) | ||||
Prepaid expenses |
( |
) | ( |
) | ||||
Gold and other precious metals |
||||||||
Other assets |
( |
) | ( |
) | ||||
Intangibles—software development |
( |
) | ||||||
Fund management and administration payable |
( |
) | ||||||
Compensation and benefits payable |
( |
) | ( |
) | ||||
Income taxes payable |
( |
) | ( |
) | ||||
Operating lease liabilities |
( |
) | ( |
) | ||||
Accounts payable and other liabilities |
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Net cash provided by operating activities |
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Cash flows from investing activities: |
||||||||
Purchase of securities owned, at fair value |
( |
) | ( |
) | ||||
Purchase of investments |
( |
) | ( |
) | ||||
Purchase of fixed assets |
( |
) | ( |
) | ||||
Proceeds from the sale of securities owned, at fair value |
||||||||
Proceeds from held-to-maturity |
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Net cash used in investing activities |
( |
) | ( |
) | ||||
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Cash flows from financing activities: |
||||||||
Dividends paid |
( |
) | ( |
) | ||||
Shares repurchased |
( |
) | ( |
) | ||||
Convertible notes issuance costs |
( |
) | ||||||
Proceeds from the issuance of convertible notes |
||||||||
Proceeds from exercise of stock options |
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Net cash (used in)/provided by financing activities |
( |
) | ||||||
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(Decrease)/increase in cash flow due to changes in foreign exchange rate |
( |
) | ||||||
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Net (decrease)/increase in cash and cash equivalents |
( |
) | ||||||
Cash and cash equivalents—beginning of year |
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Cash and cash equivalents—end of period |
$ | $ | ||||||
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Supplemental disclosure of cash flow information: |
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Cash paid for income taxes |
$ | $ | ||||||
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Cash paid for interest |
$ | $ | ||||||
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• | WisdomTree Asset Management, Inc. non-consolidated Delaware statutory trust registered with the SEC as an open-end management investment company. The Company has licensed to WTT the use of certain of its own indexes on an exclusive basis for the WisdomTree ETFs in the U.S. |
• | WisdomTree Management Jersey Limited leveraged-and-inverse |
• | WisdomTree Multi Asset Management Limited non-consolidated public limited company domiciled in Ireland. |
• | WisdomTree Management Limited non-consolidated public limited company domiciled in Ireland. |
• | WisdomTree UK Limited |
• | WisdomTree Europe Limited |
• | WisdomTree Ireland Limited |
• | WisdomTree Digital Commodity Services, LLC |
• | WisdomTree Digital Management, Inc. SEC-registered investment adviser and will provide investment advisory and other management services to blockchain-enabled mutuals hares are secondarily recorded on a blockchain. |
• |
WisdomTree Digital Movement, Inc |
• |
WisdomTree Securities, Inc. |
Three Months Ended June 30, 2021 |
Six Months Ended June 30, 2021 |
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Operating Revenues : |
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Advisory fees (previously reported) |
$ | $ | ||||||
Amounts collected on behalf of third parties |
( |
) | ( |
) | ||||
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|
|||||
Advisory fees (as corrected) |
$ | $ | ||||||
|
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|
|||||
Total revenues (previously reported) |
$ | $ | ||||||
Amounts collected on behalf of third parties |
( |
) | ( |
) | ||||
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|
|||||
Total revenues (as corrected) |
$ | $ | ||||||
|
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|
|||||
Operating Expenses: |
||||||||
Fund management and administration (previously reported) |
$ | $ | ||||||
Amounts collected on behalf of third parties |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Fund management and administration (as corrected) |
$ | $ | ||||||
|
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|
|||||
Total operating expenses (previously reported) |
$ | $ | ||||||
Amounts collected on behalf of third parties |
( |
) | ( |
) | ||||
|
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|
|
|||||
Total operating expenses (as corrected) |
$ | $ | ||||||
|
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|
|
Six Months Ended June 30, 2021 |
||||
Consolidated Statements of Cash Flows : |
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|
Cash Flows from Operating Activities |
||||
Net cash used in operating activities (previously reported) |
$ | ( |
) | |
Reclassification of net cash flows from securities purchases and sales |
||||
|
|
|||
Net cash provided by operating activities (currently reported) |
$ | |||
|
|
|||
Cash Flows from Investing Activities |
||||
Net cash used in investing activities (previously reported) |
$ | ( |
) | |
Reclassification of purchases of securities owned, at fair value |
( |
) | ||
Reclassification of proceeds from the sale of securities owned, at fair value |
||||
|
|
|||
Net cash used in investing activities (currently reported) |
$ | ( |
) | |
|
|
Equipment |
|||||
Internally-developed software |
June 30, 2022 |
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Total |
Level 1 |
Level 2 |
Level 3 |
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Assets: |
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Recurring fair value measurements: |
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Cash equivalents |
$ | $ | $ | $ | ||||||||||||
Securities owned, at fair value |
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ETFs |
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Pass-through GSEs |
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Corporate bonds |
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Investments in Convertible Notes |
||||||||||||||||
Securrency, Inc. – convertible note 7 ) |
||||||||||||||||
Fnality International Limited – convertible note (Note 7 ) |
||||||||||||||||
Total |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Non-recurring fair value measurements: |
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Onramp Invest, Inc. – preferred stock (Note 7 )(1) |
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Liabilities: |
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Recurring fair value measurements: |
||||||||||||||||
Deferred consideration (Note 9 ) |
$ | $ | $ | $ |
(1) |
Fair value determined on May 10, 2022 (Note 7). |
December 31, 2021 |
||||||||||||||||
Total |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Assets: |
||||||||||||||||
Recurring fair value measurements: |
||||||||||||||||
Cash equivalents |
$ | $ | $ | $ | ||||||||||||
Securities owned, at fair value |
||||||||||||||||
ETFs |
||||||||||||||||
Pass-through GSEs |
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Corporate bonds |
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