(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 | ||
☒ |
Accelerated filer |
☐ | ||||
Non-accelerated filer |
☐ |
Smaller reporting company |
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Emerging growth company |
PART I: FINANCIAL INFORMATION | 4 | |||||
ITEM 1. |
4 | |||||
ITEM 2. |
37 | |||||
ITEM 3. |
57 | |||||
ITEM 4. |
58 | |||||
PART II: OTHER INFORMATION | 59 | |||||
ITEM 1. |
59 | |||||
ITEM 1A. |
59 | |||||
ITEM 2. |
59 | |||||
ITEM 3. |
59 | |||||
ITEM 4. |
59 | |||||
ITEM 5. |
60 | |||||
ITEM 6. |
61 |
• | 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 potential for 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 strategy relating to digital assets and blockchain-enabled financial services, including WisdomTree Prime ™ , and achieve its objectives; |
• | our ability to successfully operate and expand our business in non-U.S. markets; |
• | the effect of laws and regulations that apply to our business; and |
• | actions of activist stockholders. |
ITEM 1. |
FINANCIAL STATEMENTS |
June 30, 2023 |
December 31, 2022 |
|||||||
Assets |
(unaudited) |
|||||||
Current assets: |
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Cash and cash equivalents (Note 3) |
$ | $ | ||||||
Financial instruments owned, at fair value (including $ December 31, 2022, respectively) (Note 5) |
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Accounts receivable (including $ |
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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 (Note 20) |
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Investments (Note 7) |
| |||||||
Right of use assets—operating leases (Note 12) |
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Goodwill (Note 22) |
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Intangible assets, net (Note 22) |
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Other noncurrent assets |
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|
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|
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Total assets |
$ | $ | ||||||
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|
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|
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Liabilities and stockholders’ equity |
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Liabilities |
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Current liabilities: |
||||||||
Fund management and administration payable |
$ | $ | ||||||
Compensation and benefits payable |
||||||||
Operating lease liabilities (Note 12) |
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Convertible notes—current (Note 10) |
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Deferred consideration—gold payments (Note 9) |
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Income taxes payable |
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Accounts payable and other liabilities |
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|
|
|
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Total current liabilities |
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Convertible notes (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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|
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Total liabilities |
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Preferred stock—Series A Non-Voting Convertible, par value $$ |
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|
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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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Preferred stock—Series C Non-Voting Convertible, par value $ |
||||||||
Common stock, par value $ 2022, respectively |
||||||||
Additional paid-in capital |
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Accumulated other comprehensive loss |
( |
( |
||||||
Retained earnings |
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|
|
|
|
|||||
Total stockholders’ equity |
||||||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity |
$ | $ | ||||||
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||||||
Operating Revenues: |
||||||||||||||||
Advisory fees |
$ |
$ |
$ |
$ |
||||||||||||
Other income |
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|
|
|
|
|
|
|
|
|||||||||
Total revenues |
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|
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|
|
|
|
|
|||||||||
Operating Expenses: |
||||||||||||||||
Compensation and benefits |
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Fund management and administration |
||||||||||||||||
Marketing and advertising |
||||||||||||||||
Sales and business development |
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Contractual gold payments (Note 9) |
||||||||||||||||
Professional fees |
||||||||||||||||
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 |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income |
||||||||||||||||
Other Income/(Expenses): |
||||||||||||||||
Interest expense |
( |
( |
( |
( |
||||||||||||
Gain/(loss) on revaluation/termination of deferred consideration—gold payments (Note 9) |
( |
|||||||||||||||
Interest income |
||||||||||||||||
Impairments (Note 7) |
( |
|||||||||||||||
Loss on extinguishment of convertible notes (Note 10) |
( |
|||||||||||||||
Other gains and losses, net |
( |
( |
( |
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income/(loss) before income taxes |
( |
|||||||||||||||
Income tax expense/(benefit) |
( |
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income/(loss) |
$ |
$ |
$ |
$ |
( |
|||||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings/(loss) per share—basic |
$ |
$ |
$ |
$ |
( |
|||||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings/(loss) per share—diluted |
$ |
$ |
$ |
$ |
( |
|||||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average common shares—basic |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average common shares—diluted |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash dividends declared per common share |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||||||
Net income/(loss) |
$ |
$ |
$ |
$ |
( |
|||||||||||
Other comprehensive income/(loss) |
||||||||||||||||
Foreign currency translation adjustment, net of income taxes |
( |
( |
||||||||||||||
Other comprehensive income/(loss) |
( |
( |
||||||||||||||
Comprehensive income/(loss) |
$ |
$ |
$ |
$ |
( |
|||||||||||
For the Three Months Ended June 30, 2023 |
||||||||||||||||||||||||||||||||
Series C Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Accumulated Other Comprehensive Loss |
Retained Earnings |
Total |
|||||||||||||||||||||||||||
Shares Issued |
Par Value |
Shares Issued |
Par Value |
|||||||||||||||||||||||||||||
Balance—April 1, 2023 |
$ |
$ |
$ |
$ |
( |
$ |
$ |
|||||||||||||||||||||||||
Shares issued in connection with termination of the 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 |
— |
— |
||||||||||||||||||||||||||||||
Dividends |
— |
— |
( |
( |
||||||||||||||||||||||||||||
Net income |
— |
— |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance—June 30, 2023 |
$ |
$ |
$ |
$ |
( |
$ |
$ |
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
For the Three Months Ended June 30, 2022 |
||||||||||||||||||||||||||||||||
Series C Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Accumulated Other Comprehensive Income/(Loss) |
Accumulated Deficit |
Total |
|||||||||||||||||||||||||||
Shares Issued |
Par Value |
Shares Issued |
Par Value |
|||||||||||||||||||||||||||||
Balance—April 1, 2022 |
$ |
$ |
$ |
$ |
$ |
( |
$ |
|||||||||||||||||||||||||
Restricted stock issued and vesting of restricted stock units, net |
( |
( |
||||||||||||||||||||||||||||||
Stock-based compensation |
— |
— |
||||||||||||||||||||||||||||||
Other comprehensive loss |
— |
— |
( |
( |
||||||||||||||||||||||||||||
Dividends |
— |
— |
( |
( |
||||||||||||||||||||||||||||
Net income |
— |
— |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance—June 30, 2022 |
$ |
$ |
$ |
$ |
( |
$ |
( |
$ |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, 2023 |
||||||||||||||||||||||||||||||||
Series C Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Accumulated Other Comprehensive Loss |
Retained Earnings |
Total |
|||||||||||||||||||||||||||
Shares Issued |
Par Value |
Shares Issued |
Par Value |
|||||||||||||||||||||||||||||
Balance—January 1, 2023 |
$ |
$ |
$ |
$ |
( |
$ |
$ |
|||||||||||||||||||||||||
Shares issued in connection with termination of the 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 |
— |
— |
— |
|||||||||||||||||||||||||||||
Dividends |
— |
— |
— |
( |
( |
|||||||||||||||||||||||||||
Net income |
— |
— |
— |
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance—June 30, 2023 |
$ |
$ |
$ |
$ |
( |
$ |
$ |
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
For the Six Months Ended June 30, 2022 |
||||||||||||||||||||||||||||||||
Series C Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Accumulated Other Comprehensive Income/(Loss) |
Accumulated Deficit |
Total |
|||||||||||||||||||||||||||
Shares Issued |
Par Value |
Shares Issued |
Par Value |
|||||||||||||||||||||||||||||
Balance—January 1, 2022 |
$ |
$ |
$ |
$ |
$ |
( |
$ |
|||||||||||||||||||||||||
Restricted stock issued and vesting of restricted stock units, net |
( |
|||||||||||||||||||||||||||||||
Shares repurchased |
( |
( |
( |
( |
||||||||||||||||||||||||||||
Stock-based compensation |
— |
— |
— |
|||||||||||||||||||||||||||||
Other comprehensive loss |
— |
— |
— |
( |
( |
|||||||||||||||||||||||||||
Dividends |
— |
— |
— |
( |
( |
|||||||||||||||||||||||||||
Net income |
— |
— |
— |
( |
( |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance—June 30, 2022 |
$ |
$ |
$ |
$ |
( |
$ |
( |
$ |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||
2023 |
2022 |
|||||||
Cash flows from operating activities: |
||||||||
Net income/(loss) |
$ | $ | ( |
|||||
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: |
||||||||
(Gain)/loss on revaluation/termination of deferred consideration—gold payments |
( |
|||||||
Advisory and license fees paid in gold, other precious metals and cryptocurrency |
( |
( |
||||||
Loss on extinguishment of convertible notes |
||||||||
Stock-based compensation |
||||||||
Contractual gold payments |
||||||||
Impairments |
||||||||
Deferred income taxes |
||||||||
Amortization of issuance costs—convertible notes |
||||||||
(Gains)/losses on financial instruments owned, at fair value |
( |
|||||||
Losses on investments |
||||||||
Amortization of right of use asset |
||||||||
Depreciation and amortization |
||||||||
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 |
||||||||
Net cash provided by operating activities |
||||||||
Cash flows from investing activities: |
||||||||
Purchase of financial instruments owned, at fair value |
( |
( |
||||||
Purchase of investments |
( |
( |
||||||
Acquisition of Securrency Transfers, Inc. (net of cash acquired) |
( |
|||||||
Purchase of fixed assets |
( |
( |
||||||
Proceeds from the sale of financial instruments owned, at fair value |
||||||||
Receipt of contingent consideration – Sale of Canadian ETF business |
||||||||
Proceeds from held-to-maturity |
||||||||
Net cash provided by/(used in) investing activities |
( |
|||||||
Cash flows from financing activities: |
||||||||
Repurchase and maturity of convertible notes (Note 10) |
( |
|||||||
Termination of deferred consideration—gold payments |
( |
|||||||
Dividends paid |
( |
( |
||||||
Issuance costs—Convertible notes |
( |
|||||||
Shares repurchased |
( |
( |
||||||
Issuance costs—Series C Preferred Stock |
( |
|||||||
Proceeds from the issuance of convertible notes (Note 10) |
||||||||
Net cash used in financing activities |
( |
( |
||||||
Increase/(decrease) in cash flow due to changes in foreign exchange rate |
( |
|||||||
Net decrease in cash and cash equivalents |
( |
( |
||||||
Cash and cash equivalents—beginning of year |
||||||||
Cash and cash equivalents—end of period |
$ |
$ |
||||||
Supplemental disclosure of cash flow information: |
||||||||
Cash paid for income taxes |
$ | $ | ||||||
Cash paid for interest |
$ | $ | ||||||
• | 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. non-consolidated Delaware statutory trust registered with the SEC as an open-end management investment company. Each Digital Fund uses blockchain technology to maintain a secondary record of its shares on one or more blockchains (e.g., Stellar or Ethereum), but does not directly or indirectly invest in any assets that rely on blockchain technology, such as cryptocurrencies. |
• | WisdomTree Digital Movement, Inc ™ to facilitate such activity. |
• | WisdomTree Securities, Inc |
• | WisdomTree Transfers, Inc. is a New York based transfer agent registered with the SEC, providing transfer agency services for the Digital Funds. The transfer agent maintains the official record of share ownership in book entry form and reconciles the official record with the secondary record of ownership of shares on one or more blockchains. |
Equipment |
||||
Internally-developed software |