WisdomTree(WT) - 2021 Q1 - Quarterly Report

PART I: FINANCIAL INFORMATION Item 1. Financial Statements The company's unaudited consolidated financial statements for the periods ended March 31, 2021, and December 31, 2020 Consolidated Balance Sheets A summary of the company's assets, liabilities, and stockholders' equity at specific points in time | Metric | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | | Total Assets | $885,217 | $896,692 | | Total Liabilities | $478,464 | $497,858 | | Total Stockholders' Equity | $274,184 | $266,265 | | Cash and Cash Equivalents | $62,302 | $73,425 | | Current Assets | $131,964 | $141,861 | | Current Liabilities | $56,558 | $73,999 | Consolidated Statements of Operations A summary of the company's revenues, expenses, and net income over a specific period | Metric | Three Months Ended March 31, 2021 (Thousands) | Three Months Ended March 31, 2020 (Thousands) | Change (YoY) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Total Revenues | $72,830 | $63,874 | +14.0% | | Operating Expenses | $54,223 | $48,240 | +12.4% | | Operating Income | $18,607 | $15,634 | +19.0% | | Net Income/(Loss) | $15,147 | $(8,638) | N/A (swing to profit) | | Basic EPS | $0.09 | $(0.06) | N/A (swing to profit) | | Diluted EPS | $0.09 | $(0.06) | N/A (swing to profit) | Consolidated Statements of Comprehensive Income/(Loss) A summary of net income and other comprehensive income or loss items | Metric | Three Months Ended March 31, 2021 (Thousands) | Three Months Ended March 31, 2020 (Thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | | Net income/(loss) | $15,147 | $(8,638) | | Other comprehensive loss | $(117) | $(853) | | Comprehensive income/(loss) | $15,030 | $(9,491) | Consolidated Statements of Changes in Stockholders' Equity A reconciliation of the beginning and ending balances of stockholders' equity accounts - Stockholders' equity increased by $7.9 million in Q1 2021, driven by $15.1 million in net income, partially offset by dividends, share repurchases, and other adjustments[24] Consolidated Statements of Cash Flows A summary of cash inflows and outflows from operating, investing, and financing activities | Metric | Three Months Ended March 31, 2021 (Thousands) | Three Months Ended March 31, 2020 (Thousands) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by/(used in) operating activities | $1,865 | $(2,634) | | Net cash (used in)/provided by investing activities | $(5,565) | $8,754 | | Net cash used in financing activities | $(7,188) | $(11,391) | | Decrease in cash and cash equivalents | $(11,123) | $(6,543) | | Cash and cash equivalents—end of period | $62,302 | $68,429 | Notes to Consolidated Financial Statements Detailed explanations of accounting policies and specific items in the financial statements - The company early adopted ASU 2020-06 on January 1, 2021, simplifying convertible instrument accounting and reducing interest expense by approximately $0.4 million per quarter[69][254] - The company adopted ASU 2019-12 on January 1, 2021, to simplify income tax accounting, which did not have a material impact on its financial statements[70][255] Note 1. Organization and Description of Business An overview of the company's business as an ETP sponsor and asset manager - WisdomTree Investments, Inc. is an ETP sponsor and asset manager offering a range of strategies including equity, commodity, and cryptocurrency[30] Note 2. Significant Accounting Policies A description of the key accounting principles and methods used in preparing the financial statements - The financial statements are prepared in conformity with U.S. GAAP and include wholly-owned subsidiaries, with all intercompany accounts and transactions eliminated[31] - Revenue is primarily from advisory fees based on ETPs' average daily net assets, recognized over time as the performance obligation is satisfied[37] - Goodwill and indefinite-lived intangible assets are tested for impairment at least annually on November 30th[53][56] Note 3. Cash and Cash Equivalents Details regarding the company's cash holdings and regulatory capital requirements | Metric | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | | Cash and Cash Equivalents | $62,302 | $73,425 | - Certain international subsidiaries are required to maintain minimum regulatory capital, which was $12.2 million at March 31, 2021, and $10.7 million at December 31, 2020[72] Note 4. Fair Value Measurements Information on how the company measures and categorizes its financial instruments at fair value - The company categorizes financial instruments into Level 1, Level 2, and Level 3 based on the transparency of inputs used in fair value measurement[74][77] | Metric | Three Months Ended March 31, 2021 (Thousands) | Three Months Ended March 31, 2020 (Thousands) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Deferred consideration (Beginning balance) | $230,137 | $173,024 | | Net realized losses (contractual gold payments) | $4,270 | $3,760 | | Net unrealized (gains)/losses (revaluation) | $(2,832) | $2,208 | | Settlements | $(4,429) | $(3,692) | | Deferred consideration (Ending balance) | $227,146 | $175,300 | Note 5. Securities Owned Details on the company's holdings of trading securities and related performance | Metric | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | | :---------------- | :-------------------------- | :-------------------------- | | Trading securities | $34,771 | $34,895 | - The company recognized trading losses of $561 thousand in Q1 2021, compared to $196 thousand in Q1 2020, on securities owned[86] Note 6. Securities Held-to-Maturity Information on debt instruments classified as held-to-maturity | Metric | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | | Debt instruments: Pass-through GSEs (amortized cost) | $411 | $451 | - Proceeds from held-to-maturity securities maturing or called prior to maturity significantly decreased to $38 thousand in Q1 2021 from $6.0 million in Q1 2020[88] - No allowance for credit losses was provided on held-to-maturity securities due to an implicit U.S. government guarantee[89] Note 7. Investments Details on the company's equity investments, particularly in Securrency, Inc | Investment | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | | Securrency, Inc. – Series A convertible preferred stock | $8,349 | $8,112 | | Securrency, Inc. – Series B convertible preferred stock | $5,500 | — | | Total | $13,849 | $8,112 | - The company recognized a gain of $237 thousand on its Series A Shares in Securrency, Inc. on March 8, 2021, upon re-measurement to fair value[93] Note 8. Fixed Assets, net A breakdown of the company's property and equipment, net of depreciation | Metric | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | | Equipment | $2,959 | $2,836 | | Furniture and fixtures | $2,225 | $2,225 | | Leasehold improvements | $11,021 | $11,012 | | Less: accumulated depreciation and amortization | $(8,773) | $(8,494) | | Total | $7,432 | $7,579 | Note 9. Deferred Consideration Details on the obligation to make fixed payments of physical gold bullion - The company has an obligation to pay ETFS Capital fixed payments of physical gold bullion, starting with 9,500 ounces per year through March 31, 2058[96] - The gain on revaluation of deferred consideration in Q1 2021 was due to a decline in spot gold prices, while the loss in Q1 2020 was due to an increase in forward-looking gold prices[100][216] | Metric | Three Months Ended March 31, 2021 (Thousands) | Three Months Ended March 31, 2020 (Thousands) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Contractual Gold Payments | $4,270 | $3,760 | | Contractual Gold Payments – gold ounces paid | 2,375 | 2,375 | | Gain/(loss) on revaluation of deferred consideration – gold payments | $2,832 | $(2,208) | Note 10. Convertible Notes Information regarding the company's 4.25% Convertible Senior Notes due 2023 - The company issued $175 million aggregate principal amount of 4.25% Convertible Senior Notes due 2023 in June and August 2020[101] - The fair value of the Convertible Notes was $215.0 million at March 31, 2021, classified as Level 2 in the fair value hierarchy[107] | Metric | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | | Principal amount | $175,000 | $175,000 | | Carrying amount | $171,163 | $166,646 | | Effective interest rate | 5.30% | 6.29% | Note 11. Preferred Shares Details on the Series A Non-Voting Convertible Preferred Stock issued by the company - The company issued 14,750 shares of Series A Non-Voting Convertible Preferred Stock, convertible into 14,750,000 common shares[110] | Metric | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | | Preferred Shares – carrying value | $132,569 | $132,569 | | Redemption value of the Preferred Shares | $88,642 | $72,667 | Note 12. Leases Information on the company's operating leases, costs, and future commitments - The company recognized an impairment charge of $303 thousand in Q1 2021 due to exiting its London office[119][218] | Metric | Three Months Ended March 31, 2021 (Thousands) | Three Months Ended March 31, 2020 (Thousands) | | :---------------- | :-------------------------------- | :-------------------------------- | | Total lease cost | $992 | $1,140 | | Metric | March 31, 2021 (Thousands) | | :-------------------------------- | :-------------------------- | | Total future minimum lease payments (undiscounted) | $25,775 | Note 13. Contingencies Disclosure of potential liabilities from lawsuits and other contingent events - The company is facing lawsuits in Italy seeking approximately €9,000 ($10,565) in aggregate, with no accrual made as of March 31, 2021[123][124] Note 14. Variable Interest Entities Information on the company's involvement with variable interest entities like Securrency | Metric | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | | Carrying Amount – Assets (Securrency) | $13,849 | $8,112 | | Maximum exposure to loss | $13,849 | $8,112 | Note 15. Revenues from Contracts with Customers A breakdown of operating revenues by type and geographic location | Metric | Three Months Ended March 31, 2021 (Thousands) | Three Months Ended March 31, 2020 (Thousands) | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Advisory fees | $71,616 | $62,950 | | Other | $1,214 | $924 | | Total operating revenues | $72,830 | $63,874 | | Geographic Distribution (Q1 2021, Thousands) | | :-------------------------- | :-------------------------- | | United States | $40,699 | | Jersey | $29,990 | | Ireland | $2,141 | Note 16. Related Party Transactions Disclosure of transactions and balances with related parties | Metric | Three Months Ended March 31, 2021 (Thousands) | Three Months Ended March 31, 2020 (Thousands) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Advisory services provided to related parties | $71,616 | $62,950 | | Accounts Receivable from Related Parties (March 31, 2021, Thousands) | | :-------------------------- | :-------------------------- | | Receivable from WTT | $14,347 | | Receivable from ManJer Issuers | $11,134 | | Receivable from WMAI and WTI | $1,777 | Note 17. Stock-Based Awards Details on stock-based compensation expense and unrecognized costs - Unrecognized stock-based compensation expense was $16.5 million at March 31, 2021, with an average remaining vesting period of 1.70 years[139] | Metric | Three Months Ended March 31, 2021 (Thousands) | Three Months Ended March 31, 2020 (Thousands) | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Stock-based compensation expense | $3,143 | $3,239 | Note 18. Earnings Per Share A calculation of basic and diluted earnings per share | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Basic earnings/(loss) per share | $0.09 | $(0.06) | | Diluted earnings/(loss) per share | $0.09 | $(0.06) | | Weighted average common shares (in thousands) | 145,649 | 152,519 | Note 19. Income Taxes An analysis of the company's income tax provision and deferred tax assets - The Q1 2021 effective tax rate of -14.9% was primarily due to a $5.2 million reduction in unrecognized tax benefits and other factors[145] | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Effective income tax rate | -14.9% | 21.5% | | Income tax benefit | $1,969 | $2,371 | | Metric | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | | Deferred tax assets, net | $6,215 | $8,063 | | Gross unrecognized tax benefits (including interest and penalties) | $22,222 | $27,016 | Note 20. Shares Repurchased Information on the company's share repurchase program and activities - The company's share repurchase program was extended through April 27, 2022, with $49.6 million remaining for future purchases as of March 31, 2021[160][162] - During Q1 2021, the company repurchased 489,763 shares of common stock for an aggregate cost of $2.6 million[161] Note 21. Goodwill and Intangible Assets A summary of the carrying amounts of goodwill and indefinite-lived intangible assets - The indefinite-lived intangible assets of $601.2 million are related to the right to manage AUM from the ETFS Acquisition[165] | Metric | March 31, 2021 (Thousands) | | :------- | :-------------------------- | | Goodwill | $85,856 | | Intangible Assets (Indefinite-Lived) | $601,247 | Note 22. Contingent Payments Details on contingent payments related to business dispositions - The company exited its investment in AdvisorEngine on May 4, 2020, receiving $9.6 million upfront and contingent payments up to $10.4 million[167] - The sale of the Canadian ETF business in Q1 2020 resulted in a recognized gain of $2.9 million[169][170] Note 23. Subsequent Events Disclosure of significant events occurring after the balance sheet date - No events requiring disclosure occurred subsequent to the issuance date of the financial statements[171] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations An analysis of the company's financial performance, condition, and recent developments for Q1 2021 Executive Summary An overview of the company's business, strategy, and recent initiatives in digital assets - WisdomTree is a leading global ETP sponsor with $69.5 billion in AUM as of March 31, 2021[174] - The company offers ETPs tracking proprietary and third-party indexes, commodities, and actively managed products, emphasizing 'Modern Alpha'[175][176] - Recent digital assets initiatives include filing for a Bitcoin Trust, launching a physically backed Ethereum ETP in Europe, and investing in Securrency, Inc[180] Assets Under Management A review of changes in the company's global assets under management - Global ETP AUM increased from $67.4 billion at December 31, 2020, to $69.5 billion at March 31, 2021, driven by market appreciation and net inflows[194] - U.S. listed ETFs' AUM increased from $38.5 billion to $42.2 billion in Q1 2021, due to market appreciation and net inflows[188][194] - International ETPs' AUM decreased from $28.9 billion to $27.4 billion in Q1 2021, primarily due to market depreciation in gold products[190][194] - During Q1 2021, global equity markets performed favorably while government bond yields rose and gold prices declined 10.6%[182][183] Our Operating and Financial Results A summary of the company's financial performance in the first quarter of 2021 - Operating revenues for Q1 2021 were $72.8 million, up 14.0% year-over-year, driven by higher average AUM[191] - Total operating expenses increased 12.4% to $54.2 million in Q1 2021, primarily due to higher incentive compensation and other costs[191] - The company reported net income of $15.1 million in Q1 2021, a significant improvement from a net loss of ($8.6) million in Q1 2020[193] Key Operating Statistics A presentation of key metrics tracking the company's operational performance | Metric | March 31, 2021 | December 31, 2020 | March 31, 2020 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Global AUM (End of period, $ millions) | $69,537 | $67,392 | $50,347 | | Global AUM (Average during period, $ millions) | $69,552 | $64,125 | $60,189 | | Global Inflows/(Outflows) ($ millions) | $1,279 | $881 | $(536) | | Average ETP advisory fee | 0.42% | 0.41% | 0.42% | | Number of ETPs | 313 | 309 | 331 | | Headcount | 227 | 217 | 210 | Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020 A detailed comparison of financial results for the first quarters of 2021 and 2020 Selected Operating and Financial Information A summary table comparing key financial metrics year-over-year | Metric | Q1 2021 (Thousands) | Q1 2020 (Thousands) | Change ($) | Change (%) | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Average global AUM | $69,552 | $60,189 | $9,363 | 15.6% | | Advisory fees | $71,616 | $62,950 | $8,666 | 13.8% | | Total revenues | $72,830 | $63,874 | $8,956 | 14.0% | | Total operating expenses | $54,223 | $48,240 | $5,983 | 12.4% | Average Global AUM An analysis of the growth in average global assets under management - Average global AUM increased 15.6% to $69.6 billion in Q1 2021 from $60.2 billion in Q1 2020, driven by market appreciation and net inflows[198] Operating Revenues A breakdown of the increase in advisory fees and other income - Advisory fee revenues increased 13.8% to $71.6 million in Q1 2021 from $63.0 million in Q1 2020, primarily due to higher average global AUM[199] - Other income increased 31.4% to $1.2 million in Q1 2021 from $0.9 million in Q1 2020[200] Operating Expenses A detailed analysis of the changes in various operating expense categories - Compensation and benefits increased due to higher incentive compensation accruals and an increase in headcount from 210 to 227[203] - Sales and business development expense decreased primarily due to lower discretionary spending resulting from the COVID-19 pandemic[206] - Professional fees increased due to spending related to the company's digital assets initiative[208] | Expense Category | Q1 2021 (Thousands) | Q1 2020 (Thousands) | Change ($) | Change (%) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Compensation and benefits | $22,627 | $17,295 | $5,332 | 30.8% | | Fund management and administration | $15,521 | $14,485 | $1,036 | 7.2% | | Marketing and advertising | $3,006 | $2,468 | $538 | 21.8% | | Sales and business development | $2,145 | $3,417 | $(1,272) | (37.2%) | | Contractual gold payments | $4,270 | $3,760 | $510 | 13.6% | | Professional fees | $2,013 | $1,273 | $740 | 58.1% | | Total operating expenses | $54,223 | $48,240 | $5,983 | 12.4% | Other Income/(Expenses) An explanation of significant changes in non-operating income and expense items - Interest expense decreased due to a lower level of debt outstanding and the early adoption of ASU 2020-06[215] - A gain on revaluation of deferred consideration was recognized in Q1 2021 ($2.8 million) compared to a loss in Q1 2020 (($2.2) million), primarily due to a decline in spot gold prices[216] - Impairments significantly decreased due to a $19.7 million non-cash impairment on AdvisorEngine in Q1 2020[218] - Other losses, net, included tax-related indemnification asset releases of $5.2 million (Q1 2021) and $6.0 million (Q1 2020)[219] | Category | Q1 2021 (Thousands) | Q1 2020 (Thousands) | Change ($) | Change (%) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Interest expense | $(2,296) | $(2,419) | $123 | (5.1%) | | Gain/(loss) on revaluation of deferred consideration | $2,832 | $(2,208) | $5,040 | N/A | | Impairments | $(303) | $(19,672) | $19,369 | (98.5%) | | Other losses, net | $(5,893) | $(2,507) | $(3,386) | 135.1% | Income taxes An analysis of the effective income tax rate and related benefits - The effective income tax rate for Q1 2021 was -14.9%, resulting in a $2.0 million income tax benefit, primarily due to a $5.2 million reduction in unrecognized tax benefits[220] - The effective income tax rate for Q1 2020 was 21.5%, resulting in a $2.4 million income tax benefit[221] Non-GAAP Financial Measures A presentation of adjusted net income and earnings per share to show core performance - Non-GAAP measures exclude items like unrealized gains/losses on deferred consideration and impairment charges to provide a consistent view of core operating performance[223] | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Adjusted net income | $12,504 | $11,224 | | Adjusted earnings per share - diluted | $0.08 | $0.07 | Liquidity and Capital Resources An overview of the company's liquidity position, capital sources, and uses of cash Liquidity A summary of the company's liquid assets and changes in cash position - Cash and cash equivalents decreased by $11.1 million in Q1 2021, primarily due to investments, dividends, and share repurchases[226] | Metric | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | | Liquid assets | $127,825 | $138,226 | | Available liquidity | $59,045 | $53,482 | Issuance of Convertible Notes Details regarding the company's outstanding convertible senior notes - The company issued $175 million aggregate principal amount of 4.25% Convertible Senior Notes due June 15, 2023[229] - The notes have an initial conversion price of approximately $5.92 per share, and the principal amount will be settled in cash upon conversion[230] Capital Resources Information on the company's primary sources of financing - The company's principal source of financing is its operating cash flow, which is expected to be sufficient to fund future operations[232] Use of Capital A description of the company's main uses of cash, including dividends and share repurchases - Main uses of cash include funding operations, a $0.03 per share quarterly cash dividend, and a share repurchase program[234] - During Q1 2021, the company repurchased 489,763 shares for $2.6 million, with $49.6 million remaining under the program[235] Contractual Obligations A summary of the company's significant contractual financial commitments - The company has $175.0 million aggregate principal amount of Convertible Notes outstanding, maturing on June 15, 2023[236][237] - Deferred consideration for gold payments had a present value of $227.1 million at March 31, 2021[239][240] - Total future minimum lease payments for operating leases were $25.8 million at March 31, 2021[242] Off-Balance Sheet Arrangements A statement regarding the absence of off-balance sheet financing arrangements - The company does not have any off-balance sheet financing or other arrangements[245] Critical Accounting Policies and Estimates A discussion of the accounting policies and estimates most critical to the financial statements Goodwill and Intangible Assets The methodology for testing goodwill and indefinite-lived intangible assets for impairment - Goodwill and indefinite-lived intangible assets are tested for impairment at least annually on November 30th, using qualitative and quantitative assessments[248][249] Investments The accounting treatment for equity investments without a readily determinable fair value - Equity investments without a readily determinable fair value are accounted for under the measurement alternative (cost less impairment, plus observable price changes)[250] Deferred Consideration – Gold Payments The valuation methodology and sensitivity analysis for the deferred consideration liability - Deferred consideration is measured at present value using forward-looking gold prices, a 9.0% discount rate, and a 1.7% perpetual growth rate[251] - A 1 percentage point increase in the discount rate would increase the Q1 2021 reported gain by $24.8 million[252] Revenue Recognition The policy for recognizing revenue from advisory fees - Revenue from advisory fees is recognized over time, based on a percentage of ETPs' average daily net assets[253] Recently Adopted Accounting Pronouncements A summary of recently adopted accounting standards and their impact - The company early adopted ASU 2020-06 on January 1, 2021, simplifying convertible instrument accounting and reducing interest expense by approximately $0.4 million per quarter[254] - The company adopted ASU 2019-12 on January 1, 2021, simplifying income tax accounting, which did not have a material impact[255] Item 3. Quantitative and Qualitative Disclosures about Market Risk A description of the company's exposure to various market risks and their potential impact Market Risk The risk of changes in ETP values due to market fluctuations - Market risk primarily represents the risk of changes in ETP values, which directly impacts advisory fee revenues[257] - Fluctuations in ETP values can reduce AUM and revenues, potentially leading to fund withdrawals[258] Interest Rate Risk The company's exposure to changes in interest rates - The company does not anticipate a material impact from changes in interest rates on its financial condition or operating results[259] - Convertible Notes bear a fixed interest rate of 4.25%, mitigating direct financial statement risk from interest rate changes[260] Exchange Rate Risk The risk of financial impact from fluctuations in foreign currency exchange rates - The company is subject to currency translation exposure from non-U.S. operations, primarily in the UK and Europe[261] - Currently, the company does not use derivative financial instruments to offset foreign exchange exposures[261] Commodity Price Risk The company's exposure to fluctuations in commodity prices, particularly gold - Fluctuations in commodity prices, particularly gold, could have a material adverse effect on the company's AUM and revenues[264] - The company uses gold ounces to satisfy deferred consideration obligations, creating exposure to gold price fluctuations[264] Item 4. Controls and Procedures A confirmation of the effectiveness of the company's disclosure and internal controls Evaluation of Disclosure Controls and Procedures Management's conclusion on the effectiveness of disclosure controls - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2021[265] Changes in Internal Control over Financial Reporting A statement on changes to internal controls during the reporting period - There were no changes in internal control over financial reporting during Q1 2021 that have materially affected, or are reasonably likely to materially affect, internal controls[266] PART II: OTHER INFORMATION Item 1. Legal Proceedings This section states that there are no legal proceedings to report - The company reported no legal proceedings[268] Item 1A. Risk Factors This section refers to the risk factors detailed in the company's Annual Report - Readers should carefully consider the risk factors outlined in the Annual Report on Form 10-K for the fiscal year ended December 31, 2020[269] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's share repurchase activities during the quarter Purchases of Equity Securities by the Issuer and Affiliated Purchasers A summary of common stock repurchases made during the first quarter of 2021 - During Q1 2021, the company repurchased 489,763 shares of its common stock at an average price of $5.37 per share, totaling approximately $2.6 million[274] - As of March 31, 2021, $49.6 million remained available under the share repurchase program, which was extended through April 27, 2022[274] Item 3. Defaults Upon Senior Securities This section states that there are no defaults upon senior securities to report - The company reported no defaults upon senior securities[275] Item 4. Mine Safety Disclosures This section states that mine safety disclosures are not applicable - Mine safety disclosures are not applicable to the company[276] Item 5. Other Information This section states that there is no other information to report - The company reported no other information[277] Item 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q - Exhibits include corporate documents, the Indenture for Convertible Senior Notes, and various CEO, CFO, and CAO certifications[278] - Financial statements for the three months ended March 31, 2021, are provided in XBRL format[279]