Business Combination (Tables)

9 Months Ended

Sep. 30, 2018

The following table summarizes the allocation of the purchase price as of the acquisition date:


Purchase price
Preferred Shares issued		14,750
Conversion ratio		1,000

Common stock equivalents		14,750,000
Common Shares issued		15,250,000

Total shares issued		30,000,000
WisdomTree stock price⁽¹⁾	$	9.00

Equity portion of purchase price	$	270,000
Cash portion of purchase price
Term Loan (See Note 12)		200,000
Cash on hand		53,000

Purchase price		523,000
Deferred consideration (See Note 11)		172,746

Total	$	695,746
Allocation of consideration
Cash and cash equivalents		13,687
Receivables and other current assets		14,069
Intangible assets⁽²⁾		601,247
Other current liabilities		(17,314	)
Fair value of net assets acquired		611,689

Goodwill resulting from the ETFS Acquisition⁽³⁾	$	84,057

(1)	The closing price of the Company’s common stock on April 10, 2018, the last trading day prior to the closing date of the acquisition.

(2)

Represents purchase price allocated to customary advisory agreements. The fair value of the intangible assets was determined using an income approach (discounted cash flow analysis) which relied upon significant unobservable inputs including a revenue growth multiple of 3% to 4% and a weighted average cost of capital of 11.6%. These intangible assets were determined to have an indefinite useful life and are not deductible for tax purposes. A deferred tax liability associated with these intangible assets was not recognized as the intangibles arose in Jersey, where the Company will be subject to a zero percent tax rate.

(3)	Goodwill arising from the ETFS Acquisition represents the value of expected synergies created from combining the operations of ETFS and the Company. The goodwill is not deductible for tax purposes as the transaction was structured as a stock acquisition occurring in the United Kingdom.

Summary of Operating Results of ETFS since the Acquisition Date

The Company’s Consolidated Statements of Operations include the following operating results of ETFS since the acquisition date of April 11, 2018 through September 30, 2018:


Revenues:		$37,137
Income before taxes:		$33,496 (including a gain on revaluation of deferred consideration of $17,630)

Summary of Pro Forma Financial Information

The following table presents unaudited pro forma financial information of the Company as if the ETFS Acquisition had been consummated on January 1, 2017. The information was derived from the historical financial results of the Company and ETFS for all periods presented and was adjusted to give effect to pro forma events that are directly attributable to the acquisition, factually supportable and expected to have a continuing impact on the combined results following the acquisition.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Revenues		n/a	$	78,594	$	229,674	$	228,004
Net income		n/a	$	6,736	$	48,088	$	22,011