| Item 1.01 |
Entry into a Material Definitive Agreement. |
SPA Agreement
In April 2018, WisdomTree International Holdings Ltd (“WTHL”), a subsidiary of WisdomTree, Inc. (the “Company”), acquired the European exchange-traded commodity, currency and leveraged-and-inverse business of ETFS Capital Limited (“ETFS”) through the acquisition of Electra Target HoldCo Limited (“ETH”) and its subsidiaries (the “2018 Acquisition”). In connection with the 2018 Acquisition, WTHL, ETH and ETFS entered into an agreement pursuant to which ETH agreed to make fixed payments to ETFS of physical gold bullion equating to 9,500 ounces of gold per year through March 31, 2058, which would then be reduced to 6,333 ounces of gold per year continuing into perpetuity (the “Contractual Gold Payments”), in order to enable ETFS to continue to meet its payment obligations under prior royalty agreements (the “historical royalty agreements”) that ETFS had with the World Gold Council (“WGC”), Gold Bullion Holdings (Jersey) Limited, a subsidiary of WGC (“GBH”), Graham Tuckwell (“GT”), and Rodber Investments Limited (“RIL”), an entity controlled by GT, who is also the Chairman of ETFS. ETH made the Contractual Gold Payments to ETFS, which then continued to pass through the payments to the other parties pursuant to the historical royalty agreements.
On May 10, 2023, the Company entered into and closed on a Sale, Purchase and Assignment Deed relating to the Contractual Gold Payments with WTHL, ETH, ETFS, WGC, GBH, GT and RIL (the “SPA Agreement”) to extinguish the Company’s obligations relating to the Contractual Gold Payments (the “Transaction”). Pursuant to the SPA Agreement, the Company issued 13,087 shares of Series C Non-Voting Convertible Preferred Stock, $0.01 par value per share (the “Series C Preferred Shares”), which are convertible into 13,087,000 shares of the Company’s common stock (the “Conversion Shares”), and paid an aggregate of approximately $50 million. The consideration paid pursuant to the SPA Agreement resulted in GBH receiving approximately $4.4 million in cash and the Series C Preferred Shares, and RIL receiving approximately $45.6 million in cash.
The SPA Agreement contains certain representations and warranties, covenants and conditions customary for similar transactions.
The foregoing description of the SPA Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the SPA Agreement, which is attached hereto as Exhibit 10.1 and is incorporated by reference in its entirety.
Investor Rights Agreement
On May 10, 2023, in connection with the Transaction and issuance of the Series C Preferred Shares, the Company and GBH entered into an Investor Rights Agreement (the “Investor Rights Agreement”), pursuant to which, among other things:
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Restrictions on Transfer. The Series C Preferred Shares are not transferable to any person other than an affiliate of GBH, the Company or an affiliate of the Company. |
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Conversion only in Connection with Sales. As described in Item 5.03 below, under the Certificate of Designations (as defined below), all or any portion of the Series C Preferred Shares held by a holder may be converted into shares of common stock only in connection with the sale of all or any portion of such common stock on an arms-length basis by such holder to a bona fide third-party purchaser. Under the Investor Rights Agreement, GBH is subject to restrictions on the manner in which the Conversion Shares can be sold. Approved sales include specified block trades, underwritten shelf takedowns and other private placements, in each case, subject to and in accordance with the limitations set forth in the Investor Rights Agreement. GBH has agreed not to distribute or sell any Conversion Shares to any person that would knowingly result in that person, together with such person’s affiliates and associates, owning, controlling or otherwise having any beneficial ownership interest representing in the aggregate 5% or more of the then outstanding shares of the Company’s common stock. GBH also has agreed not to distribute or sell any Conversion Shares to ETFS, GT or any of their affiliates, associates or any Group (as that term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as defined in Rule 13d-5 thereunder) formed by the foregoing persons. |
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Registration Rights. Any time from the later of the filing of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 and August 15, 2023 (the “First Filing Date”) until the fifth anniversary of such date, GBH may request that the Company prepare and file a registration statement covering the resale of the Conversion Shares. In addition, from and after the First Filing Date, GBH may request to sell all or any portion of the Conversion Shares pursuant to specified block trades, underwritten shelf takedowns and other private placements, in each case, subject to and in accordance with the limitations set forth in the Investor Rights Agreement. Under the Investor Rights Agreement, GBH is also entitled to certain “piggyback” registration rights in connection with certain underwritten offerings of the Company’s common stock by the Company. |
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Amendment to Certificate of Incorporation or Certificate of Designations. For so long as GBH holds the Conversion Shares, the Company will not amend its certificate of incorporation or the Certificate of Designations (as defined below) in any manner materially adverse to GBH without the written consent of GBH. |
The foregoing description of the Investor Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Investor Rights Agreement, which is attached hereto as Exhibit 4.1 and is incorporated by reference in its entirety.
