CaliberCos (CWD) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01Changes in prevailing interest rates may reduce our profitability, and we may not be able to adequately anticipate and respond to changes in market interest rates
2. 02Inflation can have an adverse impact on our business and on our customers43% rewritten
3. 03Changes in trade policies and tariffs imposed by the United States government and the governments of other nations may have a material adverse effect on our business and results of operations
4. 04A decline in the pace of growth or size of investment made by our funds may adversely affect our revenues
5. 05Our revenue, earnings, net income, and cash flows can all vary materially, which may make it difficult for us to achieve steady earnings growth on a quarterly basis and may cause the price of our Class A common stock to decline
6. 06We could lose part or all of our investments, which could have a material adverse effect on our financial condition and results of operations
7. 07We have an amount of total liabilities which may be considered significant for a company of our size which could adversely affect our financial condition and our ability to react to changes in our business
8. 08We may not be able to generate sufficient cash to service all of our debt or refinance our obligations and may be forced to take other actions to satisfy our obligations under such indebtedness, which may not be successful
9. 09The historical returns attributable to our funds should not be considered as indicative of the future results of our funds or of our future results or of any returns expected on an investment in our Class A common stock
10. 10We may be subject to litigation risks and may face liabilities and damage to our professional reputation as a result of investment decisions on behalf of investors in our funds
11. 11Actions of any joint venture partners that we may have could reduce the returns on joint venture investments
12. 12Our reliance on third parties to operate and to develop certain of our properties may harm our business
13. 13Changes in relevant tax laws, regulations, treaties, or an adverse interpretation of these items by tax authorities could adversely impact our effective tax rate and tax liability
14. 14Conflicts of interest exist between us and related parties
15. 15Risk management activities may adversely affect the return on our funds’ investments
16. 16Our real estate funds are subject to the risks inherent in the ownership, development, and operation of real estate
17. 17Investments by our investment funds may rank junior to investments made by others
18. 18Rapid growth of our businesses may be difficult to sustain and may place significant demands on our administrative, operational, and financial resources
19. 19We depend on our founders, senior professionals, and other key personnel, and our ability to retain them and attract additional qualified personnel is critical to our success and our growth prospects
20. 20We may expand into new investment strategies, geographic markets and businesses, each of which may result in additional risks and uncertainties in our businesses
21. 21The asset management industry and alternative investment industries are intensely competitive. We compete primarily on a regional, industry, and asset class basis
22. 22We compete for investment opportunities based on a variety of factors, including breadth of market coverage and relationships, access to capital, transaction execution skills, the range of products and services offered, innovation, and price
23. 23If we are unable to maintain and protect our intellectual property, or if third parties assert that we infringe their intellectual property rights, our business could suffer
24. 24Also, third parties may claim that our business operations infringe on their intellectual property rights. These claims may harm our reputation, cost us money to defend, distract the attention of our management and prevent us from offering some services
25. 25Security risks and attacks are common, increasing globally, and may result in significant liabilities
26. 26Our failure to sufficiently secure our business and services may result in unauthorized access to investor data, a negative impact on our investor attraction and retention, and significant liabilities
27. 27We depend on various cloud service providers operated by third parties, and any service outages, delays, or disruptions in these operations could harm our business and operating results
28. 28If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Class A common stock may decline

Risks Related to Our Organizational Structure

1. 29The consolidation of investment funds or operating businesses of our portfolio companies could make it more difficult to understand our operating performance and could create operational risks for us27% rewritten
2. 30If we were deemed to be an “investment company” under the Investment Company Act, applicable restrictions could make it impractical for us to continue our businesses as conducted and could have a material adverse effect on our businesses

Risks Related to the Ownership of Our Class A Common Stock

1. 31The dual class structure of our common stock has the effect of concentrating voting control with our executive officers, which will limit your ability to influence the outcome of important transactions
2. 32We may not be able to maintain a listing of our Class A common stock on Nasdaq52% rewritten
3. 33Our share price has in the past and may in the future fluctuate substantially26% rewritten
4. 34Future sales and issuances of our Class A common stock or rights to purchase Class A common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause the stock price of our Class A common stock to decline
5. 35Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
6. 36If we fail to implement and maintain an effective system of internal control, we may be unable to accurately report our operating results, meet our reporting obligations, or prevent fraud
7. 37We are an emerging growth company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our Class A common stock less attractive to investors
8. 38We are a “controlled company” within the meaning of the listing rules of Nasdaq and, as a result, can rely on exemptions from certain corporate governance requirements that provide protection to stockholders of other companies
9. 39If securities or industry analysts do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline28% rewritten
10. 40We have never paid dividends on our common stock, and we do not intend to pay dividends for the foreseeable future. Consequently, any gains from an investment in our Class A common stock will likely depend on whether the price of our Class A common stock increases
11. 41Our charter documents and Delaware law and the voting control exercised by our founders could prevent a takeover that stockholders consider favorable and could also reduce the market price of our stock
12. 42Our third amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law

Risks Related to Our Business and LINK Strategy

1. 43Our financial results and the market price of our common stock may be affected by the prices of LINKNew
2. 44Our LINK holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalentsNew
3. 45Our Treasury Reserve Policy is new and has not been tested over timeNew
4. 46If we were deemed to be an “investment company” under Investment Company Act of 1940, as amended (the “Investment Company Act”), the applicable restrictions could make it impractical for us to continue our businesses as conducted and could have a material adverse effect on our businessesNew
5. 47We are not subject to legal and regulatory obligations that apply to investment companies such as mutual funds and exchange-traded funds, or to obligations applicable to investment advisersNew
6. 48We may be subject to additional tax liability if regulation or policy changes adversely affect the tax treatment of rewards from staking LINKNew
7. 49We may face operational, technological, and security risks related to the acquisition and custody of our LINK holdings, including the loss of private keys required to access our LINK holdings and smart contract related losses and vulnerabilitiesNew
8. 50We may suffer losses due to staking activitiesNew
9. 51The irreversibility of digital asset transactions exposes us to risks of theft, loss and human error, which could negatively impact our businessNew
10. 52The change in use of proceeds from our ELOC facility to include digital asset acquisitions may increase risk and reduce liquidityNew
11. 53Our Treasury Reserve Policy exposes us to risk of non-performance by counterpartiesNew
12. 54Our digital asset treasury strategy could create complications with third party service providers, such as insurance companies, banking entities and auditors, which could have a materially adverse impact on our businessNew
13. 55Technological obsolescence and competition could adversely affect the value of LINKNew
14. 56The emergence or growth of digital assets other than LINK may have a material adverse effect on our financial condition. If the mechanisms for validating transactions in other digital assets are perceived as superior to those used by the Chainlink protocol, those digital assets could gain market share relative to LINKNew
15. 57The due diligence procedures conducted by us and our liquidity providers to mitigate transaction risk may fail to prevent transactions with a sanctioned entityNew
16. 58The launch of central bank digital currencies (“CBDCs”) may adversely impact our businessNew
17. 59Intellectual property disputes related to the open-source structure of digital asset networks expose us to risks related to software development, security vulnerabilities and potential disruptions to digital asset technology could threaten our ability to operateNew