WisdomTree (WT) risk factors, FY2025 10-K

Risks Related to Common

1. 01Stock and Convertible NotesNew

Market Risks

1. 02Declining prices of securities, gold and other precious metals and other commodities and changes in interest rates and general market conditions can adversely affect our business by reducing the market value of the assets we manage or causing WisdomTree ETP investors to sell their fund shares and trigger redemptions
2. 03Fluctuations in the amount and mix of our AUM may negatively impact revenues and operating margins
3. 04Abnormally wide bid/ask spreads and market disruptions that halt or disrupt trading or create extreme volatility could undermine investor confidence in the ETP investment structure and limit investor acceptance of ETPs
4. 05We derive a substantial portion of our revenues from a limited number of products and, as a result, our operating results are particularly exposed to investor sentiment toward investing in the products’ strategies and our ability to maintain the AUM of these products, as well as the performance of these products44% rewritten
5. 06Declining commodity prices, and gold prices in particular, including as a result of changes in demand for commodities and gold as an investment, could materially and adversely affect our business
6. 07A significant portion of our AUM is held in products with exposure to U.S. and international developed markets, and we therefore have exposure to domestic and foreign market conditions and are subject to currency exchange rate risks
7. 08Withdrawals or broad changes in investments in our ETPs by investors with significant positions may negatively impact revenues and operating margins
8. 09Third-Party Service Provider Risks
9. 10We depend on HSBC and JP Morgan to provide us with critical physical custody services for precious metals that back our ETCs. The failure of HSBC and JP Morgan to adequately safeguard the physical assets could materially adversely affect our business and harm investors in our products
10. 11Failure of third-party vendors to maintain sufficient internal controls could adversely affect us
11. 12The products issued by our European business are subject to counterparty risks
12. 13The asset management business is intensely competitive, and we may experience pressures on our pricing and market share, which could reduce revenues and profit margins
13. 14We rely on third-party distribution channels to sell our products, and increased competition, a failure to maintain business relationships and other factors could adversely impact our business
14. 15Many of our ETPs have a limited track record and poor investment performance could cause our revenues to decline

Operational Risks

1. 16Our European business subjects us to increased operational, regulatory, financial and other risks68% rewritten
2. 17Operational risks related to the post-acquisition integration of Ceres could adversely affect our business, results of operations and financial conditionNew
3. 18If we are unable to manage these initiatives effectively, there could be a material adverse effect on our ability to maintain or increase revenues and profitability
4. 19We instruct trades and perform other operational processes in respect of crypto basket ETPs that we have launched in Europe. Operational failures could materially affect our business and harm investors in these products
5. 20Catastrophic and unpredictable events could have a material adverse effect on our business

Technology Risks

1. 21A failure to effectively manage the development and use of AI, combined with an evolving regulatory environment, could have an adverse effect on our growth, reputation or business23% rewritten

Human Capital Risks

1. 22Our ability to operate effectively could be impaired if we fail to retain or recruit key personnel
2. 23Our ability to successfully operate and grow the acquired Ceres business depends on the retention of key personnel, and the loss of such individuals could adversely affect our businessNew
3. 24Our expenses are subject to fluctuations that could materially affect our operating results

Legal and Regulatory Risks

1. 25Compliance with extensive, complex and changing regulation imposes significant financial and strategic costs on our business, and non-compliance could result in fines and penalties
2. 26Our acquisition of Ceres may subject us to expanded and evolving regulatory requirements and increased supervisory oversight, which could adversely affect our businessNew
3. 27From time to time, we may be involved in legal proceedings that could require significant management time and attention, possibly resulting in significant expense or in an unfavorable outcome, which could have a material adverse effect on our business, financial condition, results of operations and cash flows
4. 28We may from time to time be subject to claims of infringement of third-party intellectual property rights, which could harm our business
5. 29We have been issued trademark and other intellectual property rights but may not be able to enforce or protect such intellectual property rights, which may harm our business

Regulatory risks

1. 30Blockchain infrastructure risks
2. 31Blockchain technology risks
3. 32Anti-Money Laundering (“AML”) risks

Other risks

1. 33Through our acquisition of Ceres, we entered the private asset markets and may not be successfulNew
2. 34Ceres’ performance is subject to risks associated with investments in direct real estate-related assetsNew
3. 35Ceres Farms’ revenues are subject to risks associated with growing crops and the performance of the agricultural industryNew
4. 36Adverse changes in government policies and regulations related to farming could affect the prices of crops and the profitability of farming operations, which could materially and adversely affect the value of Ceres Farms’ properties and its results of operationsNew
5. 37Potential liability for environmental matters could materially and adversely affect Ceres’ business, results of operations and financial conditionNew
6. 38Ceres may not be successful in pursuing new business opportunities, including in solar, AI data infrastructure and water rights, which could adversely affect its financial performance and strategic objectivesNew

Other Company Risks

1. 39Our revenues could be adversely affected if the Independent Trustees of the WisdomTree Trust or WisdomTree Digital Trust, as applicable, do not approve the continuation of our advisory agreements or determine that the advisory fees we receive from the WisdomTree U.S. listed ETFs or Digital Funds should be reduced
2. 40Damage to our reputation could adversely affect our business

Risks Relating to our Common Stock and Convertible Notes

1. 41The market price of our common stock has been fluctuating significantly and may continue to do so, and you could lose all or part of your investment
2. 42If equity research analysts issue unfavorable commentary or downgrade our common stock, the price of our common stock could decline
3. 43We may not have the ability to raise the funds necessary to settle conversions of the Convertible Notes, repurchase the Convertible Notes upon a fundamental change, or refinance our Convertible Notes upon maturity
4. 44The conditional conversion feature of the Convertible Notes, if triggered, may adversely affect our financial condition and liquidity
5. 45Future issuances of our common stock or equity-linked securities could lower our stock price and dilute the interests of existing stockholders
6. 46Provisions in our certificate of incorporation and by-laws may prevent or delay an acquisition of our Company, which could decrease the market value of our common stock
7. 47The payment of dividends to our stockholders and our ability to repurchase our common stock is subject to the discretion of our Board of Directors and may be limited by our financial condition and any applicable laws