What changed in this filing

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Item 1A. Risk Factors

2026-02-25 compared with 2025-02-26 · 536 added, 299 removed, 771 unchanged (52% of the section changed)

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in risk management policies and procedures

Competition and Distribution

Competition and

Distribution Risks

competition in the asset management industry

on third-party distribution channels

Performance and Investment Risks

Performance and

Investment Risks

· Limited track record for many of our ETPs

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risks and resource demands related to our European business

· Operational

risks related to the post-acquisition integration of Ceres

of operational failures, particularly with European crypto basket ETPs

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Human Capital Risks

● Challenges in retaining or recruiting key personnel

Expense and Cash Management

· Challenges in retaining or recruiting key personnel, including related to the Ceres Acquisition

Expense and Cash

Management Risks

· Significant fluctuations in expenses

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of intellectual property infringement claims or failure to protect trademarks and intellectual property rights

and evolving regulatory requirements and increased supervisory oversight related to the Ceres Acquisition

Digital Assets Risks

· Risks tied to our digital assets business, including competition, product development, outsourced services, cybersecurity, blockchain infrastructure and technology, regulatory compliance, anti-money laundering and other related risks

· Risks tied to the Ceres Acquisition and our entry into private assets, including execution and capital raising risks and reliance on key personnel, exposure to farmland, real estate and agricultural market conditions, tenant and commodity price risks, regulatory and environmental compliance, risks associated with Ceres Farms’ REIT status, and risks related to the pursuit of new business opportunities

Other Company Risks

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· Reputational

Risks Related to Common Stock

and Convertible Notes

Risks Related to Common

Stock and Convertible Notes

in the market price of common stock

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value of the assets we manage or causing WisdomTree ETP investors to sell their fund shares and trigger redemptions.

We are subject to risks arising from declining prices of securities,

gold and other precious metals and other commodities, which may result in a decrease in demand for investment products, a higher redemption

rate and/or a decline in AUM.

The financial markets are highly volatile and prices for financial assets may increase or decrease for many

reasons, including general economic conditions, trade uncertainties, rising or falling interest rates, the strengthening or weakening

dollar, events such as a pandemic or war, geopolitical conflicts, political events, acts of terrorism and other matters beyond

A significant portion of our revenues is derived from advisory fees earned on our AUM, in both the international and U.S.

As a result, our business can be expected to generate lower revenues in declining market environments or general economic downturns.

Such adverse conditions would likely cause the value of our AUM to decrease, which would result in lower advisory fees, or cause investors

in the WisdomTree ETPs to sell their shares in favor of investments they perceive to offer greater opportunity or lower risk, thus triggering

redemptions that would also result in decreased AUM and lower fees.

We are subject to risks arising from declining

prices of securities, gold and other precious metals and other commodities, which may result in a decrease in demand for investment products,

a higher redemption rate and/or a decline in AUM.

The financial markets are highly volatile and prices for financial assets may increase

or decrease for many reasons, including general economic conditions, trade uncertainties, rising or falling interest rates, the strengthening

or weakening of the U.S.

dollar, events such as a pandemic or war, geopolitical conflicts, political events, acts of terrorism and other

matters beyond our control.

A significant portion of our revenues is derived from advisory fees earned on our AUM, in both the international

As a result, our business can be expected to generate lower revenues in declining market environments or general economic

Such adverse conditions would likely cause the value of our AUM to decrease, which would result in lower advisory fees, or

cause investors in the WisdomTree ETPs to sell their shares in favor of investments they perceive to offer greater opportunity or lower

risk, thus triggering redemptions that would also result in decreased AUM and lower fees.

Fluctuations in the amount and mix of our AUM may negatively

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strategies and our ability to maintain the AUM of these products, as well as the performance of these products.

At December 31, 2024, 55% of our AUM was

concentrated in ten of our WisdomTree ETPs with approximately 21% in three of our domestic equity ETFs, 15% in the WisdomTree Floating

Rate Treasury Fund, or USFR, 10% in three of our precious metal products, 6% in two of our international developed market equity ETPs

and 3% in one of our emerging markets ETFs.

As a result, our operating results are particularly exposed to the performance of these funds

and our ability to maintain the AUM of these funds, as well as investor sentiment toward investing in the funds’ strategies.

the AUM in these funds were to decline, either because of declining market values or net outflows from these funds, our revenues would

be adversely affected.

At December 31, 2025, 50% of our AUM was concentrated in ten of our

WisdomTree ETPs with approximately 18% in three of our domestic equity ETFs, 15% in four of our precious metal products, 11% in the WisdomTree

Floating Rate Treasury Fund, or USFR, and 6% in two of our international developed market equity ETPs.

As a result, our operating results

are particularly exposed to the performance of these funds and our ability to maintain the AUM of these funds, as well as investor sentiment

toward investing in the funds’ strategies.

If the AUM in these funds were to decline, either because of declining market values

or net outflows from these funds, our revenues would be adversely affected.

Declining commodity prices, and gold prices in particular,

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We primarily depend on Mellon Investments Corporation, Newton

Investment Management North America, LLC and Voya Investment Management Co., LLC to provide portfolio management services, The Bank of

New York Mellon to provide us with critical administrative services to operate our business and our U.S.

listed ETFs, and other third

parties to provide many other critical services to operate our business and our U.S.

The failure of key vendors to adequately

provide such services could materially affect our operating business and harm investors in our products.

We outsource to third-party vendors to provide

us with many services that are critical to operating our business, including Mellon Investments Corporation, Newton Investment Management

North America, LLC and Voya Investment Management Co., LLC as sub-advisers providing portfolio management services, and The Bank of New

York Mellon, or BNY Mellon, to provide custody services, fund accounting, administration, transfer agency and securities lending services.

Investment Management North America, LLC, Voya Investment Management Co., LLC and Insight North America LLC to provide portfolio management

services, The Bank of New York Mellon to provide us with critical administrative services to operate our business and our U.S.

ETFs, and other third parties to provide many other critical services to operate our business and our U.S.

The failure of

key vendors to adequately provide such services could materially affect our operating business and harm investors in our products.

We outsource to third-party vendors to provide us with many services that

are critical to operating our business, including Mellon Investments Corporation, Newton Investment Management North America, LLC, Voya

Investment Management Co., LLC and Insight North America LLC as sub-advisers providing portfolio management services, and The Bank of

New York Mellon, or BNY Mellon, to provide custody services, fund accounting, administration, transfer agency and securities lending services.

We also rely on third-party providers to license indexes to certain of our U.S.

listed ETFs, perform index calculation services for our

indexes and a third-party distributor for our products.

The failure of any of these key vendors to provide us and our products with these

services could lead to operational issues and result in financial loss to us and investors in our products.

listed ETFs and European listed ETPs, perform index calculation

services for our indexes and a third-party distributor for our products.

The failure of any of these key vendors to provide us and our

products with these services could lead to operational issues and result in financial loss to us and investors in our products.

We depend on HSBC and JP Morgan to provide us with critical

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our products and our recovery of any losses from a custodian, sub-custodian or insurer may be inadequate.

We depend on Swissquote Bank Ltd and Coinbase Custody Trust

LLC to provide us with critical custody services for digital currencies that back WisdomTree digital assets.

The failure of Swissquote

and/or Coinbase to adequately safeguard these digital assets could materially adversely affect our business and harm investors in this

We depend on Swissquote Bank Ltd and Coinbase

We depend on Swissquote Bank Ltd , BitGo Trust Company, Inc.

Custody Trust LLC to provide us with critical custody services for digital currencies that back WisdomTree digital assets.

Products that

are backed by digital currencies are subject to the risks associated with the custody of digital assets, including the risk that the digital

currencies or the blockchain infrastructure could be impacted by hacks or other malicious actions.

WisdomTree Issuer X Limited is reliant

on the security procedures and infrastructure of the custodian to safeguard the underlying digital currency cryptographic keys.

of any of these custodians to adequately safeguard these digital assets could materially adversely affect our business and harm investors

in this product.

Products that are backed by digital currencies are subject to the risks

associated with the custody of digital assets, including the risk that the digital currencies or the blockchain infrastructure could be

impacted by hacks or other malicious actions.

WisdomTree Issuer X Limited, the issuer of WisdomTree Europe’s crypto ETPs, is reliant

on the security procedures and infrastructure of its custodians to safeguard the underlying digital currency cryptographic keys.

is no guarantee that the arrangements of the custodian will fully protect from loss of assets.

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Trust Company Jersey in respect of products issued by WisdomTree Issuer X Limited, APEX IFS Limited in respect of the products issued

by WMAI and State Street Fund Services (Ireland) Limited in respect of the WisdomTree UCITS ETFs to provide us with critical administrative

services to those products.

The failure of any of those providers to adequately provide such services could materially affect our operating

business and harm investors in those products.

by WMAI and BNY Mellon Fund Services (Ireland) Designated Activity Company in respect of the WisdomTree UCITS ETFs to provide us with

critical administrative services to those products.

The failure of any of those providers to adequately provide such services could materially

affect our operating business and harm investors in those products.

We depend on Apex Financial Services (Alternative

Funds) Limited in respect of the products issued by the ManJer Issuers (except WisdomTree Issuer X Limited), JTC Trust Company Jersey

in respect of products issued by WisdomTree Issuer X Limited, APEX IFS Limited in respect of the products issued by WMAI and State Street

Fund Services (Ireland) Limited in respect of the WisdomTree UCITS ETFs, to provide fund accounting, administration and, transfer agency

services, as well as custody services in the case of the WisdomTree UCITS ETFs.

The failure of any service provider to successfully provide

these services could result in financial loss to the products, us and investors in those products.

In addition, because each of the service

providers provides a multitude of important services, changing these vendor relationships would be challenging.

It might require us to

devote a significant portion of management’s time to negotiate a similar relationship with other vendors or have these services

provided by multiple vendors, which would require us to coordinate the transfer of these functions to another vendor or vendors.

in respect of products issued by WisdomTree Issuer X Limited, APEX IFS Limited in respect of the products issued by WMAI and BNY Mellon

Fund Services (Ireland) Designated Activity Company in respect of the WisdomTree UCITS ETFs, to provide fund accounting, administration

and, transfer agency services, as well as custody services in the case of the WisdomTree UCITS ETFs.

The failure of any service provider

to successfully provide these services could result in financial loss to the products, us and investors in those products.

because each of the service providers provides a multitude of important services, changing these vendor relationships would be challenging.

It might require us to devote a significant portion of management’s time to negotiate a similar relationship with other vendors

or have these services provided by multiple vendors, which would require us to coordinate the transfer of these functions to another vendor

The WisdomTree UCITS ETFs primarily depend on either of Assenagon

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of the underlying assets.

The terms of contracts

with counterparties are generally complex, often customized and often not subject to regulatory oversight.

A voluntary or involuntary

default by a counterparty may occur at any time without notice.

In the event of any default by, or

the insolvency of, any counterparty, the relevant products may be exposed to the under-segregation of assets, fraud or other factors that

may result in the recovery of less than all of the property of our issuers that was held in custody or safekeeping in the case of physically

backed products or the recovery of property that is insufficient in value to cover all amounts payable to holders of the applicable products

upon their redemption.

The terms of contracts with counterparties

are generally complex, often customized and often not subject to regulatory oversight.

A voluntary or involuntary default by

a counterparty may occur at any time without notice.

In the event of any default by, or the insolvency of, any counterparty, the relevant

products may be exposed to the under-segregation of assets, fraud or other factors that may result in the recovery of less than all of

the property of our issuers that was held in custody or safekeeping in the case of physically-backed products or the recovery of property

that is insufficient in value to cover all amounts payable to holders of the applicable products upon their redemption.

The impact of market

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performance could cause our revenues to decline.

Many of our ETPs have a limited track record upon which an evaluation of their investment

performance can be made.

Certain investors limit their investments to ETPs with track records of ten years or more.

Furthermore, as part

of our strategy, we continuously evaluate our product offerings to ensure that all our funds are useful, compelling and differentiated

investment offerings, to align our overall product line more competitively in the current ETP landscape and to reallocate our resources

to areas of greater client interest.

As a result, we may further adjust our product offerings, which may result in closing some of our

ETPs, changing their investment objective or offering new funds.

The investment performance of our products is important to our success.

While strong investment performance could stimulate sales of our ETPs, poor investment performance, on an absolute basis or as compared

to third-party benchmarks or competitive products, could lead to a decrease in sales or stimulate redemptions, thereby lowering AUM and

reducing our revenues.

Our Modern Alpha strategies are designed to provide the potential for better risk-adjusted investment returns over

full market cycles and are best suited for investors with a longer-term investment horizon.

However, the investment approach of our equity

products may not perform well during certain shorter periods of time during different points in the economic cycle.

Many of our ETPs have a limited track record

upon which an evaluation of their investment performance can be made.

Certain investors limit their investments to ETPs with track records

of ten years or more.

Furthermore, as part of our strategy, we continuously evaluate our product offerings to ensure that all our funds

are useful, compelling and differentiated investment offerings, to align our overall product line more competitively in the current ETP

landscape and to reallocate our resources to areas of greater client interest.

As a result, we may further adjust our product offerings,

which may result in closing some of our ETPs, changing their investment objective or offering new funds.

The investment performance of

our products is important to our success.

While strong investment performance could stimulate sales of our ETPs, poor investment performance,

on an absolute basis or as compared to third-party benchmarks or competitive products, could lead to a decrease in sales or stimulate

redemptions, thereby lowering AUM and reducing our revenues.

Our Modern Alpha strategies are designed to provide the potential for better

risk-adjusted investment returns over full market cycles and are best suited for investors with a longer-term investment horizon.

the investment approach of our equity products may not perform well during certain shorter periods of time during different points in

the economic cycle.

Operational Risks

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markets, it may also harm our reputation in other markets, including the U.S.

Operational risks related to the post-acquisition integration

of Ceres could adversely affect our business, results of operations and financial condition.

Following the Ceres Acquisition, we face operational risks associated with

integrating, where appropriate, its business, personnel, systems, processes and control environment into our existing operations.

integration process may be more complex, time-consuming or costly than anticipated and may require significant management attention, which

could divert resources from our other businesses.

In addition, Ceres operates in asset classes and strategies that differ from our traditional

ETP business and may require enhancements to our operational infrastructure, risk management practices, valuation processes, compliance

framework and internal controls.

Any failure to effectively integrate operations, retain key personnel, harmonize systems and controls,

or appropriately manage new and evolving operational requirements could result in operational inefficiencies, control deficiencies, increased

costs, regulatory scrutiny, reputational harm or an inability to achieve the anticipated benefits of the acquisition, any of which could

materially adversely affect our business and financial results.

We have pursued, and may continue to pursue, acquisitions and

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While we typically outsource portfolio management services to third-party sub-advisers for our products,

in this case, we instead act as determination agent and place buy and sell orders directly with a broker to rebalance these crypto basket

ETPs in line with the indices.

in this case, we instead act as determination agent and facilitate buy and sell orders via the custodian who deals directly with a broker

to rebalance these crypto basket ETPs in line with the indices.

These rebalances typically occur quarterly.

Expanding trading volumes may increase the risk of trading

The failure of any of our vendors to provide us and our products with the outsourced services and our failure to correctly place

trade orders could lead to operational issues and result in financial loss to us and/or investors in our products.

For products through

which we derive additional revenue by staking, we operationally delegate the relevant assets to validators in our role as determination

Operational errors in the process could materially affect our business and harm investors in these products.

In addition, staking

features, such as lock-up periods, staking reward payout periods and reward amounts, are not necessarily fixed over time and can cause

liquidity risk or delay the standard settlement period.

This may cause redemptions to be delayed and may result in a financial loss to

Expanding trading volumes

may increase the risk of trading errors.

The failure of any of our vendors to provide us and our products with the outsourced services

and our failure to correctly place trade orders could lead to operational issues and result in financial loss to us and/or investors in

our products.

For products through which we derive additional revenue by staking, we operationally delegate the relevant assets to validators

in our role as determination agent.

Operational errors in the process could materially affect our business and harm investors in these

In addition, staking features, such as lock-up periods, staking reward payout periods and reward amounts, are not necessarily

fixed over time and can cause liquidity risk or delay the standard settlement period.

This may cause redemptions to be delayed and may

result in a financial loss to investors.

Catastrophic and unpredictable events could have a material

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in material financial loss, regulatory violations, reputational harm or legal liability.

We are dependent upon the effectiveness of our

own, and our vendors’, information security policies, procedures and capabilities to protect the technology systems used to operate

our business (including emerging technologies, such as artificial intelligence (AI) programs), to protect the data that reside on or are

transmitted through them and to maintain adequate internal controls.

Information security risks for us and our third-party vendors have

increased significantly in recent years, in part because of the proliferation of new technologies, including AI, the ubiquity of internet

connections, and the increased sophistication and activities of threat actors.

Although we and our third-party vendors take protective

measures to secure information, our and our vendors’ technology systems have experienced cybersecurity threats and may still be

vulnerable to unauthorized access, computer viruses or other events that could result in inaccuracies in our information or system disruptions

or failures, which could materially interrupt or damage our operations.

These risks have increased with the launch of the WisdomTree Prime

mobile application and may continue to increase in the future as the mobile application’s availability expands.

In addition, technology

is subject to rapid change and we cannot guarantee that our competitors may not implement more advanced technology platforms for their

products, which could affect our business.

Any inaccuracies, delays, system failures or breaches, or advancements in technology, and the

cost necessary to address them, could subject us to client dissatisfaction and losses or result in material financial loss, regulatory

violations, reputational harm or legal liability, which, in turn, could cause a decline in our earnings or stock price.

A 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 business.

We use AI, including machine learning, in our business and

expect to continue to expand our AI capabilities, including through generative AI.

AI methods are complex and rapidly evolving, and their

introduction into new or existing processes may result in new or enhanced governmental or regulatory scrutiny, intellectual property or

other litigation, data protection and confidentiality concerns, information security risks, social or ethical challenges, competitive

harm or other complications.

For example, datasets used to develop and test AI models, the content generated by AI systems, or AI-driven

decision-making processes may be found to be insufficient, biased or harmful, or lead to adverse business decisions or operating errors.

AI technologies, including generative AI, may also produce content that appears credible but is factually inaccurate or flawed or legally

problematic, increasing regulatory, reputational and legal risks.

In addition, intellectual property ownership and licensing rights, including

We are dependent upon the effectiveness of our own, and our vendors’,

information security policies, procedures and capabilities to protect the technology systems used to operate our business (including emerging

technologies, such as artificial intelligence (AI) programs), to protect the data that reside on or are transmitted through them and to

maintain adequate internal controls.

Information security risks for us and our third-party vendors have increased significantly in recent

years, in part because of the proliferation of new technologies, including AI, the ubiquity of internet connections, and the increased

sophistication and activities of threat actors.

Although we and our third-party vendors take protective measures to secure information,

our and our vendors’ technology systems have experienced cybersecurity threats and may still be vulnerable to unauthorized access,

computer viruses or other events that could result in inaccuracies in our information or system disruptions or failures, which could materially

interrupt or damage our operations.

In addition, our vendors may incorporate AI tools into their offerings or operations, and such AI

tools may not meet existing or rapidly evolving regulatory, cybersecurity, privacy or industry standards, which could expose us to operational,

compliance or reputational risks.

These risks have increased with the launch of the WisdomTree Prime mobile application and may continue

to increase in the future as the mobile application’s availability expands.

In addition, technology is subject to rapid change and

we cannot guarantee that our competitors may not implement more advanced technology platforms for their products, which could affect our

Any inaccuracies, delays, system failures or breaches, or advancements in technology, and the cost necessary to address them,

could subject us to client dissatisfaction and losses or result in material financial loss, regulatory violations, reputational harm or

legal liability, which, in turn, could cause a decline in our earnings or stock price.

A 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 business.

We use AI, including machine learning, in our business and expect to continue

to expand our AI capabilities, including through generative AI.

AI methods are complex and rapidly evolving, and their introduction into

new or existing processes may result in new or enhanced governmental or regulatory scrutiny, intellectual property or other litigation,

data protection and confidentiality concerns, information security risks, social or ethical challenges, competitive harm or other complications.

For example, datasets used to develop and test AI models, the content generated by AI systems, or AI-driven decision-making processes

may be found to be insufficient, biased or harmful, or lead to adverse business decisions or operating errors.

AI technologies, including

generative AI, may also produce content that appears credible but is factually inaccurate or flawed or legally problematic, increasing

regulatory, reputational and legal risks.

The use of AI technologies may also increase the risk of inadvertent disclosure or misuse of

our proprietary or confidential information.

In addition, intellectual property ownership and licensing rights, including copyright, surrounding

AI technologies remain uncertain, as U.S.

courts and regulatory bodies have yet to address key issues.

AI-related regulations are evolving globally, with emerging frameworks such as the EU AI Act and increasing scrutiny from U.S.

Furthermore, AI-related regulations

are evolving globally, with emerging frameworks such as the EU AI Act and increasing scrutiny from U.S.

federal and state regulators,

including the Federal Trade Commission and SEC.

Efforts to incorporate AI technologies responsibly require continued investment in operational controls and

procedures, development and implementation of appropriate protections and safeguards for data use, including with respect to data leakage,

and compliance with evolving regulatory requirements.

Any failure to successfully integrate AI technologies, respond to client or market

demands or effectively manage AI-related risks could harm our growth and reputation, adversely impact product offerings, client interactions

or business initiatives, and expose us to legal and regulatory liabilities and additional costs, including regulatory fines or sanctions,

which may cause our AUM, revenues and earnings to decline.

Efforts to incorporate AI technologies responsibly require continued investment in operational

controls and procedures, development and implementation of appropriate protections and safeguards for data use, including with respect

to data leakage, and compliance with evolving regulatory requirements.

Our competitors may adopt or deploy AI technologies more effectively

or more rapidly than we do, which could place us at a competitive disadvantage with respect to operational efficiency, cost management

or market participation.

Any failure to successfully integrate AI technologies, respond to client or market demands or effectively manage

AI-related risks could harm our growth and reputation, adversely impact product offerings, client interactions or business initiatives,

and expose us to legal and regulatory liabilities and additional costs, including regulatory fines or sanctions, which may cause our AUM,

revenues and earnings to decline.

Human Capital Risks

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it could have an adverse effect on our business, our results of operations and financial condition.

Our 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 business.

The success of the acquired Ceres business is highly dependent on the continued

service of certain key investment, operational and management personnel with specialized expertise, client relationships and knowledge

of the acquired strategies.

The integration of Ceres into our organization may create uncertainty among employees and could result in

increased attrition, particularly if compensation structures, incentive arrangements, roles or cultural dynamics change or if market conditions

adversely affect compensation outcomes.

If we are unable to retain key personnel or effectively recruit and integrate additional talent

necessary to support and grow the acquired business, our ability to execute our strategy, maintain investment performance and realize

the anticipated benefits of the acquisition could be materially adversely affected.

Expense and Cash Management Risks

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imposes significant financial and strategic costs on our business, and non-compliance could result in fines and penalties.

We are subject to extensive regulation of our business and

We are subject to extensive regulation of our business and operations.

Two of our U.S.

subsidiaries, WTAM and WT Digital Management, are registered investment advisers and are subject to oversight

by the SEC pursuant to its regulatory authority under the Investment Advisers Act.

We also must comply with certain requirements

under the Investment Company Act with respect to the WisdomTree U.S.

listed ETFs for which WTAM acts as investment adviser and with respect

to our Digital Funds for which WT Digital Management acts as an investment adviser.

WTAM is also a member of the NFA and registered as

a commodity pool operator for certain of our ETFs.

As a commodity pool operator, we are subject to oversight by the NFA and the CFTC pursuant

to regulatory authority under the Commodity Exchange Act.

In addition, the content and use of our marketing and sales materials and

the conduct of our sales force in the U.S.

subsidiaries, WTAM and WT Digital Management, are registered investment advisers and are subject to oversight by the SEC

pursuant to its regulatory authority under the Investment Advisers Act.

We also must comply with certain requirements under the Investment

Company Act with respect to our U.S.

listed ETFs for which WTAM acts as investment adviser and with respect to our Digital Funds for which

WT Digital Management acts as an investment adviser.

WTAM is also a member of the NFA and registered as a commodity pool operator for

certain of our ETFs.

As a commodity pool operator, we are subject to oversight by the NFA and the CFTC pursuant to regulatory authority

under the Commodity Exchange Act.

In addition, the content and use of our marketing and sales materials and the conduct of our sales

force in the U.S.

regarding our U.S.

listed ETFs and Digital Funds are subject to the regulatory authority of

The SEC also has recently adopted rule amendments that are designed to modernize sales and marketing materials and, as a result,

could impact our marketing materials.

We are also subject to foreign laws and regulatory authorities with respect to operational aspects

of our products that invest in securities of issuers in foreign countries, in the marketing, offer and/or sales of our products in foreign

jurisdictions and in our offering of investment products domiciled outside of the U.S., such as our ETPs issued by the ManJer Issuers,

UCITS ETFs and ETPs issued by WMAI.

Each of the regulatory bodies with jurisdiction over us has

regulatory powers over many aspects of our business, including the authority to grant, and, in specific circumstances to cancel, permissions

to carry on particular businesses.

Our ETPs’ and Digital Funds’ failure to comply with applicable laws or regulations has

in the past, and could in the future, result in fines, censure, suspensions of personnel or other sanctions, including revocation of our

registration as an investment adviser.

For example, in August 2024, WTAM received a Wells Notice from the Staff of the SEC advising WTAM

that the Staff had made a preliminary determination to recommend that the SEC file an enforcement action against WTAM alleging violations

of certain provisions of the U.S.

federal securities laws relating to three exchange-traded series of WisdomTree Trust managed by WTAM

that pursued ESG-focused strategies.

In October 2024, without admitting or denying the SEC’s allegations, WTAM agreed to resolve

the matter by consenting to the entry of an order by the SEC, in which WTAM agreed to cease and desist from committing or causing any

violations and any future violations of Sections 206(2) and 206(4) of the Investment Advisers Act, Rules 206(4)-7 and 206(4)-8 thereunder,

and Section 34(b) of the Investment Company Act, and to pay a civil money penalty of $4.0 million.

See Note 14 to our Consolidated Financial

Statements for additional information.

Even if a sanction imposed against us, our personnel or our

ETPs or Digital Funds is small in monetary amount, the adverse publicity arising from the imposition of sanctions against us, our personnel

or our ETPs or Digital Funds by regulators could harm our reputation and thus result in redemptions from our products and impede our ability

to retain and attract investors in WisdomTree ETPs and Digital Funds, all of which may reduce our revenues.

We face the risk of significant intervention by regulatory

authorities, including extended investigation activity, adoption of costly or restrictive new regulations and judicial or administrative

proceedings that may result in substantial penalties.

Among other things, we have been and could be fined or be prohibited from engaging

in some of our business activities.

The requirements imposed by our regulators are designed to ensure the integrity of the financial markets

and to protect investors in our products and our advisory clients and are not designed to protect our stockholders.

Consequently, these

regulations often serve to limit our activities, including through investor protection and market conduct requirements.

listed ETFs and Digital Funds are subject to the regulatory authority of FINRA.

The SEC also has

recently adopted rule amendments that are designed to modernize sales and marketing materials and, as a result, could impact our marketing

We are also subject to foreign laws and regulatory authorities with respect to operational aspects of our products that invest

in securities of issuers in foreign countries, in the marketing, offer and/or sales of our products in foreign jurisdictions and in our

offering of investment products domiciled outside of the U.S., such as our ETPs issued by the ManJer Issuers, UCITS ETFs and ETPs issued

Each of the regulatory bodies with jurisdiction

over us has regulatory powers over many aspects of our business, including the authority to grant, and, in specific circumstances to cancel,

permissions to carry on particular businesses.

Our ETPs’ and Digital Funds’ failure to comply with applicable laws or regulations

has in the past, and could in the future, result in fines, censure, suspensions of personnel or other sanctions, including revocation

of our registration as an investment adviser.

Even if a sanction imposed against us, our personnel

or our ETPs or Digital Funds is small in monetary amount, the adverse publicity arising from the imposition of sanctions against us, our

personnel or our ETPs or Digital Funds by regulators could harm our reputation and thus result in redemptions from our products and impede

our ability to retain and attract investors in WisdomTree ETPs and Digital Funds, all of which may reduce our revenues.

We face the risk of significant intervention

by regulatory authorities, including extended investigation activity, adoption of costly or restrictive new regulations and judicial or

administrative proceedings that may result in substantial penalties.

Among other things, we have been and could be fined or be prohibited

from engaging in some of our business activities.

The requirements imposed by our regulators are designed to ensure the integrity of the

financial markets and to protect investors in our products and our advisory clients and are not designed to protect our stockholders.

Consequently, these regulations often serve to limit our activities, including through investor protection and market conduct requirements.

The regulatory environment in which we operate

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In addition, the SEC approved

a broad set of rules regarding data reporting and fund liquidity, fund valuation and funds’ use of derivatives, which impose additional

expense and require additional administrative services and requirements, among other matters, to comply with these rules.

regulations, or changes in the enforcement of existing laws or regulations, applicable to us or investors in our products also may adversely

affect our business, and our ability to function in this environment will depend on our ability to constantly monitor and react to these

a broad set of rules regarding data reporting and fund liquidity, fund valuation, funds’ use of derivatives and funds’ names,

which impose additional expense and require additional administrative services and requirements, among other matters, to comply with these

New laws or regulations, or changes in the enforcement of existing laws or regulations, applicable to us or investors in our products

also may adversely affect our business, and our ability to function in this environment will depend on our ability to constantly monitor

and react to these changes.

Compliance with new laws and regulations may result in increased compliance costs and expenses.

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to the regulation of financial services including, among other things, the authority to grant or cancel required licenses or registrations.

Our acquisition of Ceres may subject us to expanded and evolving

regulatory requirements and increased supervisory oversight, which could adversely affect our business.

As a result of the Ceres Acquisition, we have

expanded into investment strategies, products and markets that are subject to regulatory regimes and supervisory expectations that differ

from, and in certain respects are more complex than, those applicable to our traditional ETP business.

These expanded activities may subject

us to additional oversight by the SEC and other regulatory authorities, including with respect to certain private fund adviser requirements,

disclosure obligations, valuation practices, conflicts of interest, liquidity management and investor protection.

Regulatory requirements

applicable to private and alternative investment strategies continue to evolve, and changes in laws, rules, interpretations or enforcement

priorities could increase compliance costs, restrict our activities or require modifications to our business practices or organizational

In addition, we may be subject to more frequent or more detailed regulatory examinations, inquiries or information requests,

and any failure to comply with applicable regulatory requirements could result in fines, sanctions, remediation obligations, reputational

harm or limitations on our ability to operate or grow these businesses, any of which could materially adversely affect our business, results

of operations and financial condition.

From time to time, we may be involved in legal proceedings

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From time to time, we may be subject to litigation.

In any litigation in which we are involved, we may be forced to incur costs and expenses to defend ourselves or to pay a settlement or

judgment or comply with any injunctions in connection therewith if there is an unfavorable outcome.

The expense of defending litigation

may be significant.

The amount of time to resolve lawsuits is unpredictable and defending ourselves may divert management’s attention

from the day-to-day operations of our business, which could adversely affect our business, results of operations, financial condition

and cash flows.

In addition, an unfavorable outcome in any such litigation, including actual and potential claims by investors in our

WisdomTree WTI Crude Oil 3x Daily Leveraged ETP totaling approximately €27.4 million ($28.5 million), could have a material adverse

effect on our business, results of operations, financial condition and cash flows.

See Note 14 to our Consolidated Financial Statements

for additional information.

In any litigation in

which we are involved, we may be forced to incur costs and expenses to defend ourselves or to pay a settlement or judgment or comply with

any injunctions in connection therewith if there is an unfavorable outcome.

The expense of defending litigation may be significant.

amount of time to resolve lawsuits is unpredictable and defending ourselves may divert management’s attention from the day-to-day

operations of our business, which could adversely affect our business, results of operations, financial condition and cash flows.

an unfavorable outcome in any such litigation, including actual and potential claims by investors in our WisdomTree WTI Crude Oil 3x Daily

Leveraged ETP totaling approximately €23.6 million ($27.8 million), could have a material adverse effect on our business, results

of operations, financial condition and cash flows.

See Note 14 to our Consolidated Financial Statements for additional information.

We may from time to time be subject to claims of infringement

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rights but may not be able to enforce or protect such intellectual property rights, which may harm our business.

Although we have trademarks, including the marks

WisdomTree ® , WisdomTree Prime ® and Modern Alpha ® , and other intellectual property rights

that are registered in the U.S.

and certain other countries, including a patent relating to our index methodology and the operation of

our ETFs, our ability to enforce such intellectual property rights is subject to general litigation risks.

If we cannot successfully enforce

our intellectual property rights, we may lose the value of our brand and business reputation.

If we seek to enforce our rights, we could

be subject to litigation, including challenges to our registered intellectual property rights and claims that our intellectual property

rights are invalid or are otherwise not enforceable in jurisdictions where our intellectual property rights are not registered.

our assertion of intellectual property rights could result in the other party seeking to assert alleged intellectual property rights of

its own or assert other claims against us, which could harm our business.

Although we have trademarks, including the

marks WisdomTree ® , WisdomTree Prime ®

and Modern Alpha ® , and other intellectual property rights that are registered in the

and certain other countries, including a patent relating to our index methodology and the operation of our ETFs, our ability to

enforce such intellectual property rights is subject to general litigation risks.

If we cannot successfully enforce our intellectual

property rights, we may lose the value of our brand and business reputation.

If we seek to enforce our rights, we could be subject to

litigation, including challenges to our registered intellectual property rights and claims that our intellectual property rights are

invalid or are otherwise not enforceable in jurisdictions where our intellectual property rights are not registered.

Furthermore, our

assertion of intellectual property rights could result in the other party seeking to assert alleged intellectual property rights of its

own or assert other claims against us, which could harm our business.

If we are not ultimately successful in defending ourselves against

these claims in litigation, we may be subject to the risks described in the immediately preceding risk factor entitled “We may from

time to time be subject to claims of infringement of third-party intellectual property rights, which could harm our business.” Additionally,

unauthorized third parties may attempt to misuse our trademarks or brand identity, including through impersonation schemes or fraudulent

activities in certain jurisdictions.

While we take steps to address such misuse, our ability to prevent or mitigate these activities may

be limited, and such fraudulent actions could harm our business, reputation, or customer relationships.

these claims in litigation, we may be subject to the risks described in the immediately preceding risk factor entitled “We may

from time to time be subject to claims of infringement of third-party intellectual property rights, which could harm our business.”

Additionally, unauthorized third parties may attempt to misuse our trademarks or brand identity, including through impersonation schemes

or fraudulent activities in certain jurisdictions.

While we take steps to address such misuse, our ability to prevent or mitigate these

activities may be limited, and such fraudulent actions could harm our business, reputation, or customer relationships.

Digital Assets Risks

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Competition risks

Competition in the digital assets industry on

a global basis is increasing, ranging from large, established financial incumbents to smaller, early-stage financial technology providers

and companies.

There are jurisdictions with more stringent and robust regulatory and compliance requirements than others which could impact

a company’s ability to compete in the digital assets industry.

Our ability to successfully compete will depend largely on offering

innovative products through digital asset exposures (and more broadly in blockchain-enabled finance, including savings and payments),

having strong internal controls and risk management infrastructure to enable customer trust, embracing regulation, developing strategic

partnerships with participants in the digital assets ecosystem and broader financial services ecosystem, promoting thought leadership

and consumer education or awareness, building upon our brand and attracting and retaining talented employees.

Failure to do so could negatively

impact the success of our digital assets business.

Competition in the digital assets industry on a global basis is increasing,

ranging from large, established financial incumbents to smaller, early-stage financial technology providers and companies.

There are jurisdictions

with more stringent and robust regulatory and compliance requirements than others which could impact a company’s ability to compete

in the digital assets industry.

Our ability to successfully compete will depend largely on offering innovative products through digital

asset exposures (and more broadly in blockchain-enabled financial services, including savings and payments), having strong internal controls

and risk management infrastructure to enable customer trust, embracing regulation, developing strategic partnerships with participants

in the digital assets ecosystem and broader financial services ecosystem, promoting thought leadership and consumer education or awareness,

building upon our brand and attracting and retaining talented employees.

Failure to do so could negatively impact the success of our digital

assets business.

New product risks

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Third-party service provider risks

We rely on third-party service providers in

connection with different facets of our digital assets business, including but not limited to custodial arrangements, blockchain and wallet

infrastructure, banking relationships, cloud computing, payment platforms and processors, data infrastructure, customer support, compliance

support and product development, including mobile application development, all of which are critical to the success of our digital assets

In addition, we have partnered with a financial institution to provide co-branded debit cards to retail customers.

of, or interruption of service from, a critical third-party service provider could adversely impact our digital assets business, operating

results and financial condition.

We rely on third-party service providers in connection with different facets

of our digital assets business, including but not limited to custodial arrangements, blockchain and wallet infrastructure, banking relationships,

cloud computing, payment platforms and processors, data infrastructure, customer support, compliance support and product development,

including mobile application development, all of which are critical to the success of our digital assets business.

The loss of, or interruption

of service from, a critical third-party service provider could adversely impact our digital assets business, operating results and financial

We may incur significant costs to resolve any such disruptions in service.

In addition, such third-party

service providers may be subject to financial, legal, regulatory and labor issues, data security and cybersecurity incidents, denial-of-service

attacks, sabotage, privacy breaches or violations, fraud and other misconduct, which could directly or indirectly have an impact on our

digital assets products and services.

If any third-party service provider fails to adequately or appropriately render services or fails

to meet its contractual requirements, including compliance with applicable laws and regulations, we could be subject to regulatory enforcement

In addition, such third-party service providers

may be subject to financial, legal, regulatory and labor issues, data security and cybersecurity incidents, denial-of-service attacks,

sabotage, privacy breaches or violations, fraud and other misconduct, which could directly or indirectly have an impact on our digital

assets products and services.

If any third-party service provider fails to adequately or appropriately render services or fails to meet

its contractual requirements, including compliance with applicable laws and regulations, we could be subject to regulatory enforcement

actions and claims from third parties, including our customers, and suffer economic and reputational harm that could have an adverse effect

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both domestically and internationally is unknown and such change could be substantial and adverse to our digital assets business.

In addition, we are actively engaged with a

variety of U.S.

federal and state regulators (e.g., the SEC, FINRA, NYDFS and other state regulators) to secure, as necessary, or maintain

the appropriate regulatory, registration and/or licensing approvals for various business initiatives and operations, including but not

a New York state-chartered limited purpose trust company;

In addition, we are actively engaged with a variety of U.S.

state regulators (e.g., the SEC, FINRA, NYDFS and other state regulators) to secure, as necessary, or maintain the appropriate regulatory,

registration and/or licensing approvals for various business initiatives and operations, including but not limited to:

a New York state-chartered

limited purpose trust company;

money services and money transmitter business;

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transfer agent;

investment adviser;

and investment funds.

For example, we are licensed as a money transmitter or the equivalent in many

states and the District of Columbia, but we may be unable to obtain such licenses in all U.S.

states or may experience significant

delays, and this could have an adverse effect on our digital assets business.

As we seek to expand globally, similar approvals and/or

reliance on exemptions will be required in applicable foreign markets, which also may involve approvals specific to a digital assets or

related business.

As we secure the appropriate regulatory, registration and/or licensing approvals, or otherwise rely on, seek or confirm

exemptions therefrom, in connection with our digital assets business, we are and will be subject to a myriad of complex and evolving global

policy frameworks and associated regulatory requirements that we need to comply with, or otherwise be exempt from, to ensure our digital

assets products and services are successfully brought to different markets in a compliant manner.

Failure to secure and/or comply with

any such approvals and exemptions could result in, among other things, revocation of required licenses or registrations, loss of approved

status, private litigation, administrative enforcement actions, sanctions, civil and criminal liability, and constraints on our ability

to continue to operate our digital assets business, and have an adverse effect on our digital assets business.

As we seek to expand globally, similar approvals and/or reliance on exemptions will be required in applicable

foreign markets, which also may involve approvals specific to a digital assets or related business.

As we secure the appropriate regulatory,

registration and/or licensing approvals, or otherwise rely on, seek or confirm exemptions therefrom, in connection with our digital assets

business, we are and will be subject to a myriad of complex and evolving global policy frameworks and associated regulatory requirements

that we need to comply with, or otherwise be exempt from, to ensure our digital assets products and services are successfully brought

to different markets in a compliant manner.

Failure to secure and/or comply with any such approvals and exemptions could result in, among

other things, revocation of required licenses or registrations, loss of approved status, private litigation, administrative enforcement

actions, sanctions, civil and criminal liability, and constraints on our ability to continue to operate our digital assets business, and

have an adverse effect on our digital assets business.

Blockchain infrastructure risks

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attributes associated with public and private keys of digital assets.

Through our acquisition of Ceres, we entered the private asset markets

and may not be successful.

Acquiring Ceres marked our entry into the private asset markets, specifically

There is significant competition in the private asset markets and real estate industry.

There can be no assurance that we will

be successful in the private assets market, that Ceres will be able to raise additional capital for Ceres’ funds, that Ceres will

achieve its objectives and operate successfully, that we will have a suitable return on our investment in Ceres or that we will be able

to recover the costs we have incurred in acquiring Ceres.

Our management team currently has limited experience in private asset markets

and no direct experience in farmland investments and is largely dependent on the experience and performance of key employees of Ceres.

Although we have entered into employment agreements with certain key employees of Ceres, there can be no assurance that such employees

will continue their employment with us.

Loss of key employees of Ceres could have a material adverse effect on our ability to implement

our business strategy and to achieve our objectives with respect to the Ceres Acquisition.

Ceres’ performance is subject to risks associated with

investments in direct real estate-related assets.

Ceres provides investment advisory services to, and manages, private funds,

and a separate pooled investment vehicle, Ceres Farms, that invests its assets in farmland real estate.

Investments in direct real estate-related

assets are subject to various risks, including without limitation:

the cyclical nature of the real estate market and changes in national

or local economic or market conditions;

the financial condition of the buyers and sellers of properties;

government regulation and increases

in trade tariffs;

changes in supply of, or demand for, properties in a geographic area;

illiquidity of farmland investments;

various forms

of competition;

fluctuations in lease rates;

changes in interest rates and in the availability, cost and terms of financing;

and enforcement of governmental regulations, including rules relating to zoning, land use and environmental protection;

impact of third-party

mineral rights ownership on properties;

changes in real estate tax rates, energy prices and other operating expenses;

changes in applicable

laws and increased governmental regulation;

and various uninsured or uninsurable risks and losses.

Ceres is subject to concentration risks arising from its concentration

in real estate.

Given the cyclical nature of the real estate market, changes in national or local economic or market conditions could

have an adverse effect on Ceres.

In addition, changes in the financial condition of tenants, buyers and sellers of property, competition,

fluctuations in lease rates, the length of leases, and in the availability of financing will have a significant impact on Ceres’

The geographic concentration of Ceres Farms’ properties in the U.S.

Midwest makes its operations more vulnerable to

local economic downturns and adverse farmland-specific risks, such as adverse weather events, changes in the local climate, access to

water and plant disease exposure, than those of larger, more diversified companies.

Ceres Farms pays real estate taxes on its properties

and such taxes may increase.

Ceres Farms acquires real properties primarily by borrowing new funds secured by a mortgage on the purchased

real estate, and incurring mortgage debt increases the risk of loss since defaults on indebtedness secured by a property may result in

lenders initiating foreclosure.

Ceres’ business is dependent

in part upon the profitability of Ceres Farms’ tenants’ farming operations, and a sustained downturn in the profitability

of their farming operations could have a material adverse effect on the amount of rent Ceres Farms can collect and, consequently, its

cash flow and net profits, and Ceres’ results of operations.

Ceres Farms depends on its tenants to operate

the farms it owns in a manner that generates revenues sufficient to allow them to meet their obligations to Ceres Farms, including their

obligations to pay rent, maintain certain insurance coverage and maintain the properties generally.

The ability of Ceres Farms’

tenants to fulfill their obligations under their leases depends, in part, upon the overall profitability of their farming operations,

which could be adversely impacted by, among other things, adverse weather conditions, crop prices, crop disease, pests and unfavorable

or uncertain political, economic, business, trade or regulatory conditions.

Ceres is susceptible to any decline in the profitability of

Ceres Farms’ tenants’ farming operations, to the extent that it would impact the tenants’ abilities to pay rents.

addition, many farms are dependent on a limited number of key individuals whose injury or death may affect the successful operation of

We can provide no assurances that, if a tenant defaults on its obligations to Ceres Farms under a lease, Ceres Farms will be

able to lease or re-lease that farm on economically favorable terms in a timely manner, or at all.

In addition, Ceres Farms may experience

delays in enforcing its rights as landlord and may incur substantial costs in protecting its investment.

As a result, any downturn in

the profitability of the farming operations of Ceres Farms’ tenants, or a downturn in the farming industry as a whole, could have

a material adverse effect on Ceres’ business, results of operations and financial condition.

Ceres Farms’ revenues are subject to risks associated with growing

crops and the performance of the agricultural industry.

Ceres Farms’ investment strategy is to

acquire and manage farmland which may also include directly managing the operations of these farms.

Ceres Farms’ properties grow

corn, soybeans, wheat and other primary crops, and specialty crops including seed corn and vegetables.

As these crops are commodities,

they are subject to wide fluctuations in price.

If the value of these crops declines, it could negatively impact the level of rent that

Ceres Farms can charge to tenant farmers and cause Ceres Farms to operate at a loss.

In circumstances where Ceres Farms’ revenue

from a farm is based on a share of crop production, in addition to risks associated with commodity price fluctuations, adverse weather

conditions such as flooding or drought, or pest or plant disease problems could damage or destroy the crops and may cause Ceres Farms

to operate unprofitably.

The value of and revenues from farmland in which Ceres Farms invests will be largely dependent on the performance

of the agricultural industry, which is historically cyclical.

Crop yields can be affected by numerous factors beyond the control of Ceres

Farms, including reductions in the market prices for the farmers’ products, adverse weather and growing conditions, pest and disease

problems, and new government regulations regarding farming and the marketing of agricultural products.

Adverse 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 operations.

There are a number of government policies and

programs that directly or indirectly affect the profitability of farm operators.

These include marketing, export, renewable fuel and insurance

policies and programs.

Government policies and regulations affecting the agricultural industry, such as taxes, tariffs, duties, subsidies,

incentives, and import and export restrictions on agricultural commodities and commodity products, can influence the planting of certain

crops, the location and size of crop production, whether unprocessed or processed commodity products are traded, the volume and types

of imports and exports, the availability and competitiveness of feedstocks as raw materials, and industry profitability.

Government policies

and regulations may adversely affect the supply of, demand for, and prices of agricultural products.

In addition, international trade

disputes can adversely affect agricultural commodity trade flows by limiting or disrupting trade between countries or regions.

changes to or the elimination of programs and policies could adversely affect crop prices and the profitability of farming operations,

including farms owned by Ceres Farms, and adversely affect its business, results of operations and financial condition.

On July 4, 2025, the One Big Beautiful Bill

Act (“OBBBA”) was signed into law, enacting changes to U.S.

agricultural policy, including updates to commodity support programs,

crop insurance and trade promotion funding.

The legislation poses risks to Ceres’ business.

The OBBBA raises statutory reference

prices for major commodities, including corn and soybeans, with further annual escalations beginning in 2031.

These changes may incentivize

increased domestic production, potentially leading to oversupply and downward pressure on market prices, particularly if global demand

does not rise proportionately.

The OBBBA allocates $2.2 billion toward agricultural trade promotion, which may be deemed a subsidy by

international trading partners, potentially triggering retaliatory measures or disputes under World Trade Organization (WTO) rules and

restricting market access for U.S.

corn and soybean exports.

Delays or inconsistencies by federal agencies in administering new reference

prices, crop insurance enhancements, or trade programs could create uncertainty for the agricultural industry.

In addition, certain tax

provisions of the OBBBA may adversely impact Ceres Farms’ tenant farmers who own small farms.

Federal, state and county governments have implemented

laws and regulations in connection with farming operations, including those relating to taxes, trade, environmental, labor, immigration

and food safety, among others.

For example, labor and immigration regulations seek to provide for minimum wages and minimum and maximum

work hours, as well as to restrict the hiring of illegal immigrants.

If one of Ceres Farms’ tenants is accused of violating, or

found to have violated such regulations, it could have a material adverse effect on the tenant’s operating results, which could

adversely affect its ability to make its rental payments to Ceres Farms.

Increased enforcement of federal immigration policy could adversely

affect the overall farming labor market, which could result in upward pressure on wages for farm labor and adversely affect Ceres Farms’

tenants’ profitability and ability to pay rent.

In addition, certain states, including Iowa, Minnesota, Wisconsin, Missouri and

Kansas, in which a substantial amount of primary crop farmland is located, have laws that prohibit or restrict to varying degrees the

ownership of agricultural land by corporations or business entities similar to Ceres Farms.

Additional states may, in the future, pass

similar or more restrictive laws, and Ceres Farms may not be legally permitted, or it may become overly burdensome or expensive, to acquire

farms in these states, which could impede the growth of Ceres Farm’s portfolio and its ability to diversify geographically in states

that might otherwise offer compelling investment opportunities.

Potential liability for environmental

matters could materially and adversely affect Ceres’ business, results of operations and financial condition.

Ceres is subject to the risk of liabilities under federal, state and local

environmental laws applicable to agricultural properties, including those related to wetlands, groundwater and water runoff.

Some of these

laws could subject Ceres to responsibility and liability for:

the cost of removal or remediation of hazardous substances released on its

properties, generally without regard to Ceres’ knowledge of or responsibility for the presence of the contaminants;

investigation, removal or remediation of hazardous substances or chemical releases at disposal facilities for persons who arrange for

the disposal or treatment of these substances;

and claims by third parties for damages resulting from environmental contaminants.

costs of investigation, remediation or removal of hazardous substances may be substantial.

In addition, the presence of hazardous substances

on one of Ceres Farms’ properties, or the failure to properly remediate a contaminated property, could adversely affect Ceres Farms’

ability to sell or lease the property or to borrow using the property as collateral.

Ceres may be subject to common law claims by third

parties based on damages and costs resulting from environmental contamination emanating from a property.

Additionally, Ceres could become

subject to new, stricter environmental regulations, which could diminish the utility of Ceres Farms’ properties and have a material

adverse impact on its business, results of operations and financial condition.

The potential of finding endangered species on or near

Ceres Farms’ properties could restrict certain activities on its properties under federal, state and local laws and regulations

intended to protect threatened or endangered species.

The failure of Ceres Farmland, LLC to maintain qualification

as a REIT for U.S.

federal income tax purposes would subject it to U.S.

federal income tax on taxable income at regular corporate rates,

which could adversely impact its business, results of operations and financial condition.

Ceres Farmland, LLC, a subsidiary of Ceres Farmland Holdings, LP, has elected

to be taxed as a REIT for U.S.

federal income tax purposes.

Ceres Farmland Holdings, LP is a feeder fund that invests its capital in the

REIT, which then invests its capital exclusively in Ceres Farms.

To maintain qualification as a REIT, Ceres Farmland, LLC must meet various

requirements set forth in the Internal Revenue Code of 1986, as amended (the “Code”) concerning, among other things, the ownership

of its outstanding interests, the nature of its assets, the sources of its income and the amount of its distributions.

There can be no

assurance that Ceres Farmland, LLC will remain qualified as a REIT.

We believe that the current organization and method of operation will

enable Ceres Farmland, LLC to continue to qualify as a REIT.

However, at any time, new laws, interpretations or court decisions may change

federal tax laws relating to, or the U.S.

federal income tax consequences of, qualification as a REIT.

Ceres Farmland, LLC’s

General Partner may at any time, in its sole discretion, determine that it is no longer in Ceres Farmland, LLC’s best interest to

qualify as a REIT.

Failure of Ceres Farmland, LLC in any taxable year to qualify as a REIT will, among other things, subject Ceres Farmland,

LLC’s taxable income to tax at regular corporate rates and distributions to members of Ceres Farmland, LLC in any non-qualifying

years will not be deductible by Ceres Farmland, LLC.

If Ceres Farmland, LLC’s status as a REIT is terminated or revoked, it may

not be eligible to elect REIT status again prior to the fifth taxable year following the year in which it fails to qualify under the Code

as a REIT unless certain relief provisions apply.

The requirements for qualification as a REIT are extremely complex, and Ceres Farmland,

LLC’s compliance with such requirements may depend on factors that are outside of its control or upon the resolution of legal issues

for which guidance is lacking.

Losing its REIT status would reduce its net earnings available for investment or distribution because of

the additional tax liability, which could substantially reduce its ability to pay performance fees to Ceres.

Even if Ceres Farmland, LLC

qualifies as a REIT, it may be subject to federal income tax in certain circumstances.

In addition, any taxable REIT subsidiary of Ceres

Farmland, LLC will be subject to federal, state and local income taxes at the applicable corporate rates.

To remain qualified as a REIT

and to avoid the payment of U.S.

federal income and excise taxes, Ceres Farmland, LLC may be forced to borrow funds, use proceeds from

the issuance of securities, pay taxable dividends of stock or debt securities or sell assets to make distributions, which may result in

Ceres Farmland, LLC distributing amounts that may otherwise be used for operations.

Ceres 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 objectives.

Ceres continues to evaluate opportunities to grow its business, including

through the acquisition and leasing of properties for solar energy generation and artificial intelligence (AI) data infrastructure, and

the monetization of water rights.

While Ceres Farms currently leases certain properties for solar energy use or development and may expand

such arrangements, there can be no assurance that it will be able to identify, negotiate or execute additional opportunities on favorable

terms or at all.

Ceres’ efforts to pursue strategic adjacencies or enter new markets may be hindered by a variety of factors, including

regulatory or permitting challenges, lack of demand, competition, technological or infrastructure constraints or insufficient capital

There can be no assurance that Ceres’ initiatives to explore new business opportunities, enter new markets or make investments

or acquisitions will benefit our or its business operations, generate sufficient revenues to offset related costs, or produce the anticipated

benefits of past or future investments.

Other Company Risks

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fluctuating significantly and may continue to do so, depending upon many factors, some of which may be beyond our control, including:

● actions of activist stockholders against us, which have been costly and may be disruptive and may cause uncertainty about the strategic

direction of our business;

· decreases in our AUM;

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outstanding $150.0 million in aggregate principal amount of 3.25% Convertible Senior Notes due 2026, $345.0 million in aggregate principal

amount of 5.75% Convertible Senior Notes due 2028 and $345.0 million in aggregate principal amount of 3.25% Convertible Senior Notes due

2029, which we collectively refer to as the Convertible Notes.

Holders of the Convertible Notes have the right to require us to

repurchase their notes upon the occurrence of certain change of control transactions or liquidation, dissolution or common stock delisting

amount of 3.25% Convertible Senior Notes due 2029 and $475.0 million in aggregate principal amount of 4.625% Convertible Senior Notes

due 2030, which we collectively refer to as the Convertible Notes.

Holders of the Convertible Notes have the right to require us

to repurchase their notes upon the occurrence of certain change of control transactions or liquidation, dissolution or common stock delisting

events (each, a “fundamental change”), at a repurchase price equal to 100% of the principal amount of the notes to be repurchased,

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for our common stock.

Our stockholder rights plan, or “poison pill,”

includes terms and conditions that could discourage a takeover or other transaction that stockholders may consider favorable.

Our Stockholder Rights Agreement, dated March

17, 2023 and subsequently amended on May 4, 2023, May 10, 2023, March 18, 2024, March 25, 2024 and April 30, 2024 (as amended, the “Stockholder

Rights Agreement”), by and between the Company and Continental Stock Transfer & Trust Company, as Rights Agent, was adopted

by our Board of Directors and ratified by our stockholders in response to stockholder activism concerns.

The Stockholder Rights Agreement

is intended to protect the Company and its stockholders from efforts by a single stockholder or group of stockholders to obtain control

of the Company without paying a control premium through a number of recognized stockholder protections.

Generally, the Stockholder Rights

Agreement works by causing substantial dilution to any person or group (other than specified exempt persons) that acquires 10% (or 20%

in the case of passive stockholders) or more of our shares of common stock without the approval of the Board of Directors (such person

or group, an “Acquiring Person”) through the issuance of “Rights” to stockholders of record as of, and subsequent

to, the close of business on March 28, 2023, which Rights entitle the registered holders thereof (other than the Acquiring Person) to

receive additional shares of our common stock upon exercise of such Rights.

As a result, the overall effect of the Stockholder Rights

Agreement may be to render more difficult or discourage a merger, tender or exchange offer or other business combination involving our

Company that is not approved by the Board of Directors even if the offer may be considered beneficial by some stockholders.

will expire at the close of business on March 17, 2025, unless previously redeemed or exchanged by the Company.

See Note 19 to our Consolidated

Financial Statements for additional information.

The payment of dividends to our stockholders and our ability

15 unchanged sentences

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What changed 10-K

Item 1A. Risk Factors