What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-11 compared with 2022-11-10 · 653 added, 753 removed, 172 unchanged (89% of the section changed)

Financial Statements

HOLDINGS INC.

Consolidated Balance Sheets

1 unchanged sentence

Current assets

and cash equivalents

expenses and other assets

investments at fair value

receivable at fair value

current assets

note receivable at fair value

receivable at fair value

REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY

payable and accrued expenses

salaries and benefits

liability - current

Cash and cash equivalents

Marketable securities

Clearing broker deposits

Prepaid expenses and other current assets

Prepaid acquisition cost

Short-term investments at fair value

Notes receivable, at fair value - current portion

Investment in Fieldpoint Securities

Total current assets

Property and equipment, net

Notes receivable, at fair value - non-current portion

Right-of-use assets

Security deposit

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Stockholders’

Accounts payable and accrued expenses

Accrued salaries and benefits

Accrued Commissions

Lease liability - current

Other Current liability

Total current liabilities

Lease liability

Total liabilities

Stockholders’ equity

Preferred stock, $0.0001 par value, 50,000,000 Authorized

5,000,000 shares designated;

3,825 shares issued and outstanding at September 30, 2022 and December 31, 2021;

3,825 shares issued and outstanding at March 31, 2023 and December 31, 2022;

liquidation value of $ 0.0001 per share

5,000,000 shares designated;

834 shares issued and outstanding at September 30, 2022 and December 31, 2021;

834 shares issued and outstanding at March 31, 2023 and December 31, 2022;

liquidation value of $ 0.0001 per share

Common stock, $ 0.0001 par value, 100,000,000 shares authorized;

5,485,096 and 5,275,329 shares issued at September 30, 2022 and December 31, 2021, respectively;

5,140,114 and 5,275,329 shares outstanding at September 30, 2022 and December 31, 2021, respectively

paid-in capital

Treasury stock, at cost, 344,982 and 0 shares at September 30, 2022 and December 31, 2021, respectively

stockholders’ equity

liabilities and stockholders’ equity

4,815,597 and 5,485,096 shares issued at March 31, 2023 and December 31, 2022, respectively;

4,755,449 and 5,017,079 shares outstanding at March 31, 2023 and December 31, 2022, respectively

Additional paid-in capital

Treasury stock, at cost, 60,148 and 468,017 shares at March 31, 2023 and December 31, 2022, respectively

Accumulated deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

accompanying notes to unaudited condensed consolidated financial statements.

HOLDINGS INC.

Consolidated Statements of Operations

in thousands except share and per share amounts)

September 30,

Operating costs

and administrative

and development

and development - license acquired

operating expenses

from operations

(expenses) income

on marketable securities

in fair value of investments

Three Months Ended

Operating costs and expenses

General and administrative

Research and development

Total operating expenses

Loss from operations

Other (expenses) income

dividends related to Series O and Series P Redeemable Convertible Preferred Stock

Loss Attributable to Common Shareholders

loss per share, basic and diluted

Interest income

Loss on marketable securities

Change in fair value of investments

Total other (expenses) income

Deemed dividends related to Series O and Series P Redeemable Convertible Preferred Stock

Net Loss Attributable to Common Shareholders

Net loss per share, basic and diluted

Basic and Diluted

Weighted average

number of shares outstanding, basic and diluted

Weighted average number of shares outstanding, basic and diluted

Basic and Diluted

accompanying notes to unaudited condensed consolidated financial statements.

Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity

in thousands except share and per share amounts)

the Three Months Ended September 30, 2022

Redeemable Convertible

Preferred Stock

Treasury Stock

Stockholders’

Balance at June 30, 2022

$ ( 172,386 )

Purchase of treasury stock

Stock-based compensation

Balance at September 30, 2022

$ ( 178,625 )

the Three Months Ended September 30, 2021

Total Stockholders’

at June 30, 2021

$ ( 161,917 )

at September 30, 2021

$ ( 161,964 )

accompanying notes to unaudited condensed consolidated financial statements.

HOLDINGS INC.

Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity

in thousands except share and per share amounts)

the Nine Months Ended September 30, 2022

Redeemable Convertible

Preferred Stock

the Three Months Ended March 31, 2023

Preferred Stock

3 unchanged sentences

$ ( 185,881 )

Issuance of Series O redeemable convertible preferred stock for cash

Issuance of Series P redeemable convertible preferred stock for cash

Cost on issuance of Series O and Series P Redeemable Convertible Preferred Stock

Deemed dividends related to Series O and Series P Redeemable Convertible Preferred Stock

Redemption of Series O Redeemable Convertible Preferred Stock

Redemption of Series P Redeemable Convertible Preferred Stock

Purchase of treasury stock

Stock-based compensation

Cancellation of common stock related to investment in CBM

Fractional shares adjusted for reverse split

Balance at September 30, 2022

Cancellation of common stock

Purchase of treasury stock

Retirement of treasury stock

Balance at March 31, 2023

$ ( 189,643 )

Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity

in thousands except share and per share amounts)

For the Nine Months Ended

September 30, 2021

Total Stockholders’

the Three Months Ended March 31, 2022

Convertible Preferred Stock

Stockholders ’

at December 31, 2021

$ ( 156,603 )

Issuance of common stock and warrants (net of offering costs of $ 8,260 )

Exercise of warrants

of common stock for research and development license acquired

at September 30, 2021

$ ( 161,964 )

of Series O redeemable convertible preferred stock for cash

of Series P redeemable convertible preferred stock for cash

on issuance of Series O and Series P Redeemable Convertible Preferred Stock

dividends related to Series O and Series P Redeemable Convertible Preferred Stock

of common stock related to investment in CBM

at March 31, 2022

accompanying notes to unaudited condensed consolidated financial statements.

HOLDINGS INC.

Consolidated Statements of Cash Flows

in thousands)

September 30,

Three Months Ended

Cash flows from operating activities

Adjustments to reconcile net loss to net cash

used in operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization of right-of-use assets

1 unchanged sentence

Change in fair value of long-term investment

Research and development-acquired license,

Stock-based compensation

Realized loss (gain) on marketable securities

Realized loss on marketable securities

Unrealized loss on marketable securities

1 unchanged sentence

Changes in operating assets and liabilities:

Prepaid expenses and other

Accounts payable and accrued

Prepaid expenses and other assets

Prepaid acquisition cost

Accounts payable and accrued expenses

Accrued salaries and benefits

Lease liabilities

Interest receivable on convertible

Net cash used in operating

Cash flows from investing

Other current liabilities

Notes receivable, at fair value – net interest accrued

Net cash used in operating activities

Cash flows from investing activities

Purchase of marketable securities

1 unchanged sentence

Proceeds from sale of digital currencies

Proceeds from sale of DatChat common shares

Proceeds from promissory note receivable interest

Funds to deposit accounts, net

Purchase of fixed assets

Acquisition of FPS, net of cash acquired and receivable owed from FPS

Collection of principal on note receivable

Purchase of short-term and long-term investments

Purchase of research and development licenses

Purchase of short-term and long-term promissory

Purchase of convertible

Net cash used in investing

Cash flows from financing

Proceeds from issuance of common stock and

warrants, net of offering cost

Proceeds from issuance of Series O and Series

P Redeemable Convertible Preferred Stock, net of discount and offering cost

Proceeds from exercise of warrants

Payment for fractional shares

Redemption of Series O and Series P Redeemable

Convertible Preferred Stock

Purchase of treasury

Net cash (used in) provided

by financing activities

Net (decrease) increase in cash and cash equivalents

and restricted cash

Cash and cash equivalents,

beginning of period

Cash and cash equivalents,

end of period

Non-cash investing and financing

Net cash used in investing activities

Cash flows from financing activities

Proceeds from issuance of Series O and Series P Redeemable Convertible Preferred Stock, net of discount and offering cost

Purchase of treasury stock

Net cash (used in) provided by financing activities

Net (decrease) increase in cash and cash equivalents and restricted cash

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Non-cash investing and financing activities

Transfer from short-term investment to marketable securities

Reclassify from convertible note receivable

to notes receivable at fair value

Promissory convertible note receivable conversion

into common shares

Unpaid investment

Reclassify from convertible note receivable to notes receivable at fair value

On March 27, 2023, the Company acquired all assets and liabilities of FPS as disclosed in Note 4:

Net assets acquired, net of cash acquired and receivable owed from FPS

Less - Deposit previously transferred in October 2022 to FPS

Net cash paid

accompanying notes to unaudited condensed consolidated financial statements.

AIKIDO PHARMA INC.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

and Description of Business

AIkido Pharma Inc.

(the “Company”), formerly

known as Spherix Incorporated, was initially formed in 1967.

Since 2017, the Company has operated as a biotechnology company with a diverse

portfolio of small-molecule anticancer and antiviral therapeutics in development.

Over the past year, in an effort to enhance shareholder

value, the Company has shifted its primary focus away from biotechnology to a new line of business in the fintech and financial services

In furtherance of this new focus, in June of this year the Company formed a wholly owned financial services subsidiary,

Dominari Financial Inc.

(“Dominari”), with the purpose of making strategic acquisitions across the fintech and financial services

Additionally, AIkido Labs, LLC (“Aikido Labs”), another wholly owned subsidiary of the Company, has and

will continue to explore other opportunities in high growth industries.

To date, Aikido Labs has acquired equity positions in Anduril

Industries, Inc, Databricks, Inc., Discord, Inc., Epic Games, Inc., Payward, Inc.

Holdings Inc.

(the “Company”), formerly AIkido Pharma, Inc., was founded in 1967 as Spherix Incorporated.

Since 2017, the

Company has operated as a biotechnology company with a diverse portfolio of small-molecule anticancer and antiviral therapeutics and

their related patent technology.

In an effort to enhance shareholder value, in June of 2022, the Company formed a wholly owned financial

services subsidiary, Dominari Financial Inc.

(“Dominari”), with the intent of shifting the Company’s primary operating

focus away from biotechnology to the fintech and financial services industries.

Through Dominari, the Company acquired Dominari Securities

LLC (Dominari Securities), an introducing broker-dealer, registered with the Financial Industry Regulatory Authority (“FINRA”)

and an investment adviser registered with the Securities and Exchange Commission (“SEC”).

Dominari Securities provides investment

advisory services and annuity and insurance products of certain insurance carriers as an insurance agency through independent and affiliated

Additionally, AIkido Labs, LLC (“Aikido

Labs”), another wholly owned subsidiary of the Company, has historically explored opportunities in high growth industries.

To date, Aikido Labs has made equity investments in Anduril Industries, Inc, Databricks, Inc., Discord, Inc., Epic Games, Inc., Payward,

dba Kraken, Space Exploration Technologies Corp.

SpaceX, Tevva Motors Ltd., Thrasio, LLC, and Yanka Industries, Inc.

dba SpaceX, Tevva Motors Ltd., Thrasio, LLC, and Yanka Industries, Inc.

dba Masterclass.

Please see Notes 6, 7 and 8 below for a further

discussion of the Company’s investments.

Finally, the Company will continue to foster and develop its historical pipeline of biotechnology

assets consisting of patented technology from leading universities and researchers, including prospective treatments for pancreatic cancer,

acute myeloid leukemia and acute lymphoblastic leukemia.

The Company is also developing a broad-spectrum antiviral platform, in

which the lead compounds have activity in cell-based assays against multiple viruses including Influenza virus, Ebolavirus and Marburg

virus, SARS-CoV, MERS-CoV, and SARS-CoV-2, the cause of COVID-19.

September 9, 2022, Dominari entered into a membership interest purchase agreement (the “FPS Purchase Agreement”) with Fieldpoint

Private Bank & Trust (“Seller”), a Connecticut bank, for the purchase of its wholly owned subsidiary, Fieldpoint Private

Securities, LLC, a Connecticut limited liability company (“FPS”) and broker-dealer registered with the Financial Industry

Regulatory Authority (“FINRA”).

Pursuant to the terms of the FPS Purchase Agreement, Dominari will purchase from

the Seller 100% of the membership interests in of FPS (the “Membership Interests”) and, as a result thereof, will,

thereafter, operate FPS’s registered broker-dealer business as a wholly owned subsidiary of the Company.

The FPS Purchase

Agreement provides for Dominari’s acquisition of FPS’s Membership Interests in two closings, the first of which

occurred on October 4, 2022 (the “Initial Closing”), at which Dominari paid to the Seller $2,000,000 in consideration for

a transfer by the Seller to Dominari of 20% of the Membership Interests.

Following the Initial Closing, FPS filed a continuing

membership application requesting approval for a change of ownership, control, or business operations with FINRA in accordance with FINRA

Rule 1017 (the “Rule 1017 Application”).

Upon FINRA’s approval of the Rule 1017 Application, the second closing

will occur (the “Second Closing”), at which Dominari will pay to the Seller an additional $1.00 in consideration for a transfer

by the Seller to Dominari of the remaining 80% of the Membership Interests.

The Second Closing is subject to FINRA’s final

approval under FINRA Rule 1017 as well as other customary closing conditions, including the accuracy of the representations and warranties

of the applicable parties under the FPS Purchase Agreement and compliance therewith.

Additionally, on October 17, 2022, the Company

entered into an Amended and Restated Services Agreement with Kyle Wool, pursuant to which he has agreed to serve as Dominari’s

Chief Executive Officer, upon the termination of his existing relationship with another registered broker-dealer and lead the Company’s

transition to a fintech and financial services company.

Finally, the Company is in the process of winding down its historical pipeline of biotechnology assets consisting of patented technologies

from leading universities and researchers, including prospective treatments for pancreatic cancer, acute myeloid leukemia, and acute lymphoblastic

June 7, 2022, the Company effected a seventeen-for-one (17-for-1) reverse stock split of its class of common stock (the “Reverse

6 unchanged sentences

to purchase common stock, restricted stock units, restricted stock awards, share data, per share data and related information contained

in the condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split

for all periods presented.

Payment for fractional shares resulting from the reverse stock split amounted to $ 26 thousand.

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

in these unaudited condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse

Stock Split for all periods presented.

Payment for fractional shares resulting from the reverse stock split amounted to $ 0.03 million.

Liquidity and Capital Resources

4 unchanged sentences

upon projected cash flow requirements, the Company has adequate cash to fund its operations for at least the next twelve months from

the date of the issuance of these unaudited consolidated financial statements.

the date of the issuance of these unaudited condensed consolidated financial statements.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

Summary of Significant Accounting Policies

have been no material changes in the Company’s significant accounting policies from those previously disclosed in the 2022 Annual

Report other than those discussed below.

of Presentation and Principles of Consolidation

accompanying unaudited condensed consolidated interim financial statements include the accounts of the Company and its wholly-owned subsidiaries,

AIkido Labs and Dominari.

All significant intercompany balances and transactions have been eliminated in consolidation.

accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the accounting

principles generally accepted in the United States of America (“U.S.

GAAP”) for interim financial information and pursuant

to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on

the same basis as the Company prepares its annual audited consolidated financial statements.

The condensed consolidated balance sheet

as of September 30, 2022, condensed consolidated statements of operations for the three and nine months ended September 30, 2022 and

2021, condensed consolidated statements of stockholders’ equity for the three and nine months ended September 30, 2022 and 2021,

and the condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021 are unaudited, but include

all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the

financial position, operating results and cash flows for the periods presented.

The results for the three and nine months ended September

30, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022 or for any future interim period.

The condensed consolidated balance sheet at December 31, 2021 has been derived from audited financial statements;

however, it does not

include all of the information and notes required by U.S.

GAAP for complete financial statements.

The accompanying unaudited condensed

consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December

31, 2021 and notes thereto included in the Company’s annual report on Form 10-K, which was filed with the SEC on March 28, 2022.

accompanying condensed consolidated financial statements have been prepared in conformity with US GAAP.

This requires management to make

estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities

at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the period.

The Company’s

significant estimates and assumptions include stock-based compensation, the valuation of investments, the valuation of convertible note

and the valuation allowance related to the Company’s deferred tax assets.

Certain of the Company’s estimates could be affected

by external conditions, including those unique to the Company and general economic conditions.

It is reasonably possible that these external

factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates and assumptions.

Accounting Policies

from the policies described below, there have been no material changes in the Company’s significant accounting policies to those

previously disclosed in the Company’s annual report on Form 10-K, which was filed with the SEC on March 28, 2022.

AIKIDO PHARMA INC.

accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S.

generally accepted accounting

principles (“U.S.

GAAP”), and in conformity with the rules and regulations of the SEC.

In the opinion of management, these

financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the

results of the interim periods presented.

The condensed balance sheet at December 31, 2022, was derived from audited annual financial

statements but does not contain all of the footnote disclosures from the annual financial statements.

Accordingly, these financial statements

should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual

Report on Form 10-K for the year ended December 31, 2022.

Company’s policy is to consolidate all entities that it controls by ownership of a majority of the membership interest or outstanding

voting stock.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly

owned subsidiaries, Aikido Labs, Dominari, and Dominari Securities.

All significant intercompany balances and transactions have been

eliminated in consolidation.

for interim periods are not necessarily indicative of results to be expected for a full year or any future period .

accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S.

This requires management

to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets

and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenue and expenses

during the period.

The Company’s significant estimates and assumptions include stock-based compensation, the valuation of investments,

the valuation of notes receivable and the valuation allowance related to the Company’s deferred tax assets.

Certain of the Company’s

estimates could be affected by external conditions, including those unique to the Company and general economic conditions.

It is reasonably

possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from

those estimates and assumptions.

with clearing broker

Deposits with clearing broker consisted of approximately

$ 3.4 million held in money market funds and liquid insured deposits and a $ 0.1 million good faith deposit maintained by the Company with

its clearing broker.

These amounts are recorded as deposits with clearing broker within the unaudited condensed consolidated balance sheet

as of March 31, 2023.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

Company accounts for its leases under ASC 842, Leases .

Under this guidance, arrangements meeting the definition of a lease

are classified as operating or financing leases and are recorded on the condensed consolidated balance sheet as both a right-of-use asset

and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s

incremental borrowing rate.

Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset

is amortized over the lease term.

For operating leases, interest on the lease liability and the amortization of the right-of-use asset

result in straight-line rent expense over the lease term.

For finance leases, interest on the lease liability and the amortization of

the right-of-use asset results in front-loaded expense over the lease term.

Variable lease expenses are recorded when incurred.

12 – Commitment and Contingencies .

stock is recorded at cost and is presented as a reduction of stockholders’ equity.

accounting pronouncements

does not believe that any recently issued, but not yet effective accounting pronouncements, if currently adopted, would have an effect

on the Company’s unaudited condensed consolidated financial statements.

Company accounts for its leases under ASC 842, Leases (“ASC 842”).

Under this guidance, arrangements meeting

the definition of a lease are classified as operating or financing leases and are recorded on the unaudited condensed consolidated balance

sheet as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate

implicit in the lease or the Company’s incremental borrowing rate.

Lease liabilities are increased by interest and reduced by payments

each period, and the right-of-use asset is amortized over the lease term.

For operating leases, interest on the lease liability and the

amortization of the right-of-use asset result in straight-line rent expense over the lease term.

For finance leases, interest on the

lease liability and the amortization of the right-of-use asset results in front-loaded expense over the lease term.

Variable lease expenses

are recorded when incurred (see Note 10 - Leases ).

adopted accounting standards

October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities

from Contracts with Customers (“ASU 2021-08”).

This update amends Topic 805 to add contract assets and contract

liabilities to the list of exceptions to the recognition and measurement principles that apply to business combinations and to require

that an entity (acquirer) recognize and measure contract assets and contract liabilities in accordance with ASC 606.

adopted ASU 2021-08 on January 1, 2023.

There was no material impact to the Company’s unaudited condensed consolidated financial

statements from the implementation of ASU 2021-08.

of new accounting pronouncements not yet adopted

June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ,

to clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity

security and, therefore, is not considered in measuring the fair value of the equity security.

ASU 2022-03 also clarifies

that an entity cannot recognize and measure a contractual sale restriction as a separate unit of account.

The amendments in ASU 2022-03 may

be early adopted and are effective on a prospective basis for fiscal years beginning after December 15, 2023, and interim periods within

those fiscal years.

The Company is currently evaluating the impact of the amendments on the Company’s consolidated financial statements

and whether it will early adopt the amendments in ASU 2022-03 .

March 2023, the FASB issued ASU 2023-01, Leases , to require entities to classify and account for leases with related

parties on the basis of legally enforceable terms and conditions of the arrangement.

The amendments are effective in periods beginning

after December 15, 2023, including interim periods within those fiscal years.

The Company is currently evaluating the provisions of the

amendments and the impact on its future consolidated financial statements and whether it will early adopt the amendments in ASU 2023-01.

of new accounting pronouncements to be adopted in future periods

reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have

a significant impact on the unaudited condensed consolidated financial statements.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

FPS Acquisition

September 9, 2022, Dominari entered into a membership interest purchase agreement, as amended and restated on March 27, 2023 (the “FPS

Purchase Agreement”) with Fieldpoint Private Bank & Trust (“Seller”), a Connecticut bank, for the purchase of its

wholly owned subsidiary, Fieldpoint Private Securities, LLC, a Connecticut limited liability company (“FPS”), that is a broker-dealer

registered with FINRA and an investment adviser registered with the SEC (the “FPS Acquisition”).

Pursuant to the terms

of the FPS Purchase Agreement, Dominari purchased from the Seller 100 % of the membership interests in FPS (the “Membership

FPS’s registered broker-dealer and investment adviser businesses was renamed and will operate as Dominari Securities,

a wholly owned subsidiary of Dominari.

The FPS Purchase Agreement provides for Dominari’s acquisition of FPS’s Membership

Interests in two closings, the first of which occurred on October 4, 2022 (the “Initial Closing”), at which Dominari

paid to the Seller $ 2.0 million in consideration for a transfer by the Seller to Dominari of 20 % of the FPS Membership Interests.

Following the Initial Closing, FPS filed a continuing membership application requesting approval for a change of ownership, control,

or business operations with FINRA in accordance with FINRA Rule 1017 (the “Rule 1017 Application”).

The Rule 1017 Application

was approved by FINRA on March 20, 2023.

The second closing (the “Second Closing”) occurred on March 27, 2023.

Dominari paid

to the Seller an additional approximate $ 1.6 million consideration for a transfer by the Seller to Dominari of the remaining 80 %

of the Membership Interests.

Consideration

The FPS Acquisition was accounted for a business

combination under ASC 805.

the terms of the FPS Purchase Agreement and subsequent Amendments and Side Letters, 100 % of the membership interest was acquired for

cash consideration of approximately $ 3.4 million, which reflected the fair value of net assets acquired, plus a $ 1 purchase price.

March 31, 2023, Dominari had not finalized the purchase accounting related to the fair value of assets acquired in the FPS Acquisition.

Pursuant to the Initial Closing and Second Closing, Dominari had wired a total of approximately $ 3.6 million in cash to the Seller.

purchase price allocation identified net assets of approximately $ 3.4 million, resulting in a receivable due from the Seller for approximately

$ 0.2 million.

The receivable is not included within the consideration transferred as part of the FPS Acquisition but is included within

prepaid expenses and other assets within the unaudited condensed consolidated balance sheet as of March 31, 2023.

the acquisition method of accounting, the assets acquired, and liabilities assumed of FPS were recorded as of the acquisition date, at

their respective fair values, and consolidated with those of the Company.

Acquisition-related costs are not included as a component of

consideration transferred but are expensed in the periods in which costs are incurred.

The Company incurred approximately $ 0.3 million

of transaction costs associated with the FPS Acquisition.

The transaction costs are included in general and administrative expenses in

the unaudited condensed consolidated statement of operations.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

Value of Net Assets Acquired

Company is in the process of finalizing the purchase price allocation as of March 31, 2023.

The following table summarizes

the fair values of the assets acquired and liabilities assumed of FPS at the date of acquisition:

Cash and cash equivalents

Deposits with Clearing Broker-Dealer

Other receivables

Prepaid and other current assets

Total assets acquired

Accrued expenses

Accrued commissions

Wealth management liabilities

Total liabilities assumed

Total net assets of FPS Acquisition

Securities reported a net loss of approximately $ 0.7 million for the period ended March 31, 2023.

Revenue for the period ended March

31, 2023, was not material.

The net loss was a result of professional service costs incurred of approximately $ 0.6 million, which included

transaction costs of approximately $ 0.3 million.

The approximate $ 0.6 million of professional service costs is included in the general

and administrative expenses in the unaudited condensed consolidated statement of operations.

disclosures were omitted for this acquisition as it does not have a significant impact on the Company’s financial results.

Investments in Marketable Securities

realized gain or loss, unrealized gain or loss, and dividend income related to marketable securities for the three and nine months ended

September 30, 2022 and 2021, which are recorded as a component of gains and (losses) on marketable securities on the consolidated statements

of operations, are as follows ($ in thousands):

September 30,

realized gain or loss, unrealized gain or loss, and dividend income related to marketable securities for the three months ended March

31, 2023 and 2022, which are recorded as a component of gains and (losses) on marketable securities on the unaudited condensed consolidated

statements of operations, are as follows ($ in thousands):

Three Months Ended

Realized (loss) gain

1 unchanged sentence

Dividend income

Short-term investments

following table presents the Company’s short-term investments at September 30, 2022 and December 31, 2021 ($ in thousands):

September 30,

Investment in Hoth Therapeutics,

Investment in DatChat, Inc.

Investment in Vicinity

change in the fair value of the short-term investments for the nine months ended September 30, 2022 is summarized as follows:

($ in thousands):

Beginning balance

Transfer to marketable securities

Change in fair value of investment

Realized gain recognized

through sale of marketable securities

Ending balance

AIKIDO PHARMA INC.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

in Hoth Therapeutics, Inc.

March 11, 2022, 1,130,701 shares of Hoth common stock were transferred to the marketable securities account and were sold for net proceeds

of approximately $ 0.9 million.

August 17, 2022, 35,714 shares of Hoth common stock were transferred to marketable securities account.

following summarizes the Company investment in Hoth as of September 30, 2022 and December 31, 2021:

September 30,

Fair value as of

September 30,

(in thousands)

Security Name

as of December 31,

Fair value as of

December 31, 2021

(in thousands)

in DatChat, Inc.

February 14, 2022, 357,916 shares (valued at $ 2.21 per share) of DatChat common stock were transferred to the marketable securities account

and were sold for net proceeds of approximately $ 0.8 million.

in Vicinity Motor Corp.

October 25, 2021, the Company entered into a warrant agreement with Vicinity Motor Corp.

(“Vicinity”) that entitles the Company

to purchase up to 246,399 shares of Vicinity common stock at $ 5.10 per share.

The warrant expires on October 25, 2024 .

The fair value

was determined using a Black-Scholes simulation.

The Company recorded the fair value of the Vicinity warrant of approximately $ 33,000

and $ 0.4 million in the consolidated balance sheet as of September 30, 2022 and December 31, 2021, respectively, reflecting the benefit

received as part of its purchase of Vicinity common shares through its brokerage account.

The initial investment in Vicinity was measured

at approximately $ 0.6 million.

Gains or losses associated with changes in the fair value of investments in Vicinity warrants are recognized

as Change in fair value of investment on the consolidated statements of operations.

During the nine months ended September 30, 2022,

the Company recorded approximately $ 0.4 million of change in fair value of investment for this investment.

following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates:

September 30,

Short-term investments

The following table presents the Company’s

short-term investments as of March 31, 2023, and December 31, 2022 ($ in thousands):

Investment in Vicinity Motor Corp.

There was no change in the fair value of the

short-term investments for the three months ended March 31, 2023.

The following table provides quantitative information

regarding Level 3 fair value measurements inputs at their measurement dates:

Option term (in years)

1 unchanged sentence

Expected dividends

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

Long-Term Investments

January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2016-01 and related ASU 2018-03 concerning recognition

and measurement of financial assets and financial liabilities.

In adopting this guidance, the Company has made an accounting policy election

to adopt an adjusted cost method measurement alternative for investments in equity securities without readily determinable fair values.

equity investments that are accounted for using the measurement alternative, the Company initially records equity investments at cost

but is required to adjust the carrying value of such equity investments through earnings when there is an observable transaction involving

the same or a similar investment with the same issuer or upon an impairment.

following table presents the Company’s other investments at September 30, 2022 and December 31, 2021 ($ in thousands):

September 30,

The following table presents the Company’s

other investments as of March 31, 2023, and December 31, 2022 ($ in thousands):

Investment in Kerna Health Inc

14 unchanged sentences

Investment in Anduril

change in the value of the long-term investments for the nine months ended September 30, 2022 is summarized as follows:

($ in thousands):

Beginning balance

Purchase of investments

in fair value of long-term investments

Ending balance

in Kerna Health Inc

May 2022, the Company purchased additional 400,000 shares of common stock of Kerna Health Inc, (“Kerna”) for approximately

There was no change in the value of the long-term

investments for the three months ended March 31, 2023.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

Investment in Kerna Health Inc

On September 15, 2021, the Company entered into

a securities purchase agreement (the “Kerna Securities Purchase Agreement”) with Kerna Health Inc., (“Kerna”).

Under the Kerna Securities Purchase Agreement, the Company agreed to purchase 1,333,334 shares of common stock of Kerna for

$ 1.0 million.

The investment in Kerna was valued at $ 4.9 million as of September 30, 2022.

AIKIDO PHARMA INC.

Kerna, a private company, raised capital during the fourth quarter of 2021, increasing its share price value to $ 2.85 per

Therefore, the Company recorded a $ 2.8 million unrealized gain on this investment during the fourth quarter of 2021.

The investment

in Kerna was valued at $ 3.8 million as of December 31, 2021.

In May 2022, the Company purchased additional 400,000 shares

of common stock of Kerna Health Inc, (“Kerna”) for approximately $ 1.1 million.

The investment in Kerna was valued at

$ 4.9 million as of March 31, 2023.

Investment in Kaya Holding Corp.

Kaya Now Inc.)

On September 29, 2021, the Company entered into

a securities purchase agreement (the “Kaya Securities Purchase Agreement”) with Kaya Holding Corp., (“Kaya”).

Under the Kaya Securities Purchase Agreement, the Company agreed to purchase 8,325,000 shares of common stock of Kaya for approximately

$ 0.7 million.

Kaya, a private company, raised capital during the fourth quarter of 2021, increasing its share price value to $ 0.20 per

Therefore, the Company recorded approximately $ 1.0 million in unrealized gain on this investment during the fourth quarter

The investment in Kaya was valued at approximately $ 1.7 million as of December 31, 2021.

On March 2, 2022, the Company purchased

additional 3,375,000 shares of common stock of Kaya Now Inc., aka Kaya Holding Corp., (“Kaya”) for approximately

$ 0.6 million.

On July 21, 2022, in consideration for extending

the maturity date of the Kaya Now Promissory Note (See Note 8 – Notes Receivable ) to February 1, 2023, Kaya agreed to

issue to the Company 1,000,000 shares at $ 0.2 per share of common stock.

During the fourth quarter of 2022, the Company

identified indicators of impairment for the Kaya investment as a result of adverse changes in Kaya’s business operations, including

liquidity concerns.

As a result, the Company recorded an impairment charge of approximately $ 3.1 million in the fourth quarter of

The impairment charge represents an unrealized impairment loss of approximately $ 2.5 million in stock, $ 0.5 million related

to the promissory note (see Note 8 – Notes Receivable ), and $ 50,000 in Kaya warrants (see Note 9 – Fair

Value of Financial Assets and Liabilities ).

The investment in Kaya was valued at $ 0 as of March 31, 2023.

Investment in Tevva Motors Ltd.

On September 22, 2021, the Company entered into

a securities purchase agreement (the “Tevva Motors Subscription Agreement”) with Big Sky Opportunities Fund, LLC, who handled

the offering for Tevva Motors.

Under the Tevva Motors Subscription Agreement, the Company agreed to purchase 29,004 interests

of Tevva Motors for approximately $ 1.0 million.

Subsequently, on September 30, 2021, the Company entered into a second securities

purchase agreement with Big Sky Opportunities Fund, LLC to purchase an additional 29,004 interests of Tevva Motors for approximately

$ 1.0 million.

The investment in Tevva was valued at approximately $ 2.0 million as of December 31, 2021.

Tevva Motors (“Tevva”),

a private company, raised capital during the first quarter of 2022, increasing its share price value to $ 58.0 per share.

to the first quarter raise, Tevva had an additional fund raise in the second quarter at a lower valuation of $ 48.16 per share.

the Company recorded a first quarter of 2022 unrealized gain of approximately $ 1.4 million offset by a second quarter of 2022 unrealized

loss of approximately $ 0.6 million.

The investment in Tevva was valued at approximately $ 2.8 million as of as of March 31, 2023.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

in Kaya Now Inc (aka Kaya Holding Corp)

March 2, 2022, the Company purchased additional 3,375,000 shares of common stock of Kaya Now Inc., aka Kaya Holding Corp., (“Kaya”)

for approximately $ 0.6 million.

July 21, 2022, in consideration for extending the maturity date of the Kaya Now Promissory Note (See Note 7 – Notes Receivable )

to February 1, 2023, Kaya agreed to issue to the Company 1,000,000 shares at $ 0.2 per share of common stock.

Company recorded approximate $ 0.2 million in unrealized gain on this investment during the nine months ended September 30, 2022.

investment in Kaya was valued at approximately $ 2.5 million as of September 30, 2022.

in Tevva Motors

Motors (“Tevva”), a private company, raised capital during the first quarter of 2022, increasing its share price value to

$ 58.0 per share.

Therefore, the Company recorded a $ 1.4 million unrealized gain on this investment during the nine months ended September

The investment in Tevva was valued at approximately $ 3.4 million as of September 30, 2022.

in ASP Isotopes

August 2022, the Company purchased additional 100,000 shares of common stock of ASP Isotopes Inc.

Investment in ASP Isotopes Inc.

On November 18, 2021, the Company entered into

a securities purchase agreement (the “ASP Securities Purchase Agreement”) with ASP Isotopes Inc., (“ASP Isotopes”).

Under the ASP Securities Purchase Agreement, the Company agreed to purchase 500,000 shares of common stock of ASP Isotopes for

$ 1.0 million.

The investment in ASP Isotopes was valued at approximately $ 1.0 million as of December 31, 2021.

In August 2022,

the Company purchased additional 100,000 shares of common stock of ASP Isotopes Inc.

(“ASP”) for $ 0.3 million.

The investment in ASP was valued at $ 1.3 million as of September 30, 2022.

in AerocarveUS Corporation

investment in AerocarveUS Corporation was valued at $ 1.0 million as of September 30, 2022.

January 27, 2022, the Company entered into a securities purchase agreement (the “Qxpress Securities Purchase Agreement”)

with Qxpress.

Under the Qxpress Securities Purchase Agreement, the Company agreed to purchase 46,780 shares of common stock of Qxpress

In November 2022, the Company transferred all 600,000 shares of ASP Isotopes common stock, approximately $ 1.4 million,

inclusive of a $ 0.1 million unrealized gain, to the marketable securities account.

Investment in AerocarveUS Corporation

On November 22, 2021, the Company entered into

a securities purchase agreement (the “AerocarveUS Securities Purchase Agreement”) with AerocarveUS Corporation, (“AerocarveUS”).

Under the AerocarveUS Securities Purchase Agreement, the Company agreed to purchase 250,000 shares of common stock of AerocarveUS

for $ 1.0 million.

The investment in Qxpress was valued at $ 1.0 million as of September 30, 2022.

in Masterclass

March of 2022, the Company entered into a securities purchase agreement (the “Masterclass Securities Purchase Agreement”)

with Masterclass.

Under the Masterclass Securities Purchase Agreement, the Company agreed to purchase 4,841 shares of common stock of

Masterclass for approximately $ 0.2 million.

The investment in Masterclass was valued at approximately $ 0.2 million as of September 30,

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

March of 2022, the Company entered into a securities purchase agreement (the “Kraken Securities Purchase Agreement”) with

Under the Kraken Securities Purchase Agreement, the Company agreed to purchase a total of 8,409 shares of common stock of Kraken

for approximately $ 0.5 million.

In August 2022, the Company entered into a common stock transfer agreement with a private seller to purchase

3,723 shares of Kraken for approximately $ 0.1 million.

The investment in Kraken was valued at approximately $ 0.6 million as of September

in Epic Games

March 22, 2022, the Company entered into a securities purchase agreement (the “Epic Games Securities Purchase Agreement”)

with Epic Games.

Under the Epic Games Securities Purchase Agreement, the Company agreed to purchase an aggregate of 901 shares of common

stock of Epic Games for a total $ 1.5 million.

In April 2022, the Company invested an additional $ 2 million for the purchase of additional

shares of common stock of Epic Games.

The investment in Epic Games was valued at $ 3.5 million as of September 30, 2022.

March 23, 2022, the Company entered into a securities purchase agreement (the “Tesspay Securities Purchase Agreement”) with

Under the Tesspay Securities Purchase Agreement, the Company agreed to purchase 1,000,000 shares of common stock of Tesspay

for approximately $ 0.2 million.

The Company also invested an additional $ 1.0 million for pre-IPO.

Tesspay, a private company, raised

capital during the first quarter of 2022, increasing its share price value to $ 0.25 per share.

Therefore, the Company recorded $ 10,000

in unrealized gain on this investment during the nine months ended September 30, 2022.

The investment in Tesspay was valued at approximately

$ 1.3 million as of September 30, 2022.

March 30, 2022, the Company entered into a securities purchase agreement (the “SpaceX Securities Purchase Agreement”) with

SpaceX, under which the company agreed to purchase shares of common stock of SpaceX for $1.5 million.

In April 2022, the Company invested

an additional $2 million for the purchase of additional shares of common stock of SpaceX.

The investment in SpaceX was valued at $ 3.5

million as of September 30, 2022.

in Databricks

March 25, 2022, the Company entered into a securities purchase agreement (the “Databricks Securities Purchase Agreement”)

with Databricks.

Under the Databricks Securities Purchase Agreement, the Company agreed to purchase an aggregate of 3,830 shares of common

stock of Databricks for a total $ 1.2 million.

The investment in Databricks was valued at $ 1.2 million as of September 30, 2022.

in Discord, Inc.

May 2022, the Company entered into a securities purchase agreement (the “Discord Securities Purchase Agreement”) with privately-held

company Discord, Inc., a social communications platform provider that is particularly popular with gamers, as one of the Company’s

pursuits of potentially high growth interests with near term monetization events.

Under the Discord Securities Purchase Agreement, the

Company agreed to purchase a total of 618 shares of common stock of Discord for approximately $ 0.5 million.

The investment in Discord

was valued at $ 0.5 million as of September 30, 2022.

in Thrasio, LLC

April 2022, the Company entered into a securities purchase agreement (the “Thrasio Securities Purchase Agreement”) with privately-held

company Thrasio, LLC, an aggregator of private brands of top Amazon businesses and direct-to-consumer brands, as one of the Company’s

pursuits of potentially high growth interests with near term monetization events.

Under the Thrasio Securities Purchase Agreement, the

Company agreed to purchase a total of 20,000 shares of common stock of Thrasio for $ 0.3 million.

The investment in Thrasio was valued

at $ 0.3 million as of September 30, 2022.

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

in Automation Anywhere, Inc.

April 2022, the Company entered into a securities purchase agreement (the “Automation Anywhere Securities Purchase Agreement”)

with privately-held company Automation Anywhere, Inc., a provider of business automation solutions, as one of the Company’s pursuits

of potentially high growth interests with near term monetization events.

Under the Automation Anywhere Securities Purchase Agreement,

the Company agreed to purchase a total of 18,490 shares of common stock of Automation Anywhere for approximately $ 0.5 million.

The investment in AerocarveUS was valued at approximately $ 1.0 million as of December 31, 2021.

The investment

in Automation Anywhere was valued at $ 0.5 million as of September 30, 2022.

in Anduril Industries, Inc.

April 2022, the Company entered into a securities purchase agreement (the “Anduril Securities Purchase Agreement”) with privately-held

company Anduril Industries, Inc., a defense products company, as one of the Company’s pursuits of potentially high growth interests

in AerocarveUS Corporation was valued at $ 1.0 million as of March 31, 2023.

Investment in Qxpress

On January 27, 2022, the Company entered into

a securities purchase agreement (the “Qxpress Securities Purchase Agreement”) with Qxpress.

Under the Qxpress Securities Purchase

Agreement, the Company agreed to purchase 46,780 shares of common stock of Qxpress for $ 1.0 million.

The investment in

Qxpress was valued at $ 1.0 million as of March 31, 2023.

Investment in Masterclass (a.k.a.

Industries Inc.)

In March of 2022, the Company entered into a securities

purchase agreement (the “Masterclass Securities Purchase Agreement”) with Masterclass.

Under the Masterclass Securities Purchase

Agreement, the Company agreed to purchase 4,841 shares of common stock of Masterclass for approximately $ 0.2 million.

there was also a private fund raise in the second quarter, the per share amount approximated the fair value of the Company’s investment

in Masterclass, resulting in no unrealized gain or loss.

The investment in Masterclass was valued at approximately $ 0.2 million as

of March 31, 2023.

Investment in Kraken (a.k.a.

Payward, Inc.)

In March of 2022, the Company entered into a securities

purchase agreement (the “Kraken Securities Purchase Agreement”) with Kraken.

Under the Kraken Securities Purchase Agreement,

the Company agreed to purchase a total of 8,409 shares of common stock of Kraken for approximately $ 0.5 million.

2022, the Company entered into a common stock transfer agreement with a private seller to purchase 3,723 shares of Kraken for

approximately $ 0.1 million.

The investment in Kraken was valued at approximately $ 0.6 million as of March 31, 2023.

Investment in Epic Games, Inc.

On March 22, 2022, the Company entered into a

securities purchase agreement (the “Epic Games Securities Purchase Agreement”) with Epic Games.

Under the Epic Games Securities

Purchase Agreement, the Company agreed to purchase an aggregate of 901 shares of common stock of Epic Games for a total $ 1.5 million.

In April 2022, the Company invested an additional $ 2 million for the purchase of additional shares of common stock of Epic Games.

Although there was also a fund raise in April, the per share amount approximated the fair value of the Company’s investment in Epic

Games, resulting in no unrealized gain or loss.

The investment in Epic Games was valued at $ 3.5 million as of March 31, 2023.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

Investment in Tesspay Inc.

On March 23, 2022, the Company entered into a

securities purchase agreement (the “Tesspay Securities Purchase Agreement”) with Tesspay.

Under the Tesspay Securities Purchase

Agreement, the Company agreed to purchase 1,000,000 shares of common stock of Tesspay for approximately $ 0.2 million.

Company also invested an additional $ 1.0 million for pre-IPO.

Tesspay, a private company, raised capital during the first quarter

of 2022, increasing its share price value to $ 0.25 per share.

Therefore, the Company recorded $ 10,000 in unrealized gain on

this investment during the first quarter of 2022.

Subsequent to the first quarter of 2022 raise, Tesspay had an additional fund raise

in the fourth quarter of 2022 at $ 0.50 per share, resulting in an additional unrealized gain of approximately $ 1.3 million.

The investment in Tesspay was valued at approximately $ 2.5 million as of March 31, 2023.

Investment in SpaceX (a.k.a.

Space Exploration

Technologies Corp.)

On March 30, 2022, the Company entered into a

securities purchase agreement (the “SpaceX Securities Purchase Agreement”) with SpaceX, under which the company agreed to

purchase shares of common stock of SpaceX for $ 1.5 million.

In April 2022, the Company invested an additional $ 2.0 million for

the purchase of additional shares of common stock of SpaceX.

The Company identified a private fund raise on January 3, 2023.

proximity to the December 31, 2022 valuation date, the value of the fund raise was used as a proxy for the fair valuation of the Company’s

investment in SpaceX as of December 31, 2022.

The per share price of SpaceX’s recent fund raise resulted in an unrealized gain of

approximately $ 0.6 million.

The investment in SpaceX was valued at approximately $ 3.7 million as of March 31, 2023.

Investment in Databricks, Inc.

On March 25, 2022, the Company entered into a

securities purchase agreement (the “Databricks Securities Purchase Agreement”) with Databricks.

Under the Databricks Securities

Purchase Agreement, the Company agreed to purchase an aggregate of 3,830 shares of common stock of Databricks for a total $ 1.2 million.

The investment in Databricks was valued at $ 1.2 million as of March 31, 2023.

Investment in Discord Inc.

In May 2022, the Company entered into a securities

purchase agreement (the “Discord Securities Purchase Agreement”) with privately-held company Discord, Inc., a social communications

platform provider that is particularly popular with gamers, as one of the Company’s pursuits of potentially high growth interests

with near term monetization events.

Under the Anduril Securities Purchase Agreement, the Company agreed to purchase a total of 14,880

shares of common stock of Anduril for approximately $ 0.5 million.

The investment in Anduril was valued at $ 0.5 million as of September

Notes Receivable

following table presents the Company’s notes receivable at September 30, 2022 ($ in thousands):

Interest Rate

Shor-term convertible

Under the Discord Securities Purchase Agreement, the Company agreed to purchase a total of 618 shares

of common stock of Discord for approximately $ 0.5 million.

The investment in Discord was valued at $ 0.5 million as of March 31, 2023.

Investment in Thrasio Holdings, Inc.

In April 2022, the Company entered into a securities

purchase agreement (the “Thrasio Securities Purchase Agreement”) with privately-held company Thrasio, LLC, an aggregator of

private brands of top Amazon businesses and direct-to-consumer brands, as one of the Company’s pursuits of potentially high growth

interests with near term monetization events.

Under the Thrasio Securities Purchase Agreement, the Company agreed to purchase a total

of 20,000 shares of common stock of Thrasio for $ 0.3 million.

The investment in Thrasio was valued at $ 0.3 million

as of March 31, 2023.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

Investment in Automation Anywhere, Inc.

In April 2022, the Company entered into a securities

purchase agreement (the “Automation Anywhere Securities Purchase Agreement”) with privately-held company Automation Anywhere,

Inc., a provider of business automation solutions, as one of the Company’s pursuits of potentially high growth interests with near

term monetization events.

Under the Automation Anywhere Securities Purchase Agreement, the Company agreed to purchase a total of 18,490 shares

of common stock of Automation Anywhere for approximately $ 0.5 million.

The investment in Automation Anywhere was valued at $ 0.5 million

as of March 31, 2023.

Investment in Anduril Industries, Inc.

In April 2022, the Company entered into a securities

purchase agreement (the “Anduril Securities Purchase Agreement”) with privately-held company Anduril Industries, Inc., a defense

products company, as one of the Company’s pursuits of potentially high growth interests with near term monetization events.

the Anduril Securities Purchase Agreement, the Company agreed to purchase a total of 14,880 shares of common stock of Anduril

for approximately $ 0.5 million.

The investment in Anduril was valued at $ 0.5 million as of March 31, 2023.

Notes Receivable

Nano Innovations Inc

Short-term notes receivable

Jeffrey Cooper Investment

Raefan Industries LLC

Now Investment

Long-term notes receivable

Innovative Robotics Investment

Company recorded an interest income receivable of approximately $ 0.3 million on the Convergent Convertible Note as of September 30, 2022.

Jeffrey Cooper Investment

Group LLC promissory note was satisfied and replaced with a personal note issued to Mr.

Jeffrey Cooper, of Raefan Industries.

recorded an interest income receivable of approximately $ 0.2 million on the Mr.

Jeffrey Cooper Promissory Note as of September 30, 2022.

AIKIDO PHARMA INC.

The following table presents the Company’s

notes receivable as of March 31, 2023 ($ in thousands):

Maturity Date

Stated Interest

Notes receivable, at fair value

Convergent convertible note, current

Convergent convertible note, non-current portion

Raefan Industries LLC Investment

American Innovative Robotics Investment

Notes receivable, at fair value - current portion

Notes receivable, at fair value - non-current portion

Convergent Therapeutics, Inc.

The Company’s 8 % convertible promissory

note (“Convergent Convertible Note”) issued by Convergent Therapeutics, Inc.

(“Convergent”) in the principal amount

of approximately $ 1.8 million pursuant to a Note Purchase Agreement matured on January 29, 2023 .

Upon maturity, Convergent entered

into a contractual repayment schedule with the Company.

Pursuant to the schedule, Convergent will make a total of eight payments in the

amount of $ 250 thousand and accrued interest, every three months until fully satisfied.

The principal balance of the Convergent Convertible

Note is approximately $ 1.8 million as of March 31, 2023.

The Company recorded principal repayment of $ 0.25 million and interest income

of approximately $ 0.04 million on the Convergent Convertible Note as of March 31, 2023.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

The Company recorded an interest income receivable

of approximately $ 0.1 million on the Raefan Industries Promissory Note as of September 30, 2022.

Slinger Bag Inc Investment

The Company recorded an interest income receivable

of approximately $ 63,000 on the Slinger Bag Convertible Note as of June 17, 2022.

On June 17, 2022, the Company received 558,659 shares

of common stock of Connexa Sports Technologies Inc (also known as Slinger Bag) as a result of conversion of principal and accrued interest

on the Slinger Bag Convertible Note.

All the 558,659 shares of common stock of Connexa Sports received were transferred to marketable

securities account.

Nano Innovations Inc Investment

The Company recorded an interest income receivable

of approximately $ 57,000 on the Nano Convertible Note as of September 30, 2022.

Kaya Now Investment

On April 5, 2022, the Company purchased an 8 %

promissory note (“Kaya Now Promissory Note”) issued by Kaya Now Inc (“Kaya”) in the principal amount of $ 0.5 million

pursuant to a Note Purchase Agreement with Kaya Now.

The Company paid a purchase price for the Kaya Now Promissory Note of $ 0.5 million.

The Company will receive interest on the Kaya Now Promissory Note at the rate of 8 % per annum payable upon conversion or maturity of the

Kaya Now Promissory Note.

The Kaya Now Promissory Note shall mature on February 1, 2023 .

On July 21, 2022, the Company and Kaya executed

an amendment of the Kaya Now Promissory Note (“Amendment”) such that the Kaya Now Promissory Note shall mature on February

In consideration of the Amendment, Kaya has agreed to issue to the Company 1,000,000 additional shares at $ 0.2 per share of Kaya’s

common stock.

Under the amendment, interest on the Note during the extended term shall be paid on October 1, 2022 and January 1, 2023

at the rate of 8 % per annum.

The Company recorded an interest income of approximately

$ 20,000 on the Kaya Now Promissory Note as of September 30, 2022.

American Innovative Robotics Investment

On April 1, 2022, the Company purchased an 8 %

promissory note (“Robotics Promissory Note”) issued by American Innovative Robotics, LLC (“Robotics”) in the principal

amount of $ 1.1 million pursuant to a Note Purchase Agreement with Robotics.

The Company paid a purchase price for the Robotics Promissory

Note of $ 1.1 million.

The Company will receive interest on the Robotics Promissory Note at the rate of 8 % per annum payable every three

months starting from July 1, 2022.

The Robotics Promissory Note shall mature on April 1, 2027 .

The Company recorded an interest income of approximately

$ 45,000 on the Robotics Promissory Note as of September 30, 2022.

of approximately $ 0.5 million on the Raefan Industries Promissory Note as of March 31, 2023

American Innovative Robotics, LLC Investment

The Company recorded interest income of approximately

$ 22,000 on the Robotics Promissory Note for the three months ended March 31, 2023.

Kaya Now Inc.

During the fourth quarter of 2022, the Company

identified indicators of impairment for the Kaya investment as a result of adverse changes in Kaya’s business operations, including

liquidity concerns.

As a result, the Company recorded an impairment charge of $ 0.5 million in the fourth quarter of 2022.

The impairment

charge represents an impairment loss of the total investment held as a promissory note resulting in a $ 0 balance for the Kaya Now

Promissory Note as of March 31, 2023.

The Company received and recorded interest income

related to the Kaya Now Promissory Note of approximately $ 10,000 for the three months ended March 31, 2023.

Fair Value of Financial Assets and

7 unchanged sentences

of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

The Company uses three levels of inputs that may

15 unchanged sentences

Such determination requires significant management judgment.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

The following table presents the Company’s

assets and liabilities that are measured at fair value at September 30, 2022 and December 31, 2021 ($ in thousands):

Fair value measured at September 30, 2022

Total at September 30,

Quoted prices in active

assets and liabilities that are measured at fair value as of March 31, 2023, and December 31, 2022 ($ in thousands):

Fair value measured as of March 31, 2023

Significant other

observable inputs

Significant unobservable

Marketable securities:

1 unchanged sentence

Short-term investment

Short-term notes receivable at fair value

Long-term notes receivable at fair value

Fair value measured at December 31, 2021

Total at December 31,

Quoted prices in active

Notes receivable, at fair value - current portion

Notes receivable, at fair value - non-current portion

Fair value measured as of December 31, 2022

Significant other

observable inputs

Significant unobservable

Marketable securities:

1 unchanged sentence

Short-term investment

Notes receivable at fair value

Convertible note receivable

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

Notes receivable, at fair value - current portion

Notes receivable, at fair value - non-current portion

Level 3 Measurement

The following tables set forth a summary of the

The following table sets forth a summary of the

changes in the fair value of the Company’s Level 3 financial assets that are measured at fair value on a recurring basis ($ in thousands):

Short-term notes receivable at fair value at December 31, 2021

Accrued interest receivable

Reclassify from convertible note receivable to notes receivable at fair value

Purchase of notes receivable

Change in fair value of note receivable

Conversion of note receivable to marketable securities

Short-term notes receivable at fair value at September 30, 2022

Long-term notes receivable at fair value at December 31, 2021

Purchase of notes receivable

Long-term notes receivable at fair value at September 30, 2022

Short-term investment at December 31, 2022

Change in fair value of investment

Short-term investment at September 30, 2022

Long term and Short-term Note Receivable

and Convertible Notes Receivable

The Company has elected to measure the purchases

of the notes using the fair value option at each reporting date.

Under the fair value option, bifurcation of an embedded derivative is

not necessary, and all related gains and losses on the host contract and derivative due to change in the fair value will be reflected

in interest income and other, net in the consolidated statements of operations.

The value at which the Company’s convertible

note is carried on its books is adjusted to estimated fair value at the end of each quarter, taking into account general economic and

stock market conditions and those characteristics specific to the underlying investments.

Interest accrues on the unpaid principal balance

on a quarterly basis and is recognized in interest income in the consolidated statements of operations.

Convergent Investment

As of September 30, 2022, the fair value of the

Convergent Convertible Note was measured at $ 2.3 million, taking into consideration cost of the investment, market participant inputs,

market conditions, liquidity, operating results and other qualitative and quantitative factors.

No change in fair value for principal

was recorded during the nine months ended September 30, 2022.

AIKIDO PHARMA INC.

Short-term investment at March 31, 2023

Notes receivable, at fair value - current portion, at December 31, 2022

Collection of principal outstanding

Accrued interest receivable, net

Note receivable, Convergent Convertible Note, non-current portion

Notes receivable, at fair value - current portion at March 31, 2023

Notes receivable, at fair value - non-current portion, at December 31, 2022

Note receivable, Convergent Convertible Note, non-current portion

Notes receivable, at fair value - non-current portion, value at March 31, 2023

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

Jeffrey Cooper Investment

As of September 30, 2022, the fair value of the

Jeffrey Cooper Promissory Note was measured at approximately $ 3.0 million, taking into consideration cost of the investment, market

participant inputs, market conditions, liquidity, operating results and other qualitative and quantitative factors.

No change in fair

value for principal was recorded during the nine months ended September 30, 2022.

Raefan Industries LLC Investment

As of September 30, 2022, the fair value of the

Raefan Industries Promissory Note was measured at approximately $ 2.1 million, taking into consideration cost of the investment, market

participant inputs, market conditions, liquidity, operating results and other qualitative and quantitative factors.

No change in fair

value for principal was recorded during the nine months ended September 30, 2022.

Slinger Bag Inc Investment

The Company recorded an interest income receivable

of approximately $ 63,000 on the Slinger Bag Convertible Note as of June 17, 2022.

On June 17, 2022, the Company received 558,659 shares

of common stock of Connexa Sports Technologies Inc (also known as Slinger Bag) as a result of conversion of principal and accrued interest

on the Slinger Bag Convertible Note.

All the 558,659 shares of common stock of Connexa Sports received were transferred to marketable

securities account.

As of September 30, 2022, the fair value of the

Slinger Bag Convertible Note was measured at $ 0 .

Nano Innovations Inc Investment

As of September 30, 2022, the fair value of the

Nano Convertible Note was measured at approximately $ 0.8 million, taking into consideration cost of the investment, market participant

inputs, market conditions, liquidity, operating results and other qualitative and quantitative factors.

No change in fair value for principal

was recorded during the nine months ended September 30, 2022.

The Company believes that the fair value of the

warrant of Nano is immaterial.

Kaya Now Investment

On July 21, 2022, the Company and Kaya executed

an amendment of the Kaya Now Promissory Note (“Amendment”) such that the Kaya Now Promissory Note shall mature on February

In consideration of the Amendment, Kaya has agreed to issue to the Company 1,000,000 additional shares at 20 cents per share

of Kaya’s common stock.

Under the amendment, interest on the Note during the extended term shall be paid on October 1, 2022 and

January 1, 2023 at the rate of 8% per annum.

As of September 30, 2022, the fair value of the

Kaya Now Promissory Note was measured at $ 0.5 million, taking into consideration cost of the investment, market participant inputs, market

conditions, liquidity, operating results and other qualitative and quantitative factors.

No change in fair value for principal was recorded

during the nine months ended September 30, 2022.

The Company believes that the fair value of the

warrant of Kaya is immaterial.

American Innovative Robotics Investment

As of September 30, 2022, the fair value of the

Robotics Promissory Note was measured at $ 1.1 million, taking into consideration cost of the investment, market participant inputs, market

conditions, liquidity, operating results and other qualitative and quantitative factors.

No change in fair value for principal was recorded

during the nine months ended September 30, 2022.

AIKIDO PHARMA INC.

Note Receivable at fair value

As of March 31, 2023, the fair value of the notes

receivable was measured taking into consideration cost of the investment, market participant inputs, market conditions, liquidity, operating

results and other qualitative and quantitative factors.

No material change was noted in the fair value of the notes receivable during

the three months ended March 31, 2023.

On December 1, 2021, the Company entered into

a Lease Agreement (the “Company’s Lease”) with Trump Tower Commercial LLC, a New York limited liability company.

the Company’s Lease, the Company will rent a portion of the twenty-second floor at 725 Fifth Avenue, New York, New York (the “22 nd Floor

The Company plans to use the 22 nd Floor Premises to run its day-to-day operations.

The initial term

of the Company’s Lease is seven (7) years commencing on July 11, 2022 (“Commencement Date).

Under the Company’s Lease,

the Company will pay monthly rent, commencing on January 11, 2023, equal to $ 12,874 .

Effective for the sixth and seventh years of the

Company’s Lease, the rent shall increase to $ 13,502 .

The Company took possession of the 22 nd Floor Premises on the

Commencement Date.

On September 23, 2022, Dominari entered into a

Lease Agreement (“Dominari’s Lease”) with Trump Tower Commercial LLC, a New York limited liability company.

Under Dominari’s

Lease, Dominari will rent a portion of a floor at 725 Fifth Avenue, New York, New York (the “Premises”).

Dominari plans to

use the Premises to run its day-to-day operations.

The initial term of Dominari’s Lease is seven (7) years commencing on the date

that possession of the Premises is delivered to Dominari.

Under Dominari’s Lease, Dominari will pay monthly rent equal to $ 49,368 .

Effective for the sixth and seventh years of Dominari’s Lease, the rent shall increase to $ 51,868 per month.

The Company has

taken possession of the Premises in February 2023.

The tables below represent the Company’s

lease assets and liabilities as of March 31, 2023:

Operating lease right-of-use-assets

The following tables summarize quantitative information

about the Company’s operating leases, under the adoption of ASC 842:

Weighted-average remaining lease term – operating leases (in years)

Weighted-average discount rate – operating leases

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

Net Loss per Share Attributable to

Common Stockholders

Basic loss per common share is computed by dividing

the net loss allocable to common stockholders by the weighted-average number of shares of common stock or common stock equivalents outstanding.

Diluted loss per common share is computed similar to basic loss per share except that it reflects the potential dilution that could occur

if dilutive securities or other obligations to issue common stock were exercised or converted into common stock.

Securities that could

potentially dilute loss per share in the future that were not included in the computation of diluted loss per share at September 30, 2022

and 2021 are as follows:

As of September 30,

During the three months ended March 31, 2023,

the Company recorded approximately $ 0.1 million as lease expense to current period operations.

Operating leases

Operating lease cost

Operating lease expense

Short-term lease rent expense

Net rent expense

Supplemental cash flow information related to leases were as follows:

Operating cash flows - operating leases

Right-of-use assets obtained in exchange for operating lease liabilities

As of March 31, 2023, future minimum payments

during the next five years and thereafter are as follows:

Remaining Period Ended December 31, 2023

Year Ended December 31, 2024

Year Ended December 31, 2025

Year Ended December 31, 2026

Year Ended December 31, 2027

Year Ended December 31, 2028

Less present value discount

Operating lease liabilities

Net Loss per Share

Basic loss per share of common stock is computed

by dividing the net loss allocable to common stockholders by the weighted-average number of shares of common stock or common stock equivalents

Diluted loss per common share is computed similar to basic loss per share except that it reflects the potential dilution

that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock.

that could potentially dilute loss per share in the future that were not included in the computation of diluted loss per share for the

three months ended March 31, 2023, and 2022 are as follows:

As of March 31,

Convertible preferred stock

1 unchanged sentence

Options to purchase common stock

Redeemable Convertible Preferred Stock

Series O and Series P Redeemable Convertible

Preferred Stock

On February 24, 2022, the Company entered into

a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional investors (the “Investors”),

pursuant to which the Company agreed to issue and sell, in concurrent registered direct offerings (the “Offerings”), (i) 11,000

shares of the Company’s Series O Redeemable Convertible Preferred Stock, par value $ 0.001 per share (the “Series O Preferred

Stock”), and (ii) 11,000 shares of the Company’s Series P Redeemable Convertible Preferred Stock, par value $ 0.001 per share

(the “Series P Preferred Stock” and together with the Series O Preferred Stock, the “Preferred Stock”), in each

case, at an offering price of $ 952.38 per share, representing a 5 % original issue discount to the stated value of $ 1,000 per share of

Preferred Stock, for gross proceeds of each Offering of $ 10,476,180 , or approximately $ 21.0 million in the aggregate for the Offerings,

before the deduction of the placement agent’s fee and offering expenses.

The shares of Series O Preferred Stock will have a stated

value of $ 1,000 per share and will be convertible, at a conversion price of $ 1.00 per share, into 11,000,000 shares of common stock (subject

in certain circumstances to adjustments).

The shares of Series P Preferred Stock will have a stated value of $ 1,000 per share and will

be convertible, at a conversion price of $ 1.00 per share, into 11,000,000 shares of common stock (subject in certain circumstances to

adjustments).

The Series O Preferred Stock and the Series P Preferred Stock are being offered by the Company pursuant to a registration

statement on Form S-3 (File No.

333-238172) (the “Registration Statement”) filed under the Securities Act of 1933, as amended

(the “Securities Act”).

The Purchase Agreement contains customary representations, warranties and agreements by the Company

and customary conditions to closing.

The closing of the Offerings occurred on March 2, 2022.

In connection with this transaction, the

Company received net proceeds of $ 21.0 million, which was deposited in an escrow account.

In connection with the Offerings, the Company

has entered into an engagement agreement (the “Engagement Agreement Agreement”) with H.C Wainwright & Company, LLC, as

placement agent (“HCW”), pursuant to which the Company agreed to pay HCW an aggregate cash fee equal to 8 % of the aggregate

gross proceeds raised in the offerings and issue HCW common stock purchase warrants to purchase up to 1,760,000 shares of common stock

in the aggregate at an exercise price of $ 1.25 .

The warrants were recorded as a component of stockholders’ equity in accordance

with FASB Accounting Standards Codification (“ASC”) 815.

Redemption Rights

After (i) the earlier of (1) the receipt of stockholder

approval and (2) the date that is 90 days following the Original Issue Date (the date of the first issuance of any shares of the Preferred

Stock regardless of the number of transfers of any particular shares of Preferred Stock and regardless of the number of certificates which

may be issued to evidence such Preferred Stock) and (ii) before the date that is 120 days after the Original Issue Date (the “ Redemption

Period ”), each Holder shall have the right to cause the Company to redeem all or part of such Holder’s shares of Preferred

Stock at a price per share equal to 105 % of the Stated Value.

As a result, the Preferred Stock were recorded

separately from stockholders’ equity because they are redeemable upon the occurrence of redemption events that are considered not

solely within the Company’s control.

AIKIDO PHARMA INC.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

During the second quarter of 2022, the Company

redeemed for cash at a price equal to 105% of the $1,000 stated value per share all of its 11,000 outstanding shares of Series O Preferred

Stock and its 11,000 Series P Preferred Stock.

The total redemption amount was $ 23.1 million.

As a result, all shares of the Series O

Preferred Stock and Series P Preferred Stock have been retired and are no longer outstanding.

During the nine months ended September 30, 2022,

the Company recognized approximately $ 4.1 in deemed dividends related to the Preferred Stock in the condensed consolidated statements

of operations and the unaudited condensed consolidated statements of changes in redeemable preferred stock and stockholders’ equity.

Stockholders’ Equity

One June 5, 2020, CBM Biopharma, Inc.

approved a distribution to its stockholders of 1,939,058 the Company’s common shares.

The Company, as one of CBM’s shareholder,

received 387,812 shares of its common stock.

The Company cancelled 22,812 shares received on January 1, 2022.

During the nine months ended September 30, 2022, the Company issued an aggregate of 238,244 shares of the Company’s common

stock to members of the Company’s Board and an employee for services rendered.

Stockholders’ Equity and Convertible

Preferred Stock

On March 6, 2023, the Company cancelled 644,499

shares of common stock as a result of retirement of 644,499 shares of treasury stock.

On March 20, 2023, the Company cancelled 25,000

shares of common stock owned by a board member.

Treasury Stock

1 unchanged sentence

of directors authorized a share buyback program (the “Share Buyback Program”), pursuant to which the Company authorized the

Repurchase Program in an amount of up to three million dollars.

During the nine months ended September 30, 2022, the Company repurchased

344,982 shares at a cost of approximately $ 2.2 million or $ 6.48 per share through marketable securities account under the Share Buyback

Share Buyback Program in an amount of up to three million dollars.

During the three months ended March 31, 2023, the Company

repurchased 236,630 shares at a cost of approximately $ 0.9 million or $ 3.97 per share through marketable securities account

under the Share Buyback Program.

The Company records treasury stock using the cost method.

A summary of warrant activity for the nine months

ended September 30, 2022, is presented below:

Weighted Average

On March 6, 2023, the Company retired 644,499

shares of treasury stock with original cost of approximately $ 3.8 million.

A summary of warrant activity for the three months

ended March 31, 2023, is presented below:

Exercise Price

Total Intrinsic Value

Weighted Average

Remaining Contractual

Outstanding as of December 31, 2022

Outstanding as of September 30, 2022

AIKIDO PHARMA INC.

Outstanding as of March 31, 2023

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

A summary of restricted stock awards activity

for the nine months ended September 30, 2022, is presented below:

Number of Restricted

Weighted Average

Grant Day Fair Value

for the three months ended March 31, 2023, is presented below:

Nonvested at December 31, 2022

Nonvested at September 30, 2022

As of September 30, 2022, approximately $ 24,000 of

unrecognized stock-based compensation expense was related to restricted stock awards.

The weighted average remaining contractual terms

of unvested restricted stock awards was approximately 0.25 years at September 30, 2022.

Nonvested at December 31, 2022

As of March 31, 2023, there is no unrecognized

stock-based compensation expense related to restricted stock awards.

Stock Options

A summary of stock option activity for the nine

months ended September 30, 2022 is presented below:

Number of Shares

Weighted Average

A summary of option activity under the Company’s

stock option plan for the three months ended March 31, 2023 is presented below:

Exercise Price

Total Intrinsic Value

Weighted Average

Remaining Contractual

Total Intrinsic

Life (in years)

Outstanding as of December 31, 2022

Employee options granted

Employee options forfeited

Employee options expired

Outstanding as of September 30, 2022

Outstanding as of March 31, 2023

Options vested and exercisable

Stock-based compensation associated with the amortization

of stock option expense was approximately $ 40,000 and $ 0.2 million for the nine months ended September 30, 2022 and 2021, respectively.

All stock compensation was recorded as a component of general and administrative expenses.

of stock option expense was approximately $ 4,800 and $ 0 for the three months ended March 31, 2023, and 2022, respectively.

All stock compensation

was recorded as a component of general and administrative expenses.

Estimated future stock-based compensation expense

relating to unvested stock options is approximately $ 0.1 million.

relating to unvested stock options is approximately $ 10,000 .

Commitments and Contingencies

1 unchanged sentence

In the past, in the ordinary course of business,

the Company actively pursued legal remedies to enforce its intellectual property rights and to stop unauthorized use of our technology.

Other than ordinary routine litigation incidental to the business, we know of no material, active or pending legal proceedings against

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

Risks and Uncertainties - COVID-19

Management continues to evaluate the impact of

the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect

on the Company’s financial position, results of its operations and/or search for drug candidates, the specific impact is not readily

determinable as of the date of these consolidated financial statements.

The COVID-19 pandemic has slowed down some drug development efforts

and has slowed the acquisition of new drugs.

However, the impact of the pandemic and ensuing lockdowns are easing.

The process of drug

development and further acquisitions is now continuing.

The consolidated financial statements do not include any adjustments that might

result from the outcome of this uncertainty.

On December 1, 2021, the Company entered into a Lease

Agreement (the “Company’s Lease”) with Trump Tower Commercial LLC, a New York limited liability company.

Under the Company’s

Lease, the Company will rent a portion of the twenty-second floor at 725 Fifth Avenue, New York, New York (the “22 nd

Floor Premises”).

The Company plans to use the 22 nd Floor Premises to run its day-to-day operations.

The initial term

of the Company’s Lease is seven (7) years commencing on July 11, 2022 (“Commencement Date).

Under the Company’s Lease,

the Company will pay monthly rent, commencing on January 11, 2023, equal to twelve-thousand, eight hundred and seventy-four dollars.

for the sixth and seventh years of the Company’s Lease, the rent shall increase to thirteen-thousand, five hundred and two dollars

The Company took possession of the Lease on the Commencement Date.

The tables below represent the Company’s lease

assets and liabilities as of September 30, 2022:

September 30,

Operating lease right-of-use-assets

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

The following

tables summarize quantitative information about the Company’s operating leases, under the adoption of ASC Topic 842 , Leases :

September 30,

Weighted-average remaining lease term – operating leases (in years)

Weighted-average discount rate – operating leases

During the nine months

ended September 30, 2022, the Company recorded approximately $ 71,000 as lease expense to current period operations.

Ended September 30,

Operating leases

Operating lease cost

Variable lease cost

Operating lease expense

Short-term lease rent expense

Net rent expense

Supplemental cash flow information related to

leases were as follows:

September 30,

Operating cash flows - operating leases

Right-of-use assets obtained in exchange for operating lease liabilities

As of September 30, 2022,

future minimum payments during the next five years and thereafter are as follows:

Remaining Period Ended December 31, 2022

Year Ended December 31, 2023

Year Ended December 31, 2024

Year Ended December 31, 2025

Year Ended December 31, 2026

Less present value discount

Operating lease liabilities

AIKIDO PHARMA INC.

the Company actively pursued legal remedies to enforce its intellectual property rights and to stop unauthorized use of the Company’s technology.

Other than ordinary routine litigation incidental to the business, the Company is not aware of any material, active or pending legal proceedings brought against it.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

License agreements

On April 13, 2020, the Company entered into a

License Agreement (the “License Agreement”) with University of Maryland (“UM”) pursuant to which UM granted the

Company an exclusive, worldwide, royalty bearing license to certain intellectual property to, among other things, discover, develop, make,

have made, use and sell certain licensed products and sell, use and practice certain licensed services with respect to cancer.

During the nine months ended September 30, 2022,

the Company paid approximately $ 0.5 million of additional license fees to UM.

Dominari Securities, the Company’s broker-dealer

subsidiary, is registered with the SEC as an introducing broker-dealer and is a member of FINRA.

The Company’s broker-dealer subsidiary

is subject to SEC Uniform Net Capital Rule (Rule 15c3-1) which requires the maintenance of minimum net capital and requires that the ratio

of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1.

As such, the subsidiary is subject to the minimum

net capital requirements promulgated by the SEC and has elected to calculate minimum capital requirements using the basic method permitted

by Rule 15c3-1.

As of March 31, 2023, Dominari Securities had net capital of approximately $ 2.9 million, which was approximately $ 2.9

million in excess of required minimum net capital of $ 0.1 million.

Related Party Transaction

In 2021, the Company engaged the services of Revere

Securities, LLC (“Revere”) to strategically manage and build the Company’s investment processes.

Kyle Wool, Board Member,

is the president of Revere.

The Company incurred fees of approximately $ 0.08 million and $ 0.3 million during the three months

ending March 31, 2023, and 2022, respectively.

These fees were included in general and administrative expense in the unaudited condensed consolidated statements of operations.

Subsequent Events

Dominari’s Lease of Office Space at Trump

Tower New York

On September 23, 2022, Dominari entered into a

Lease Agreement (“Dominari’s Lease”) with Trump Tower Commercial LLC, a New York limited liability company.

Under Dominari’s

Lease, Dominari will rent a portion of a floor at 725 Fifth Avenue, New York, New York (the “Premises”).

Dominari plans to

use the Premises to run its day-to-day operations.

The initial term of Dominari’s Lease is seven (7) years commencing on the date

that possession of the Premises is delivered to Dominari.

Under Dominari’s Lease, Dominari will pay rent equal to forty-nine thousand

three hundred and sixty-eight dollars per month.

Effective for the sixth and seventh years of Dominari’s Lease, the rent shall increase

to fifty-one thousand eight hundred and sixty-eight dollars per month.

The Company anticipates that it will take possession of Dominari’s

Lease in 2023.

Yu Employment Agreement

3, 2023, Dominari Securities, the Company’s broker-dealer subsidiary, entered into an employment

agreement (the Agreement), as amended on April 19, 2023, with Soo Yu.

Yu is currently a member of the Company’s board of directors.

Pursuant to the Agreement, which is for a term of one year , Ms.

Yu will serve as a registered brokerage representative for Dominari Securities

and a special projects manager for the Company.

Under the Agreement, Ms.

Yu is paid a base salary of $ 150,000 per year and receives a

60 % commission on the gross revenue she generates at Dominari Securities.

In addition to her base salary and commissions, Ms.

Yu is eligible

to receive up to $ 7.8 million based on the assets under management or account value of accounts she opens at Dominari Securities.

Yu completing all required registrations and opening accounts for clients with assets under management or account value of

at least $ 50 million, Ms.

Yu will be entitled to a payment of $ 2.4 million.

accounts for clients with assets under management or account value of at least $ 150 million (inclusive of prior account values), Ms.

will be entitled to a payment of $ 2.7 million.

Yu opening accounts for clients with

assets under management or account value of at least $ 560 million (inclusive of prior account values), Ms.

Yu will be entitled to a payment

of $ 2.7 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements