What changed in this filing

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Item 1. Financial Statements

2023-08-09 compared with 2023-05-11 · 454 added, 507 removed, 318 unchanged (75% of the section changed)

Financial Statements

HOLDINGS INC.

Consolidated Balance Sheets

DOMINARI HOLDINGS INC.

Condensed Consolidated Balance Sheets

($ in thousands except share and per share amounts)

2 unchanged sentences

Marketable securities

Clearing broker deposits

Prepaid expenses and other current assets

Deposits with clearing broker

Prepaid expenses and other assets

Prepaid acquisition cost

5 unchanged sentences

Notes receivable, at fair value - non-current portion

Employee forgivable loan receivable

Right-of-use assets

4 unchanged sentences

Accrued salaries and benefits

Income taxes withheld

Accrued Commissions

7 unchanged sentences

5,000,000 shares designated;

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

3,825 shares issued and outstanding at June 30, 2023 and December 31, 2022;

liquidation value of $ 0.0001 per share

5,000,000 shares designated;

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

834 shares issued and outstanding at June 30, 2023 and December 31, 2022;

liquidation value of $ 0.0001 per share

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

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

5,345,312 and 5,485,096 shares issued at June 30, 2023 and December 31, 2022, respectively;

5,285,164 and 5,017,079 shares outstanding at June 30, 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

Treasury stock, at cost, 60,148 and 468,017 shares at June 30, 2023 and December 31, 2022, respectively

Accumulated deficit

1 unchanged sentence

Total liabilities and stockholders’ equity

accompanying notes to unaudited condensed consolidated financial statements.

HOLDINGS INC.

Consolidated Statements of Operations

See accompanying notes to unaudited condensed consolidated

financial statements.

DOMINARI HOLDINGS INC.

Condensed Consolidated Statements of Operations

($ in thousands except share and per share amounts)

Three Months Ended

Six Months Ended

Operating costs and expenses

3 unchanged sentences

Loss from operations

Other (expenses) income

Other income (expenses)

Interest income

Loss on marketable securities

Gain (loss) on marketable securities

Unrealized loss on note receivable

Change in fair value of investments

Total other (expenses) income

Total other income (expenses)

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

4 unchanged sentences

Basic and Diluted

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 Three Months Ended March 31, 2023

See accompanying notes to unaudited condensed consolidated

financial statements.

DOMINARI H OLDINGS

Condensed Consolidated

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

($ in thousands

except share and per share amounts)

For the Three

Months Ended June 30, 2023 and 2022

Preferred Stock

1 unchanged sentence

Stockholders’

Balance at March 31, 2023

$ ( 189,643 )

Stock-based compensation

Balance at June 30, 2023

$ ( 198,306 )

Redeemable Convertible

Preferred Stock

Treasury Stock

Stockholders’

Balance at March 31, 2022

$ ( 167,309 )

Redemption of Series O Redeemable Convertible

Preferred Stock

Redemption of Series P Redeemable

Convertible Preferred Stock

Deemed dividends related

to Series O and Series P Redeemable Convertible Preferred Stock

Repurchase of treasury stock

Stock-based compensation

Fractional shares adjusted

for reverse split

Balance at June 30,

$ ( 172,386 )

For the Six Months Ended June 30, 2023 and 2022

Preferred Stock

Treasury Stock

Total Stockholders’

Balance at December 31, 2022

4 unchanged sentences

Retirement of treasury stock

Balance at March 31, 2023

Balance at June 30, 2023

$ ( 198,306 )

the Three Months Ended March 31, 2022

Convertible Preferred Stock

Redeemable Convertible

Preferred Stock

Stockholders’

at December 31, 2021

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

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

Repurchase of treasury stock

Stock-based compensation

Cancellation of common stock

related to investment in CBM

Fractional shares adjusted

for reverse split

at June 30, 2022

See accompanying notes to unaudited condensed consolidated

financial statements.

DOMINARI HOLDINGS INC.

Condensed Consolidated Statements of Cash Flows

($ in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities

5 unchanged sentences

Realized loss on marketable securities

Unrealized loss on marketable securities

Realized gain on sale of digital currencies

Unrealized (gain) loss on marketable securities

Unrealized loss on note receivable

Changes in operating assets and liabilities:

1 unchanged sentence

Prepaid acquisition cost

Deposits with clearing broker

Accounts payable and accrued expenses

Accrued salaries and benefits

Accrued commissions

Lease liabilities

9 unchanged sentences

Collection of principal on note receivable

Funds to employee forgivable loan

Purchase of short-term and long-term investments

Purchase of short-term and long-term promissory notes

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

Proceeds from issuance of Series O and Series P

Redeemable Convertible Preferred Stock, net of discount and offering cost

Payment for fractional shares

Redemption of Series O and Series P Redeemable Convertible Preferred Stock

Purchase of treasury stock

Net cash (used in) provided by financing activities

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

Net cash used in financing activities

Net decrease in cash and cash equivalents and restricted cash

Cash and cash equivalents, beginning of period

3 unchanged sentences

Reclassify from convertible note receivable to notes receivable at fair value

Promissory convertible note receivable conversion into common shares

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

2 unchanged sentences

Net cash paid

accompanying notes to unaudited condensed consolidated financial statements.

See accompanying notes to unaudited condensed

consolidated financial statements.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

Organization and Description of Business and Recent Developments

and Description of Business

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

Organization and Description of Business

and Recent Developments

Organization and Description of Business

Dominari 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.

Financial”), with the intent of shifting the Company’s primary operating focus away from biotechnology to the fintech and

financial services industries.

Through Dominari Financial, 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 brokers.

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.

Labs”), another wholly owned subsidiary of 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 leukemia.

Aikido Labs has historically explored opportunities in high growth industries

and has equity holdings including Anduril Industries, Inc, Databricks, Inc., Discord, Inc., Epic Games, Inc., Payward, Inc.

Space Exploration Technologies Corp.

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

dba Masterclass.

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

Stock Split”).

The Reverse Stock Split, which was approved by stockholders at an annual stockholder meeting on May 20, 2022, was

consummated pursuant to a Certificate of Amendment filed with the Secretary of State of Delaware on June 2, 2022.

The Reverse Stock Split

was effective on June 7, 2022.

All references to common stock, convertible preferred stock, warrants to purchase common stock, options

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

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

Company continues to incur ongoing administrative and other expenses, including public company expenses, in excess of corresponding (non-financing

related) revenue.

While the Company continues to implement its business strategy, it intends to finance its activities through managing

current cash on hand from the Company’s past equity offerings.

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 condensed consolidated financial statements.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

The Company continues to incur ongoing administrative

and other expenses, including public company expenses, in excess of corresponding (non-financing related) revenue.

While the Company continues

to implement its business strategy, it intends to finance its activities through managing current cash on hand from the Company’s

past equity offerings.

Based upon projected cash flow requirements, the

Company has adequate cash and cash equivalents and marketable securities to fund its operations for at least the next twelve months from the date of the issuance of these unaudited

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 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 (“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

There 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.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated

financial statements have been prepared in conformity with U.S.

generally accepted accounting principles (“U.S.

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.

The 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

Financial, and Dominari Securities.

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

Results for interim periods are not necessarily

indicative of results to be expected for a full year or any future period.

Use of Estimates

The 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.

Deposits with clearing broker

Deposits with Dominari Securities’ clearing

broker consisted of approximately $ 7.1 million held in money market funds and liquid insured deposits maintained by the Company with its

clearing broker as of June 30, 2023.

The 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 ).

The Company recognizes revenues under ASC

606 - Revenue from Contracts with Customers (“ASC 606”) .

Revenues are recognized when control

of the promised goods or performance obligations for services is transferred to the Company’s customers, in an amount that reflects

the consideration the Company expects to be entitled to in exchange for the goods or services.

following provides detailed information on the recognition of the Company’s revenues from contracts with customers:

● Underwriting

services include underwriting and placement agent services in both the equity and debt capital

markets, including private equity placements, initial public offerings, follow-on offerings,

and underwriting and distributing public and private debt.

Underwriting and placement agent

revenues are recognized at a point in time on trade-date, as the client obtains the control

and benefit of the underwriting offering at that point.

Costs associated with underwriting

transactions are deferred until the related revenue is recognized or the engagement is otherwise

concluded and are recorded on a gross basis within the general and administrative line item

in the unaudited condensed consolidated statements of operations as the Company is acting

as a principal in the arrangement.

Any expenses reimbursed by the Company’s clients

are recognized as other income.

● Commissions

are earned by executing, transactions for clients primarily in equity,

equity-related, and debt products.

Commission revenues associated with trade execution are recognized

at a point in time on trade-date.

Commissions revenues are generally paid on settlement date

and the Company records receivables to account for timing between trade-date and payment

on settlement date.

Recently adopted accounting standards

In October 2021, the FASB issued ASU 2021-08,

Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU

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.

The Company 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

Effect of new accounting pronouncements not

In 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 .

In 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.

Effect of new accounting pronouncements to

be adopted in future periods

The Company reviewed all other recently issued

accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on these unaudited

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.

On September 9, 2022, Dominari Financial 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 Financial purchased from the Seller 100 % of the membership interests in FPS (the “FPS Membership Interests”).

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

owned subsidiary of Dominari Financial.

The FPS Purchase Agreement provides for Dominari Financial’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 Financial paid to the Seller $ 2.0 million in consideration for a transfer by the Seller to Dominari Financial 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

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

Dominari Financial paid to the Seller an additional approximate $ 1.6 million consideration for a transfer by the Seller

to Dominari Financial of the remaining 80 % of the FPS Membership Interests.

Consideration Transferred

The FPS Acquisition was accounted for as 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:

Under the terms of the FPS Purchase Agreement

and subsequent Amendments and Side Letters, 100 % of the FPS Membership Interests were acquired for cash consideration of approximately

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

At March 31, 2023, Dominari Financial 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 Financial had wired a total of approximately $ 3.6 million in cash to the Seller.

The purchase price allocation

identified net assets of approximately $ 3.4 million, resulting in a receivable due from the Seller for approximately $ 0.2 million.

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.

Under 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

The transaction costs are included in general and administrative expenses in the unaudited condensed consolidated statement

of operations.

Fair Value of Net Assets Acquired

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

8 unchanged sentences

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.

Dominari Securities reported a net loss of approximately

$ 7.7 million for the three-months ended June 30, 2023.

Revenue for the period ended June 30, 2023, was approximately $ 0.07 million.

net loss was primarily a result of approximately $ 5.4 million of bonus and employee compensation expense and professional services of

approximately $ 0.9 million.

The bonus and compensation expense and professional service fees related to establishing the operations of

the broker-dealer and are included in the general and administrative expenses line item within the unaudited condensed consolidated statement

of operations.

Investments in Marketable Securities

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):

The realized gain or loss, unrealized gain or

loss, and dividend income related to marketable securities for the three and six months ended June 30, 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

Unrealized loss

Six Months Ended

Realized loss

Unrealized gain (loss)

Dividend income

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

Short-term investments

The following table presents the Company’s

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

short-term investments as of June 30, 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.

There was no change in the fair value of the short-term

investments for the six months ended June 30, 2023.

The following table provides quantitative information

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

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

Option term (in years)

2 unchanged sentences

Long-Term Investments

The Company holds interests in several privately

held companies as long-term investments that the Company perceives as potential IPO candidates.

The following table presents the Company’s

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

long-term investments as of June 30, 2023, and December 31, 2022 ($ in thousands):

Investment in Kerna Health Inc

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Investment in Anduril

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.

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

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.

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

The investment

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

On November 22, 2021, the Company entered

into an agreement (the “AerocarveUS Agreement”) with AerocarveUS Corporation, (“AerocarveUS”).

AerocarveUS Agreement, the Company agreed to purchase 250,000 shares of common stock of AerocarveUS for $ 1.0 million.

AerocarveUS changed its name to “Unusual Machines, Inc.” on July 5, 2022.

In March of 2023, the Company was issued an

additional 64,377 shares at no cost.

In June 2023, the Company purchased an additional 150,000 shares of common stock for

approximately $ 0.08 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 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.

The investment in AerocarveUS Corporation (a.k.a.

Unusual Machines, Inc.) was valued at approximately

$ 1.08 million as of June 30, 2023.

Notes Receivable

The following table presents the Company’s

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

notes receivable as of June 30, 2023 ($ in thousands):

Maturity Date

Stated Interest

Stated Interest Rate

Principal Amount

Interest Receivable

Notes receivable, at fair value

Convergent convertible note - current

Convergent convertible note, non-current portion

Convergent convertible note - non-current

Raefan Industries LLC Investment

12 unchanged sentences

The principal balance of the Convergent Convertible

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

Note was approximately $ 1.8 million as of June 30, 2023.

The Company recorded principal repayment of $ 0.5 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

of approximately $ 0.1 million on the Convergent Convertible Note for the six months ended June 30, 2023.

Raefan Industries LLC Investment

The Company recorded an interest income receivable

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

of approximately $ 0.6 million on the Raefan Industries Promissory Note as of June 30, 2023 and an unrealized loss on the note of

approximately $ 0.2 million.

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.

$ 44,000 on the Robotics Promissory Note for the six months ended June 30, 2023.

Kaya Now Inc.

5 unchanged sentences

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.

Promissory Note as of June 30, 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.

related to the Kaya Now Promissory Note of approximately $ 10,000 for the six months ended June 30, 2023.

Fair Value of Financial Assets and

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

Fair value measured as of March 31, 2023

assets and liabilities that are measured at fair value as of June 30, 2023, and December 31, 2022 ($ in thousands):

Fair value measured as of June 30, 2023

active markets

Significant other

observable inputs

Significant unobservable

Marketable securities:

15 unchanged sentences

Short-term investment at December 31, 2022

Short-term investment at March 31, 2023

Short-term investment at June 30, 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

Note receivable, Convergent Therapeutics, non-current portion

Unrealized loss on note receivable

Accrued interest receivable

Notes receivable at fair value, current portion at June 30, 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

Note receivable, Convergent Therapeutics, non-current portion

Accrued interest receivable

Notes receivable at fair value, non-current portion at June 30, 2023

Note Receivable at fair value

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

As of June 30, 2023, the fair value of the notes

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

1 unchanged sentence

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

the three months ended March 31, 2023.

the three months ended June 30, 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 Company’s Lease, the Company rents a portion of the twenty-second floor at 725 Fifth Avenue, New York, New York (the “22 nd Floor

The Company currently uses the 22 nd Floor Premises to run its day-to-day operations.

The initial term

1 unchanged sentence

Under the Company’s Lease,

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

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

Effective for the sixth and seventh years of the

2 unchanged sentences

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.

On September 23, 2022, Dominari Financial entered

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

Under Dominari Financial’s Lease, Dominari Financial rents a portion of a floor at 725 Fifth Avenue, New York, New York

(the “Premises”).

Dominari Financial currently uses the Premises to run its day-to-day operations.

The initial term of Dominari

Financial’s Lease is seven (7) years commencing on the date that possession of the Premises is delivered to Dominari Financial.

Under Dominari Financial’s Lease, Dominari Financial is required to pay monthly rent equal to $ 49,368 .

Effective for the sixth and

seventh years of Dominari Financial’s Lease, the rent shall increase to $ 51,868 per month.

The Company took possession of the

Premises in February 2023.

The tables below represent the Company’s

lease assets and liabilities as of March 31, 2023:

lease assets and liabilities as of June 30, 2023:

Operating lease right-of-use-assets

3 unchanged sentences

Weighted-average discount rate – operating leases

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

During the three months ended March 31, 2023,

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

During the six months ended June 30, 2023, the

Company recorded approximately $ 0.4 million of lease expense to current period operations.

Three Months Ended

Six Months Ended

Operating leases

3 unchanged sentences

Net rent expense

Supplemental cash flow information related to leases were as follows:

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:

As of June 30, 2023, future minimum payments during

the next five years and thereafter are as follows:

Remaining Period Ended December 31, 2023

12 unchanged sentences

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,

six months ended June 30, 2023, and 2022 are as follows:

As of June 30,

Convertible preferred stock

1 unchanged sentence

Options to purchase common stock

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

Stockholders’ Equity and Convertible

4 unchanged sentences

shares of common stock owned by a board member.

June 27, 2023, pursuant to Soo Yu’s employment

agreement and the Company’s 2022 Equity Incentive Plan, the Company executed a Grant Agreement, through which Soo Yu was granted

1,033,591 shares of the Company’s common stock.

Upon issuance, the shares were fully-vested and nonforfeitable with a total fair

value of approximately $ 2.7 million.

Pursuant to the Grant Agreement, the Company withheld 503,876 of the shares granted to satisfy

Soo Yu’s tax obligation of approximately $ 1.3 million and recorded as income taxes withheld within the unaudited condensed consolidated

balance sheet.

See Restricted Stock roll-forward below.

Treasury Stock

2 unchanged sentences

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.

During the six months ended June 30, 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.

1 unchanged sentence

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:

A summary of warrant activity for the six months

ended June 30, 2023, is presented below:

Exercise Price

Outstanding as of December 31, 2022

Outstanding as of March 31, 2023

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

Outstanding as of June 30, 2023

Restricted Stock Awards

A summary of restricted stock awards activity

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

Nonvested at December 31, 2022

for the six months ended June 30, 2023, is presented below:

Number of Restricted

Weighted Average

Grant Day Fair Value

Nonvested at December 31, 2022

As of March 31, 2023, there is no unrecognized

Nonvested at June 30, 2023

As of June 30, 2023, there is no unrecognized

stock-based compensation expense related to restricted stock awards.

1 unchanged sentence

A summary of option activity under the Company’s

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

stock option plan for the six months ended June 30, 2023 is presented below:

Number of Shares

Weighted Average

Exercise Price

Total Intrinsic

Total Intrinsic Value

Weighted Average

Remaining Contractual

Life (in years)

Outstanding as of December 31, 2022

Outstanding as of March 31, 2023

Employee options expired

Outstanding as of June 30, 2023

Options vested and exercisable

Stock-based compensation associated with the amortization

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

of stock option expense was approximately $ 8,000 and $ 0 for the six months ended June 30, 2023, and 2022, respectively.

All stock compensation

2 unchanged sentences

relating to unvested stock options is approximately $ 7,000 .

The following table presents our total revenues

disaggregated by revenue type for the three and six months ended June 30, 2023 and 2022 (in thousands):

Three Months Ended

Six Months Ended

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 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

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

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 Securities, the Company’s broker-dealer

6 unchanged sentences

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.

As of June 30, 2023, Dominari Securities had net capital of approximately $ 7.3 million, which was approximately $ 7.2 million

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

Related Party Transaction

2 unchanged sentences

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

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.

is also a member of the board of directors of Revere.

The Company incurred fees of approximately $ 0.08 million and $ 0.6 million during

the six months ending June 30, 2023, and 2022, respectively.

These fees were included in general and administrative expense in the unaudited

condensed consolidated statements of operations.

Segment Reporting

The Company operates in two reportable

business segments:

(1) Dominari Securities and (2) Legacy AIkido Pharma.

The Dominari Securities reportable business segment represents

the Company’s broker-dealer business, which is composed of underwriting and transactional service activities.

The Legacy AIkido

Pharma reportable business segment includes Aikido Labs, which manages the investments holdings of the legacy entity.

Prior to the FPS Acquisition, the Company operated as a single operating segment comprised of Legacy AIkido Pharma.

The chief operating decision-maker (“CODM”)

has access to and regularly reviews internal financial reporting for each business and uses that information to make operational decisions

and allocate resources.

Accounting policies applied by the reportable segments are the same as those used by the Company and described

in the “ Summary of Significant Accounting Policies.

” While assets are primarily held within the Legacy AIkido Pharma

reportable business segment, total assets by segment is not disclosed as the CODM does not assess performance, make strategic decisions,

or allocate resources based on assets.

The measures of segment profitability that are most

relied upon by the CODM are gross revenues and net loss, as presented within the table below and reconciled to the statement of operations.

Three Months Ended June 30, 2023

Dominari Securities

Legacy AIkido Pharma

Operating Costs

General and administrative

Research and development

Loss from operations

Other (expenses) income

Interest income

Loss on marketable securities

Unrealized loss on note receivable

Total other (expenses) income

Six Months Ended June 30, 2023

Dominari Securities

Legacy AIkido Pharma

Operating Costs

General and administrative

Research and development

Loss from operations

Other (expenses) income

Interest income

Loss on marketable securities

Unrealized loss on note receivable

Total other (expenses) income

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