What changed in this filing

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Item 1A. Risk Factors

2024-04-01 compared with 2023-03-31 · 791 added, 678 removed, 51 unchanged (97% of the section changed)

RISK FACTORS.

Company’s business and operations are subject to numerous risks.

The material risks and uncertainties that management believes

affect the Company are described below.

The Company’s business

and operations are subject to numerous risks.

The material risks and uncertainties that management believes affect the Company are described

The risks and uncertainties described below are not the only ones facing the Company.

risks and uncertainties that are presently unknown, management is not aware of or focused on or that management currently deems immaterial

may also impair the Company’s business operations.

If any of the following risks actually occur, the Company’s financial

condition and results of operations may be materially and adversely affected.

we have a limited operating history to evaluate our company, the likelihood of our success must be considered in light of the problems,

expenses, difficulties, complications and delays frequently encountered by an early-stage financial services company.

Since we have a limited operating history in our current financial

services business, it will make it difficult for investors and securities analysts to evaluate our business and prospects.

You must consider

our prospects in light of the risks, expenses, and difficulties we face as an early-stage financial services company with a limited operating

Investors should evaluate an investment in our securities in light of the uncertainties encountered by early-stage companies

in an intensely competitive industry.

There can be no assurance that our efforts will be successful or that we will be able to become

you should consider the Company’s prospects in light of the costs, uncertainties, delays and difficulties frequently encountered

by companies in their start-up stages, particularly those in the financial services industry.

Shareholders should carefully consider

the risks and uncertainties that a business with no operating history will face.

In particular, shareholders should consider that there

is a significant risk that we will not be able to:

or execute our current business plan, or that our current business plan is sound;

sufficient funds in the capital markets or otherwise to fully effectuate our business plan;

our management team;

of the foregoing risks may adversely affect the Company and result in the failure of our business.

In addition, we expect to encounter

unforeseen expenses, difficulties, complications, delays and other known and unknown factors.

continue to incur operating losses and may not achieve profitability.

Additional risks and uncertainties that are

presently unknown, management is not aware of or focused on or that management currently deems immaterial may also impair the Company’s

business operations.

If any of the following risks actually occur, the Company’s financial condition and results of operations may

be materially and adversely affected.

We may amend or supplement these risk factors from time to time in other reports we file with the

Business Risks

Because we have a limited operating history

to evaluate our company, the likelihood of our success must be considered in light of the problems, expenses, difficulties, complications

and delays frequently encountered by an early-stage financial services company.

Since we have a limited operating history in our

current financial services business, it will make it difficult for investors and securities analysts to evaluate our business and prospects.

You must consider our prospects in light of the risks, expenses, and difficulties we face as an early-stage financial services company

with a limited operating history.

Investors should evaluate an investment in our securities in light of the uncertainties encountered

by early-stage companies in an intensely competitive industry.

There can be no assurance that our efforts will be successful or that we

will be able to become profitable.

Accordingly, you should consider the Company’s

prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by companies in their start-up stages,

particularly those in the financial services industry.

Stockholders should carefully consider the risks and uncertainties that a business

with no operating history will face.

In particular, stockholders should consider that there is a significant risk that we will not be

implement or execute our current business plan, or that our current business plan is sound;

raise sufficient funds in the capital markets or otherwise to fully effectuate our business plan;

maintain our management team;

attract clients.

Any of the foregoing risks may adversely affect

the Company and result in the failure of our business.

In addition, we expect to encounter unforeseen expenses, difficulties, complications,

delays and other known and unknown factors.

We continue to incur operating losses and

may not achieve profitability.

Our net loss for the year ended December 31, 2023

1 unchanged sentence

Our accumulated deficit was $208.8 million as of December 31, 2023.

Our ability to become profitable depends

upon our ability to generate revenue from our financial products.

We do not know when, or if, we will generate any revenue from such

financial products.

Even though our revenue may increase, we expect to incur significant additional losses while we grow and expand our

Our ability to become profitable depends upon our

ability to generate revenue from our financial products and services.

We do not know when, or if, we will generate significant revenue

from such financial services and products.

Even though our revenue may increase, we expect to incur significant additional losses while

we grow and expand our business.

We cannot predict if and when we will achieve profitability.

Our failure to achieve and sustain profitability could negatively

impact the market price of our common stock.

we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial

results or prevent fraud and our business may be harmed and our stock price may be adversely impacted.

internal controls over financial reporting are necessary for us to provide reliable financial reports and to effectively prevent fraud.

Any inability to provide reliable financial reports or to prevent fraud could harm our business.

The Sarbanes-Oxley Act of 2002 requires

management to evaluate and assess the effectiveness of our internal control over financial reporting.

In order to continue to comply

with the requirements of the Sarbanes-Oxley Act, we are required to continuously evaluate and, where appropriate, enhance our policies,

procedures and internal controls.

If we fail to maintain the adequacy of our internal controls over financial reporting, we could be

subject to litigation or regulatory scrutiny and investors could lose confidence in the accuracy and completeness of our financial reports.

We cannot assure you that in the future we will be able to fully comply with the requirements of the Sarbanes-Oxley Act or that management

will conclude that our internal control over financial reporting is effective.

If we fail to fully comply with the requirements of the

Sarbanes-Oxley Act, our business may be harmed and our stock price may decline.

assessment, testing and evaluation of the design and operating effectiveness of our internal control over financial reporting resulted

in our conclusion that, as of December 31, 2022, our internal control over financial reporting was not effective, due to our lack of

segregation of duties, and lack of controls in place to ensure that all material transactions and developments impacting the consolidated

financial statements are reflected.

We can provide no assurance as to conclusions of management with respect to the effectiveness of

our internal control over financial reporting in the future.

in market and economic conditions may adversely affect the Company’s business and profitability.

in the financial services industry is heavily influenced by the overall strength of economic conditions and financial market activity,

which generally have a direct and material impact on the Company’s results of operations and financial condition.

These conditions

are a product of many factors, which are mostly unpredictable and beyond the Company’s control, and may affect the decisions made

by financial market participants.

in economic and political conditions, including economic output levels, interest and inflation rates, employment levels, prices of commodities

including oil and gas, exogenous market events, consumer confidence levels, and fiscal and monetary policy can affect market conditions.

For example, the Federal Reserve’s policies determine, in large part, the cost of funds for lending and investing and the return

earned on those loans and investments.

Changes in the Federal Reserve’s policies are beyond our control and, consequently, the

impact of these changes on our activities and results of our operations are difficult to predict.

While global financial markets have

shown signs of improvement in recent years, uncertainty remains.

A period of sustained downturns and/or volatility in the securities

markets, and/or prolonged levels of increasing interest rates, could lead to a return to increased credit market dislocations, reductions

in the value of real estate, and other negative market factors which could significantly impair our revenues and profitability.

markets may also be impacted by political and civil unrest occurring in the Middle East, Eastern Europe, Russia, Venezuela and Asia.

Continued uncertainties loom over the outcome of the EU’s financial support programs.

It is possible that other EU member states

may choose to follow Britain’s lead and leave the EU.

Any negative impact on economic conditions and global markets from these

developments could adversely affect our business, financial condition and liquidity.

or unfavorable market or economic conditions could result in reduced transaction volumes, reduced revenue and reduced profitability in

any or all of the Company’s principal businesses.

of the Company’s revenues will be derived from fees generated from its asset management business segment.

Asset management

fees often are primarily comprised of base management and performance (or incentive) fees.

Management fees are primarily based on

assets under management.

Assets under management balances are impacted by net inflow/outflow of client assets and changes in market

Poor investment performance by the Company’s portfolio managers could result in a loss of managed accounts and could

result in reputational damage that might make it more difficult to attract new investors and thus further impact the Company’s

business and financial condition.

Our failure to achieve and sustain profitability

could negatively impact the market price of our common stock.

If we cannot meet

our future capital requirements, we may be unable to develop and enhance our services, take advantage of business opportunities and respond

to competitive pressures.

We may need to raise

additional funds in the future to grow our business internally, invest in new businesses, expand through acquisitions, enhance our current

services or respond to changes in our target markets.

If we raise additional capital through the sale of equity or equity derivative securities,

the issuance of these securities could result in dilution to our existing stockholders.

If additional funds are raised through the issuance

of debt securities, the terms of that debt could impose additional restrictions on our operations or harm our financial condition.

financing may be unavailable on acceptable terms.

If we fail to maintain an effective system

of internal controls over financial reporting, we may not be able to accurately report our financial results or prevent fraud and our

business may be harmed and our stock price may be adversely impacted.

Effective internal controls over financial reporting

are necessary for us to provide reliable financial reports and to effectively prevent fraud.

Any inability to provide reliable financial

reports or to prevent fraud could harm our business.

The Sarbanes-Oxley Act of 2002 requires management to evaluate and assess the effectiveness

of our internal control over financial reporting.

In order to continue to comply with the requirements of the Sarbanes-Oxley Act, we are

required to continuously evaluate and, where appropriate, enhance our policies, procedures and internal controls.

If we fail to maintain

the adequacy of our internal controls over financial reporting, we could be subject to litigation or regulatory scrutiny and investors

could lose confidence in the accuracy and completeness of our financial reports.

We cannot assure you that in the future we will be able

to fully comply with the requirements of the Sarbanes-Oxley Act or that management will conclude that our internal control over financial

reporting is effective.

If we fail to fully comply with the requirements of the Sarbanes-Oxley Act, our business may be harmed and our

stock price may decline.

Our assessment, testing and evaluation of the design

and operating effectiveness of our internal control over financial reporting resulted in our conclusion that, as of December 31, 2023,

our internal control over financial reporting was not effective, due to the design and maintenance of fair value reporting relating to

certain notes receivable.

We can provide no assurance as to conclusions of management with respect to the effectiveness of our internal

control over financial reporting in the future.

Developments in

market and economic conditions may adversely affect the Company’s business and profitability.

Performance in the financial

services industry is heavily influenced by the overall strength of economic conditions and financial market activity, which generally

have a direct and material impact on the Company’s results of operations and financial condition.

These conditions are a product

of many factors, which are mostly unpredictable and beyond the Company’s control, and may affect the decisions made by financial

market participants.

Changes in economic and

political conditions, including economic output levels, interest and inflation rates, employment levels, prices of commodities including

oil and gas, exogenous market events, consumer confidence levels, and fiscal and monetary policy can affect market conditions.

the Federal Reserve’s policies determine, in large part, the cost of funds for lending and investing and the return earned on those

loans and investments.

Changes in the Federal Reserve’s policies are beyond our control and, consequently, the impact of these changes

on our activities and results of our operations are difficult to predict.

While global financial markets have shown signs of improvement

in recent years, uncertainty remains.

A period of sustained downturns and/or volatility in the securities markets, and/or prolonged levels

of increasing interest rates, could lead to a return to increased credit market dislocations, reductions in the value of real estate,

and other negative market factors which could significantly impair our revenues and profitability.

markets may also

be impacted by political and civil unrest occurring in the Middle East, Eastern Europe, Russia, Venezuela and Asia.

Continued uncertainties

loom over the outcome of the EU’s financial support programs.

It is possible that other EU member states may choose to follow Britain’s

lead and leave the EU.

Any negative impact on economic conditions and global markets from these developments could adversely affect our

business, financial condition and liquidity.

Uncertain or unfavorable

market or economic conditions could result in reduced transaction volumes, reduced revenue and reduced profitability in any or all of

the Company’s principal businesses.

A portion of the Company’s revenues will be derived from fees generated from its asset management business segment.

Asset management fees often are primarily comprised of base management and performance (or incentive) fees.

Management fees are primarily based on assets under management.

Assets under management balances are impacted by net inflow/outflow of client assets and changes in market values.

Poor investment performance by the Company’s portfolio managers could result in a loss of managed accounts and could result in reputational damage that might make it more difficult to attract new investors, and, thus further impact the Company’s business and financial condition.

If the Company experiences losses of managed accounts, fee revenue will decline.

In addition, in

periods of declining market values, the values of assets under management may ultimately decline, which would negatively impact fee

past decade, passively managed index funds have seen greater investor interest, and this trend has become more prevalent in recent

A continued lessening of investor interest in active investing and continued increase in passive investing may lead to a continued

decline in the revenue the Company generates from commissions on the execution of trading transactions and, in respect of its market-making

activities, a reduction in the value of its trading positions and commissions and spreads.

expects its investment banking revenue, in the form of underwriting, placement and financial advisory fees, to be directly related

to the volume and value of transactions as well as the Company’s role in these transactions, and will typically only be earned

upon the successful completion of a transaction.

In an environment of uncertain or unfavorable market or economic conditions, the

volume and size of capital-raising transactions and acquisitions and dispositions typically decreases, thereby reducing the demand

for the Company’s investment banking services and increasing price competition among financial services companies seeking such

Accordingly, the Company’s business will be highly dependent on market conditions, the decisions and actions

of its clients, and interested third parties.

The number of engagements the Company has at any given time will be subject to change

and may not necessarily result in future revenues.

Company may make strategic acquisitions of businesses, engage in joint ventures or divest or exit existing businesses, which could result

in unforeseen expenses or disruptive effects on its business.

time to time, the Company may consider acquisitions of other businesses or joint ventures with other businesses.

Any acquisition or joint

venture that the Company determines to pursue will be accompanied by a number of risks.

After the announcement or completion of an acquisition

or joint venture, the Company’s share price could decline if investors view the transaction as too costly or unlikely to improve

the Company’s competitive position.

or difficulties relating to such a transaction, including integration of products, employees, offices, technology systems, accounting

systems and management controls, may be difficult to predict accurately and be greater than expected causing the Company’s estimates

to differ from actual results.

The Company may be unable to retain key personnel after the transaction, and the transaction may impair

relationships with customers and business partners.

In addition, the Company may be unable to achieve anticipated benefits and synergies

from the transaction as fully as expected or within the expected time frame.

Divestitures or elimination of existing businesses or products

could have similar effects, including the loss of earnings of the divested business or operation.

These difficulties could disrupt the

Company’s ongoing business, increase its expenses, and adversely affect its operating results and financial condition.

of doing business increase, the Company may not be able to continue to grow its revenues through “organic” growth (the growth

attendant to hiring one employee at a time or through expanding into a new business line through a limited investment in technology and

In lieu of organic growth, it becomes increasingly necessary to grow through the acquisition of a business or businesses

that fulfill the Company’s strategic decisions for growth.

However, due to competition or the cost of such acquisitions, such expansion

may not be available on a profitable basis and may threaten the Company’s ongoing ability to expand its business.

ability to attract, develop and retain highly skilled and productive employees, particularly qualified financial advisors is critical

to the success of the Company’s business.

Company faces intense competition for qualified employees from other businesses in the financial services industry, and the performance

of its business may suffer to the extent it is unable to attract and retain employees effectively, particularly given the relatively

small size of the Company and its employee base compared to some of its competitors.

The primary sources of revenue in each of the Company’s

business lines are commissions and fees earned on advisory and underwriting transactions and customer accounts managed by its employees,

who are regularly recruited by other firms and in certain cases are able to take their client relationships with them when they change

Experienced employees are regularly offered financial inducements by larger competitors to change employers, and thus competitors

can de-stabilize the Company’s relationship with valued employees.

Some specialized areas of the Company’s business are operated

by a relatively small number of employees, the loss of any of whom could jeopardize the continuation of that business following the employee’s

in the financial services industry is high.

The cost of retaining skilled professionals in the financial services industry has escalated

considerably.

In addition, in periods of declining market values, the values of assets under management may ultimately decline, which would negatively impact fee revenues.

In the past decade, passively managed index funds have seen greater investor interest, and this trend has become more prevalent in recent years.

A continued lessening of investor interest in active investing and continued increase in passive investing may lead to a continued decline in the revenue the Company generates from commissions on the execution of trading transactions and, in respect of its market-making activities, a reduction in the value of its trading positions and commissions and spreads.

The Company expects its investment banking revenue, in the form of underwriting, placement and financial advisory fees, to be directly related to the volume and value of transactions as well as the Company’s role in these transactions and will typically only be earned upon the successful completion of a transaction.

In an environment of uncertain or unfavorable market or economic conditions, the volume and size of capital-raising transactions and acquisitions and dispositions typically decreases, thereby reducing the demand for the Company’s investment banking services and increasing price competition among financial services companies seeking such engagements.

Accordingly, the Company’s business will be highly dependent on market conditions, the decisions and actions of its clients, and interested third parties.

The number of engagements the Company has at any given time will be subject to change and may not necessarily result in future revenues.

The Company may

make strategic acquisitions of businesses, engage in joint ventures or divest or exit existing businesses, which could result in unforeseen

expenses or disruptive effects on its business.

From time to time, the

Company may consider acquisitions of other businesses or joint ventures with other businesses.

Any acquisition or joint venture that the

Company determines to pursue will be accompanied by a number of risks.

After the announcement or completion of an acquisition or joint

venture, the Company’s stock price could decline if investors view the transaction as too costly or unlikely to improve the Company’s

competitive position.

Costs or difficulties

relating to such a transaction, including integration of products, employees, offices, technology systems, accounting systems and management

controls, may be difficult to predict accurately and be greater than expected causing the Company’s estimates to differ from actual

The Company may be unable to retain key personnel after the transaction, and the transaction may impair relationships with customers

and business partners.

In addition, the Company may be unable to achieve anticipated benefits and synergies from the transaction as fully

as expected or within the expected time frame.

Divestitures or elimination of existing businesses or products could have similar effects,

including the loss of earnings of the divested business or operation.

These difficulties could disrupt the Company’s ongoing business,

increase its expenses, and adversely affect its operating results and financial condition.

As the costs of doing business increase, the

Company may not be able to continue to grow its revenues through “organic” growth (the growth attendant to hiring one employee

at a time or through expanding into a new business line through a limited investment in technology and employment).

In lieu of organic

growth, it becomes increasingly necessary to grow through the acquisition of a business or businesses that fulfill the Company’s

strategic decisions for growth.

However, due to competition or the cost of such acquisitions, such expansion may not be available on a

profitable basis and may threaten the Company’s ongoing ability to expand its business.

The ability to

attract, develop and retain highly skilled and productive employees, particularly qualified financial advisors is critical to the success

of the Company’s business.

The Company faces intense

competition for qualified employees from other businesses in the financial services industry, and the performance of its business may

suffer to the extent it is unable to attract and retain employees effectively, particularly given the relatively small size of the Company

and its employee base compared to some of its competitors.

The primary sources of revenue in each of the Company’s business lines

are commissions and fees earned on advisory and underwriting transactions and customer accounts managed by its employees, who are regularly

recruited by other firms and in certain cases are able to take their client relationships with them when they change firms.

employees are regularly offered financial inducements by larger competitors to change employers, and thus competitors can de-stabilize

the Company’s relationship with valued employees.

Some specialized areas of the Company’s business are operated by a relatively

small number of employees, the loss of any of whom could jeopardize the continuation of that business following the employee’s departure.

Turnover in the financial

services industry is high.

The cost of retaining skilled professionals in the financial services industry has escalated considerably.

Financial industry employers are increasingly offering guaranteed contracts, upfront payments, and increased compensation.

These can be important factors in a current employee’s decision to leave us as well as in a prospective employee’s decision

As competition for skilled professionals in the industry remains intense, we may have to devote significant resources to

attracting and retaining qualified personnel.

To the extent we have compensation targets, we may not be able to retain our employees,

which could result in increased recruiting expense or result in our recruiting additional employees at compensation levels that are not

within our target range.

In particular, our financial results may be adversely affected by the costs we incur in connection with any

upfront loans or other incentives we may offer to newly recruited financial advisors and other key personnel.

If we were to lose the

services of any of our investment bankers, sales and trading professionals, asset managers, or executive officers to a competitor or

otherwise, we may not be able to retain valuable relationships and some of our clients could choose to use the services of a competitor

instead of our services.

If we are unable to retain our senior professionals or recruit additional professionals, our reputation, business,

results of operations and financial condition could be adversely affected.

Further, new business initiatives and efforts to expand existing

businesses generally require that we incur compensation and benefits expense before generating additional revenues.

companies in our industry whose employees accept positions with competitors frequently claim that those competitors have engaged in unfair

hiring practices.

important factors in a current employee’s decision to leave us as well as in a prospective employee’s decision to join us.

As competition for skilled professionals in the industry remains intense, we may have to devote significant resources to attracting and

retaining qualified personnel.

To the extent we have compensation targets, we may not be able to retain our employees, which could result

in increased recruiting expenses or result in our recruiting additional employees at compensation levels that are not within our target

In particular, our financial results may be adversely affected by the costs we incur in connection with any upfront loans or other

incentives we may offer to newly recruited financial advisors and other key personnel.

If we were to lose the services of any of our investment

bankers, sales and trading professionals, asset managers, or executive officers to a competitor or otherwise, we may not be able to retain

valuable relationships and some of our clients could choose to use the services of a competitor instead of our services.

If we are unable

to retain our senior professionals or recruit additional professionals, our reputation, business, results of operations and financial

condition could be adversely affected.

Further, new business initiatives and efforts to expand existing businesses generally require that

we incur compensation and benefits expense before generating additional revenues.

Moreover, companies in

our industry whose employees accept positions with competitors frequently claim that those competitors have engaged in unfair hiring practices.

We may be subject to claims in the future as we seek to hire qualified personnel, some of whom may work for our competitors.

Some of these claims may result in material litigation.

could incur substantial costs in defending against these claims, regardless of their merits.

Such claims could also discourage potential

employees who work for our competitors from joining us.

Recent actions by some larger competitors to reject the “Recruiting Protocol”,

an industry adopted set of practices permitting financial advisors to port their client relationships to a new firm under strict rules,

is likely to increase the likelihood of litigation among competitors surrounding the employment of new advisors and their solicitation

of their clients and may act as a new barrier to recruitment of financial advisors.

Company depends on its senior employees and the loss of their services could harm its business.

Company’s success is dependent in large part upon the services of its senior executives and employees.

Any loss of service of the

chief executive officer (“CEO”) may adversely affect the business and operations of the Company.

If the Company’s senior

executives or employees terminate their employment and the Company is unable to find suitable replacements in relatively short periods

of time, its operations may be materially and adversely affected.

precautions the Company takes to prevent and detect employee misconduct may not be effective and the Company could be exposed to unknown

and unmanaged risks or losses.

Company runs the risk that employee misconduct could occur.

Misconduct by employees could include, employees binding the Company to transactions

that exceed authorized limits or present unacceptable risks to the Company (rogue trading);

employee theft and improper use of Company

or client property;

Some of these

claims may result in material litigation.

We could incur substantial

costs in defending against these claims, regardless of their merits.

Such claims could also discourage potential employees who work for

our competitors from joining us.

Recent actions by some larger competitors to reject the “Recruiting Protocol”, an industry

adopted set of practices permitting financial advisors to port their client relationships to a new firm under strict rules, is likely

to increase the likelihood of litigation among competitors surrounding the employment of new advisors and their solicitation of their

clients and may act as a new barrier to recruitment of financial advisors.

If we fail to manage our anticipated growth

effectively, our business, financial condition and operating results could be harmed.

To manage our growth effectively, we must continue

to implement our operational plans and strategies, improve, and expand our infrastructure of people and information systems and expand,

train and manage our employee base.

To support continued growth, we must effectively integrate, develop and motivate new employees.

face significant competition for personnel.

Failure to manage our hiring needs effectively or successfully integrate our new hires may

have a material adverse effect on our business, financial condition and operating results.

Additionally, the growth of our business places

significant demands on our operations, as well as our management and other employees.

The growth of our business may require significant

additional resources to meet these daily requirements, which may not scale in a cost-effective manner or may negatively affect the quality

of our services and client experience.

We are also required to manage relationships with a growing number of partners, institutions, clients

and other third parties.

Our information technology systems and our internal controls and procedures may not be adequate to support future

growth of our operations and employee base.

If we are unable to manage the growth of our operations effectively, our business, financial

condition and operating results may be materially adversely affected.

The Company depends

on its senior employees and the loss of their services could harm its business.

The Company’s success

is dependent in large part upon the services of its senior executives and employees.

Any loss of services of the chief executive officer

and other senior executive officers may adversely affect the business and operations of the Company.

If the Company’s senior executives

or employees terminate their employment and the Company is unable to find suitable replacements in relatively short periods of time, its

operations may be materially and adversely affected.

The precautions

the Company takes to prevent and detect employee misconduct may not be effective and the Company could be exposed to unknown and unmanaged

risks or losses.

The Company runs the

risk that employee misconduct could occur.

Misconduct by employees could include, employees binding the Company to transactions that exceed

authorized limits or present unacceptable risks to the Company (rogue trading);

employee theft and improper use of Company or client property;

employees conspiring with other employees or third parties to defraud the Company;

employees hiding unauthorized

or unsuccessful activities from the Company, including outside business activities that are undisclosed and may result in liability to

employees steering or soliciting their clients into investments which have not been sponsored by the Company and without

the proper diligence;

the improper use of confidential information;

employees hiding unauthorized or unsuccessful activities

from the Company, including outside business activities that are undisclosed and may result in liability to the Company;

employees steering

or soliciting their clients into investments which have not been sponsored by the Company and without the proper diligence;

use of confidential information;

employee conduct outside of acceptable norms including harassment;

or employees engaging in “hacking” or breaching our cybersecurity safeguards.

types of misconduct could result in unknown and unmanaged risks or losses to the Company including regulatory sanctions and serious harm

to its reputation.

or employees engaging in “hacking”

or breaching our cybersecurity safeguards.

These types of misconduct

could result in unknown and unmanaged risks or losses to the Company including regulatory sanctions and serious harm to its reputation.

The precautions the Company takes to prevent and detect these activities may not be effective.

If employee misconduct

does occur, the Company’s business operations could be materially adversely affected.

have been a number of highly-publicized cases involving fraud or other misconduct by employees in the financial services industry and

there is a risk that our employees could engage in misconduct in the future that adversely affects our business.

We are subject to a

number of obligations and standards arising from our asset management business and our authority over the assets managed by our asset

management business.

In addition, our financial advisors may act in a fiduciary capacity, providing financial planning, investment advice

and discretionary asset management.

The violation of these obligations and standards by any of our employees could adversely affect our

clients and us.

It is not always possible to deter employee misconduct, and the precautions we take to detect and prevent this activity

may not be effective in all cases.

If our employees engage in misconduct, our business could be materially adversely affected, including

our cash position.

misconduct, including harassment in the workplace, has come under increasing scrutiny in the national media.

While the Company has adopted

a Code of Conduct and instituted training for its employees, it is difficult to predict when an employee may deviate from acceptable

practices and open the Company to liability either from actions taken by other employees or by authorities.

The Company could also become

liable for its actions in enforcing its rules of conduct on former employees who disagree with the Company’s actions.

risk refers to the risk that a change in the level of one or more market prices, rates, indices, volatilities, correlations or other

market factors, such as market liquidity, will result in losses for a position or portfolio owned by us.

results of operations may be materially affected by market fluctuations and by global and economic conditions and other factors, including

changes in asset values.

results of operations may be materially affected by market fluctuations due to global financial markets, economic conditions, changes

to global trade policies and tariffs and other factors, including the level and volatility of equity, fixed income and commodity prices,

the level and term structure of interest rates, inflation and currency values, and the level of other market indices.

The results of

our Capital Markets business segment, particularly results relating to our involvement in primary and secondary markets for all types

of financial products, are subject to substantial market fluctuations due to a variety of factors that we cannot control or predict with

great certainty.

These fluctuations impact results by causing variations in business flows and activity and in the fair value of securities

and other financial products.

Fluctuations also occur due to the level of global market activity, which, among other things, affects

the size, number and timing of investment banking client assignments and transactions and the realization of returns from our principal

periods of unfavorable market or economic conditions, the level of individual investor participation in the global markets, as well as

the level of client assets, may also decrease, which would negatively impact the results of our Private Client and Asset Management business

Substantial market fluctuations could also cause variations in the value of our investments in our funds, the flow of investment

capital into or from Assets Under Management (“AUM”), and the way customers allocate capital among money market, equity,

fixed income or other investment alternatives, which could negatively impact our Private Client and Asset Management business segments.

Company may incur losses and be subject to reputational harm to the extent that, for any reason, it is unable to sell securities it purchased

as an underwriter at anticipated price levels.

As an underwriter, the Company is subject to heightened standards regarding liability

for material misstatements or omissions in prospectuses and other offering documents relating to offerings it underwrites.

Any such misstatement

or omission could subject the Company to enforcement action by the SEC and claims of investors, either of which could have a material

adverse impact on the Company’s results of operations, financial condition and reputation.

As a market maker and dealer, the Company

may own large positions in specific securities, and these undiversified holdings concentrate the risk of market fluctuations and may

result in greater losses than would be the case if the Company’s holdings were more diversified.

value of our financial instruments may be materially affected by market fluctuations.

Market volatility, illiquid market conditions and

disruptions in the credit markets may make it extremely difficult to value and monetize certain of our financial instruments, particularly

during periods of market displacement.

Subsequent valuations in future periods, in light of factors then prevailing, may result in significant

changes in the values of these instruments and may adversely impact historical or prospective fees and performance-based fees (also known

as incentive fees, which include carried interest) in respect of certain businesses.

In addition, at the time of any sales and settlements

of these financial instruments, the price we ultimately realize will depend on the demand and liquidity in the market at that time and

may be materially lower than their current fair value.

Any of these factors could cause a decline in the value of our financial instruments,

which may have an adverse effect on our results of operations in future periods.

In addition, financial markets are susceptible to severe

events evidenced by rapid depreciation in asset values accompanied by a reduction in asset liquidity.

Under these extreme conditions,

hedging and other risk management strategies may not be as effective at mitigating trading losses as they would be under more normal

market conditions.

Moreover, under these conditions, market participants are particularly exposed to trading strategies employed by many

market participants simultaneously and on a large scale.

Our risk management and monitoring processes seek to quantify and mitigate risk

to more extreme market moves.

However, severe market events have historically been difficult to predict and we could realize significant

losses if extreme market events were to occur.

large and concentrated positions may expose us to losses.

Concentration of risk may reduce revenues or result in losses in our market-making,

investing, underwriting, including block trading, and lending businesses in the event of unfavorable market movements, or when market

conditions are more favorable for our competitors.

Changes in interest rates (especially if such changes are rapid), sustained low or

high interest rates or uncertainty regarding the future direction of interest rates, may create a less favorable environment for certain

of the Company’s businesses, particularly its fixed income business, resulting in reduced business volume and reduced revenue.

If interest rates remain at low levels, the Company’s profitability will be negatively impacted.

risk may expose the Company to losses caused by the inability of borrowers or other third parties to satisfy their obligations.

Company is exposed to the risk that third parties that owe it money, securities or other assets will not perform their obligations.

Company is exposed to credit risk related to third parties such as trading counterparties, customers, clearing agents, exchanges, clearing

houses, and other financial intermediaries as well as issuers whose securities we hold.

These parties may default on their obligations

owed to the Company due to bankruptcy, lack of liquidity, operational failure or other reasons.

This default risk may arise, for example,

from holding securities of third parties, executing securities trades that fail to settle at the required time due to non-delivery by

the counterparty or systems failure by clearing agents, exchanges, clearing houses or other financial intermediaries, and extending credit

to clients through bridge or margin loans or other arrangements.

Significant failures by third parties to perform their obligations owed

to the Company could adversely affect the Company’s revenue and its ability to borrow in the credit markets.

risk refers to the risk that we will be unable to finance our operations due to a loss of access to the capital markets or difficulty

in liquidating our assets.

Liquidity risk also encompasses our ability (or perceived ability) to meet our financial obligations without

experiencing significant business disruption or reputational damage that may threaten our viability as a going concern as well as the

associated funding risks triggered by the market or idiosyncratic stress events that may negatively affect our liquidity and may impact

our ability to raise new funding.

is essential to our businesses and we rely on external sources to finance a significant portion of our operations.

liquidity could be negatively affected by our inability to raise funding in the long-term or short-term debt capital markets, our inability

to access the secured lending markets, or unanticipated outflows of cash or collateral by customers or clients.

Factors that we cannot

control, such as disruption of the financial markets or negative views about the financial services industry generally, including concerns

regarding fiscal matters in the U.S.

If employee misconduct does occur, the

Company’s business operations could be materially adversely affected.

There have been a number

of highly-publicized cases involving fraud or other misconduct by employees in the financial services industry and there is a risk that

our employees could engage in misconduct in the future that adversely affects our business.

We are subject to a number of obligations

and standards arising from our asset management business and our authority over the assets managed by our asset management business.

addition, our financial advisors may act in a fiduciary capacity, providing financial planning, investment advice and discretionary asset

The violation of these obligations and standards by any of our employees could adversely affect our clients and us.

not always possible to deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective

in all cases.

If our employees engage in misconduct, our business could be materially adversely affected, including our cash position.

Employee misconduct,

including harassment in the workplace, has come under increasing scrutiny in the national media.

While the Company has adopted a Code

of Conduct and instituted training for its employees, it is difficult to predict when an employee may deviate from acceptable practices

and open the Company to liability either from actions taken by other employees or by authorities.

The Company could also become liable

for its actions in enforcing its rules of conduct on former employees who disagree with the Company’s actions.

Our failure to deal appropriately with

conflicts of interest could damage our reputation and adversely affect our business.

Appropriately

dealing with conflicts of interest is complex and difficult and our reputation could be damaged if we fail, or appear to fail, to deal

appropriately with one or more potential or actual conflicts of interest.

It is possible that potential or perceived conflicts could give

rise to investor dissatisfaction or litigation or regulatory enforcement actions.

In addition, regulatory scrutiny of, or litigation in

connection with, conflicts of interest would have a material adverse effect on our reputation, which could materially and adversely affect

our business in a number of ways, including an inability to raise additional funds, a reluctance of counterparties to do business with

us and the costs of defending litigation.

Our results of

operations may be materially affected by market fluctuations and by global and economic conditions and other factors, including changes

in asset values.

Our results of operations

may be materially affected by market fluctuations due to global financial markets, economic conditions, changes to global trade policies

and tariffs and other factors, including the level and volatility of equity, fixed income and commodity prices, the level and term structure

of interest rates, inflation and currency values, and the level of other market indices.

The results of our Capital Markets business segment,

particularly results relating to our involvement in primary and secondary markets for all types of financial products, are subject to

substantial market fluctuations due to a variety of factors that we cannot control or predict with great certainty.

These fluctuations

impact results by causing variations in business flows and activity and in the fair value of securities and other financial products.

Fluctuations also occur due to the level of global market activity, which, among other things, affects the size, number and timing of

investment banking client assignments and transactions and the realization of returns from our principal investments.

During periods of unfavorable

market or economic conditions, the level of individual investor participation in the global markets, as well as the level of client assets,

may also decrease, which would negatively impact the results of our Private Client and Asset Management business segments.

market fluctuations could also cause variations in the value of our investments in our funds, the flow of investment capital into or from

Assets Under Management, and the way customers allocate capital among money market, equity, fixed income or other investment alternatives,

which could negatively impact our Private Client and Asset Management business segments.

The Company may incur

losses and be subject to reputational harm to the extent that, for any reason, it is unable to sell securities it purchased as an underwriter

at anticipated price levels.

As an underwriter, the Company is subject to heightened standards regarding liability for material misstatements

or omissions in prospectuses and other offering documents relating to offerings it underwrites.

Any such misstatement or omission could

subject the Company to enforcement action by the SEC and claims of investors, either of which could have a material adverse impact on

the Company’s results of operations, financial condition and reputation.

As a market maker and dealer, the Company may own large

positions in specific securities, and these undiversified holdings concentrate the risk of market fluctuations and may result in greater

losses than would be the case if the Company’s holdings were more diversified.

The value of our financial

instruments may be materially affected by market fluctuations.

Market volatility, illiquid market conditions and disruptions in the credit

markets may make it extremely difficult to value and monetize certain of our financial instruments, particularly during periods of market

displacement.

Subsequent valuations in future periods, in light of factors then prevailing, may result in significant changes in the values

of these instruments and may adversely impact historical or prospective fees and performance-based fees (also known as incentive fees,

which include carried interest) in respect of certain businesses.

In addition, at the time of any sales and settlements of these financial

instruments, the price we ultimately realize will depend on the demand and liquidity in the market at that time and may be materially

lower than their current fair value.

Any of these factors could cause a decline in the value of our financial instruments, which may have

an adverse effect on our results of operations in future periods.

In addition, financial markets are susceptible to severe events evidenced

by rapid depreciation in asset values accompanied by a reduction in asset liquidity.

Under these extreme conditions, hedging and other

risk management strategies may not be as effective at mitigating trading losses as they would be under more normal market conditions.

Moreover, under these conditions, market participants are particularly exposed to trading strategies employed by many market participants

simultaneously and on a large scale.

Our risk management and monitoring processes seek to quantify and mitigate risk to more extreme market

However, severe market events have historically been difficult to predict and we could realize significant losses if extreme market

events were to occur.

Holding large and concentrated

positions may expose us to losses.

Concentration of risk may reduce revenues or result in losses in our market-making, investing, underwriting,

including block trading, and lending businesses in the event of unfavorable market movements, or when market conditions are more favorable

for our competitors.

Changes in interest rates (especially if such changes are rapid), sustained low or high interest rates or uncertainty

regarding the future direction of interest rates, may create a less favorable environment for certain of the Company’s businesses,

particularly its fixed income business, resulting in reduced business volume and reduced revenue.

If interest rates remain at low levels,

the Company’s profitability will be negatively impacted.

The Company is

exposed to the risk that third parties that owe it money, securities or other assets will not perform their obligations.

The Company is exposed

to credit risk related to third parties such as trading counterparties, customers, clearing agents, exchanges, clearing houses, and other

financial intermediaries as well as issuers whose securities we hold.

These parties may default on their obligations owed to the Company

due to bankruptcy, lack of liquidity, operational failure or other reasons.

This default risk may arise, for example, from holding securities

of third parties, executing securities trades that fail to settle at the required time due to non-delivery by the counterparty or systems

failure by clearing agents, exchanges, clearing houses or other financial intermediaries, and extending credit to clients through bridge

or margin loans or other arrangements.

Significant failures by third parties to perform their obligations owed to the Company could adversely

affect the Company’s revenue and its ability to borrow in the credit markets.

Liquidity is essential

to our businesses and we rely on external sources to finance a significant portion of our operations.

Our liquidity could be

negatively affected by our inability to raise funding in the long-term or short-term debt capital markets, our inability to access the

secured lending markets, or unanticipated outflows of cash or collateral by customers or clients.

Factors that we cannot control, such

as disruption of the financial markets or negative views about the financial services industry generally, including concerns regarding

fiscal matters in the U.S.

and other geographic areas, could impair our ability to raise funding.

In addition, our ability

to raise funding could be impaired if investors or lenders develop a negative perception of our long-term or short-term financial prospects

due to factors such as an incurrence of large trading losses, a downgrade by the rating agencies, a decline in the level of our business

activity, if regulatory authorities take significant action against us or our industry, or we discover significant employee misconduct

or illegal activity.

If we are unable to raise funding using the methods described above, we would likely need to finance or liquidate

unencumbered assets, such as our investment portfolios or trading assets, to meet maturing liabilities or other obligations.

unable to sell some of our assets or we may have to sell assets at a discount to market value, either of which could adversely affect

our results of operations, cash flows and financial condition.

risk refers to the risk of loss, or of damage to our reputation, resulting from inadequate or failed processes or systems, from human

factors or from external events (e.g., fraud, theft, legal and compliance risks, cyber-attacks or damage to physical assets).

incur operational risk across the full scope of our business activities, including revenue-generating activities (e.g., sales and trading)

and support and control groups (e.g., information technology and trade processing).

are subject to operational risks, including a failure, breach or other disruption of our operations or security systems or those of our

third parties (or third parties thereof), as well as human error or malfeasance, which could adversely affect our businesses or reputation.

businesses are highly dependent on our ability to process and report, on a daily basis, a large number of transactions across numerous

We may introduce new products or services or change processes or reporting, including in connection with new regulatory requirements,

resulting in new operational risk that we may not fully appreciate or identify.

The trend toward direct access to automated, electronic

markets and the move to more automated trading platforms has resulted in the use of increasingly complex technology that relies on the

continued effectiveness of the programming code and integrity of the data to process the trades.

We rely on the ability of our employees,

consultants, and internal systems to operate our different businesses and process a high volume of transactions.

Additionally, we are

subject to complex and evolving laws and regulations governing cybersecurity, privacy and data protection, which may differ and potentially

conflict, in various jurisdictions.

As a participant in the global capital markets, we face the risk of incorrect valuation or risk management

of our trading positions due to flaws in data, models, electronic trading systems or processes or due to fraud or cyber-attack.

also face the risk of operational failure or disruption of any of the clearing agents, exchanges, clearing houses or other financial

intermediaries we use to facilitate our lending and securities transactions.

In the event of a breakdown or improper operation of our

or a direct or indirect third party’s systems (or third parties thereof) or processes or improper or unauthorized action by third

parties, including consultants and subcontractors or our employees, we could suffer financial loss, an impairment to our liquidity position,

a disruption of our businesses, regulatory sanctions or damage to our reputation.

In addition, the interconnectivity of multiple financial

institutions with central agents, exchanges and clearing houses, and the increased importance of these entities, increases the risk that

an operational failure at one institution or entity may cause an industry-wide operational failure that could materially impact our ability

to conduct business.

Furthermore, the concentration of Company and personal information held by a handful of third parties increases

the risk that a breach at a key third party may cause an industry-wide data breach that could significantly increase the cost and risk

of conducting business.

There can be no assurance that our business contingency and security response plans fully mitigate all potential

Our ability to conduct business may be adversely affected by a disruption in the infrastructure that supports our businesses

and the communities where we are located.

This may include a disruption involving physical site access;

In addition, our ability to raise funding

could be impaired if investors or lenders develop a negative perception of our long-term or short-term financial prospects due to factors

such as an incurrence of large trading losses, a downgrade by the rating agencies, a decline in the level of our business activity, if

regulatory authorities take significant action against us or our industry, or we discover significant employee misconduct or illegal activity.

If we are unable to raise funding using the methods described above, we would likely need to finance or liquidate unencumbered assets,

such as our investment portfolios or trading assets, to meet maturing liabilities or other obligations.

We may be unable to sell some

of our assets or we may have to sell assets at a discount to market value, either of which could adversely affect our results of operations,

cash flows and financial condition.

From time to time

we may invest in securities that are illiquid or subject to restrictions.

From time to time we

may invest in securities that are subject to restrictions which prohibit us from selling the securities for a period of time.

Such agreements

may limit our ability to generate liquidity quickly through the disposition of the underlying investment while the agreement is effective.

We are subject

to operational risks, including a failure, breach or other disruption of our operations or security systems or those of our third parties

(or third parties thereof), as well as human error or malfeasance, which could adversely affect our businesses or reputation.

Our businesses are highly

dependent on our ability to process and report, on a daily basis, a large number of transactions across numerous markets.

We may introduce

new products or services or change processes or reporting, including in connection with new regulatory requirements, resulting in new

operational risk that we may not fully appreciate or identify.

The trend toward direct access to automated, electronic markets and the

move to more automated trading platforms has resulted in the use of increasingly complex technology that relies on the continued effectiveness

of the programming code and integrity of the data to process the trades.

We rely on the ability of our employees, consultants, and internal

systems to operate our different businesses and process a high volume of transactions.

Additionally, we are subject to complex and evolving

laws and regulations governing cybersecurity, privacy and data protection, which may differ and potentially conflict, in various jurisdictions.

As a participant in the global capital markets, we face the risk of incorrect valuation or risk management of our trading positions due

to flaws in data, models, electronic trading systems or processes or due to fraud or cyber-attack.

We also face the risk

of operational failure or disruption of any of the clearing agents, exchanges, clearing houses or other financial intermediaries we use

to facilitate our lending and securities transactions.

In the event of a breakdown or improper operation of our or a direct or indirect

third party’s systems (or third parties thereof) or processes or improper or unauthorized action by third parties, including consultants

and subcontractors or our employees, we could suffer financial loss, an impairment to our liquidity position, a disruption of our businesses,

regulatory sanctions or damage to our reputation.

In addition, the interconnectivity of multiple financial institutions with central agents,

exchanges and clearing houses, and the increased importance of these entities, increases the risk that an operational failure at one institution

or entity may cause an industry-wide operational failure that could materially impact our ability to conduct business.

Furthermore, the

concentration of Company and personal information held by a handful of third parties increases the risk that a breach at a key third party

may cause an industry-wide data breach that could significantly increase the cost and risk of conducting business.

There can be no assurance

that our business contingency and security response plans fully mitigate all potential risks to us.

Our ability to conduct business may

be adversely affected by a disruption in the infrastructure that supports our businesses and the communities where we are located.

may include a disruption involving physical site access;

cybersecurity incidents;

terrorist activities;

political unrest;

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catastrophic events;

climate-related incidents and natural disasters (such as earthquakes,

tornadoes, hurricanes and wildfires);

electrical outages;

climate-related incidents and natural disasters (such as earthquakes, tornadoes, hurricanes and wildfires);

environmental hazards;

computer servers;

communications or other services we

and our employees or third parties with whom we conduct business.

Although we employ backup systems for our data, those backup systems

may be unavailable following a disruption, the affected data may not have been backed up or may not be recoverable from the backup, or

the backup data may be costly to recover, which could adversely affect our business.

Notwithstanding

evolving technology and technology-based risk and control systems, our businesses ultimately rely on people, including our employees

and those of third parties with which we conduct business.

As a result of human error or engagement in violations of applicable policies,

laws, rules or procedures, certain errors or violations are not always discovered immediately by our technological processes or by our

controls and other procedures, which are intended to prevent and detect such errors or violations.

These can include calculation errors,

mistakes in addressing emails or other communications, errors in software or model development or implementation, or errors in judgment,

as well as intentional efforts to disregard or circumvent applicable policies, laws, rules or procedures.

Human errors and malfeasance,

even if promptly discovered and remediated, can result in material losses and liabilities for us.

communications or other services we use;

and our employees or third parties with whom

we conduct business.

Although we employ backup systems for our data, those backup systems may be unavailable following a disruption, the

affected data may not have been backed up or may not be recoverable from the backup, or the backup data may be costly to recover, which

could adversely affect our business.

Notwithstanding evolving

technology and technology-based risk and control systems, our businesses ultimately rely on people, including our employees and those

of third parties with which we conduct business.

As a result of human error or engagement in violations of applicable policies, laws,

rules or procedures, certain errors or violations are not always discovered immediately by our technological processes or by our controls

and other procedures, which are intended to prevent and detect such errors or violations.

These can include calculation errors, mistakes

in addressing emails or other communications, errors in software or model development or implementation, or errors in judgment, as well

as intentional efforts to disregard or circumvent applicable policies, laws, rules or procedures.

Human errors and malfeasance, even if

promptly discovered and remediated, can result in material losses and liabilities for us.

Any theft of data, technology or intellectual

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joint ventures or clients conducting business in those jurisdictions.

Company’s information systems may experience an interruption or breach in security.

Company relies heavily on communications and information systems to conduct its business.

Any failure, interruption or breach in security

of these systems could result in failures or disruptions in the Company’s customer relationship management, regulatory or other

reporting, general ledger, and other systems.

While the Company has policies and procedures designed to prevent or limit the effect of

the failure, interruption or security breach of its information systems, there can be no assurance that any such failures, interruptions

or security breaches will not occur or, if they do occur, that they will be adequately addressed.

Recent disclosures of such incursions

by foreign and domestic unauthorized agents aimed at large financial institutions reflect higher risks for all such institutions.

occurrence of any failures, interruptions or security breaches of the Company’s information systems could damage the Company’s

reputation, result in a loss of customer business, subject the Company to additional regulatory scrutiny, or expose the Company to civil

litigation and possible financial liability, any of which could have a material adverse effect on the Company’s financial condition

and results of operations.

businesses rely extensively on data processing and communications systems.

In addition to better serving clients, the effective use of

technology increases efficiency and enables us to reduce costs.

Adapting or developing our technology systems to meet new regulatory

requirements, client needs, and competitive demands is critical for our business.

Introduction of new technology presents challenges

on a regular basis.

There are significant technical and financial costs and risks in the development of new or enhanced applications,

including the risk that we might be unable to effectively use new technologies or adapt our applications to emerging industry standards.

Our continued success depends, in part, upon our ability to:

The Company’s

information systems may experience an interruption or breach in security.

The Company relies heavily

on communications and information systems to conduct its business.

Any failure, interruption or breach in security of these systems could

result in failures or disruptions in the Company’s customer relationship management, regulatory or other reporting, general ledger,

and other systems.

While the Company has policies and procedures designed to prevent or limit the effect of the failure, interruption

or security breach of its information systems, there can be no assurance that any such failures, interruptions or security breaches will

not occur or, if they do occur, that they will be adequately addressed.

Recent disclosures of such incursions by foreign and domestic

unauthorized agents aimed at large financial institutions reflect higher risks for all such institutions.

The occurrence of any failures,

interruptions or security breaches of the Company’s information systems could damage the Company’s reputation, result in a

loss of customer business, subject the Company to additional regulatory scrutiny, or expose the Company to civil litigation and possible

financial liability, any of which could have a material adverse effect on the Company’s financial condition and results of operations.

Our businesses rely extensively

on data processing and communications systems.

In addition to better serving clients, the effective use of technology increases efficiency

and enables us to reduce costs.

Adapting or developing our technology systems to meet new regulatory requirements, client needs, and competitive

demands is critical for our business.

Introduction of new technology presents challenges on a regular basis.

There are significant technical

and financial costs and risks in the development of new or enhanced applications, including the risk that we might be unable to effectively

use new technologies or adapt our applications to emerging industry standards.

Our continued success depends, in part, upon our ability

(i) successfully maintain and upgrade the capability of our technology systems;

(ii) address the needs of our clients by using technology to provide products and services that satisfy their demands;

and (iii) retain

skilled information technology employees.

Failure of our technology systems, which could result from events beyond our control, or an

inability to effectively upgrade those systems or implement new technology-driven products or services, could result in financial losses,

liability to clients, and violations of applicable privacy and other applicable laws and regulatory sanctions.

Cybersecurity

(ii) address the needs of our clients by using technology

to provide products and services that satisfy their demands;

and (iii) retain skilled information technology employees.

Failure of our

technology systems, which could result from events beyond our control, or an inability to effectively upgrade those systems or implement

new technology-driven products or services, could result in financial losses, liability to clients, and violations of applicable privacy

and other applicable laws and regulatory sanctions.

Cybersecurity and

security breaches of our technology systems, or those of our clients or other third-party vendors we rely on, could subject us to significant

liability and harm our reputation.

operational systems and infrastructure must continue to be safeguarded and monitored for potential failures, disruptions, cyber-attacks

and breakdowns.

Our operations rely on the secure processing, storage and transmission of confidential and other information in our computer

systems and networks.

Although cybersecurity incidents among financial services firms are on the rise, we have not experienced any material

losses relating to cyber-attacks or other information security breaches.

However, there can be no assurance that we will not suffer such

losses in the future.

our implementation of protective measures and endeavoring to modify them as circumstances warrant, our computer systems, software and

networks may be vulnerable to human error, natural disasters, power loss, spam attacks, unauthorized access, distributed denial of service

attacks, computer viruses and other malicious code and other events that could have an impact on the security and stability of our operations.

Notwithstanding the precautions we take, if one or more of these events were to occur, this could jeopardize the information we confidentially

maintain, including that of our clients and counterparties, which is processed, stored in and transmitted through our computer systems

and networks, or otherwise cause interruptions or malfunctions in our operations or the operations of our clients and counterparties.

We may be required to expend significant additional resources to modify our protective measures, to investigate and remediate vulnerabilities

or other exposures or to make required notifications or disclosures.

We may also be subject to litigation and financial losses that are

neither insured nor covered under any of our current insurance policies.

technological breakdown could also interfere with our ability to comply with financial reporting and other regulatory requirements, exposing

us to potential disciplinary action by regulators.

Our regulators have introduced programs to review our protections against such incidents

which, if they determined that our systems do not reasonably protect our clients’ assets and their data, could result in enforcement

activity and sanctions.

providing services to clients, we may manage, utilize and store sensitive or confidential client or employee data, including personal

As a result, we may be subject to numerous laws and regulations designed to protect this information, such as U.S.

state and international laws governing the protection of personally identifiable information.

These laws and regulations are increasing

in complexity and number.

If any person, including any of our associates, negligently disregards or intentionally breaches our established

controls with respect to client or employee data, or otherwise mismanages or misappropriates such data, we could be subject to significant

monetary damages, regulatory enforcement actions, fines and/or criminal prosecution.

In addition, unauthorized disclosure of sensitive

or confidential client or employee data, whether through system failure, employee negligence, fraud or misappropriation, could damage

our reputation and cause us to lose clients and related revenue.

liability in the event of a security breach of client data could be significant.

Depending on the circumstances giving rise to the breach,

this liability may not be subject to a contractual limit or an exclusion of consequential or indirect damages.

The federally mandated

Consolidated Audit Trail (“CAT”) program which requires that client personally identifiable information be submitted to a

database not controlled by us may expose us to liability for breaches of that database not under our control.

a result of the foregoing, the Company has and is likely to incur significant costs in preparing its infrastructure and maintaining it

to resist any such attacks.

In addition to personnel dedicated to overseeing the infrastructure and systems to defend against cybersecurity

incidents, senior management is regularly briefed on issues, preparedness and any incidents requiring response.

At their regularly scheduled

meetings, the Audit Committee of the Board of Directors and the Board of Directors are briefed and brought up to date on cybersecurity.

Company continually encounters technological change.

financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven

products and services, driven by the emergence of the Fintech industry.

The effective use of technology increases efficiency and enables

financial institutions to better serve customers and reduce costs.

The Company’s future success depends, in part, upon its ability

to address the needs of its customers by using technology to provide products and services that will satisfy customer demands, as well

as to create additional efficiencies in the Company’s operations.

Many of the Company’s competitors have substantially greater

resources to invest in technological improvements.

Failure to successfully keep pace with technological change affecting the financial

services industry could have a material adverse impact on the Company’s business and, in turn, the Company’s financial condition

and results of operations.

is risk associated with the sufficiency of coverage under the Company’s insurance policies.

Company’s operations and financial results are subject to risks and uncertainties related to the use of a combination of insurance,

self-insured retention and self-insurance for a number of risks, including most significantly property and casualty, general liability,

cyber-crime, workers’ compensation, and the portion of employee-related health care benefits plans funded by the Company, and certain

errors and omissions liability, among others.

the Company endeavors to purchase insurance coverage that is appropriate to its assessment of risk, it is unable to predict with certainty

the frequency, nature or magnitude of claims for direct or consequential damages.

The Company’s business may be negatively affected

if in the future its insurance proves to be inadequate or unavailable.

In addition, insurance claims may divert management resources

away from operating the business.

change concerns could disrupt our businesses, adversely affect client activity levels, adversely affect the creditworthiness of our counterparties

Our operational systems

and infrastructure must continue to be safeguarded and monitored for potential failures, disruptions, cyber-attacks and breakdowns.

operations rely on the secure processing, storage and transmission of confidential and other information in our computer systems and networks.

Although cybersecurity incidents among financial services firms are on the rise, we have not experienced any material losses relating

to cyber-attacks or other information security breaches.

However, there can be no assurance that we will not suffer such losses in the

Despite our implementation

of protective measures and endeavoring to modify them as circumstances warrant, our computer systems, software and networks may be vulnerable

to human error, natural disasters, power loss, spam attacks, unauthorized access, distributed denial of service attacks, computer viruses

and other malicious code and other events that could have an impact on the security and stability of our operations.

Notwithstanding the

precautions we take, if one or more of these events were to occur, this could jeopardize the information we confidentially maintain, including

that of our clients and counterparties, which is processed, stored in and transmitted through our computer systems and networks, or otherwise

cause interruptions or malfunctions in our operations or the operations of our clients and counterparties.

We may be required to expend

significant additional resources to modify our protective measures, to investigate and remediate vulnerabilities or other exposures or

to make required notifications or disclosures.

We may also be subject to litigation and financial losses that are neither insured nor

covered under any of our current insurance policies.

A technological breakdown

could also interfere with our ability to comply with financial reporting and other regulatory requirements, exposing us to potential disciplinary

action by regulators.

Our regulators have introduced programs to review our protections against such incidents which, if they determined

that our systems do not reasonably protect our clients’ assets and their data, could result in enforcement activity and sanctions.

In providing services

to clients, we may manage, utilize and store sensitive or confidential client or employee data, including personal data.

we may be subject to numerous laws and regulations designed to protect this information, such as U.S.

federal and state and international

laws governing the protection of personally identifiable information.

These laws and regulations are increasing in complexity and number.

If any person, including any of our associates, negligently disregards or intentionally breaches our established controls with respect

to client or employee data, or otherwise mismanages or misappropriates such data, we could be subject to significant monetary damages,

regulatory enforcement actions, fines and/or criminal prosecution.

In addition, unauthorized disclosure of sensitive or confidential client

or employee data, whether through system failure, employee negligence, fraud or misappropriation, could damage our reputation and cause

us to lose clients and related revenue.

Potential liability in

the event of a security breach of client data could be significant.

Depending on the circumstances giving rise to the breach, this liability

may not be subject to a contractual limit or an exclusion of consequential or indirect damages.

The federally mandated Consolidated Audit

Trail (“CAT”) program which requires that client personally identifiable information be submitted to a database not controlled

by us may expose us to liability for breaches of that database not under our control.

As a result of the foregoing,

the Company has and is likely to incur significant costs in preparing its infrastructure and maintaining it to resist any such attacks.

In addition to personnel dedicated to overseeing the infrastructure and systems to defend against cybersecurity incidents, senior management

is regularly briefed on issues, preparedness and any incidents requiring response.

At its regularly scheduled meetings, the Board of Directors

is briefed and brought up to date on cybersecurity matters.

The Company continually

encounters technological change.

The financial services

industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services,

driven by the emergence of the Fintech industry.

The effective use of technology increases efficiency and enables financial institutions

to better serve customers and reduce costs.

The Company’s future success depends, in part, upon its ability to address the needs

of its customers by using technology to provide products and services that will satisfy customer demands, as well as to create additional

efficiencies in the Company’s operations.

Many of the Company’s competitors have substantially greater resources to invest

in technological improvements.

Failure to successfully keep pace with technological change affecting the financial services industry could

have a material adverse impact on the Company’s business and, in turn, the Company’s financial condition and results of operations.

There is risk associated

with the sufficiency of coverage under the Company’s insurance policies.

The Company’s operations

and financial results are subject to risks and uncertainties related to the use of a combination of insurance, self-insured retention

and self-insurance for a number of risks, including most significantly property and casualty, general liability, cyber-crime, workers’

compensation, and the portion of employee-related health care benefits plans funded by the Company, and certain errors and omissions liability,

among others.

While the Company endeavors

to purchase insurance coverage that is appropriate to its assessment of risk, it is unable to predict with certainty the frequency, nature

or magnitude of claims for direct or consequential damages.

The Company’s business may be negatively affected if in the future its

insurance proves to be inadequate or unavailable.

In addition, insurance claims may divert management resources away from operating the

Climate change

concerns could disrupt our businesses, adversely affect client activity levels, adversely affect the creditworthiness of our counterparties

and damage our reputation.

change may cause extreme weather events that, among other things, could damage our facilities and equipment, injure our employees, disrupt

operations at one or more of our primary locations, negatively affect our ability to service and interact with our clients, and adversely

affect the value of our investments.

Climate change may cause

extreme weather events that, among other things, could damage our facilities and equipment, injure our employees, disrupt operations at

one or more of our primary locations, negatively affect our ability to service and interact with our clients, and adversely affect the

value of our investments.

Any of these events may increase our costs including our costs to insure against these events.

change may also have a negative impact on the financial condition of our clients, which may decrease revenues from those clients and

increase the credit exposures to those clients.

Additionally, our reputation and client relationships may be damaged as a result of our

involvement, or our clients’ involvement, in certain industries associated with causing or exacerbating, or alleged to cause or

exacerbate, climate change.

We also may be negatively impacted by any decisions we make to continue to conduct or change our activities

in response to considerations relating to climate change.

New regulations or guidance relating to climate change, as well as the perspectives

of shareholders, employees and other stakeholders regarding climate change, may affect whether and on what terms and conditions we engage

in certain activities or offer certain products.

Environmental,

Social and Governance (ESG) Risks

our society and our business are faced with challenges associated with the implementation of policies and practices that are supportive

of concerns related to environmental, social and governance (ESG) issues.

We continue to explore implementing ESG considerations across

our business practices and operations, a task complicated by the lack of consensus around a defining standard of ESG.

We continue to

focus on improving the resilience of our operations, fostering an inclusive workforce and maintaining a system of good corporate governance.

However, our efforts in this regard may be insufficient and may expose the Company to reputational risk from entities purporting to “grade”

ESG platforms, reductions in business with certain clients demanding greater ESG efforts or to regulatory expectation and enforcement

if such practices become the subject of rule-making by regulators to whom we are subject.

REGULATORY AND COMPLIANCE RISKS

Company is subject to extensive securities regulation and the failure to comply with these regulations could subject it to monetary penalties

or sanctions.

securities industry and the Company’s business are subject to extensive regulation by the SEC, state securities regulators, other

governmental regulatory authorities and industry self-regulatory organizations.

The Company may be adversely affected by new or revised

legislation or regulations or changes in the interpretation or enforcement of existing laws and rules by these governmental authorities

and self-regulatory organizations.

Securities is a broker-dealer and investment adviser registered with the SEC and is primarily regulated by FINRA.

Broker-dealers are

subject to regulations which cover all aspects of the securities business, including, without limitation sales methods and supervision,

underwriting, trading practices among broker-dealers, emerging standards concerning fees and charges imposed on clients for fee-based

programs, use and safekeeping of customers’ funds and securities, anti-money laundering and the USA Patriot Act (the “Patriot

Act”) compliance, capital structure of securities firms, trade and regulatory reporting, cybersecurity, pricing of services, compliance

with DOL rules and regulations for retirement accounts, compliance with lending practices (Regulation T), record keeping, and the conduct

of directors, officers and employees.

with many of the regulations applicable to the Company involves a number of risks, particularly in areas where applicable regulations

may be subject to varying interpretation.

The requirements imposed by these regulations are designed to ensure the integrity of the financial

markets and to protect customers and other third parties who deal with the Company.

New regulations may result in enhanced standards

of duty on broker-dealers in their dealings with their clients (fiduciary standards).

Consequently, these regulations often serve to

limit the Company’s activities, including through net capital, customer protection and market conduct requirements, including those

relating to principal trading.

Much of the regulation of broker-dealers has been delegated to self-regulatory organizations, principally

FINRA adopts rules, subject to approval by the SEC, which govern its members and conducts periodic examinations of member firms’

the Company is found to have violated any applicable laws, rules or regulations, formal administrative or judicial proceedings may be

initiated against it that may result in censure, fine, civil or criminal penalties, including treble damages in the case of insider trading

violations, the issuance of cease-and-desist orders, the suspension or termination of our broker-dealer or investment advisory activities,

the suspension or disqualification of our officers or employees;

Climate change may also

have a negative impact on the financial condition of our clients, which may decrease revenues from those clients and increase the credit

exposures to those clients.

Additionally, our reputation and client relationships may be damaged as a result of our involvement, or our

clients’ involvement, in certain industries associated with causing or exacerbating, or alleged to cause or exacerbate, climate

We also may be negatively impacted by any decisions we make to continue to conduct or change our activities in response to considerations

relating to climate change.

New regulations or guidance relating to climate change, as well as the perspectives of stockholders, employees

and other stakeholders regarding climate change, may affect whether and on what terms and conditions we engage in certain activities or

offer certain products.

The Company is

subject to extensive securities regulation and the failure to comply with these regulations could subject it to monetary penalties or

The securities industry

and the Company’s businesses are subject to extensive regulation by the SEC, state securities regulators, other governmental regulatory

authorities and industry self-regulatory organizations.

The Company may be adversely affected by new or revised legislation or regulations

or changes in the interpretation or enforcement of existing laws and rules by these governmental authorities and self-regulatory organizations.

Dominari Securities is

a broker-dealer and investment adviser registered with the SEC and is primarily regulated by FINRA.

Broker-dealers are subject to regulations

which cover all aspects of the securities business, including, without limitation sales methods and supervision, underwriting, trading

practices among broker-dealers, emerging standards concerning fees and charges imposed on clients for fee-based programs, use and safekeeping

of customers’ funds and securities, anti-money laundering and the USA Patriot Act (the “Patriot Act”) compliance, capital

structure of securities firms, trade and regulatory reporting, cybersecurity, pricing of services, compliance with Department of Labor

rules and regulations for retirement accounts, compliance with lending practices (Regulation T), record keeping, and the conduct of directors,

officers and employees.

Compliance with many

of the regulations applicable to the Company involves a number of risks, particularly in areas where applicable regulations may be subject

to varying interpretation.

The requirements imposed by these regulations are designed to ensure the integrity of the financial markets

and to protect customers and other third parties who deal with the Company.

New regulations may result in enhanced standards of duty on

broker-dealers in their dealings with their clients (fiduciary standards).

Consequently, these regulations often serve to limit the Company’s

activities, including through net capital, customer protection and market conduct requirements, including those relating to principal

Much of the regulation of broker-dealers has been delegated to self-regulatory organizations, principally FINRA.

rules, subject to approval by the SEC, which govern its members and conducts periodic examinations of member firms’ operations.

If the Company is found

to have violated any applicable laws, rules or regulations, formal administrative or judicial proceedings may be initiated against it

that may result in censure, fine, civil or criminal penalties, including treble damages in the case of insider trading violations, the

issuance of cease-and-desist orders, the suspension or termination of our broker-dealer or investment advisory activities, the suspension

or disqualification of our officers or employees;

or other adverse consequences.

imposition of any of the above or other penalties could have a material adverse effect on our operating results and financial condition.

services firms have been subject to increased regulatory scrutiny increasing the risk of financial liability and reputational harm resulting

from adverse regulatory actions.

in the financial services industry have been operating in an onerous regulatory environment.

The industry has experienced increased scrutiny

from a variety of regulators, including the SEC,FINRA, and state regulators.

Penalties and fines sought by regulatory authorities have

increased substantially.

We may be adversely affected by changes in the interpretation or enforcement of existing laws and rules by these

governmental authorities and SROs.

Each of the regulatory bodies with jurisdiction over us has regulatory powers dealing with many different

aspects of financial services, including, but not limited to, the authority to fine us and to grant, cancel, restrict or otherwise impose

conditions on the right to continue operating particular businesses.

For example, the failure to comply with the obligations imposed

by the Exchange Act on broker-dealers and the Advisers Act on investment advisers, including recordkeeping, registration, advertising

and operating requirements, disclosure obligations and prohibitions on fraudulent activities, or by the Investment Company Act of 1940,

as amended (the “1940 Act”), could result in investigations, sanctions and reputational damage.

Increasingly, regulators

have instituted a practice of “regulation by enforcement” where new interpretations of existing regulations are introduced

by bringing enforcement actions against securities firms for activities that occurred in the past but were not then thought to be problematic.

We also may be adversely affected as a result of new or revised legislation or regulations imposed by the SEC, other U.S.

governmental regulatory authorities or SROs (e.g., FINRA) that supervise the financial markets.

Substantial legal liability or significant

regulatory action taken against us could have a material adverse effect on our business prospects including our cash position.

regulatory changes, and enhanced regulatory and enforcement activity, relating to the asset management business may increase our compliance

and legal costs and otherwise adversely affect our business.

and foreign governments have taken regulatory actions impacting the investment management industry, and may continue to take further

actions, including expanding current (or enacting new) standards, requirements and rules that may be applicable to us and our subsidiaries,

particularly those subsidiaries that are SEC registered investment advisers.

For example, the SEC and several states and municipalities

in the United States have adopted “pay-to-play” rules, which could limit our ability to charge advisory fees.

Such “pay-to-play”

rules could affect the profitability of that portion of our business.

Additionally, the use of “soft dollars,” where a portion

of commissions paid to broker-dealers in connection with the execution of trades also pays for research and other services provided to

advisors has been mostly prohibited in Europe and, is periodically reexamined in the U.S.

The imposition of any

of the above or other penalties could have a material adverse effect on our operating results and financial condition.

Financial services

firms have been subject to increased regulatory scrutiny increasing the risk of financial liability and reputational harm resulting from

adverse regulatory actions.

Firms in the financial

services industry have been operating in an onerous regulatory environment.

The industry has experienced increased scrutiny from a variety

of regulators, including the SEC, FINRA, and state regulators.

Penalties and fines sought by regulatory authorities have increased substantially.

We may be adversely affected by changes in the interpretation or enforcement of existing laws and rules by these governmental authorities

Each of the regulatory bodies with jurisdiction over us has regulatory powers dealing with many different aspects of financial

services, including, but not limited to, the authority to fine us and to grant, cancel, restrict or otherwise impose conditions on the

right to continue operating particular businesses.

For example, the failure to comply with the obligations imposed by the Exchange Act

on broker-dealers and the Advisers Act on investment advisers, including recordkeeping, registration, advertising and operating requirements,

disclosure obligations and prohibitions on fraudulent activities, or by the Investment Company Act of 1940, as amended (the “1940

Act”), could result in investigations, sanctions and reputational damage.

Increasingly, regulators have instituted a practice of

“regulation by enforcement” where new interpretations of existing regulations are introduced by bringing enforcement actions

against securities firms for activities that occurred in the past but were not then thought to be problematic.

We also may be adversely

affected as a result of new or revised legislation or regulations imposed by the SEC, other U.S.

or foreign governmental regulatory authorities

or SROs (e.g., FINRA) that supervise the financial markets.

Substantial legal liability or significant regulatory action taken against

us could have a material adverse effect on our business prospects including our cash position.

Numerous regulatory

changes and enhanced regulatory and enforcement activity relating to the asset management business may increase our compliance and legal

costs and otherwise adversely affect our business.

and foreign governments

have taken regulatory actions impacting the investment management industry, and may continue to take further actions, including expanding

current (or enacting new) standards, requirements and rules that may be applicable to us and our subsidiaries, particularly those subsidiaries

that are SEC registered investment advisers.

For example, the SEC and several states and municipalities in the United States have adopted

“pay-to-play” rules, which could limit our ability to charge advisory fees.

Such “pay-to-play” rules could affect

the profitability of that portion of our business.

Additionally, the use of “soft dollars,” where a portion of commissions

paid to broker-dealers in connection with the execution of trades also pays for research and other services provided to advisors has been

mostly prohibited in Europe and, is periodically reexamined in the U.S.

and may be limited or modified in the future.

Furthermore, new regulations regarding the management of hedge funds and the use of certain investment products may impact our investment

management business and result in increased costs.

For example, many regulators around the world adopted disclosure and reporting requirements

relating to the hedge fund business.

June 5, 2019, the SEC adopted Regulation Best Interest (“Reg BI”) as Rule 15l-1 under the Exchange Act.

Reg BI imposes a

new federal standard of conduct on registered broker-dealers and their associated persons when dealing with retail clients and requires

that a broker-dealer and its representatives act in the best interest of such client and not place its own interests ahead of the customer’s

Furthermore, new

regulations regarding the management of hedge funds and the use of certain investment products may impact our investment management business

and result in increased costs.

For example, many regulators around the world adopted disclosure and reporting requirements relating to

the hedge fund business.

On June 5, 2019, the

SEC adopted Regulation Best Interest (“Reg BI”) as Rule 15l-1 under the Exchange Act.

Reg BI imposes a new federal standard

of conduct on registered broker-dealers and their associated persons when dealing with retail clients and requires that a broker-dealer

and its representatives act in the best interest of such client and not place its own interests ahead of the customer’s interests.

Reg BI requires enhanced documentation for recommendations of securities transactions to broker-dealer retail clients.

new rules and processes related thereto will likely limit revenue and most likely involve increased costs, including, but not limited

to, compliance costs associated with new or enhanced technology as well as increased litigation costs.

is not possible to determine the extent of the impact of any new laws, regulations or initiatives that may be imposed, or whether any

existing proposals will become law.

Conformance with any new laws or regulations could make compliance more difficult and expensive and

affect the manner in which we conduct business.

the Company violates the securities laws, or is involved in litigation in connection with a violation, the Company’s reputation

and results of operations may be adversely affected .

aspects of the Company’s business involve substantial risks of liability.

An underwriter is exposed to substantial liability under

federal and state securities laws, other federal and state laws, and court decisions, including decisions with respect to underwriters’

The new rules and

processes related thereto will likely limit revenue and most likely involve increased costs, including, but not limited to, compliance

costs associated with new or enhanced technology as well as increased litigation costs.

It is not possible to

determine the extent of the impact of any new laws, regulations or initiatives that may be imposed, or whether any existing proposals

will become law.

Conformance with any new laws or regulations could make compliance more difficult and expensive and affect the manner

in which we conduct business.

If the Company

violates the securities laws or is involved in litigation in connection with a violation, the Company’s reputation and results of

operations may be adversely affected .

Many aspects of

the Company’s business involve substantial risks of liability.

An underwriter is exposed to substantial liability under federal

and state securities laws, other federal and state laws, and court decisions, including decisions with respect to underwriters’

liability and limitations on indemnification of underwriters by issuers.

9 unchanged sentences

to an adverse judgment or settlement of a securities lawsuit.

Company’s risk management policies and procedures may leave it exposed to unidentified risks or an unanticipated level of risk.

policies and procedures the Company employs to identify, monitor and manage risks may not be fully effective.

Some methods of risk management

are based on the use of observed historical market behavior.

As a result, these methods may not predict future risk exposures, which

could be significantly greater than historical measures indicate.

Other risk management methods depend on evaluation of information regarding

markets, clients or other matters that are publicly available or otherwise accessible.

This information may not be accurate, complete,

up-to-date or properly evaluated.

Management of operational, legal and regulatory risk requires, among other things, policies and procedures

to properly record and verify a large number of transactions and events.

The Company cannot give assurances that its policies and procedures

will effectively and accurately record and verify this information.

Company seeks to monitor and control its risk exposure through a variety of separate but complementary financial, credit, operational,

compliance and legal reporting systems.

The Company believes that it effectively evaluates and manages the market, credit and other risks

to which it is exposed.

Nonetheless, the effectiveness of the Company’s ability to manage risk exposure can never be completely

or accurately predicted or fully assured, and there can be no guarantee that the Company’s risk management will be successful.

For example, unexpectedly large or rapid movements or disruptions in one or more markets or other unforeseen developments can have a

material adverse effect on the Company’s financial condition and results of operations.

The consequences of these developments

can include losses due to adverse changes in securities values, decreases in the liquidity of trading positions, higher volatility in

earnings, and increases in general systemic risk.

Certain of the Company’s risk management systems are subject to regulatory review

and may be found to be insufficient by the Company’s regulators potentially leading to regulatory sanctions.

There can be no guarantee

that the operation of these systems will allow the Company to prevent or mitigate the various risks faced by its businesses.

regulators periodically review companies’ risk control practices, and, if found inadequate, bring enforcement actions and sanctions

against such firms.

ASSOCIATED WITH THE COMPANY’S COMMON STOCK

common stock may be delisted from The Nasdaq Capital Market if we fail to comply with continued listing standards.

common stock is currently traded on The Nasdaq Capital Market under the symbol “DOMH”.

If we fail to meet any of the continued

listing standards of The Nasdaq Capital Market, our common stock could be delisted from The Nasdaq Capital Market.

These continued listing

standards include specifically enumerated criteria, such as:

$1.00 minimum closing bid price;

● stockholders’

equity of $2.5 million;

The Company’s

risk management policies and procedures may leave it exposed to unidentified risks or an unanticipated level of risk.

The policies and procedures

the Company employs to identify, monitor and manage risks may not be fully effective.

Some methods of risk management are based on the

use of observed historical market behavior.

As a result, these methods may not predict future risk exposures, which could be significantly

greater than historical measures indicate.

Other risk management methods depend on evaluation of information regarding markets, clients

or other matters that are publicly available or otherwise accessible.

This information may not be accurate, complete, up-to-date or properly

Management of operational, legal and regulatory risk requires, among other things, policies and procedures to properly record

and verify a large number of transactions and events.

The Company cannot give assurances that its policies and procedures will effectively

and accurately record and verify this information.

The Company seeks to

monitor and control its risk exposure through a variety of separate but complementary financial, credit, operational, compliance and legal

reporting systems.

The Company believes that it effectively evaluates and manages the market, credit and other risks to which it is exposed.

Nonetheless, the effectiveness of the Company’s ability to manage risk exposure can never be completely or accurately predicted

or fully assured, and there can be no guarantee that the Company’s risk management will be successful.

For example, unexpectedly

large or rapid movements or disruptions in one or more markets or other unforeseen developments can have a material adverse effect on

the Company’s financial condition and results of operations.

The consequences of these developments can include losses due to adverse

changes in securities values, decreases in the liquidity of trading positions, higher volatility in earnings, and increases in general

systemic risk.

Certain of the Company’s risk management systems are subject to regulatory review and may be found to be insufficient

by the Company’s regulators potentially leading to regulatory sanctions.

There can be no guarantee that the operation of these systems

will allow the Company to prevent or mitigate the various risks faced by its businesses.

Various regulators periodically review companies’

risk control practices, and, if found inadequate, bring enforcement actions and sanctions against such firms.

Risks Associated with

the Company’s Common Stock

Our common stock may be delisted from The

Nasdaq Capital Market if we fail to comply with continued listing standards.

Our common stock is currently traded on The Nasdaq

Capital Market (“Nasdaq”), under the symbol “DOMH.” If we fail to meet any of the continued listing standards

of Nasdaq, our common stock could be delisted from Nasdaq.

These continued listing standards include specifically enumerated criteria,

a $1.00 minimum closing bid price;

stockholders’ equity of $2.5 million;

500,000 shares of publicly held common stock with a market value of at least $1 million;

round-lot stockholders;

with Nasdaq’s corporate governance requirements, as well as additional or more stringent

criteria that may be applied in the exercise of Nasdaq’s discretionary authority.

we fail to comply with Nasdaq’s continued listing standards, we may be delisted and our common stock will trade, if at all, only

on the over-the-counter market, such as the OTC Bulletin Board or OTCQX market, and then only if one or more registered broker-dealer

market makers comply with quotation requirements.

In addition, delisting of our common stock could depress our stock price, substantially

limit liquidity of our common stock and materially adversely affect our ability to raise capital on terms acceptable to us, or at all.

Further, delisting of our common stock would likely result in our common stock becoming a “penny stock” under the Exchange

share price may be volatile and there may not be an active trading market for our common stock.

can be no assurance that the market price of our common stock will not decline below its present market price or that there will be an

active trading market for our common stock.

The market prices of upstart financial services companies have been and are likely to continue

to be highly volatile.

Fluctuations in our operating results and general market conditions for upstart financial services stocks could

have a significant impact on the volatility of our common stock price.

We have experienced significant volatility in the price of our

common stock.

From January 1, 2022 through December 31, 2022, the share price of our common stock (on a split-adjusted basis) ranged

from a high of $11.56 to a low of $3.02.

The reason for the volatility in our stock is not well understood and may continue.

that may have contributed to such volatility include, but are not limited to:

300 public stockholders;

compliance with Nasdaq’s corporate governance requirements, as well as additional or more stringent criteria that may be applied in the exercise of Nasdaq’s discretionary authority.

If we fail to comply with Nasdaq’s continued

listing standards, we may be delisted and our common stock will trade, if at all, only on the over-the-counter market, such as the OTC

Bulletin Board or OTCQX market, and then only if one or more registered broker-dealer market makers comply with quotation requirements.

In addition, the delisting of our common stock could depress our stock price, substantially limit liquidity of our common stock and materially

adversely affect our ability to raise capital on terms acceptable to us, or at all.

Further, delisting of our common stock would likely

result in our common stock becoming a “penny stock” under the Exchange Act.

Our share price may be volatile and there

may not be an active trading market for our common stock.

There can be no assurance that the market price

of our common stock will not decline below its present market price or that there will be an active trading market for our common stock.

The market prices of upstart financial services companies have been and are likely to continue to be highly volatile.

Fluctuations in

our operating results and general market conditions for upstart financial services stocks could have a significant impact on the volatility

of our common stock price.

We have experienced significant volatility in the price of our common stock.

From January 1, 2023 through December

31, 2023, the closing share price of our common stock (on a split-adjusted basis) ranged from a high of $4.45 to a low of $1.85.

for the volatility in our common stock is not well understood and may continue.

Factors that may have contributed to such volatility include,

but are not limited to:

● developments

regarding regulatory filings;

funding requirements and the terms of our financing arrangements;

● introduction

of new technologies by us or our competitors;

6 unchanged sentences

speculation regarding any of the foregoing.

shares of common stock are thinly traded and, as a result, stockholders may be unable to sell at or near ask prices, or at all, if they

need to sell shares to raise money or otherwise desire to liquidate their shares.

common stock has been “thinly-traded” meaning that the number of persons interested in purchasing our common stock at or

near ask prices at any given time may be relatively small or non-existent.

This situation is attributable to a number of factors, including

the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors and others

in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they

tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our

shares until such time as we become more seasoned and viable.

Our trading volumes are further adversely affected by the 1-for-19 reverse

stock split that was effective as of March 4, 2016.

In addition, we believe that due to the limited number of shares of our common stock

outstanding, an options market has not been established for our common stock, limiting the ability of market participants to hedge or

otherwise undertake trading strategies available for larger companies with broader shareholder bases which prevents institutions and

others from acquiring or trading in our securities.

Consequently, there may be periods of several days or more when trading activity

in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that

will generally support continuous sales without an adverse effect on share price.

We cannot give stockholders any assurance that a broader

or more active public trading market for our common shares will develop or be sustained, or that current trading levels will be sustained.

of the “anti-takeover” provisions in our Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws and

Delaware General Corporation Law, a third party may be discouraged from making a takeover offer that could be beneficial to our stockholders.

effect of certain provisions of our Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws and the anti-takeover

provisions of the Delaware General Corporation Law (the “DGCL”), could delay or prevent a third party from acquiring us or

replacing members of our Board of Directors, or make more costly any attempt to acquire control of the Company, even if the acquisition

or the Board designees would be beneficial to our stockholders.

These factors could also reduce the price that certain investors might

be willing to pay for shares of the common stock and result in the market price being lower than it would be without these provisions.

on our common stock are not likely.

the last five years, we have not paid cash dividends on our common stock, and we do not anticipate paying cash dividends on our common

stock in the foreseeable future.

Investors must look solely to the potential for appreciation in the market price of the shares of our

common stock to obtain a return on their investment.

UNRESOLVED STAFF COMMENTS.

a smaller reporting company, we are not required to provide the information required by this item.

We lease offices located in New York, New York and we believe that

the New York offices are sufficient to meet our current needs.

Our shares of common stock are thinly traded

and, as a result, stockholders may be unable to sell at or near ask prices, or at all, if they need to sell shares to raise money or otherwise

desire to liquidate their shares.

Our common stock has been “thinly-traded”

meaning that the number of persons interested in purchasing our common stock at or near ask prices at any given time may be relatively

small or non-existent.

This situation is attributable to a number of factors, including the fact that we are a small company that is relatively

unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales

volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven

company such as ours or purchase or recommend the purchase of our shares until such time as we become more seasoned and viable.

volumes may have been further adversely affected by the 17-for-1 reverse stock split that was effective as of June 7, 2022.

we believe that due to the limited number of shares of our common stock outstanding, an options market has not been established for our

common stock, limiting the ability of market participants to hedge or otherwise undertake trading strategies available for larger companies

with broader stockholder bases which prevents institutions and others from acquiring or trading in our securities.

Consequently, there

may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer

which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share

We cannot give stockholders any assurance that a broader or more active public trading market for our common shares will develop

or be sustained, or that current trading levels will be sustained.

Our stock price and trading volume could

decline as a result of inaccurate or unfavorable research, or the cessation of research cover, about our business published by securities

or industry analysts.

The trading market for

our common stock may be affected by the research and reports that securities or industry analysts publish about us or our business.

one or more of the analysts who covers us downgrades our common stock or publishes inaccurate or unfavorable research about our business,

our stock price could decline.

In addition, the analysts’ projections may have little or no relationship to the results we actually

achieve and could cause our stock price to decline if we fail to meet their projections.

If one or more of these analysts ceases coverage

of us or fails to publish reports on us regularly, our stock price or trading volume could decline.

Because of the “anti-takeover”

provisions in our Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws and Delaware General Corporation Law,

a third party may be discouraged from making a takeover offer that could be beneficial to our stockholders.

The effect of certain provisions of our Amended

and Restated Certificate of Incorporation, Amended and Restated Bylaws and the anti-takeover provisions of the Delaware General Corporation

Law (the “DGCL”), could delay or prevent a third party from acquiring us or replacing members of our Board of Directors, or

make more costly any attempt to acquire control of the Company, even if the acquisition or the Board designees would be beneficial to

our stockholders.

These factors could also reduce the price that certain investors might be willing to pay for shares of the common stock

and result in the market price being lower than it would be without these provisions.

We incur increased costs as a result

of being a public company.

As a public company,

we incur significant levels of legal, accounting, regulatory and other expenses.

Sarbanes-Oxley and related rules of the SEC, together

with the listing requirements of Nasdaq, impose significant requirements relating to disclosure controls and procedures and internal control

over financial reporting.

We have incurred costs as a result of compliance with these public company requirements, and we may need to

hire additional qualified personnel in order to continue to satisfy these public company requirements.

We are required to expend considerable

time and resources complying with public company regulations.

Furthermore, if we are unable to satisfy our obligations as a public company,

we could be subject to delisting of our common stock, fines, sanctions and other regulatory action.

Because of their

significant stock ownership, some of our executive officers and directors will be able to exert control over us and our significant corporate

Our executive officers,

directors and their affiliates own or control, in the aggregate, beneficially own approximately 32.93% of our outstanding common stock

as of December 31, 2023.

These stockholders may be able to exercise influence over matters requiring stockholder approval, such as

the election of directors and the approval of significant corporate transactions, including transactions involving an actual or potential

change of control of the company or other transactions that non-controlling stockholders may not deem to be in their best interests.

concentration of ownership may harm the market price of our common stock by, among other things:

delaying, deferring, or preventing a

change in control of our company;

impeding a merger, consolidation, takeover, or other business combination involving our company;

us to enter into transactions or agreements that are not in the best interests of all stockholders;

or discouraging a potential acquirer

from making a tender offer or otherwise attempting to obtain control of our company.

Dividends on our common stock are not likely.

During the last five years, we have not paid cash

dividends on our common stock, and we do not anticipate paying cash dividends on our common stock in the foreseeable future.

must look solely to the potential for appreciation in the market price of the shares of our common stock to obtain a return on their investment.

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-K

Item 1A. Risk Factors