What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2025-04-15 compared with 2024-04-01 · 1136 added, 920 removed, 302 unchanged (87% of the section changed)

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

a smaller reporting company, we are not required to provide the information required by this item.

CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

financial statements and supplementary data required by this Item 8 follow.

to Consolidated Financial Statements

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

As a smaller reporting company, we are not required

to provide the information required by this item.

CONSOLIDATED FINANCIAL STATEMENTS AND

SUPPLEMENTARY DATA

Consolidated financial statements and supplementary

data required by this Item 8 follow.

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firms (PCAOB ID Number 688 ) F-2

1 unchanged sentence

Consolidated Statements of Operations for the Years Ended December 31, 2024 and 2023 F-4

Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholder’s Equity for the Years Ended December 31, 2023 and 2022 F-5

Consolidated Statements of Changes in and Stockholders’ Equity

for the Years Ended December 31, 2024 and 2023 F-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023 F-6

Notes to the Consolidated Financial Statements F-7

of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm

the Shareholders and Board of Directors of

1 unchanged sentence

on the Financial Statements

We have audited the accompanying consolidated

balance sheets of Dominari Holdings Inc.

and Subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated

statements of operations, changes in redeemable convertible preferred stock and stockholders’ equity and cash flows

for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company

as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December

31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and

are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules

and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal

control over financial reporting.

have audited the accompanying consolidated balance sheets of Dominari Holdings Inc.

(the “Company”) as of December 31, 2024

and 2023, the related consolidated statements of operations, changes in stockholders’ equity and cash flows for each of the two

years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, based on our audits, the financial statements present fairly, in all material respects, the financial position of the

Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period

ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material

misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures

included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation

of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

of Long Term Equity Investments

of December 31, 2024, the Company had $12.3 million of long term equity investments in companies without readily determinable fair values.

The Company typically measures these investments at cost less any impairment, adjusted for observable price changes in orderly transactions

for identical or similar investments of the same issuer.

We identified the valuation of these investments as a critical audit matter

because of the significant judgement management uses to estimate the carrying value of the investments.

This is a challenging audit area

due to the subjectivity used in assessing whether observable price changes have occurred for investments that are identical or similar

to the investment the Company holds, and in assessing whether or not an investment is impaired.

The following are the primary procedures we performed to address this

critical audit matter.

The critical audit matter communicated below is a matter arising from

the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective,

or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken

as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter

or on the accounts or disclosures to which they relate.

Valuation of Long-term Investments

As of December 31, 2023, the Company had $24.15 million of investments

in companies without readily determinable fair values.

The Company typically measures these investments at cost less any impairment, adjusted

for observable price changes in orderly transactions for an identical or similar investment.

We identified the valuation of these investments

as a critical audit matter because of the significant judgement management uses to estimate the investment value.

This is a challenging

audit area due to the subjectivity in assessing whether observable price changes have occurred for investments that are identical or similar

to the investment the Company holds, and in assessing whether an investment is impaired.

The following are the primary procedures we

performed to address this critical audit matter.

We obtained an understanding of management’s process for accounting for their

investments that do not have readily determinable fair values.

We considered the appropriateness of the Company’s application

of accounting policy by obtaining and reviewing the Company’s analysis and confirming its compliance with accounting

principles generally accepted in the United States.

We tested the mathematical accuracy of the Company’s carrying value

calculations.

We evaluated the accounting conclusions reached by the Company as to whether any observable transactions had occurred

that were identical or similar in nature through reading the Company’s available financial and other information regarding the

investee and through public searches for corroborating or contradictory information.

Further, we evaluated the appropriateness of

the Company’s impairment conclusions considering this internal and external information.

For certain investments, we utilized

our internal valuation group specialists to assess the appropriateness of the valuation methodologies and recompute the valuations

We also evaluated the adequacy of the Company’s disclosures in the notes to the consolidated financial statements in

relation to this matter.

We obtained an understanding of management’s process for accounting for those investments which do not have

readily determinable fair values.

We considered the appropriateness of the Company’s application of accounting policy by obtaining

and reviewing the Company’s analysis and confirming its compliance with accounting principles generally accepted in the United States.

We tested the mathematical accuracy of the Company’s carrying value calculations.

We evaluated the accounting conclusions reached

by the Company as to whether or not any observable and orderly transactions had occurred for an identical or similar investment in the

same issuer through reading the Company’s available financial and other information regarding the investee and through public searches

for corroborating or contradictory information and indicators of impairment.

Further, we evaluated the appropriateness of the Company’s

impairment conclusions considering this internal and external information.

For certain investments, we utilized our internal valuation

group specialists to assess the appropriateness of the valuation methodologies.

We also evaluated the adequacy of the Company’s

disclosures in the notes to the consolidated financial statements in relation to this matter.

have served as the Company’s auditor since 2022.

April 1, 2024

HOLDINGS INC.

Balance Sheets

DOMINARI HOLDINGS

Consolidated Balance Sheets

($ in thousands except share and per share amounts)

and cash equivalents

with clearing broker

expenses and other assets

acquisition cost

investments at fair value

receivable, at fair value - current portion

in Fieldpoint Securities

Current assets

and equipment, net

receivable, at fair value - non-current portion

AND STOCKHOLDERS’ EQUITY

payable and accrued expenses

salaries and benefits

liability - current

current liability

Cash and cash equivalents

Marketable securities

Receivable from clearing brokers

Prepaid expenses and other assets

Notes receivable, at fair value - current portion

Total current assets

Property and equipment, net

Notes receivable, at fair value - non-current portion

Long term equity investments

Loans to employees

Right-of-use assets

Security deposit

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Stockholders’

Accounts payable and accrued expenses

Accrued commissions

Contract liabilities - current

Lease liability - current

Other current liabilities

Total current liabilities

Contract liabilities, less current portion

Lease liability, less current portion

Total liabilities

Stockholders’ equity

Preferred stock, $.0001 par value, 50,000,000 authorized

Convertible Preferred Series D:

5,000,000 shares designated;

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

issued and outstanding as of December 31, 2024 and 2023;

liquidation value of $ 0.0001 per share

Convertible Preferred Series D-1:

5,000,000 shares designated;

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

issued and outstanding as of December 31, 2024 and 2023;

liquidation value of $ 0.0001 per share

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

5,995,065 and 5,485,096 shares issued at December 31, 2023 and 2022, respectively;

5,934,917 and 5,017,079 shares outstanding at December 31, 2023 and 2022, respectively

paid-in capital

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

stockholders’ equity

liabilities and stockholders’ equity

accompanying notes to consolidated financial statements.

HOLDINGS INC.

Statements of Operations

7,037,022 and 5,995,065 shares issued as of December 31, 2024 and 2023, respectively;

6,976,874 and 5,934,917 shares outstanding as of December 31, 2024 and 2023, respectively

Additional paid-in capital

Treasury stock, as of cost, 60,148 shares as of December 31, 2024 and 2023

Accumulated deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

See accompanying notes to consolidated financial

DOMINARI HOLDINGS INC.

Consolidated Statements of Operations

($ in thousands except share and per share amounts)

Ended December 31,

costs and expenses

and administrative

and development

and development - license acquired

operating expenses

from operations

income (expenses)

(loss) on marketable securities

loss on note receivable

in fair value of investments

Years Ended December 31,

Operating costs and expenses

General and administrative

Research and development

Research and development - license acquired

Total operating expenses

Loss from operations

Other income (expenses)

Interest income

Gain on marketable securities, net

Realized and unrealized loss on note receivable, net

Change in carrying value of investments

Total other expenses

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

Loss Attributable to Common Shareholders

Net loss per share, basic and diluted

2 unchanged sentences

Basic and Diluted

accompanying notes to consolidated financial statements.

HOLDINGS INC.

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

See accompanying notes to consolidated financial

DOMINARI HOLDINGS INC.

Consolidated Statements of Changes in Stockholders’ Equity

($ in thousands except share and per share amounts)

Convertible Preferred Stock

Preferred Stock

Treasury Stock

Stockholders’

1 unchanged sentence

$ ( 185,881 )

of Series O redeemable convertible preferred stock for cash

of Series P redeemable convertible preferred stock for cash

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

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

of Series O Redeemable Convertible Preferred Stock

of Series P Redeemable Convertible Preferred Stock

of treasury stock

of common stock related to investment in CBM

shares adjusted for reverse split

at December 31, 2022

Stock-based compensation

Cancellation of common stock

Purchase of treasury stock

Retirement of treasury stock

Balance at December 31, 2023

$ ( 208,763 )

of common stock

of treasury stock

at December 31, 2023

Stock-based compensation

Balance at December 31, 2024

$ ( 223,466 )

accompanying notes to consolidated financial statements.

HOLDINGS INC.

Statements of Cash Flows

See accompanying notes to consolidated financial

DOMINARI HOLDINGS INC.

Consolidated Statements of Cash Flows

($ in thousands)

4 unchanged sentences

Change in fair value of short-term investment

Change in fair value of long-term investment

Research and development-acquired license, expensed

Change in carrying value of long-term investment

Non-cash warrant revenue

Stock-based compensation

Realized loss on marketable securities

Realized (gain) loss on marketable securities

Unrealized (gain) loss on marketable securities

Unrealized loss on note receivable

Realized and unrealized loss on note receivable

Realized gain on receiving shares in exchange of note receivable extension

2 unchanged sentences

Prepaid acquisition cost

Clearing broker deposits

Receivable from clearing brokers

Accounts payable and accrued expenses

Accrued salaries and benefits

Accrued commissions

Contract liabilities

Lease liabilities

3 unchanged sentences

Cash flows from investing activities

Purchase of membership interest in FPS

Purchase of marketable securities

Sale of marketable securities

Proceeds from sale of digital currencies

Purchase of fixed assets

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

Return of deposit (funding of deposit) into a managed account, net

Collection of principal on note receivable

Funds to employee forgivable loan

Purchase of research and development licenses

Purchase of short-term and long-term investments

Purchase of short-term and long-term promissory notes

Net cash used in investing activities

Loans to employees

Purchase of long-term investments

Redemption of long-term investments

Collection of loans to employees

Net cash provided by (used in) investing activities

Cash flows from financing activities

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

Payment for fractional shares

Redemption of Series O and Series P Redeemable Convertible Preferred Stock

Purchase of treasury stock

Net cash used in financing activities

Net decrease in cash and cash equivalents and restricted cash

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

4 unchanged sentences

Note receivable principal and interest receivable reduced due to receiving shares

Transfer from short-term investment to marketable securities

Reclassify from convertible note receivable to notes receivable at fair value

Transfer from long-term investment to marketable securities

Promissory convertible note receivable conversion into common shares

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

On March 27, 2023, the Company acquired all assets and liabilities of FPS:

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

1 unchanged sentence

Net cash paid

accompanying notes to consolidated financial statements.

See accompanying notes to consolidated financial

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

to Consolidated Financial Statements

Organization and Description of Business and Recent Developments

and Description of Business

Holdings Inc.

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

Since 2017, the

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

their related patent technology.

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

services subsidiary, Dominari Financial Inc.

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

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

Through Dominari Financial, the Company acquired

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

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

Dominari Securities provides investment advisory services and annuity and insurance products of certain insurance carriers as an insurance

agency through independent and affiliated brokers.

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

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

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

registered with the Financial Industry Regulatory Authority (“FINRA”) and an investment adviser registered with the Securities

and Exchange Commission (“SEC”).

Pursuant to the terms of the FPS Purchase Agreement, Dominari purchased from

the Seller 100 % of the membership interests in FPS (the “Membership Interests”).

FPS’s registered broker-dealer and

investment adviser businesses will be operated as a wholly owned subsidiary of Dominari.

The FPS Purchase Agreement provides for

Dominari’s acquisition of FPS’s Membership Interests in two closings, the first of which occurred on October 4, 2022

(the “Initial Closing”), at which Dominari paid to the Seller $ 2.0 million in consideration for a transfer by the Seller

to Dominari of 20 % of the FPS Membership Interests.

Following the Initial Closing, FPS filed a continuing membership application

requesting approval for a change of ownership, control, or business operations with FINRA in accordance with FINRA Rule 1017 (the “Rule

1017 Application”).

Notes to Consolidated Financial Statements

Organization and Description of Business

and Recent Developments

Organization and Description of Business

Dominari Holdings Inc.

(the “Company”),

formerly AIkido Pharma, Inc., was founded in 1967 as Spherix Incorporated.

Since 2017, the Company operated as a biotechnology company

with a diverse portfolio of small-molecule anticancer and antiviral therapeutics and their related patent technology.

The Company is in

the process of winding down its historical pipeline of biotechnology assets held by Aikido Labs, LLC.

In an effort to enhance shareholder

value, in June of 2022, the Company formed a wholly owned financial services subsidiary, Dominari Financial Inc.

(“Dominari Financial”),

with the intent of shifting the Company’s primary operating focus away from biotechnology to the fintech and financial services

Through Dominari Financial, the Company acquired Dominari Securities LLC (“Dominari Securities”), an introducing

broker-dealer, a member of the Financial Industry Regulatory Authority (“FINRA”) and an investment adviser registered with

the Securities and Exchange Commission (“SEC”).

Dominari Securities is also licensed to provide investment advisory services

and annuity and insurance products of certain insurance carriers as an insurance agency through independent and affiliated brokers.

On September 9, 2022, Dominari Financial entered

into a membership interest purchase agreement, as amended and restated on March 27, 2023 (the “FPS Purchase Agreement”) with

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

Private Securities, LLC, a Connecticut limited liability company (“FPS”), that is a broker-dealer, a member of FINRA and an

investment adviser registered with the SEC.

Pursuant to the terms of the FPS Purchase Agreement, Dominari Financial purchased

from the Seller 100 % of the membership interests in FPS (the “Membership Interests”).

The registered broker-dealer and investment

adviser businesses will be operated as a wholly owned subsidiary of Dominari Financial.

The FPS Purchase Agreement provided for

Dominari Financial’s acquisition of FPS’ Membership Interests in two closings, the first of which occurred on October

4, 2022 (the “Initial Closing”), at which Dominari Financial paid to the Seller $ 2.0 million in consideration for a transfer

by the Seller to Dominari Financial 20 % of the FPS Membership Interests.

Following the Initial Closing, FPS filed a continuing

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

Rule 1017 (the “Rule 1017 Application”).

The Rule 1017 Application was approved by FINRA on March 20, 2023.

The second closing occurred on March

Dominari paid to the Seller an additional $ 1.4 million in consideration for a transfer by the Seller to Dominari of the remaining

80 % of the Membership Interests.

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

Stock Split”).

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

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

The Reverse Stock Split

was effective on June 7, 2022.

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

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

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

periods presented.

Payment for fractional shares resulting from the reverse stock split amounted to $ 26,000 .

closing occurred on March 27, 2023.

Dominari Financial paid to the Seller an additional $ 1.4 million in consideration for a transfer by

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

As a result of the ownership change, FPS was renamed

Dominari Securities LLC.

On October 13, 2023, the Company entered into

two separate Limited Liability Agreements with Dominari Manager LLC (“Manager”) and Dominari IM LLC (“Investment Manager”)

which are both wholly owned subsidiaries and whose operations are included within the consolidated financial statements of Dominari Holdings

Manager was named as the manager of Dominari Master SPV LLC (the “Master SPV”), a limited liability company formed by

the Company in 2022, and is responsible for the day-to-day operations of the Master SPV.

Investment Manager was named the investment manager

of Master SPV and is responsible for providing investment advice and decisions on behalf of the Master SPV.

Beginning in March 2024, the

Manager established various series of funds (the “Series”) of the Master SPV for the purpose of making investments in companies

identified by the Investment Manager with proceeds generated by the sale of non-voting interests in such Series by the Master SPV to investors,

in which the Company may, from time to time as it deems appropriate, also invest in such series alongside third-party investors.

On May 21, 2024, Dominari Financial and Heritage

Strategies LLC (“HS”) entered into a Limited Liability Company Operating Agreement (the “JV Agreement”) of Dominari

Financial Heritage Strategies LLC (“DFHS”).

The JV Agreement governs the operation of DFHS, including the distributions to

the members of DFHS upon the offer, sale and renewal of various insurance products and services, including life insurance, private placement

insurance, group medical plans, qualified plans, business insurance, and family office and estate planning services.

Pursuant to the terms

of the JV Agreement, Dominari Financial and HS are the co-managing members (the “Co-Managing Members”), each with fifty percent

( 50 %) ownership interests in DFHS.

Revenues from the sale of the various insurance products and services after deducting general and administrative

costs are distributed to the Co-Managing Members as set forth in the JV Agreement.

Liquidity and Capital Resources

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

related) revenue.

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

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

upon projected cash flow requirements, the Company has adequate cash and cash equivalents and marketable securities to fund its operations

for at least the next twelve months from the date of the issuance of these consolidated financial statements.

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

The Company continues to incur ongoing administrative

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

While the Company continues

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

past equity offerings.

As of December 31, 2024, the Company has approximately

$ 4 million of cash and cash equivalents and $ 5.8 million of marketable securities.

Additionally, the Company had approximately $ 17 million

in receivable from clearing brokers.

As disclosed in Note 18, subsequent to December 31, 2024, the Company raised approximately $ 13.5

All of such funds are available to fund the Company’s operations.

Based upon projected cash flow requirements, the Company

has adequate cash and cash equivalents and marketable securities, together with the anticipated cash flow from operations to fund its

operations for at least the next twelve months from the date of the issuance of these consolidated financial statements.

Summary of Significant Accounting Policies

of Presentation and Principles of Consolidation

accompanying consolidated financial statements have been prepared in accordance with U.S.

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements

have been prepared in conformity with U.S.

generally accepted accounting principles (“U.S.

GAAP”) for financial information.

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

voting stock.

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries,

Aikido Labs, Dominari Financial, and Dominari Securities.

All significant intercompany balances and transactions have been eliminated

in consolidation.

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

This requires management to make estimates

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

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

The Company’s

significant estimates and assumptions include stock-based compensation, the valuation of investments, the valuation of notes receivable

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

Certain of the Company’s estimates could be affected

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

It is reasonably possible that these external

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

segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the

Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance.

The CODM reviews financial information for the purposes of making operating decisions, allocating resources, and evaluating financial

performance of the business of the reportable operating segments, based on discrete financial information.

The Company’s chief

executive officer is the CODM.

The measures of segment profitability that are most relied upon by the CODM are gross revenues and net

Concentration

Company maintains cash balances at four financial institutions in checking accounts.

From time to time, the Company’s cash account

balances exceed the balances as covered by the Federal Deposit Insurance System.

The Company has never suffered a loss due to such excess

As of December 31, 2023 and 2022, the Company had no cash equivalents.

securities are classified as trading and are carried at fair value.

The Company’s marketable securities consist of highly liquid

mutual funds and exchange-traded & closed-end funds which are valued at quoted market prices.

and Equipment

and equipment are stated at cost.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets,

which range from three to five years .

Property and equipment held under finance leases are amortized on a straight-line basis over the

shorter of the lease term or estimated useful life of the asset.

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

and Development

and development costs, including acquired in-process research and development expenses for which there is no alternative future use,

are expensed as incurred.

Advance payments for goods and services that will be used in future research and development activities are

expensed when the activity has been performed or when the goods have been received rather than when the payment is made.

Company accounts for the issuance of common stock purchase warrants issued in connection with the equity offerings in accordance with

the provisions of Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging (“ASC 815”).

The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) gives the Company

a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement).

Company accounts for share-based payment awards exchanged for services at the estimated grant date fair value of the award.

Stock options

issued under the Company’s long-term incentive plans are granted with an exercise price equal to no less than the market price

of the Company’s stock at the date of grant and expire up to ten years from the date of grant.

These options generally vest over

a one- to five-year period.

Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating

the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application

of management’s judgment.

Term - The expected term of options represents the period that the Company’s stock-based awards are expected to be outstanding

based on the simplified method, which is the half-life from vesting to the end of its contractual term.

Volatility - The Company computes stock price volatility over expected terms based on its historical common stock trading prices.

Interest Rate - The Company bases the risk-free interest rate on the implied yield available on U.

Treasury zero-coupon issues with

an equivalent remaining term.

Dividend - The Company has never declared or paid any cash dividends on its common shares and does not plan to pay cash dividends in

the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models.

Company accounts for forfeitures as they occur.

Value Option - Short-term Note and Convertible Note

guidance in ASC 825, Financial Instruments , provides a fair value option election that allows entities to make an irrevocable

election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities.

Company has elected to measure the purchases of its notes using the fair value option at each reporting date.

Under the fair value option,

bifurcation of an embedded derivative is not necessary, and all related gains and losses on the host contract and derivative due to change

in the fair value will be reflected in interest income and other, net in the consolidated statements of operations.

Interest accrues

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

decision to elect the fair value option is determined on an instrument-by-instrument basis and must be applied to an entire instrument

and is irrevocable once elected.

Pursuant to this guidance, assets and liabilities are measured at fair value based, in part, on general

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

The carrying value is adjusted

to estimated fair value at the end of each quarter, required to be reported separately in our consolidated balance sheets from those

instruments using another accounting method.

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

with clearing broker

with Dominari Securities’ clearing broker consisted of approximately $ 6.7 million held in money market funds and liquid insured

deposits maintained by the Company with its clearing broker as of December 31, 2023.

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

Under this guidance, arrangements meeting

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

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

the lease or the Company’s incremental borrowing rate.

Lease liabilities are increased by interest and reduced by payments each

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

For operating leases, interest on the lease liability and the amortization

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

For finance leases, interest on the lease liability

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

Variable lease expenses are recorded

when incurred (see Note 11 - Leases ).

Company recognizes revenues under ASC 606 - Revenue from Contracts with Customers (“ASC 606”) .

are recognized when control of the promised goods or performance obligations for services is transferred to the Company’s customers,

in an amount that reflects the consideration the Company expects to be entitled to in exchange for the goods or services (see Note 15

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

services include underwriting and placement agent services in both the equity and debt capital markets, including private equity

placements, initial public offerings, follow-on offerings, and underwriting and distributing public and private debt.

and placement agent revenues are recognized at a point in time on trade-date, as the client obtains the control and benefit of the

underwriting offering at that point.

Costs associated with underwriting transactions are deferred until the related revenue is recognized

or the engagement is otherwise concluded and are recorded on a gross basis within the general and administrative line item in the

consolidated statements of operations as the Company is acting as a principal in the arrangement.

Any expenses reimbursed by the

Company’s clients are recognized as other income.

are earned by executing, transactions for clients primarily in equity, equity-related, and debt products.

Commission revenues associated

with trade execution are recognized at a point in time on trade-date.

Commissions revenues are generally paid on settlement date

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

advisory fees are earned in connection with investment advisory services.

Account advisory fees are recognized over time using

the time elapsed method as the Company determined that the customer simultaneously receives and consumes the benefits of investment

advisory services as they are provided.

Account advisory fees are generally paid in advance of a specified service period (e.g.

and are initially deferred within in our Consolidated Balance Sheet.

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

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

GAAP”), and in conformity with

the rules and regulations of the SEC.

The Company’s policy is to consolidate all

entities that it controls by ownership of a majority of the membership interest or outstanding voting stock.

The accompanying consolidated

financial statements include the accounts of the Company and its wholly owned subsidiaries, Aikido Labs, Dominari Financial, and Dominari

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

2024, the Company entered into a limited liability company operating agreement to form Dominari Financial Heritage Strategies LLC (“DFHS”).

The Company has a 50 % interest in DFHS.

The purpose of DFHS is to sell various insurance products and services, including life insurance,

private placement insurance, group medical plans, qualified plans, business insurance, and family office and estate planning services.

Company has determined it is not the primary beneficiary of DFH and thus will not consolidate the activities in its consolidated financial

The Company will account for its interest in DFHS under the equity method accounting in accordance with ASC 323.

of December 31, 2024, there has been no material activity in DFHS.

Use of Estimates

The accompanying consolidated financial statements

have been prepared in conformity with U.S.

This requires management to make estimates and assumptions that affect certain reported

amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements,

and the reported amounts of revenue and expenses during the period.

The Company’s significant estimates and assumptions include

stock-based compensation, the valuation of investments, the valuation of notes receivable and the valuation allowance related to the Company’s

deferred tax assets.

Certain of the Company’s estimates could be affected by external conditions, including those unique to the

Company and general economic conditions.

It is reasonably possible that these external factors could have an effect on the Company’s

estimates and could cause actual results to differ from those estimates and assumptions.

Concentration of Cash

The Company maintains cash balances at four financial

institutions in checking accounts.

From time to time, the Company’s cash account balances exceed the balances as covered by the

Federal Deposit Insurance System.

The Company has never suffered a loss due to such excess balances.

As of December 31, 2024 and 2023,

the Company had no cash equivalents.

Marketable Securities

Marketable securities are classified as trading

and are carried at fair value.

The Company’s marketable securities consist of highly liquid mutual funds, exchange-traded &

closed-end funds which are valued at quoted market prices, as well as warrants of publicly listed companies received as consideration

for underwriting services provided.

Property and Equipment

Property and equipment are stated at cost.

is computed using the straight-line method over the estimated useful lives of the assets, which range from three to five years .

and equipment held under finance leases are amortized on a straight-line basis over the shorter of the lease term or estimated useful

life of the asset.

Research and Development

Research and development costs, including acquired

in-process research and development expenses for which there is no alternative future use, are expensed as incurred.

Advance payments

for goods and services that will be used in future research and development activities are expensed when the activity has been performed

or when the goods have been received rather than when the payment is made.

Accounting for Warrants

The Company accounts for the issuance of common

stock purchase warrants issued in connection with the equity offerings in accordance with the provisions of Accounting Standards Codification

(“ASC”) 815, Derivatives and Hedging (“ASC 815”).

The Company classifies as equity any contracts that (i)

require physical settlement or net-share settlement or (ii) gives the Company a choice of net-cash settlement or settlement in its own

shares (physical settlement or net-share settlement).

Stock-based Compensation

The Company accounts for share-based payment awards exchanged for services

at the estimated grant date fair value of the award.

Stock options issued under the Company’s long-term incentive plans are granted

with an exercise price equal to no less than the market price of the Company’s stock at the date of grant and expire up to ten years

from the date of grant.

These options generally vest over a one- to five-year period.

The Company estimates the fair value of

stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating the fair value of stock-based

awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment.

The Company recognizes stock-based compensation expense on a graded-vesting basis over the requisite service period for each separately

vesting tranche of each award.

Expected Term - The expected term of options represents

the period that the Company’s stock-based awards are expected to be outstanding based on the simplified method, which is the half-life

from vesting to the end of its contractual term.

Expected Volatility - The Company computes stock price volatility over

expected terms based on its historical common stock trading prices.

Risk-Free Interest Rate - The Company bases the

risk-free interest rate on the implied yield available on U.

Treasury zero-coupon issues with an equivalent remaining term.

Expected Dividend - Through December 31, 2024,

the Company has never declared or paid any cash dividends on its common shares and did not plan to pay cash dividends in the foreseeable

future, and, therefore, used an expected dividend yield of zero in its valuation models.

Subsequent to December 31, 2024, on February

11, 2025, the Company declared a special cash dividend.

The Company accounts for forfeitures as they occur.

Fair Value Option - Short-term Note and Convertible Note

The guidance in ASC 825, Financial Instruments ,

provides a fair value option election that allows entities to make an irrevocable election of fair value as the initial and subsequent

measurement attribute for certain eligible financial assets and liabilities.

The Company has elected to measure the purchases of its notes

using the fair value option at each reporting date.

Under the fair value option, bifurcation of an embedded derivative is not necessary,

and all related gains and losses on the host contract and derivative due to change in the fair value will be reflected in interest income

and other, net in the consolidated statements of operations.

Interest accrues on the unpaid principal balance on a quarterly basis and

is recognized in interest income in the consolidated statements of operations.

The decision to elect the fair value option is

determined on an instrument-by-instrument basis and must be applied to an entire instrument and is irrevocable once elected.

to this guidance, assets and liabilities are measured at fair value based, in part, on general economic and stock market conditions and

those characteristics specific to the underlying investments.

The carrying value is adjusted to estimated fair value at the end of each

quarter, required to be reported separately in our consolidated balance sheets from those instruments using another accounting method.

Receivable from Clearing Brokers

Receivable from Dominari Securities’ clearing

brokers consisted of approximately $ 15.4 million of liquid insured deposits, $ 1.3 million of commissions receivable and $ 0.6 million of

good faith deposits maintained by the Company with its clearing brokers as of December 31, 2024.

Receivable from Dominari Securities’

clearing brokers consisted of approximately $ 7.2 million of liquid insured deposits and $ 0.5 million of good faith deposits maintained

by the Company with its clearing brokers as of December 31, 2023.

Such amount is stated at the amount the Company expects to collect.

The Company maintains allowances for credit losses for estimated losses resulting from the inability of its clearing brokers to make required

Management considers the following factors when determining the collectability of specific accounts:

customer credit-worthiness,

past transaction history with the customer, current economic industry trends, and changes in customer payment terms.

If the financial

condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would

Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and

a credit to a valuation allowance.

As of December 31, 2024 and 2023 an allowance for credit losses was not deemed necessary.

The Company accounts for its leases under ASC

842, Leases (“ASC 842”).

Under this guidance, arrangements meeting the definition of a lease are classified

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

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

borrowing rate.

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

over the lease term.

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

rent expense over the lease term.

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

in front-loaded expense over the lease term.

Variable lease expenses are recorded when incurred (see Note 9 - Leases ).

The Company recognizes revenue under ASC

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

Revenue is recognized when control of

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

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

The following provides detailed information on

the recognition of the Company’s revenue from contracts with customers:

Underwriting services include underwriting and

private placement agent services in both the public and private equity and debt capital markets, including private equity placements,

initial public offerings, follow-on offerings, and underwriting and distributing public and private debt.

Underwriting and placement agent

revenue are recognized at a point in time on trade-date, as the client obtains the control and benefit of the underwriting offering at

The Company expenses any costs associated with underwriting transactions and they are recorded on a gross basis within the

general and administrative line item in the consolidated statements of operations as the Company is acting as a principal in the arrangement.

The Company applies the practical expedient under ASC 606, as any such costs would by amortized in one year or less.

The Company also

provides investment banking services.

Investment banking services typically include fees earned for acting as a financial advisor for

mergers and acquisitions or similar transactions.

These services provided by the Company are not distinct from the potential transaction

that may occur.

Due to this, the Company believes the performance obligation for providing investment banking services is satisfied when

the earliest occurs (i) termination of the engagement letter, (ii) expiration of engagement letter or (iii) successful transaction has

Any non-cash consideration earned by the Company

in providing the aforementioned services is recorded at fair value in accordance with ASC 820, on the date that revenue is recognized.

Commissions are earned by executing transactions for clients primarily in equity, equity-related, and debt products.

Commission revenue associated with trade execution are recognized at a point in time on trade-date.

Commissions revenue are generally paid on settlement date and the Company records receivables to account for timing between trade-date and payment on settlement date and are included in receivable from clearing brokers on the accompanying consolidated balance sheet.

● Account advisory and management fees are two revenue streams which are both recognized over time.

Please see further description below:

o The Company

earns revenue for performing account advisory and investment advisory services for customers based on contractually fixed rates applied,

as a percentage, to the market value of assets in a customer’s account.

The performance obligation for investment advisory services

is considered a series of distinct services that are substantially the same and are satisfied each day of the contract and are recognized

as revenue over time.

Investment advisory fees are payable in arrears on a quarterly basis.

fees represent asset-based fees received in exchange for providing management services to certain related party pooled investment vehicles

These fees are charged based upon contractually fixed rates applied, as a percentage, to the total assets of those pooled investment

vehicles managed by the Company at the date upon which an investor subscribes into the fund, subsequently deferred.

The Company recognizes

these revenues over time as the Company has determined that the customer simultaneously receives and consumes the benefits of the management

services as they are provided.

Revenues are typically recognized over a period of five years, which the Company has estimated to be a

reasonable estimate of the period during which the Company shall provide management services.

Contract liabilities relate to payments received in advance of performance

under the contract and are the result of remaining performance obligations for management services.

Contract liabilities are recognized

as revenues when the Company provides ongoing investment management services.

During the year ending December 31, 2024, Manager received

approximately $ 1.2 million of cash which will be recognized over time.

As of December 31, 2024, $ 1.1 million of such revenue has been

deferred and is included in contract liabilities on the accompanying consolidated balance sheet.

Approximately $ 0.2 million is expected

to be recognized during the year ending December 31, 2025, and is recorded in current liabilities.

The remaining balance is expected to

be recognized through 2029.

Other revenue includes revenues such as miscellaneous fees and reimbursed expenses.

Other revenue is recognized as revenue ratably over the period that such services are provided which are distinct from the services provided in other periods.

Type of other revenue include trailing fees for mutual funds 12b- 1, variable annuity, fixed annuities, and insurance products.

These trailing fees are paid by product partners for ongoing services and/or advice provided to underlying investor accounts.

Trailing fees are recognized as income when earned, usually monthly or quarterly as net asset value is determined.

The Company uses the asset and liability method

24 unchanged sentences

expense in the statement of operations.

January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2016-01 and related ASU 2018-03 and ASU 2019-04

concerning recognition and measurement of financial assets and financial liabilities.

In adopting this guidance, the Company has made

an accounting policy election to adopt an adjusted cost method measurement alternative for investments in equity securities without readily

determinable fair values.

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

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

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

adopted accounting standards

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

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

This update amends Topic 805 to add contract assets and contract

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

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

adopted ASU 2021-08 on January 1, 2023.

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

from the implementation of ASU 2021-08.

of new accounting pronouncements not yet adopted

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

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

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

ASU 2022-03 also clarifies

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

The amendments in ASU 2022-03 may

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

those fiscal years.

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

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

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

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

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

The amendments are effective in periods beginning

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

The Company is currently evaluating the provisions of the

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

of new accounting pronouncements to be adopted in future periods

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

to have a significant impact on these consolidated financial statements.

FPS Acquisition

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

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

purchase of its wholly owned subsidiary, Fieldpoint Private Securities, LLC, a Connecticut limited liability company (“FPS”),

that is a broker-dealer registered with FINRA and an investment adviser registered with the SEC (the “FPS Acquisition”).

to the terms of the FPS Purchase Agreement, Dominari Financial purchased from the Seller 100 % of the membership interests in FPS

(the “FPS Membership Interests”).

FPS’s registered broker-dealer and investment adviser businesses were renamed and

will operate as Dominari Securities, a wholly owned subsidiary of Dominari Financial.

The FPS Purchase Agreement provided for Dominari

Financial’s acquisition of FPS’s Membership Interests in two closings, the first of which occurred on October 4, 2022

(the “Initial Closing”), at which Dominari Financial paid to the Seller $ 2.0 million in consideration for a transfer

by the Seller to Dominari Financial of 20 % of the FPS Membership Interests.

Following the Initial Closing, FPS filed a continuing

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

Rule 1017 (the “Rule 1017 Application”).

The Rule 1017 Application was approved by FINRA on March 20, 2023.

closing occurred on March 27, 2023.

Dominari Financial paid to the Seller an additional approximate $ 1.4 million consideration for

a transfer by the Seller to Dominari Financial of the remaining 80 % of the FPS Membership Interests.

Consideration

FPS Acquisition was accounted for as a business combination under ASC 805.

the terms of the FPS Purchase Agreement and subsequent amendments and side letters to the agreement 100 % of the FPS Membership Interests

were acquired for cash consideration of approximately $ 3.4 million, which reflected the fair value of net assets acquired, plus a $ 1

purchase price.

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

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

Acquisition-related costs are not included as a component of

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

The Company incurred approximately $ 0.3 million

of transaction costs associated with the FPS Acquisition.

The transaction costs are included in general and administrative expenses in

the consolidated statement of operations.

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

Value of Net Assets Acquired

following table summarizes the fair values of the assets acquired and liabilities assumed of FPS at the date of acquisition ($ in thousands):

Cash and cash equivalents

Deposits with Clearing Broker-Dealer

Other receivables

Prepaid and other current assets

Total assets acquired

Accrued expenses

Accrued commissions

Wealth management liabilities

Total liabilities assumed

Total net assets of FPS Acquisition

Investments in Marketable Securities

realized gain or loss, unrealized gain or loss, and dividend income related to marketable securities for the years ended December 31,

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

are as follows ($ in thousands):

Long-term Equity Investments

The Company accounts for long-term equity investments

under Accounting Standards Codification (“ASC”) 321 “Investments—Equity Securities” (“ASC 321”).

In accordance with ASC 321, equity securities with readily determinable fair values are accounted for at fair value based on quoted market

Any equity securities with a readily determinable fair value are included within marketable securities on the accompanying consolidated

balance sheet.

Equity securities without readily determinable fair values are accounted for either at net asset value or using the measurement

Under the measurement alternative, the equity investments are measured at cost, less any impairment, if any, plus or minus

changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

Recently Adopted Accounting Standards

In October 2021, the Financial Accountings Standards

Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805) Accounting

for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”).

This update amends Topic

805 to add contract assets and contract liabilities to the list of exceptions to the recognition and measurement principles that

apply to business combinations and to require that an entity (acquirer) recognize and measure contract assets and contract liabilities

in accordance with ASC 606.

The Company adopted ASU 2021-08 on January 1, 2023.

There was no material impact to the Company’s

consolidated financial statements from the implementation of ASU 2021-08.

In June 2022, the FASB issued ASU 2022-03, Fair

Value Measurement of Equity Securities Subject to Contractual Sale Restrictions , to clarify that a contractual restriction on the

sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring

the fair value of the equity security.

ASU 2022-03 also clarifies that an entity cannot recognize and measure a contractual

sale restriction as a separate unit of account.

The amendments in ASU 2022-03 may be early adopted and are effective on

a prospective basis for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.

The Company adopted ASU

2022-03 on January 1, 2024.

There was no material impact to the Company’s consolidated financial statements from the implementation

of ASU 2022-03.

In March 2023, the FASB issued ASU 2023-01,

Leases , to require entities to classify and account for leases with related parties on the basis of legally enforceable terms

and conditions of the arrangement.

The amendments are effective in periods beginning after December 15, 2023, including interim periods

within those fiscal years.

The Company adopted ASU 2023-01 on January 1, 2024.

There was no material impact to the Company’s

consolidated financial statements from the implementation of ASU 2023-01.

In November 2023, the FASB issued ASU No.

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires enhanced disclosures regarding significant

segment expenses and other segment items for public entities on both an annual and interim basis.

Specifically, the update required that

entities provide, during interim periods, all disclosures related to a reportable segment’s profit or loss and assets that were previously

required only on an annual basis.

Additionally, this guidance necessitates the disclosure of the title and position of the Chief Operating

Decision Maker (“CODM”).

The new guidance does not modify how a public entity identifies its operating segments, aggregates

them, or applies the quantitative thresholds to determine its reportable segments.

This update is effective for fiscal years beginning

after December 15, 2023, and interim periods within those fiscal years starting after December 15, 2024.

This ASU must be applied retrospectively

to all prior periods presented.

The Company adopted this ASU during the year ended December 31, 2024.

Effect of new accounting pronouncements to

be adopted in future periods

The Company reviewed all other recently issued

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

financial statements, besides below.

In December 2023, the FASB issued ASU 2023-09,

Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income

tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements.

2023-09 is effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company’s management

does not believe the adoption of ASU 2023-09 will have a material impact on its consolidated financial statements and disclosures.

Marketable Securities

The realized gain or loss, unrealized gain or

loss, and dividend income related to marketable securities for the years ended December 31, 2024 and 2023, which are recorded as a component

of gains and (losses) on marketable securities on the consolidated statements of operations, are as follows ($ in thousands):

Years Ended December 31,

Realized loss

Realized gain (loss)

Unrealized gain (loss)

Dividend income

Short-term investments

following table presents the Company’s short-term investments as of December 31, 2023 and 2022 ($ in thousands):

Investment in Vicinity Motor Corp.

change in the fair value of the short-term investments for the year ended December 31, 2023, is summarized as follows:

($ in thousands):

Beginning balance

Change in fair value of short-term investment

Ending balance

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

in Vicinity Motor Corp.

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

(“Vicinity”) that entitles the Company

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

The warrant expires on October 25, 2024.

The fair value

was determined using a Black-Scholes simulation.

The Company recorded the fair value of the Vicinity warrant of approximately $0 and

$ 13 ,000 in the consolidated balance sheet as of December 31, 2023 and 2022, respectively, reflecting the benefit received as part of

its purchase of Vicinity common stock through its brokerage account.

Gains or losses associated with changes in the fair value of investments

in Vicinity warrants are recognized as change in fair value of investment on the consolidated statements of operations.

During the year

ended December 31, 2023, the Company recorded approximately $ 13 ,000 of change in fair value of investment for this investment.

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

Option term (in years)

Risk-free interest rate

Expected dividends

Long-Term Investments

Company holds interests in several privately held companies as long-term investments that the Company perceives as potential IPO candidates.

The following table presents the Company’s long-term investments as of December 31, 2023 and 2022 ($ in thousands):

Investment in Kerna Health Inc

Investment in Kaya Now

Investment in Tevva Motors

Investment in ASP Isotopes

Interest and dividend income

Long-Term Equity Investments

The Company holds interests in several privately

held companies as long-term investments.

The following table presents the Company’s long-term investments as of December 31, 2024

and 2023 ($ in thousands):

December 31, 2024

December 31, 2023

Carrying Value

Investment in Kerna Health

Investment in Kaya Now, Inc.

Investment in Big Sky Opportunities Fund LLC (Tevva Motors Limited)*

Investment in Unusual Machines ***

Investment in Qxpress*

Investment in Masterclass*

Investment in Kraken*

Investment in Epic Games*

Investment in Tesspay**

Investment in SpaceX*

Investment in Databricks*

Investment in Discord*

Investment in Thrasio*

Investment in Automation Anywhere*

Investment in Anduril*

change in the value of the long-term investments for the year ended December 31, 2023, is summarized as follows:

($ in thousands):

* Investments

made in these companies are through a Special Purpose Vehicle (“SPV”).

Investment in Revere Master SPV Series 1 (Qxpress Pte Ltd)*

Investment in MW LSV MasterClass, LLC (Yanka Industries, Inc.

Masterclass)*

Investment in Payward, Inc.

and MWSI VC Kraken-II, LLC (Payward, Inc.

d.b.a.Kraken)* *

Investment in Aeon Partners Fund Series EG (Epic Games, Inc.)*

Investment in Tesspay, Inc.

and Revere Master SPV Series VI (TessPay, Inc.)**

Investment in Aeon Partners Fund Series G (SpaceX, Inc.)*

Investment in Aeon Partners Fund Series DB (Databricks, Inc.)*

Investment in Discord Inc.

Investment in Thrasio, Inc.

Investment in Automation Anywhere, Inc.

Investment in Dominari Master SPV LLC Series VI (X.AI Corp.

Investment in Dominari Master SPV LLC Series XI (Cerebras Systems Inc.)*

Investment in Dominari Master SPV LLC Series XII (Groq, Inc.)*

Investment in AdvEn Inc.

Investment in Forge Investments LLC Series Fund FG-MHM (Anduril Industries, Inc.)*

* Investments made in these companies are through a Special Purpose Vehicle (“SPV”).

The SPV is the holder of the actual stock.

does not hold these stock certificates directly.

** Investments

made in these companies are through both an SPV and direct investments.

Beginning balance

Purchase of investments

Receiving shares in exchange of note receivable extension

Change in fair value of long-term investments

Ending balance

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

The Company does not hold these stock certificates directly.

** Investments made in these companies are through both an SPV and direct investments.

*** Underlying company had an IPO transaction during 2024.

The Company has included the underlying investment in marketable securities as of December 31, 2024.

The Company recorded a decrease in the carrying

values of approximately $ 6.4 million for the year ended December 31, 2024.

Please see below details of the changes in carrying value by

Investment in Aeon Partners Fund Series

G (SpaceX, Inc.)

The Company redeemed its holdings in SpaceX in

April of 2024 totaling 36,842 shares of participating membership unites of SpaceX for $ 3.5 million.

This resulted in the

Company recording a decrease in the carrying value of the investment for the fiscal year ended December 31, 2024.

Investment in Dominari Master SPV LLC Series

VI (X.AI Corp.

On May 2, 2024, the Company entered into an agreement

(the “xAI Agreement”) with Dominari Master SPV LLC whereby the Company agreed to purchase 100,000 Series XI xAI

Units for $ 0.1 million.

During the Company’s fourth quarter 2024 review of the xAI investment, the Company noted a fourth quarter

funding round that slightly increased the carrying value.

As a result, as of December 31, 2024, the company recorded an increase in the

carrying value of $ 9,113 .

Investment in Dominari Master SPV LLC Series

XI (Cerebras Systems Inc.)

On June 17, 2024, the Company entered into an

agreement (the “Cerebras Agreement”) with Dominari Master SPV LLC whereby the Company agreed to purchase 25,000 Series

XI Cerebras Units for $ 25,000 .

Investment in Dominari Master SPV LLC Series

XII (Groq, Inc.)

On July 25, 2024, the Company entered into an

agreement (the “Groq Agreement”) with Dominari Master SPV LLC whereby the Company agreed to purchase 25,000 Series XII Groq

Units for $ 25,000 .

Investment in Unusual Machines

Unusual Machines, Inc, an emerging leader in first-person

view (FPV) drone technology, closed its initial public offering of common stock on February 14, 2024 at a public offering price of $ 4 per

share and the shares began trading on the NYSE American under the ticker symbol “UMAC”.

As of December 31, 2024, the value

of the Company’s holdings in UMAC are presented within the Marketable Securities line item of the financial statements, as the investment

has a readily determinable fair value.

Investment in Big Sky Opportunities Fund

LLC (Tevva Motors Limited)

On September 22, 2021, the Company entered into

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

the offering for Tevva Motors.

As of December 31, 2023 the investment was valued at $ 2.8 million.

During the second quarter of 2024,

the Company identified indicators of impairment for the Tevva investment as a result of liquidity concerns.

As a result, the Company recorded

an impairment charge of approximately $ 2.8 million and the investment in Tevva was valued at $0 as of December 31, 2024.

Investment in Tesspay, Inc.

and Revere Master SPV Series VI (TessPay,

On March 23, 2022,

the Company entered into a securities purchase agreement (the “Tesspay Securities Purchase Agreement”) with Tesspay.

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

$ 0.2 million.

The Company also invested an additional $ 1.0 million for pre-IPO shares with Revere Master SPV LLC-Series VI,

who handled the offering for Tesspay.

As of December 31, 2023 the investment was valued at $ 2.7 million.

Management noted that Tesspay

filed an amendment to its SEC Form S-1 Registration Statement on April 30, 2024 wherein Tesspay disclosed its intent to IPO at between

$ 5.0 and $ 6.0 price per share.

However, given the uncertainty around the probability of the timing of an IPO, the Company has

written its investment down to its cost basis.

Through the fiscal year 2024 the Company has recorded a decrease in the carrying value

of the investment of $ 1.4 million, with a carrying value of $ 1.2 million as of December 31, 2024.

Investment in Forge Investments LLC Series Fund FG-MHM (Anduril

Industries, Inc.)

The Company redeemed its holdings in Anduril in

November of 2024 totaling 14,880 shares of participating membership unites of Fund FG-MHM for net proceeds of $ 0.5 million.

This resulted in the Company recording a decrease in the carrying value of the investment for the fiscal year ended December 31, 2024.

Investment in Thrasio, Inc.

In April 2022, the Company entered into

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

aggregator of private brands of top Amazon businesses and direct-to-consumer brands.

As of December 31, 2023 the investment was valued

at $ 0.3 million.

During our first quarter 2024 review of the Thrasio investment Dominari noted news activity related to Thrasio had

filed for Chapter 11 bankruptcy protection.

As a result, the Company recorded an impairment charge of approximately $ 0.3 million

and the investment in Thrasio was valued at $0 as of December 31, 2024.

Investment in Aeon Partner Funds Series EG (Epic Games, Inc.)

On March 22, 2022, the Company entered into a securities purchase agreement

(the “Epic Games Securities Purchase Agreement”) with Aeon Partners Fund, Series EG, who handled the offering of Epic Games

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

stock of Epic Games for a total $ 1.5 million.

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

of additional shares of common stock of Epic Games through the Aeon Partners Fund, Series EG.

As of December 31, 2023 the investment was

valued at $ 3.5 million.

During the Company’s first quarter of 2024 review of the investment Dominari noted a $ 1.5 billion

funding round at a lower price per share than the Company’s initial investment in Epic Games resulting in a $ 1.3 million decrease

in the carrying value of this investment during the fiscal year ended December 31, 2024.

The investment was valued at $ 2.2 million

as of December 31, 2024.

Investment in Payward, Inc.

Kraken-II, LLC (Payward, Inc.

d.b.a.Kraken)

During the Company’s first quarter of 2024 review of the investment,

Dominari recorded a $ 0.2 million decrease in the carrying value of this investment during the fiscal year ended December 31, 2024.

The investment was valued at $ 0.3 million as of December 31, 2024.

Investment in AdvEn Inc.

On December 26,

2021, the Company entered into a securities purchase agreement (the “AdvEn Securities Purchase Agreement”) with AdvEn Inc.

(“AdvEn’), formerly known as Nano Innovations Inc.

Under the AdvEn Securities Purchase Agreement, the Company purchased a 10 %

senior secured convertible promissory note (the “AdvEn Convertible Note”) in the principal amount of $ 750,000 and warrants

(“AdvEn Warrants”, and together with the AdvEn Convertible Note, the “AdvEn Convertible Securities”) permitting

the Company to purchase an amount of AdvEn’s common voting shares equal to 50 % of the number of common shares issuable upon

the conversion of the AdvEn Convertible Note.

The Company paid a purchase price of $ 750,000 for the AdvEn Convertible Note and the

AdvEn Warrants.

In the fourth quarter of 2022, the Company identified indicators of impairment and recorded an impairment loss on the

total investment held.

On September 11, 2024, the Company entered into a securities exchange

agreement with AdvEn in which the Company agreed to cancel and retire the AdvEn Convertible Securities in exchange for a number of shares

of Series D preferred stock of AdvEn equal to 110 % of the outstanding amount of the AdvEn Convertible Note that was cancelled multiplied

by AdvEn’s initial public offering price, which is convertible into shares and warrants (the “Exchange”) and carries

a liquidation preference of $ 1,000 per share.

During the Company’s first quarter of 2024 review of the investment, Dominari

recorded a $ 0.1 million decrease in the carrying value of this investment during the fiscal year ended December 31, 2024.

The investment

was valued at $ 0.8 million as of December 31, 2024.

Investment in Aeon Partners Fund Series

DB (Databricks, Inc.)

In the fourth quarter of 2024, the Company partially

redeemed a portion of its membership units in Aeon Partner Funds Series DB (Databricks, Inc.).

In November of 2024, the Company redeemed

4,638.44 membership units and recognized a gain of approximately $ 31,000 from the carrying value of the investment from December 31, 2023.

The Company adjusted the carrying value of the remaining investment based on its November 2024 transaction, resulting in an increase of

$ 35,388 in the adjusted carrying value during the fiscal year ended December 31, 2024.

The investment was valued at $ 0.5 million as of

December 31, 2024.

Investment in Automation Anywhere, Inc.

In April 2022, the Company entered into a securities

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

During our fourth quarter review of its investment, the Company noted recent secondary transactions indicating a decrease in the

implied value of the investment per the Company’s independent third-party valuation.

As a result, the Company recorded and impairment

charge of approximately $ 80,000 and the investment in Automation Anywhere was valued at $ 0.4 million as of December 31, 2024.

Notes Receivable

following table presents the Company’s notes receivable as of December 31, 2023 and 2022 ($ in thousands):

Maturity Date

Stated Interest Rate

Principal Amount

Interest Receivable

The following table presents the Company’s notes receivable as

of December 31, 2024 and 2023 ($ in thousands):

December 31, 2024

Interest Rate Principal

Amount Interest

Receivable Fair Value

Notes receivable, at fair value

Convergent convertible note - current

Raefan Industries LLC Investment

American Innovative Robotics Investment

Convergent convertible note 12/2/2024 8 % $ -

Raefan Industries LLC 06/30/2025 8 % $ -

American Innovative Robotics 04/01/2027 8 % $ 1,106 $ 23 $ 902

Notes receivable, at fair value - current portion $ -

Notes receivable, at fair value - non-current portion $ 902

Short-term convertible notes receivable

Convergent Investment

Short-term notes receivable

Raefan Industries LLC Investment

Long-term notes receivable

American Innovative Robotics Investment

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

Therapeutics, Inc.

Company’s 8 % convertible promissory note (“Convergent Convertible Note”) issued by Convergent Therapeutics, Inc.

(“Convergent”) in the principal amount of approximately $ 1.8 million pursuant to a Note Purchase Agreement matured on January

Upon maturity, Convergent entered into a contractual repayment schedule with the Company.

Pursuant to the schedule, Convergent

will make a total of eight payments in the amount of $ 250 thousand and accrued interest, every three months until fully satisfied.

The principal balance of the Convergent Convertible Note was approximately

$ 1.0 and $ 2.0 million as of December 31, 2023 and 2022, respectively.

The Company recorded an interest income receivable of approximately

$ 13 ,000 and $ 0.2 million on the Convergent Convertible Note as of December 31, 2023 and 2022, respectively.

The Company recorded principal repayment of $ 1.0 million and $ 0 , interest

receivable repayment of approximately $ 0.3 million and $ 0 , and an unrealized gain on the note of approximately $ 6,000 and $ 0 on the Convergent

Convertible Note for the years ended December 31, 2023 and 2022, respectively.

Industries LLC Investment

December 6, 2021, the Company purchased an 8 % promissory note (“Raefan Industries Promissory Note”) issued by Raefan Industries,

LLC (“Raefan Industries”) in the principal amount of approximately $ 2.0 million pursuant to a Note Purchase Agreement with

Raefan Industries.

On December 6, 2022, the Company, Raefan Industries and Mr.

Jeffrey Cooper entered into a Consolidated, Amended

and Restated Promissory Note agreement (the “Raefan Amended Note Agreement”).

October 20, 2023, in consideration for extending the maturity date of the Raefan Amended Note (See Note 8 – Notes Receivable )

to December 31, 2024, Raefan Industries agreed and had delivered to the Company 357,143 shares of TessPay at $ 0.5 per share of common

The Company reduced approximately $ 0.1 million of principal and interest receivable balance of Raefan Amended Note and recorded

an income of approximately $ 35,000 for receiving TessPay shares.

The Company recorded an interest income receivable of approximately

$ 0.4 million and $ 26,000 on the Amended Note as of December 31, 2023 and 2022 and an unrealized loss on the note of approximately

$ 3.3 million and $ 0 for the years ended December 31, 2023 and 2022, respectively.

Innovative Robotics, LLC Investment

The Company recorded interest income of approximately $ 89,000 and $ 67,000 ,

and an unrealized gain on the note of approximately $ 6,000 and $ 0 on the Robotics Promissory Note for the year ended December 31, 2023

and 2022, respectively.

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

the fourth quarter of 2022, the Company identified indicators of impairment for the Kaya investment as a result of adverse changes in

Kaya’s business operations, including liquidity concerns.

As a result, the Company recorded an impairment charge of $ 0.5 million

in the fourth quarter of 2022.

The impairment charge represents an impairment loss of the total investment held as a promissory note

resulting in a $ 0 balance for the Kaya Now Promissory Note as of December 31, 2023 and 2022.

Company received and recorded interest income related to the Kaya Now Promissory Note of approximately $ 10,000 for the year ended December

Fair Value of Financial Assets and Liabilities

instruments, including cash and cash equivalents, accounts payable and accrued liabilities are carried at cost, which management believes

approximates fair value due to the short-term nature of these instruments.

The Company measures the fair value of financial assets and

liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal

or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

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

Company uses three levels of inputs that may be used to measure fair value:

1 - quoted prices in active markets for identical assets or liabilities

2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable

3 - inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)

inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market

Unobservable inputs require significant management judgment or estimation.

In some cases, the inputs used to measure an

asset or liability may fall into different levels of the fair value hierarchy.

In those instances, the fair value measurement is required

to be classified using the lowest level of input that is significant to the fair value measurement.

Such determination requires significant

management judgment.

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

following table presents the Company’s assets and liabilities that are measured at fair value as of December 31, 2023 and 2022

($ in thousands):

December 31, 2023

Interest Rate Principal

Amount Interest

Receivable Fair Value

Notes receivable, at fair value

Convergent convertible note 12/2/2024 8 % $ 1,006 $ 58 $ 1,064

Raefan Industries LLC 12/31/2024 8 % $ 1,363 $ 751 $ 2,114

American Innovative Robotics 04/01/2027 8 % $ 1,106 $ 22 $ 1,128

Notes receivable, at fair value - current portion $ 3,177

Notes receivable, at fair value - non-current portion $ 1,129

Convergent Therapeutics, Inc.

On December 2, 2024, the Convergent Convertible

Note matured and for the year ended December 31, 2024, the Company received principal repayments of approximately $ 1 million and interest

income of approximately $ 223,000 and a realized loss of $ 6,000 .

Raefan Industries LLC

During 2024, the Company deemed that the note

for Raefan Industries LLC was uncollectible, and as a result, the Company recorded a realized loss as a result of directly writing off

the note on Raefan Industries LLC.

For the year ended December 31, 2024, a total of $ 2.1 million of principal and interest went uncollected.

American Innovative Robotics, LLC

During 2024, the Company recorded interest income

of approximately $ 89,000 , and an unrealized loss on the note of approximately $ 227,000 on the Robotics Promissory Note for the year ended

December 31, 2024.

Subsequent to December 31, 2024, the Company received approximately $ 1.1 million for full payment of the outstanding

principal amount and accrued interest.

Fair Value of Financial Assets and

Financial instruments, including cash and cash

equivalents, accounts payable and accrued liabilities are carried at cost, which management believes approximates fair value due to the

short-term nature of these instruments.

The Company measures the fair value of financial assets and liabilities based on the exchange

price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market

for the asset or liability in an orderly transaction between market participants on the measurement date.

The Company maximizes the use

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

The Company uses three levels of inputs that may

be used to measure fair value:

Level 1 - quoted prices in active markets

for identical assets or liabilities

Level 2 - quoted prices for similar

assets and liabilities in active markets or inputs that are observable

Level 3 - inputs that are unobservable

(for example, cash flow modeling inputs based on assumptions)

Observable inputs are based on market data obtained

from independent sources, while unobservable inputs are based on the Company’s market assumptions.

Unobservable inputs require significant

management judgment or estimation.

In some cases, the inputs used to measure an asset or liability may fall into different levels of the

fair value hierarchy.

In those instances, the fair value measurement is required to be classified using the lowest level of input that

is significant to the fair value measurement.

Such determination requires significant management judgment.

The following table presents the Company’s assets and liabilities

that are measured at fair value as of December 31, 2024 and 2024 ($ in thousands):

Fair value measured as of December 31, 2024

Total at December 31,

Quoted prices in active markets

Significant other observable inputs

Significant unobservable inputs

active markets

Significant other

Marketable securities:

Total marketable securities

Short-term investment

Notes receivable at fair value, current portion

Notes receivable at fair value, non-current portion

Fair value measured as of December 31, 2023

active markets

Significant other

observable inputs

Marketable securities:

Total marketable securities

Short-term investment

Notes receivable at fair value, current portion

Notes receivable at fair value, non-current portion

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

3 Measurement

following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial assets that are measured

at fair value on a recurring basis ($ in thousands):

Short-term investment at December 31, 2021

Change in fair value of investment

Short-term investment at December 31, 2022

Change in fair value of investment

Short-term investment at December 31, 2023

Level 3 Measurement

The following table sets forth a summary of the

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

December 31, 2024

Notes receivable at fair value, current portion at December 31, 2023

Accrued interest receivable

Reclassify from convertible note receivable to notes receivable at fair value

Purchase of notes receivable

Change in fair value of short-term investment

Conversion of note receivable to marketable securities

Collection of principal outstanding

Realized and unrealized loss on note receivable

Change in interest receivable

Notes receivable at fair value, current portion at December 31, 2024

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

Unrealized gain (loss) on notes receivable

Notes receivable at fair value, non-current portion at December 31, 2024

December 31, 2023

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

Collection of principal outstanding

Unrealized loss on note receivable

Principle reduced due to receiving shares

Principal reduced due to receiving shares

Accrued interest receivable

1 unchanged sentence

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

Purchase of notes receivable

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

Unrealized gain on note receivable

1 unchanged sentence

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

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

Receivable at fair value

of December 31, 2023, the fair value of the notes receivable was measured taking into consideration cost of the investment, market participant

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

Notes Receivable at fair value

As of December 31, 2024, the fair value of the

notes receivable was measured taking into consideration cost basis, market participant inputs, market conditions, liquidity, operating

results and other qualitative and quantitative factors.

For the year ended December 31, 2024 the Company had realized and unrealized losses

on notes receivable of $ 2.3 million.

The following table provides quantitative information

regarding the Company’s Level 3 fair value measurements at December 31, 2024 and 2023:

Valuation technique

Discounted cash flow

Unobservable input and range:

Probability of default

Discount rate

Property and Equipment

and equipment, net, consists of the following as of December 31, 2023 and 2022:

Leasehold improvements

Shorter of the remaining lease term or estimated useful life

Machinery, equipment and computer software

1 to 15 years

Furniture and fixtures

Property and equipment, net, consists of the following as of December

31, 2024 and 2023:

Estimated December 31, December 31,

Useful Lives 2024

Leasehold improvements Shorter of the remaining lease term or estimated useful life $ 50 $ 50

Machinery, equipment and computer software 1 to 15 years 169 169

Furniture and fixtures 3 to 5 years 208 208

Total $ 427 $ 427

Accumulated depreciation and amortization ( 188 ) ( 83 )

Total property and equipment, net $ 239 $ 344

expense was $ 83 ,000 and $0 during the years ended December 31, 2023 and 2022, respectively.

December 1, 2021, the Company entered into a Lease Agreement (the “Company’s Lease”) with Trump Tower Commercial LLC,

a New York limited liability company.

Under the Company’s Lease, the Company rents a portion of the twenty-second floor at 725

Fifth Avenue, New York, New York (the “22 nd Floor Premises”).

The Company currently uses the 22 nd Floor

Premises to run its day-to-day operations.

The initial term of the Company’s Lease is seven ( 7 ) years commencing on July 11, 2022

(“Commencement Date”).

Under the Company’s Lease, the Company is required to pay monthly rent, commencing on January

11, 2023, equal to $ 12,874 .

Effective for the sixth and seventh years of the Company’s Lease, the rent shall increase to $ 13,502 .

The Company took possession of the 22 nd Floor Premises on the Commencement Date.

September 23, 2022, Dominari Financial entered into a Lease Agreement (“Dominari Financial’s Lease”) with Trump Tower

Commercial LLC, a New York limited liability company.

Under Dominari Financial’s Lease, Dominari Financial rents a portion of a

floor at 725 Fifth Avenue, New York, New York (the “Premises”).

Dominari Financial currently uses the Premises to run its

day-to-day operations.

The initial term of Dominari Financial’s Lease is seven ( 7 ) years commencing on February 1, 2023.

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

Effective for the sixth and seventh

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

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

tables below represent the Company’s lease assets and liabilities as of December 31, 2023 and 2022:

Depreciation expense was $ 105 ,000 and $ 83 ,000 during the years ended

December 31, 2024 and 2023, respectively.

On December 1, 2021, the Company entered into

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

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

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

The initial term

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

Under the Company’s Lease,

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

Effective for the sixth and seventh years

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

The Company took possession of the 22 nd Floor Premises

on the Commencement Date.

On September 23, 2022, Dominari Financial entered

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

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

(the “Premises”).

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

The initial term of Dominari

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

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

Effective for the sixth and

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

The Company took possession of the

Premises in February 2023.

The tables below represent the Company’s

lease assets and liabilities as of December 31, 2024 and 2023:

Operating lease right-of-use-assets

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

The following tables summarize quantitative information

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

December 31, December 31,

Weighted-average remaining lease term – operating leases (in years) 5.5 6.5

Weighted-average discount rate – operating leases 10.0 % 10.0 %

the years ended December 31, 2023 and 2022, the Company recorded approximately $ 0.8 million and 0.1 million of lease expense to current

period operations.

During the years ended December 31, 2024 and 2023,

the Company recorded approximately $ 0.8 million, both years, of lease expense to current period operations.

Operating leases

Operating lease cost

Operating lease expense

Short-term lease rent expense

Net rent expense

cash flow information related to leases were as follows:

Supplemental cash flow information related to

leases were as follows:

Operating cash flows - operating leases

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

of December 31, 2023, future minimum payments during the next five years and thereafter are as follows:

As of December 31, 2024, future minimum payments

during the next five years and thereafter are as follows:

Year Ended December 31, 2025

5 unchanged sentences

Operating lease liabilities

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

Net Loss per Share

loss per share of common stock is computed by dividing the net loss allocable to common stockholders by the weighted-average number of

shares of common stock or common stock equivalents outstanding.

Diluted loss per common share is computed similar to basic loss per share

except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were

exercised or converted into common stock.

Securities that could potentially dilute loss per share in the future that were not included

in the computation of diluted loss per share for the years ended December 31, 2023, and 2022 are as follows:

Basic loss per share of common stock is computed

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

outstanding for the period.

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

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

as of the first day of the period.

Securities that could potentially dilute loss per share in the future that were not included in the

computation of diluted loss per share for the years ended December 31, 2024, and 2023 are as follows:

As of December 31,

3 unchanged sentences

Options to purchase common stock

Redeemable Convertible Preferred Stock

O and Series P Redeemable Convertible Preferred Stock

February 24, 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional

investors (the “Investors”), pursuant to which the Company agreed to issue and sell, in concurrent registered direct offerings

(the “Offerings”), (i) 11,000 shares of the Company’s Series O Redeemable Convertible Preferred Stock, par value $ 0.001

per share (the “Series O Preferred Stock”), and (ii) 11,000 shares of the Company’s Series P Redeemable Convertible

Preferred Stock, par value $ 0.001 per share (the “Series P Preferred Stock” and together with the Series O Preferred Stock,

the “Preferred Stock”), in each case, at an offering price of $ 952.38 per share, representing a 5 % original issue discount

to the stated value of $ 1,000 per share of Preferred Stock, for gross proceeds of each Offering of $ 10,476,180 , or approximately $ 21.0

million in the aggregate for the Offerings, before the deduction of the placement agent’s fee and offering expenses.

of Series O Preferred Stock will have a stated value of $ 1,000 per share and will be convertible, at a conversion price of $ 1.00 per

share, into 11,000,000 shares of common stock (subject in certain circumstances to adjustments).

The shares of Series P Preferred Stock

will have a stated value of $ 1,000 per share and will be convertible, at a conversion price of $ 1.00 per share, into 11,000,000 shares

of common stock (subject in certain circumstances to adjustments).

The Series O Preferred Stock and the Series P Preferred Stock are

being offered by the Company pursuant to a registration statement on Form S-3 (File No.

333-238172) (the “Registration Statement”)

filed under the Securities Act of 1933, as amended (the “Securities Act”).

The Purchase Agreement contains customary representations,

warranties and agreements by the Company and customary conditions to closing.

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

In connection with this transaction, the Company received net proceeds of $ 21.0 million, which was deposited in an escrow account.

connection with the Offerings, the Company has entered into an engagement agreement (the “Engagement Agreement Agreement”)

with H.C Wainwright & Company, LLC, as placement agent (“HCW”), pursuant to which the Company agreed to pay HCW an aggregate

cash fee equal to 8 % of the aggregate gross proceeds raised in the offerings and issue HCW common stock purchase warrants to purchase

up to 103,528 shares of common stock in the aggregate at an exercise price of $ 21.25 .

The warrants were recorded as a component of stockholders’

equity in accordance with ASC 815.

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

(i) the earlier of (1) the receipt of stockholder approval and (2) the date that is 90 days following the Original Issue Date (the date

of the first issuance of any shares of the Preferred Stock regardless of the number of transfers of any particular shares of Preferred

Stock and regardless of the number of certificates which may be issued to evidence such Preferred Stock) and (ii) before the date that

is 120 days after the Original Issue Date (the “ Redemption Period ”), each Holder shall have the right to cause the

Company to redeem all or part of such Holder’s shares of Preferred Stock at a price per share equal to 105 % of the Stated Value.

a result, the Preferred Stock were recorded separately from stockholders’ equity because they are redeemable upon the occurrence

of redemption events that are considered not solely within the Company’s control.

the second quarter of 2022, the Company redeemed for cash at a price equal to 105 % of the $ 1,000 stated value per share all of its 11,000

outstanding shares of Series O Preferred Stock and its 11,000 Series P Preferred Stock.

The total redemption amount was $ 23.1 million.

As a result, all shares of the Series O Preferred Stock and Series P Preferred Stock have been retired and are no longer outstanding.

the year ended December 31, 2023 and 2022, the Company recognized approximately $ 0 and $ 4.1 million in deemed dividends related to the

Preferred Stock in the consolidated statements of operations and the consolidated statements of changes in redeemable preferred stock

and stockholders’ equity, respectively.

Stockholders’ Equity and Convertible Preferred Stock

March 6, 2023, the Company cancelled 644,499 shares of common stock as a result of retirement of 644,499 shares of treasury stock.

March 20, 2023, the Company cancelled 25,000 shares of common stock owned by an executive.

January 21, 2022, the Company’s board of directors authorized a share buyback program (the “Share Buyback Program”),

pursuant to which the Company authorized the Share Buyback Program in an amount of up to three million dollars.

year ended December 31, 2023, the Company repurchased 236,630 shares at a cost of approximately $ 0.9 million or $ 3.97 per share

through marketable securities account under the Share Buyback Program.

During the year ended December 31, 2022, the Company repurchased

468,017 shares at a cost of approximately $ 3.1 million or $ 6.53 per share through marketable securities account under the Share Buyback

The Company records treasury stock using the cost method.

March 6, 2023, the Company retired 644,499 shares of treasury stock with original cost of approximately $ 3.8 million.

D Convertible Preferred Stock

connection with the acquisition of North South’s patent portfolio in September 2013, the Company issued 1,379,685 shares of its

Series D Convertible Preferred Stock (“Series D Preferred Stock”) to the stockholders of North South.

Each share of Series

D Preferred Stock has a stated value of $ 0.0001 per share and is convertible into 10 over 1,373 of a share of Common Stock.

liquidation, dissolution or winding up of the Company’s business, each holder of Series D Preferred Stock shall be entitled to

receive, for each share of Series D Preferred Stock held, a preferential amount in cash equal to the greater of (i) the stated value

or (ii) the amount the holder would receive as a holder of Common Stock on an “as converted” basis.

Each holder of Series

D Preferred Stock shall be entitled to vote on all matters submitted to its stockholders and shall be entitled to such number of votes

equal to the number of shares of Common Stock such shares of Series D Preferred Stock are convertible into at such time, taking into

account the beneficial ownership limitations set forth in the governing Certificate of Designation and the conversion limitations described

The conversion ratio of the Series D Preferred Stock is subject to adjustment in the event of stock splits, stock dividends, combination

of shares and similar recapitalization transactions.

of December 31, 2023 and 2022, 5,000,000 Series D Preferred Stock was designated;

Stockholders’ Equity and Convertible

Preferred Stock

As of December 31, 2024, there are 7,037,022 shares

of common stock issued and 6,976,874 shares outstanding.

Treasury Stock

There are 60,148 shares of treasury stock as of

December 31, 2024.

Series D Convertible Preferred Stock

In connection with the acquisition of North South’s

patent portfolio in September 2013, the Company issued 1,379,685 shares of its Series D Convertible Preferred Stock (“Series

D Preferred Stock”) to the stockholders of North South.

Each share of Series D Preferred Stock has a stated value of $ 0.0001 per

share and is convertible into 10 over 1,373 of a share of Common Stock.

Upon the liquidation, dissolution or winding up of the

Company’s business, each holder of Series D Preferred Stock shall be entitled to receive, for each share of Series D Preferred Stock

held, a preferential amount in cash equal to the greater of (i) the stated value or (ii) the amount the holder would receive as a holder

of Common Stock on an “as converted” basis.

Each holder of Series D Preferred Stock shall be entitled to vote on all matters

submitted to its stockholders and shall be entitled to such number of votes equal to the number of shares of Common Stock such shares

of Series D Preferred Stock are convertible into at such time, taking into account the beneficial ownership limitations set forth in the

governing Certificate of Designation and the conversion limitations described below.

The conversion ratio of the Series D Preferred Stock

is subject to adjustment in the event of stock splits, stock dividends, combination of shares and similar recapitalization transactions.

As of December 31, 2024 and 2023, 5,000,000 Series

D Preferred Stock was designated;

3,825 and 3,825 shares remained issued and outstanding.

HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

D-1 Convertible Preferred Stock

Company’s Series D-1 Convertible Preferred Stock (“Series D-1 Preferred Stock”) was established on November 22, 2013.

Each share of Series D-1 Preferred Stock has a stated value of $ 0.0001 per share and is convertible into 10 over 1,373 of a share of

Common Stock.

Upon the liquidation, dissolution or winding up of the Company’s business, each holder of Series D-1 Preferred Stock

shall be entitled to receive, for each share of Series D-1 Preferred Stock held, a preferential amount in cash equal to the greater of

(i) the stated value or (ii) the amount the holder would receive as a holder of Common Stock on an “as converted” basis.

Each holder of Series D-1 Preferred Stock shall be entitled to vote on all matters submitted to the Company’s stockholders and

shall be entitled to such number of votes equal to the number of shares of Common Stock such shares of Series D-1 Preferred Stock are

convertible into at such time, taking into account the beneficial ownership limitations set forth in the governing Certificate of Designation.

The conversion ratio of the Series D-1 Preferred Stock is subject to adjustment in the event of stock splits, stock dividends, combination

of shares and similar recapitalization transactions.

The Company commenced an exchange with holders of Series D Convertible Preferred

Stock pursuant to which the holders of the Company’s outstanding shares of Series D Preferred Stock acquired in the Merger could

exchange such shares for shares of the Company’s Series D-1 Preferred Stock on a one-for-one basis.

of December 31, 2023 and 2022, 5,000,000 Series D-1 Preferred Stock was designated;

Series D-1 Convertible Preferred Stock

The Company’s Series D-1 Convertible Preferred

Stock (“Series D-1 Preferred Stock”) was established on November 22, 2013.

Each share of Series D-1 Preferred Stock has a

stated value of $ 0.0001 per share and is convertible into 10 over 1,373 of a share of Common Stock.

Upon the liquidation,

dissolution or winding up of the Company’s business, each holder of Series D-1 Preferred Stock shall be entitled to receive, for

each share of Series D-1 Preferred Stock held, a preferential amount in cash equal to the greater of (i) the stated value or (ii) the

amount the holder would receive as a holder of Common Stock on an “as converted” basis.

Each holder of Series D-1 Preferred

Stock shall be entitled to vote on all matters submitted to the Company’s stockholders and shall be entitled to such number of votes

equal to the number of shares of Common Stock such shares of Series D-1 Preferred Stock are convertible into at such time, taking into

account the beneficial ownership limitations set forth in the governing Certificate of Designation.

The conversion ratio of the Series

D-1 Preferred Stock is subject to adjustment in the event of stock splits, stock dividends, combination of shares and similar recapitalization

transactions.

The Company commenced an exchange with holders of Series D Convertible Preferred Stock pursuant to which the holders of

the Company’s outstanding shares of Series D Preferred Stock acquired in the Merger could exchange such shares for shares of the

Company’s Series D-1 Preferred Stock on a one-for-one basis.

As of December 31, 2024 and 2023, 5,000,000 Series

D-1 Preferred Stock was designated;

834 and 834 shares remained issued and outstanding.

summary of warrant activity for years ended December 31, 2023 and 2022 is presented below:

Outstanding as of December 31, 2021

A summary of warrant activity for the years ended

December 31, 2024, is presented below:

Warrants Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life

Outstanding as of December 31, 2023 444,796 $ 29.25 -

Outstanding as of December 31, 2024 444,796 $ 29.25 -

of Mutual Understanding - In March 2022, pursuant to a Confirmation of Mutual Understanding (the “Confirmation”), all

parties to the Confirmation acknowledged and confirmed a scrivener’s error set forth in warrants to purchase shares of the Company’s

common stock (the “Warrants”) dated March 10, 2020, April 15, 2020 and March 2, 2021.

Pursuant to the Confirmation, all parties,

which were involved in the original execution of the warrants, agreed that clause (v) of the definition of Fundamental Transaction in

Section 3(d) of the Warrants, is as follows:

“ the Company, directly or indirectly,

in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without

limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby

such other Person or group acquires more than 50 % of the voting power of the Company’s outstanding equity securities, including

with respect to the election of directors (not including any shares of Common Stock held by the other Person or other Persons making

or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business

combination) ”.

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

Restricted Stock Awards

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

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

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

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

value of approximately $ 2.7 million.

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

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

See Restricted Stock roll-forward below.

December 19, 2023, pursuant to Soo Yu’s

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

was granted 1,287,129 shares of the Company’s common stock.

Upon issuance, the shares were fully vested and nonforfeitable with

a total fair value of approximately $ 2.6 million.

Pursuant to the Grant Agreement, the Company withheld 657,079 of the shares granted

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

See Restricted Stock roll-forward below.

December 19, 2023, pursuant to the Company’s

2022 Equity Incentive Plan, the Company executed a Grant Agreement, through which Joshua Shipley was granted 33,003 shares of the Company’s

common stock.

All current outstanding warrants were issued prior to 2023 in connection

with prior raises by the Company.

Restricted Stock Awards and Stock Options

On October 7, 2022, the Company adopted the 2022

Equity Incentive Plan (“2022 Plan”).

The 2022 Plan provided for the issuance of up to 1,100,000 shares in the form of stock

options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards.

The 2022 Plan expires on January

1, 2032, and is administered by Dominari Holdings Board of Directors.

In October 2023, the Company issued an aggregate

of 96,311 shares of the Company’s common stock to a member of the Company’s Board of Directors for services rendered.

These restricted stock awards began vesting annually in three increments beginning on April 13, 2024.

During the year ended December 31,

2024, 32,103 shares were vested and the remaining shares forfeited.

On June 11, 2024, the Company executed grant agreements

with each of Messrs.

Anthony Hayes and Kyle Wool pursuant to their employment agreements with the Company, and in accordance with the

Company’s 2022 Equity Incentive Plan.

Pursuant to the grant agreements, each received 154,559 shares of the Company’s common

stock with a grant value of $ 2.18 .

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

to the Grant Agreement, the Company withheld 13,300 of the shares granted to satisfy Soo Yu’s tax obligation of approximately $ 27,000

and recorded as income taxes withheld within the consolidated balance sheet.

See Restricted Stock roll-forward below.

During the year ended December 31, 2023, the Company

also issued an aggregate of 136,309 shares of the Company’s common stock to members of the Company’s Board of Directors and

an employee for services rendered.

During the year ended December 31, 2022, the Company

issued an aggregate of 238,244 shares of the Company’s common stock to members of the Company’s Board of Directors and an

employee for services rendered.

A summary of restricted stock awards activity

for the years ended December 31, 2023 and 2022, is presented below:

Nonvested at December 31, 2021

$ 0.7 million.

On December 31, 2024, the Company executed grant

agreements with each of Messrs.

Anthony Hayes and Kyle Wool pursuant to their employment agreements with the Company, and in accordance

with the Company’s 2022 Equity Incentive Plan.

Pursuant to the grant agreements, each received 309,118 shares of the Company’s

common stock with a grant value of $ 0.98 .

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

$ 0.7 million.

A summary of restricted stock awards activity for the years ended December 31, 2024 and 2023, is presented below:

Nonvested at December 31, 2022

1 unchanged sentence

Nonvested at December 31, 2023

Nonvested at December 31, 2024

Stock-based compensation associated with the amortization

2 unchanged sentences

As of December 31, 2024, there is approximately

$ 0.2 million unrecognized stock-based compensation expense related to restricted stock awards.

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

$ 50,000 unrecognized stock-based compensation expense related to restricted stock awards.

Stock Options

A summary of option activity under the Company’s

stock option plan for year ended December 31, 2023 and 2022 is presented below:

A summary of option activity under the Company’s stock option

plan for year ended December 31, 2024 and 2023 is presented below:

Weighted Remaining

Average Total Contractual

Number of Exercise Intrinsic Life

Shares Price Value (in years)

Outstanding as of December 31, 2022 31,193 $ 302.97 $ -

3 unchanged sentences

Outstanding as of December 31, 2023 420,168 $ 5.80 $ -

Employee options granted

Employee options forfeited ( 43,334 ) $ 3.10 -

3 unchanged sentences

Stock-based compensation associated with the amortization

of stock option expense was approximately $ 0.2 million and $ 13,000 for the years ended December 31, 2023, and 2022, respectively.

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

of stock option expense was approximately $ 0.3 million and $ 0.2 million for the years ended December 31, 2024, and 2023, respectively.

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

Estimated future stock-based compensation expense

relating to unvested stock options is approximately $ 0.1 million.

The following table presents our total revenues

disaggregated by revenue type for the years ended December 31, 2023, and 2022 (in thousands):

Advisory fees

The following table presents our total revenues disaggregated by revenue

type for the years ended December 31, 2024, and 2023 (in thousands):

Underwriting services

Account advisory and management

Other revenue

Commitments and Contingencies

Legal Proceedings

The Company may be subject to certain legal and

other claims that arise in the ordinary course of its business.

In particular, the Company and its subsidiaries may be named in and subject

to various proceedings and claims arising primarily from the Company’s securities business activities, including lawsuits, arbitration

claims, class actions, and regulatory matters.

Some of these claims may seek substantial compensatory, punitive, or indeterminate damages.

The Company and its subsidiaries may also be subject to other reviews, investigations, and proceedings by governmental and self-regulatory

organizations regarding the Company’s business, which may result in adverse judgments, settlements, fines, penalties, injunctions,

and other relief.

Due to the inherent difficulty of predicting the outcome of litigation and other claims the Company cannot state with

certainty what the eventual outcome of potential litigation or other claims will be.

Notwithstanding this uncertainty, the Company does

not believe that the results of these potential claims are likely to have a material effect on its financial position or results of operations.

In March 2024, the Company received a notice of

petition of a filed action seeking relief related to the March 2024 affiliates of new registered representatives.

This notice was filed

against the Company’s subsidiary Dominari Securities.

The Company does not agree with the claim of the plaintiff and will defend

itself accordingly.

While the Company intends to defend itself vigorously from this claim, it is unable to predict the outcome of such

legal proceeding.

petition of a filed action seeking relief related to the hiring in March 2024 of new registered representatives from the representatives’

former employer.

This notice was filed against the Company’s subsidiary, Dominari Securities.

The Company does not agree with the

plaintiff’s claims.

While the Company intends to defend itself vigorously from this claim, it is unable to predict the outcome of

such legal proceeding.

Any potential loss as a result of this legal proceeding cannot be reasonably estimated.

As a result, the Company has

not recorded a loss contingency for the aforementioned claim.

As a result, the Company

has not recorded a loss contingency for the aforementioned claim.

In the past, in the ordinary course of business,

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

Other than as described above and ordinary routine litigation incidental to the business, the Company is not aware of any

material, active or pending legal proceedings brought against it.

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

The income tax provision consists of the following

($ in thousands):

Other than ordinary routine litigation incidental to the business, the Company is not aware of any material, active or pending

legal proceedings brought against it.

The income tax provision consists of the following ($ in thousands):

For the years ended

Increase in valuation allowance

Increase (decrease) in valuation allowance

State and local

Increase in valuation allowance

Increase (decrease) in valuation allowance

Income Tax Provision (Benefit)

The following is a reconciliation of the U.S.

federal statutory rate to the effective income tax rates for the years ended December 31, 2023 and 2022:

federal statutory rate

to the effective income tax rates for the years ended December 31, 2024 and 2023:

For the years ended

1 unchanged sentence

State Taxes, Net of Federal Tax Benefit

162m disallowed compensation

Other permanent differences

State rate change in effect

AMT credit benefit

Decrease due to true up of State NOL

Deferred tax adjustment for stock based compensation

Decrease due to change in Federal NOL and other true ups

17 unchanged sentences

Right of use asset

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

Total deferred tax liability

In assessing the realization of deferred tax assets,

14 unchanged sentences

The Company has approximately $ 154.4 million of state and city NOLs, which expire from 2035 through 2044.

As of December 31, 2023, the Company also had federal research and development tax credit carryforwards of $ 0.2 million which may be available

to offset future income tax liabilities and begin to expire in 2042.

As of December 31, 2024, the Company also had federal research and development tax credit carryforwards of $ 0.2 million which may be

available to offset future income tax liabilities and begin to expire in 2042.

(*) The Company revised certain balances in the deferred tax

assets and liabilities schedule to correct immaterial errors.

Deferred tax assets for net-operating losses carryforward were increased

and stock based compensation was decreased for a reclassification of the benefits associated with vested RSU’s that should have

increased NOLs in prior periods and stock based compensation were decreased for expired stock options benefits that were no longer available

for tax deduction purpose.

The decrease in total deferred tax assets was equally offset by the decrease in the valuation allowance with

no effect to the deferred tax asset or the consolidated financial statements.

The change in the total deferred tax assets had no effect on total

assets, net loss, stockholders’ equity or cash flows.

The amounts revised are presented below:

Year Ended December 31, 2023

As Reported Correction As Adjusted

Net operating losses $ 33,124 $ 1,343 $ 34,467

Stock based compensation $ 9,754 $ ( 9,311 ) $ 443

Total deferred tax assets $ 57,166 $ ( 7,967 ) $ 49,199

Valuation allowance $ ( 55,946 ) $ 7,967 $ ( 47,979 )

Utilization of the U.S.

43 unchanged sentences

to its consolidated financial position.

In December, 2023, the FASB issued 2023-09, Income

Taxes (Topic 740):

Improvements to Income Tax Disclosures (ASU 2023-09) which establishes new income tax disclosure requirements in addition

to modifying and eliminating certain existing requirements.

Public business entities must apply the ASU’s guidance to annual periods

beginning after December 15, 2024.

The Company may choose to early adopt any new or revised accounting standards whenever such early adoptions

is permitted.

The Company has chosen not to early adopt this standard.

Dominari Securities, the Company’s broker-dealer

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

The Company’s broker-dealer subsidiary

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

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

As such, the subsidiary is subject to the minimum

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

by Rule 15c3-1.

As of December 31, 2023, Dominari Securities had net capital of approximately $ 4.9 million, which was approximately $ 4.7

million in excess of required minimum net capital of $ 0.2 million.

Related Party Transaction

Dominari Securities is subject to the Securities

and Exchange Commission Uniform Net Capital Rule (Rule 15c3- 1), which requires the maintenance of a minimum level of net capital, and

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

Dominari Securities calculates net

capital under Rule 15c3-1.

Rule 15c3-1 also provides that equity capital may not be withdrawn if the resulting net capital ratio would

exceed 10 to 1.

On December 31, 2024, Dominari Securities had net capital (as defined) of $ 14,030,196 which was $ 13,659,041 in excess

of its required minimum net capital of $ 371,155 .

Dominari Securities is exempt from Rule 15c3-3

of the SEC under paragraph (k)(2)(ii).

Dominari Securities’ other business activities;

which consist of:

private placements, direct

mutual funds, direct variable annuities on a subscription way basis where the funds are payable to the issuer or its agent and not to

Dominari Securities.

Dominari Securities also provides investment advisory services, annuity, and insurance products of certain insurance

carriers as an insurance agency through independent and affiliated brokers, are exempt as contemplated by Footnote 74 of the SEC Release

34-70073 adopting amendments to 17 C.F.R.

Dominari Securities is exempt from the Securities

and Exchange Commission Rule 15c3-3 pursuant to the exemptive provisions of sub-paragraph (k)(2)(ii) thereof, and therefore, is not required

to maintain a “Special Reserve Bank Account for the Exclusive Benefit of Customers.”

Related Party Transactions

In 2021, the Company engaged the services of Revere

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

Kyle Wool, Board Member,

was previously a member of the board of directors of Revere.

The Company incurred fees of approximately $ 75,000 and $ 1.0 million

during the years ending December 31, 2023, and 2022, respectively.

These fees were included in general and administrative expenses in

the consolidated statements of operations.

DOMINARI HOLDINGS INC.

(Formerly AIkido Pharma, Inc.)

Notes to Consolidated Financial Statements

Securities, LLC (“Revere”) to assist in the management and building of the Company’s investment processes.

one of the Company’s board members, was previously a member of the board of directors of Revere until June 2023 and currently holds

approximately 30 % of Revere’s outstanding equity.

From time to time, the Company participates in offerings of securities as an underwriter

in transactions in which Revere is also participating as an underwriter.

On such transactions, the Company earned $ 930,000 for the year

ended December 31, 2024.

Additionally, the Company incurred referral fees of approximately $ 50,000 and $ 80,000 for the year ended December

31, 2024 and 2023, respectively.

The Company incurred fees on behalf of Series

which were intended for future expenses of each Series entity.

As of December 31, 2024, such amount was $ 157,000 and is included in other

current liabilities on the accompanying consolidated balance sheet.

During the year December 31, 2024, the Company

entered into employee loans with various employees totaling $ 2.4 million.

The terms of the loan agreements range from 3 years to 7 years,

with an average annual interest rate of approximately 3.2 %.

The total interest received for the year ended December 31, 2024 was approximately

As of December 31, 2024, the total outstanding balance of the employee loans was $ 2.1 million included in loans to employees

on the accompanying consolidated balance sheet.

Certain of the Company’s investments are

made through related party special purpose vehicles.

These are included within Note 5 of the consolidated financial statements and include

the following investments:

investment in Revere Master SPV Series 1 (Qxpress Pte Ltd), investment in Dominari Master SPV LLC Series VI

xAI), investment in Dominari Master SPV LLC Series XI (Cerebras Systems Inc.), and investment in Dominari Master SPV

LLC Series XII (Groq, Inc.).

The Company earns revenues for managing certain pooled investment vehicles

which are related parties.

These include the entirety of the management fee revenues ($ 0.1 million) included within the advisory and management

fees caption within the statement of operations.

As of December 31, 2024, the total amount of contract liabilities disclosed in Note 2

represented amounts received in advance of revenue earned on managing such related party investment vehicles.

Segment Reporting

Operating segments are defined as components of

an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”),

who is the Chief Executive Officer, in deciding how to allocate resources to an individual segment and in assessing performance.

reviews financial information for the purposes of making operating decisions, allocating resources, and evaluating financial performance

of the business of the reportable operating segments, based on discrete financial information.

The measures of segment profitability that

are most relied upon by the CODM are gross revenues and net loss.

The Company operates in two reportable

7 unchanged sentences

as a single operating segment comprised of Legacy AIkido.

The chief operating decision-maker (“CODM”)

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

and allocate resources.

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

in the “ Summary of Significant Accounting Policies.

” While assets are primarily held within the Legacy AIkido reportable

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

resources based on assets.

The CODM has access to and regularly reviews internal

financial reporting for each business and uses that information to make operational decisions and allocate resources.

Accounting policies

applied by the reportable segments are the same as those used by the Company and described in the “ Summary of Significant Accounting

The measures of segment profitability that are

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

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

Additionally, the CODM views the expenses listed below to be significant in their analysis.

Year Ended December 31, 2024

Dominari Financial

Legacy AIkido Pharma

Operating Costs

General and administrative

Research and development

Compensation and benefits

Professional and consulting fees

Data processing

Other expenses

Loss from operations

3 unchanged sentences

Unrealized loss on note receivable

Change in fair value of investments

Change in carrying value of investments

Total other (expenses) income

Year Ended December 31, 2023

Dominari Financial

Legacy AIkido Pharma

Operating Costs

General and administrative

Research and development

Compensation and benefits

Professional and consulting fees

Data processing

Other expenses

Loss from operations

3 unchanged sentences

Unrealized loss on note receivable

Change in fair value of investments

Change in carrying value of investments

Total other (expenses) income

Subsequent Events

In March 2024 the Company received a notice of

petition of a filed action seeking relief related to the March 2024 affiliates of new registered representatives.

This notice was filed

against the Company’s subsidiary Dominari Securities LLC.

The Company does not agree with the claim of the plaintiff and will defend

itself accordingly.

At this time the Company has no reasonable basis to assess or record any potential income statement impact related

to this petition.

See Note 16 Commitment and Contingencies for further information.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURE

New independent registered

public accounting firm

2022, the Company engaged Marcum LLP (“Marcum”), as the Company’s new independent registered public accounting firm.

The decision to engage Marcum was approved by the Company’s Audit Committee.

During the fiscal year

ending December 31, 2021, and through July 5, 2022, the Company had not consulted Marcum regarding (i) application of accounting principles

to any specified transaction, either completed or proposed, (ii) the type of audit opinion that might be rendered on the Company’s

consolidated financial statements, or (iii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv))

or a reportable event (as defined in Item 304(a)(1)(v)).

During the fiscal year ending December 31, 2020, Marcum acted as the Company’s

independent registered public accounting firm.

February 2025 Registered

Direct Offering and Private Placement

On February 10, 2025,

the Company entered into securities purchase agreements with certain accredited investors for the sale by the Company of 1,439,467 registered

shares of its common stock, unregistered Series A warrants to purchase up to 1,439,467 shares of common stock and unregistered Series

B warrants to purchase up to 1,439,467 shares of common stock at a combined purchase price of $ 3.47 per share and accompanying warrants

in a direct offering.

In a concurrent private placement, the Company entered into securities purchase agreements with certain accredited

investors for the sale of 2,436,587 unregistered shares of common stock, unregistered Series A warrants to purchase up to 2,436,587 shares

of common stock and unregistered Series B warrants to purchase up to 2,436,587 shares of common stock at a combined purchase price of

$ 3.47 per share and accompanying warrants (the “February 2025 Financings”).

The Series A warrants are exercisable immediately

upon issuance at an exercise price of $ 3.72 per share and will expire five years from the date of issuance.

The Series B warrants are

exercisable immediately upon issuance at an exercise price of $ 4.22 per share and will expire five years from the date of issuance.

gross proceeds to the Company from the February 2025 Financings were approximately $ 13.5 million, before deducting fees and other offering

expenses, and excluding the proceeds, if any, from the cash exercise of the warrants.

The securities in the

concurrent private placement were offered under Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder and, along

with the shares of common stock underlying such warrants, have not been registered under the Securities Act or applicable state securities

Accordingly, the unregistered shares, the warrants, and the shares of common stock underlying the warrants may not be offered or

sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements.

Certain officers, directors,

employees and members of the Company’s advisory board participated in the February 2025 Financings on the same terms as the other

Advisory Agreements

On February 10, 2025,

the Company entered into certain advisory agreements (the “Advisory Agreements”) with five newly appointed members of its

advisory board for initial appointments of two years.

The Company has issued an aggregate of 2,550,000 unregistered shares (the “Advisory

Shares”) to the newly appointed members with an additional issuance of an aggregate of 850,000 Advisory Shares to be issued upon

certain Company milestones being met.

The Advisory Shares were

offered in a private placement under Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder and have not been registered

under the Securities Act or applicable state securities laws.

Accordingly, the Advisory Shares may not be offered or sold in the United

States absent registration with the SEC or an applicable exemption from such registration requirements.

The Company has agreed to file

one or more registration statements with the SEC covering the resale of the unregistered shares of Common Stock issued pursuant to the

Advisory Agreements.

Bitcoin ETF Investment

In February 2025, the

Company implemented a bitcoin investment strategy through investments in bitcoin Exchange-Traded Funds (“ETFs”) as a treasury

reserve asset on an ongoing basis, subject to market conditions and the Company’s anticipated cash needs.

The Company views bitcoin

ETFs as a reliable store of value, and believes bitcoin has compelling characteristics as a scarce and finite asset that can serve as

a reasonable inflation hedge and safe haven amid global instability.

While a highly volatile asset, bitcoin’s price has also appreciated

significantly since bitcoin’s inception.

The Company believes that a substantial portion of bitcoin’s appreciation is attributable

to the view that bitcoin is or will become a reliable store of value.

As of March 31, 2025,

the Company (via Dominari Holdings Inc.) had approximately $ 2,000,000 in its bitcoin treasury through holdings of Blackrock’s iShares

Bitcoin Trust ETF.

The Company expects to continue to invest a portion of its excess cash and earnings in bitcoin in furtherance of its

bitcoin treasury strategy.

Strategic Initiative

with Hut 8 Corp.

On February 18, 2025,

the Company announced the creation of American Data Centers Inc.

(“ADC”), a strategic venture focused on acquiring, building

out and transforming data center campuses across the United States to meet the accelerated demand for advanced computing.

On March 31, 2025, ADC

completed a series of transactions providing for the launch of American Bitcoin Corp., a strategic initiative focused on industrial-scale

Bitcoin mining and strategic Bitcoin reserve development and monetization (the “Transactions”).

To effectuate the Transactions,

ADC, Hut 8 Corp., a Delaware corporation, and certain of its subsidiaries (“Hut 8”), and the stockholders of ADC entered into

a Contribution and Stock Purchase Agreement, pursuant to which Hut 8 contributed to ADC substantially all of Hut 8’s wholly owned

ASIC bitcoin miners in exchange for newly issued stock representing 80 % of the issued and outstanding equity interests of ADC after giving

effect to the issuance.

At the closing of the Transactions, ADC changed its name to American Bitcoin Corp.

(“American Bitcoin”).

In connection with the

Transactions, American Bitcoin and Hut 8 also entered into definitive agreements providing for Hut 8 and its personnel to provide day-to-day

commercial and operational management services and ASIC colocation services to American Bitcoin, in each case on an exclusive basis for

so long as such agreements remain in effect.

Hut 8 and its personnel will also provide back-office support services to American Bitcoin

pursuant to a shared services agreement with American Bitcoin.

As a result of the Transactions,

American Bitcoin has become a subsidiary of Hut 8 in which the Company holds a 3.17 % minority interest in American Bitcoin.

On February 11, 2025, the Company declared a special

cash dividend on our common stock and pursuant to the terms of certain common stock purchase warrants issued in our recently completed

financings (on an as-exercised basis) of $ 0.32 per share, which was paid on March 3, 2025, to shareholders and certain warrant holders

of record as of the close of business on February 24, 2025.

American Innovative Robotics, LLC

On March 24, 2025, the Company received approximately

$ 1.1 million for full payment of the outstanding principal amount and accrued interest of its note receivable from American Innovative

Robotics, LLC.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING

AND FINANCIAL DISCLOSURE

Not Applicable.

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 7A. Quantitative and Qualitative Disclosures About Market Risk