What changed in this filing

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Item 1. Financial Statements

2025-05-13 compared with 2024-11-08 · 585 added, 497 removed, 366 unchanged (75% of the section changed)

3 unchanged sentences

($ in thousands except share and per share amounts)

September 30,

Current assets

1 unchanged sentence

Marketable securities

Deposits with clearing broker

Receivable from clearing brokers

Prepaid expenses and other assets

Notes receivable, at fair value - current portion

Due from related party

Total current assets

2 unchanged sentences

Long term equity investments

Loans to employees

Right-of-use assets

3 unchanged sentences

Accounts payable and accrued expenses

Accrued salaries and benefits

Accrued commissions

Lease liability - current

Other current liability

Contract liabilities - current

Other current liabilities

Total current liabilities

Lease liability, less current portion

Contract liabilities, less current portion

Total liabilities

1 unchanged sentence

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

Convertible Preferred Series D:

5,000,000 shares designated;

3,825 shares issued and outstanding as of September 30, 2024 and December 31, 2023;

3,825 shares issued and outstanding as of March 31, 2025 and December 31, 2024;

liquidation value of $ 0.0001 per share

Convertible Preferred Series D-1:

5,000,000 shares designated;

834 shares issued and outstanding as of September 30, 2024 and December 31, 2023;

834 shares issued and outstanding as of March 31, 2025 and December 31, 2024;

liquidation value of $ 0.0001 per share

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

6,336,286 and 5,995,065 shares issued as of September 30, 2024 and December 31, 2023, respectively;

6,276,138 and 5,934,917 shares outstanding as of September 30, 2024 and December 31, 2023

14,704,045 and 7,037,022 shares issued as of March 31, 2025 and December 31, 2024, respectively;

14,643,897 and 6,976,874 shares outstanding as of March 31, 2025 and December 31, 2024

Additional paid-in capital

Treasury stock, as of cost, 60,148 shares as of September 30, 2024 and December 31, 2023

Treasury stock, as of cost, 60,148 shares as of March 31, 2025 and December 31, 2024

Accumulated deficit

5 unchanged sentences

Condensed Consolidated Statements of Operations

($ in thousands except share and per share amounts)

($ in thousands except share and per share

Three Months Ended

September 30,

Nine Months Ended

September 30,

Operating costs and expenses

General and administrative

Research and development

Total operating expenses

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Condensed Consolidated Statements of Changes

in Redeemable Convertible Preferred Stock and Stockholders’ Equity

($ in thousands except share and per share amounts)

For the Three Months Ended September 30, 2024

Preferred Stock

Treasury Stock

Stockholders’

Balance at June 30, 2024

$ ( 220,324 )

Stock-based compensation

Balance at September 30, 2024

$ ( 224,535 )

Preferred Stock

Treasury Stock

Stockholders’

Balance at June 30, 2023

$ ( 198,306 )

Stock-based compensation

Balance at September 30, 2023

$ ( 201,847 )

See accompanying notes to unaudited condensed consolidated

financial statements

For the Nine Months Ended September 30, 2024

in Stockholders’ Equity

($ in thousands except share and per share

For the Three Months Ended March 31, 2025 and

Preferred Stock

4 unchanged sentences

Stock-based compensation

Balance at September 30, 2024

Issuance of common stock

Advisory shares issued

Dividends issued

Balance at March 31, 2025

$ ( 263,034 )

5 unchanged sentences

Stock-based compensation

Cancellation of common stock

Purchase of treasury stock

Retirement of treasury stock

Balance at September 30, 2023

Balance at March 31, 2024

$ ( 214,204 )

4 unchanged sentences

($ in thousands)

Nine Months Ended

September 30,

Cash flows from operating activities

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

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Amortization of right-of-use assets

Change in fair value short-term investments

Change in carrying value of long-term investment

Non-cash warrant revenue

Stock-based compensation

Realized (gain) loss on marketable securities

Unrealized (gain) loss on marketable securities

Realized and unrealized loss on note receivable

Realized loss on marketable securities

Unrealized (gain) on marketable securities

Realized and unrealized (gain) loss on note receivable

Changes in operating assets and liabilities:

Prepaid expenses and other assets

Prepaid acquisition cost

Clearing broker deposits

Due from related party

Receivable from clearing brokers

Accounts payable and accrued expenses

2 unchanged sentences

Lease liabilities

Contract liabilities

Other current liabilities

Notes receivable, at fair value – net interest accrued

Net cash used in operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities

1 unchanged sentence

Sale of marketable securities

Purchase of fixed assets

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

Collection of principal on note receivable

Sale of long-term equity investments

Loans to employees

Purchase of short-term and long-term investments

Redemption of long-term investments

Collection of loans to employees

Net cash provided by (used in) investing activities

Net cash (used in) provided by investing activities

Cash flows from financing activities

Purchase of treasury stock

Net cash used in financing activities

Cash paid for dividends

Cash received from issuance of common stock

Net cash provided by financing activities

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

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Cash and cash equivalents,

end of period

See accompanying notes to unaudited condensed consolidated

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Notes to Condensed Consolidated Financial Statements

Organization and Description of Business

and Recent Developments

Organization and Description of Business and Recent Developments

Organization and Description of Business

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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.

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

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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 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

FPS’s registered broker-dealer and investment adviser businesses will be operated as a wholly owned subsidiary

of Dominari Financial.

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

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

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

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”).

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 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.

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 condensed financial statements of Dominari Holdings Inc.

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.

Dominari IM LLC (“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.

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

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past equity offerings.

Based upon projected cash flow requirements, the

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

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

As of March 31, 2025, the Company has approximately $ 6.3 million

of cash and cash equivalents and $ 12.6 million of marketable securities.

Additionally, the Company had approximately $ 12.4 million

in receivable from clearing brokers.

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

Summary of Significant Accounting Policies

There have been no material changes in the Company’s

significant accounting policies from those previously disclosed in the 2023 Annual Report.

There have been no material changes in the Company’s significant

accounting policies from those previously disclosed in the 2024 Annual Report.

Basis of Presentation and Principles of Consolidation

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consisting of only normal recurring adjustments, necessary for a fair statement of the results of the interim periods presented.

condensed consolidated balance sheet as of September 30, 2024, condensed consolidated statements of operations for the three months and

nine months ended September 30, 2024 and 2023, condensed consolidated statements of stockholders’ equity for the three months and

nine months ended September 30, 2024 and 2023, and the condensed consolidated statements of cash flows for the nine months ended September

30, 2024 and 2023 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers

necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The results for

the three months and nine months ended September 30, 2024 are not necessarily indicative of results to be expected for the year ending

December 31, 2024 or for any future interim period.

The condensed consolidated balance sheet as of December 31, 2023 has been derived

from audited financial statements;

however, it does not include all of the information and notes required by U.S.

GAAP for complete financial

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated

financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2023.

The condensed

consolidated balance sheet as of March 31, 2025, condensed consolidated statements of operations for the three months ended March 31,

2025 and 2024, condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2025 and 2024, and

the condensed consolidated statements of cash flows for the three months ended March 31, 2025 and 2024 are unaudited, but include all

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

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

The results for the three months ended March 31, 2025 are not necessarily

indicative of results to be expected for the year ending December 31, 2025 or for any future interim period.

The condensed consolidated

balance sheet as of December 31, 2024 has been derived from audited financial statements;

however, it does not include all of the information

and notes required by U.S.

GAAP for complete financial statements.

The accompanying unaudited condensed consolidated financial statements

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

report on Form 10-K for the year ended December 31, 2024.

The Company’s policy is to consolidate all

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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 September 30, 2024, there has been no material activity in DFHS.

Joint Ventures

On May 21, 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

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.

The Company has determined it

is not the primary beneficiary of DFH and thus will not consolidate the activities in its consolidated financial statements.

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

As of March 31, 2025, there has been

no material activity in DFHS.

Use of Estimates

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

Deposits with clearing broker

Deposits with Dominari Securities’ clearing

broker consisted of approximately $ 14.2 million held in money market funds and liquid insured deposits maintained by the Company with

its clearing broker as of September 30, 2024.

Receivable from Clearing Brokers

Receivable from Dominari Securities’ clearing brokers consisted

of approximately $ 10.4 million of liquid insured deposits, $ 0.3 million of commissions receivable and $ 0.8 million of good

faith deposits maintained by the Company with its clearing brokers as of March 31, 2025.

Receivable from Dominari Securities’ clearing

brokers consisted of approximately $ 14.4 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.

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 payments.

Management considers the following factors when determining the collectability of specific

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 be required.

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 March 31, 2025 and December 31, 2024 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 unaudited condensed consolidated balance sheet as both a right-of-use asset and

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

incremental borrowing rate.

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

is amortized over the lease term.

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

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

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

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

Variable lease expenses are recorded when incurred (see Note

8 - Leases ).

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

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

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

borrowing rate.

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

over the lease term.

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

rent expense over the lease term.

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

in front-loaded expense over the lease term.

Variable lease expenses are recorded when incurred (see Note 8 - 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 that point.

Costs associated with underwriting transactions are deferred until the related revenue is recognized or the engagement is otherwise concluded and are recorded on a gross basis within the general and administrative line item in the unaudited condensed consolidated statements of operations as the Company is acting as a principal in the arrangement.

Any expenses reimbursed by the Company’s clients are recognized as other income.

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

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 that point.

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 occurred.

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

● 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.

Account 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.

quarterly) and are initially deferred within in our Condensed Consolidated Balance Sheet.

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

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.

o Management fees represent asset-based fees received in exchange for providing management services to certain

related party pooled investment vehicles (funds).

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

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.

As of December 31, 2024,

the Company recognized $ 1.1 million of contract liabilities of which $ 0.2 million was expected to be recognized within a year.

31, 2025, the Company recognized $ 1.7 million of contract liabilities of which $ 0.4 million is expected to be recognized within a year.

The remaining balance is expected to be recognized through 2030.

During the three months ended March 31, 2025, the Company recognized

revenue of $ 0.06 million that was included in contract liabilities as of December 31, 2024.

● Other revenue includes amounts recognized over time and at a point

Amounts recognized over time are recognized ratably over the period that such services are provided which are distinct from the

services provided in other periods.

Types 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

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

Other revenues

recognized at a point in time include carried interest fees.

Carried interest is typically charged to investment vehicles managed at a

rate of 20 % of realized gains recognized by those vehicles managed by the Company.

Carried interest is considered a form of variable consideration

as the fee is subject to reversal, and therefore the recognition of such fee is deferred until the fee becomes fixed and determinable.

Long-term equity investments

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

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

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.

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 FASB issued ASU 2021-08,

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

This update amends Topic 805 to add contract assets and contract liabilities to the list of exceptions to the

recognition and measurement principles that apply to business combinations and to require that an entity (acquirer) recognize and measure

contract assets and contract liabilities in accordance with ASC 606.

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

There was no material impact to the Company’s unaudited condensed consolidated financial statements from the implementation of ASU

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

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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 unaudited condensed 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.

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,

There was no material impact to the Company’s

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

Effect of new accounting pronouncements to

be adopted in future periods

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

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

In November 2023, the FASB issued ASU No.

2023-07, 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

The Company reviewed all other recently issued

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The realized gain or loss, unrealized gain or

loss, and dividend income related to marketable securities for the three months and nine months ended September 30, 2024 and 2023, which

are recorded as a component of gains and (losses) on marketable securities on the unaudited condensed consolidated statements of operations,

are as follows ($ in thousands):

Three Months Ended September 30,

Nine Months Ended

September 30,

loss, and dividend income related to marketable securities for the three months ended March 31, 2025 and 2024, which are recorded as a

component of gains and (losses) on marketable securities on the unaudited condensed consolidated statements of operations, are as follows

($ in thousands):

Three Months Ended

Realized gain (loss)

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Long-Term Equity Investments

The Company holds interests in several privately

held and publicly traded companies as long-term investments.

The following table presents the Company’s long-term investments as

of September 30, 2024, and December 31, 2023 ($ in thousands):

The Company holds interests in several privately held and publicly

traded companies as long-term investments.

The following table presents the

Company’s long-term investments as of March 31, 2025, and December

31, 2024 ($ in thousands):

December 31, 2024

September 30, 2024

Carrying Value

Investment in Kerna Health Inc

Investment in Kaya Now

Investment in Tevva Motors*

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 XAI*

Investment in Cerebras*

Investment in Groq*

Investment in AdvEn

Investment in Anduril*

March 31, 2025

Investment in Kerna Health

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.

Masterclass)**

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 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 American Bitcoin Corp.

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

The SPV is the holder of the actual stock.

The SPV is the holder of the actual

The Company does not hold these stock certificates directly.

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The Company recorded an increase in the carrying

values of approximately $ 0.9 million for the three month period ended September 30, 2024 and a decrease in the carrying values of approximately

$ 4.6 million for the nine month period ended September 30, 2024.

The Company also recorded a $( 0.5 ) million change in carrying value of

investment upon transferring Unusual Machine, Inc shares to marketable securities in addition to the $( 6.0 ) million year to date change

from the above table.

See Investment in Unusual Machine, Inc below.

Investment in SpaceX

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 nine month period ended September 30, 2024.

Investment in xAI

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.

Investment in Cerebras

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 Groq

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 September 30, 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 Tevva Motors

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 September 30, 2024.

Investment in Tesspay

On March 23, 2022, the Company entered into a

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

Under the Tesspay Securities Purchase

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

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

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

Through the first nine months of 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 September 30, 2024.

Investment in Anduril

In April 2022, the Company entered into a securities

purchase agreement (the “Anduril Securities Purchase Agreement”) with Forge Investments LLC, Fund FG-MHM, who handled the

offering of Anduril Industries, Inc.

shares, a privately-held defense products company.

As of December 31, 2023 the investment was valued

at $ 0.5 million.

During the second quarter 2024 review of the investment Dominari noted news activity related to a recent arm’s length

funding round, raising $ 1.5 billion.

As a result of this the implied holding value of the investment had decreased slightly per the Company’s

independent third-party valuation.

As a result, the Company recorded an impairment charge of approximately $ 0.1 million and the investment

in Anduril was valued at $ 0.4 million as of the third quarter of 2024.

Investment in Thrasio

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 September 30, 2024.

Investment in Epic Games

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 shares.

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 $ 0.9 million decrease in the

carrying value of this investment during the nine months ended September 30, 2024.

The investment was valued at $ 2.7 million as of September

Investment in AdvEn

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.

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.

The investment was valued at $ 0.9 million as of September 30, 2024.

values of approximately $ 0.3 million for the three month period ended March 31, 2025.

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

During the first quarter of 2025, the Company redeemed its interest

in Databricks, Inc.

for net proceeds of approximately $ 0.5 million, which resulted in a gain of approximately $ 28,000 .

Investment in American Bitcoin 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.

Based upon a recent funding round, the Company adjusted its carrying value of

American Bitcoin to be $ 0.3 million.

Notes Receivable

The following table presents the Company’s

notes receivable as of September 30, 2024 and December 31, 2023 ($ in thousands):

September 30, 2024

Maturity Date Stated Interest Rate Principal Amount Interest Receivable Fair Value

The following table presents the Company’s notes receivable as

of March 31, 2025 and December 31, 2024 ($ in thousands):

March 31, 2025

Maturity Date Stated

Interest Rate Principal

Amount Interest

Receivable Fair Value

Notes receivable, at fair value

Convergent convertible note 12/2/2024 8 % $ 250 $ 48 $ 285

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

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December 31, 2024

Maturity Date Stated Interest Rate Principal Amount Interest Receivable Fair Value

Maturity Date Stated

Interest Rate Principal

Amount Interest

Receivable Fair Value

Notes receivable, at fair value

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

Convergent Therapeutics, Inc.

The Company recorded principal repayment of approximately

$ 0.3 million, interest income of approximately $ 53,000 and an unrealized loss on the note of approximately $ 21,000 on the Convergent Convertible

Note for the three months ended September 30, 2024.

The Company recorded principal repayment of $ 0.7

million, interest income of approximately $ 0.2 million on the Convergent Convertible Note for the nine months ended September 30, 2024.

Raefan Industries LLC

The Company recorded a realized loss as a result

of directly writing off approximately $ 0.4 million and $ 2.1 million of principal and interest, which the Company deemed uncollectible

during the three and nine months ended September 30, 2024, respectively.

American Innovative Robotics, LLC

The Company recorded interest income of approximately

$ 22,000 , and an unrealized loss on the note of approximately $ 500 on the Robotics Promissory Note for the three months ended September

The Company recorded interest income of approximately

$ 67,000 , and an unrealized loss on the note of approximately $ 1,700 on the Robotics Promissory Note for the nine months ended September

Fair Value of Financial Assets and

$ 20,000 , and an unrealized gain on the note of approximately $ 221,000 on the American Innovative Robotics Promissory Note for the three

months ended March 31, 2025.

The note was fully paid off as of March 24, 2025 resulting in an ending value of $ 0 .

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, resulting in an ending value of $ 0 for the period ended March 31, 2025 and December

Fair Value of Financial Assets and Liabilities

Financial instruments, including cash and cash

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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)

The Company uses three levels of inputs that may be used to measure

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

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

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The following table presents the Company’s

assets and liabilities that are measured at fair value as of September 30, 2024, and December 31, 2023 ($ in thousands):

Fair value measured as of September 30, 2024

September 30,

assets and liabilities that are measured at fair value as of March 31, 2025, and December 31, 2024 ($ in thousands):

Fair value measured as of March 31, 2025

active markets

Significant other

Marketable securities:

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active markets

Significant other

Marketable securities:

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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):

September 30, 2024

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

Collection of principal outstanding

Realized and unrealized gain (loss) on note receivable, net

Change in interest receivable

Notes receivable at fair value, current portion at September 30, 2024

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

Unrealized gain (loss) on notes receivable

Notes receivable at fair value, non-current portion at September 30, 2024

September 30, 2023

Short-term investment at December 31, 2022

Change in fair value of investment

Short-term investment at September 30, 2023

Change in interest receivable

Collection of principal and interest outstanding

Notes receivable at fair value, non-current portion at March 31, 2025

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

Collection of principal outstanding

Note receivable, Convergent Therapeutics, non-current portion

Unrealized loss on note receivable

Accrued interest receivable

Notes receivable at fair value, current portion at September 30, 2023

Realized and unrealized gain and loss on note receivable, net

Change in interest receivable

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

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

Note receivable, Convergent Therapeutics, non-current portion

Accrued interest receivable

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

Unrealized loss on notes receivable

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

Notes Receivable at fair value

As of September 30, 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 nine month period ended September 30, 2024 the Company had realized and

unrealized losses on notes receivable of $ 2.1 million and for the three month period ended the Company had realized and unrealized losses

on notes receivable of $ 0.4 million.

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”).

As of March 31, 2025, 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.

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

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.

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 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 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 September 30, 2024:

September 30,

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

The tables below represent the Company’s lease assets and liabilities

as of March 31, 2025:

Operating lease right-of-use-assets

The following tables summarize quantitative information

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

September 30,

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

Weighted-average remaining lease term – operating leases (in years) 5.2

Weighted-average discount rate – operating leases 10.0 %

During the three and nine months ended September

30, 2024 and 2023, the Company recorded approximately $ 0.2 million, respectively, of lease expense to current period operations.

Three Months Ended

Nine Months Ended

September 30,

During the three months ended March 31, 2025 and

2024, the Company recorded approximately $ 0.2 million, respectively, of lease expense to current period operations.

Operating leases

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Net rent expense

Three Months Ended

Nine Months Ended

September 30,

Operating leases

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Net rent expense

Supplemental cash flow information related to

leases were as follows:

Nine Months Ended

September 30,

Operating cash flows - operating leases

As of September 30, 2024, future minimum payments

during the next five years and thereafter are as follows:

As of March 31, 2025, future minimum payments during the next five

years and thereafter are as follows:

Remaining Period Ended December 31, 2025

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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 nine months ended September 30, 2024, and 2023 are as follows:

As of September 30,

computation of diluted loss per share for the three months ended March 31, 2025, and 2024 are as follows:

As of March 31,

Convertible preferred stock

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Options to purchase common stock

Stockholders’ Equity and Convertible

Preferred Stock

As of September 30, 2024, there are 6,336,286

shares of common stock issued and 6,276,138 shares outstanding.

Stockholders’ Equity and Convertible Preferred Stock

As of March 31, 2025, there are 14,704,045 shares of common stock issued

and 14,643,897 shares outstanding.

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, and the same amount of unregistered Series A warrants and unregistered Series B warrants were issued 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, and the same amount of unregistered Series A warrants and unregistered Series B warrants were

issued at a combined purchase price of $ 3.47 per share and accompanying warrants (the “February 2025 Financings”).

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.

The net proceeds to the Company from the February 2025 Financings were

approximately $ 13.5 million.

On February 10, 2025, the Company entered into advisory agreements

with various individuals who were issued shares of common stock.

The agreements are for a term of two years but are cancellable by either

As part of these agreements, 2,550,000 shares of common stock were issued on February 18, 2025.

An additional 850,000 shares may

be issued under the terms of the agreements when certain provisions are met which as of the date of grant is probable.

These shares are

nonforfeitable and thus were fully expensed by the Company at the time of grant.

The Company used a Monte Carlo simulation to calculate

the grant date fair value of the common stock.

The fair value of issued shares amounted to $ 20,944,000 and is presented in general and

administrative expenses on the consolidated statement of operations.

The following were assumptions used in the Company’s

fair value analysis:

Risk-free interest rate 4.14 %

Estimated maturity date 10 years

Underlying stock price 6.16

Expected volatility 112.5 %

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 laws.

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 investors.

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 March 31, 2025 and December 31, 2024, 5,000,000 Series

D Preferred Stock was designated;

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

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.

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 March 31, 2025 and December 31, 2024, 5,000,000 Series

D-1 Preferred Stock was designated;

834 and 834 shares remained issued and outstanding.

On February 11, 2025, the board of directors approved

a special cash dividend of $ 0.32 per share payable on March 3, 2025, to holders of common stock and certain warrant holders as of close

of business on February 24, 2025.

Cash dividends paid in 2025 totaled $ 7 million and have been charged to accumulated deficit.

Treasury Stock

There are 60,148 shares of treasury stock as of

September 30, 2024.

A summary of warrant activity for the three months

ended September 30, 2024, is presented below:

There are 60,148 shares of treasury stock as of March 31, 2025.

A summary of warrant activity for the three months ended March 31,

2025, is presented below:

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

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

Outstanding as of September 30, 2024 444,796 $ 29.25 -

Restricted Stock Awards

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 were vested in 1/3 increments in annual installments beginning April 13, 2024.

During the nine months ended

September 30, 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

Granted 7,752,108 3.97

Expired ( 21,716 ) $ 36.24 -

Outstanding as of March 31, 2025 8,175,188 $ 5.26 -

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.

On February 10, 2025, the Company issued 50,000

shares of the Company’s common stock under the Company’s 2022 Equity Incentive Plan.

Upon issuance, the shares were fully-vested

and nonforfeitable with a total fair value $ 308,000 .

On February 10, 2025 the Company issued 351,851

shares of the Company’s common stock to Messr.

Christopher Devall under the Company’s 2022 Equity Incentive Plan.

Upon issuance,

the shares were fully-vested and nonforfeitable with a total fair value $ 2.1 million.

On February 14, 2025 in connection with the closing of the PIPE, the

Committee determined that it is in the best interests of the Company and its stockholders to make a special equity grant to Messr.

Pursuant to the Committee’s decision, he received 500,000 shares of the Company’s common stock.

Upon issuance, the

shares were fully-vested and nonforfeitable with a total fair value of approximately $ 3.4 million.

On March 11, 2025, 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.

Upon issuance, the shares were fully-vested and nonforfeitable with a total fair value of approximately $ 1.7 million.

Restricted Stock roll-forward below.

A summary of restricted stock awards activity

for the nine months ended September 30, 2024, is presented below:

Number of Restricted Stock Awards

Weighted Average Grant Day Fair Value

Additionally,

on February 14, 2025 the Company granted an additional 500 k shares to Anthony Hayes and Kyle pursuant to their employment agreements

with the Company, and in accordance with the Company’s 2022 Equity Incentive Plan.

The shares were issued in April, 2025 following

a vote by the board and shareholders to approve the additional shares.

See Restricted Stock roll-forward below.

A summary of restricted stock awards activity for the three months

ended March 31, 2025, is presented below:

Nonvested at December 31, 2024

Nonvested at September 30, 2024

( 1,210,969 )

Nonvested at March 31, 2025

Stock-based compensation associated with the amortization

of restricted stock awards expense was approximately $ 41,000 and $ 93,000 for the three months ended September 30, 2024, and 2023, respectively,

and $ 0.8 million and $ 2.7 million for the nine months ended September 30, 2024 and 2023, respectively.

All stock compensation was recorded

as a component of general and administrative expenses.

As of September 30, 2024, there is approximately

$ 82,800 unrecognized stock-based compensation expense related to restricted stock awards.

of restricted stock awards expense was approximately $ 7,644,000 and $ 75,000 for the three months ended March 31, 2025, and 2024, respectively.

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

As of March 31, 2025, there is approximately $ 36,000 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 the nine months ended September 30, 2024, is presented below:

Number of Shares Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life (in years)

A summary of option activity under the Company’s stock option

plan for the three months ended March 31, 2025, is presented below:

Weighted Remaining

Number of Average Total Intrinsic Contractual

Shares Exercise Price Value Life (in years)

Outstanding as of December 31, 2024 376,654 $ 4.29 $ -

Employee options expired ( 30,000 ) $ 3.36

Outstanding as of September 30, 2024 419,988 $ 4.16 $ -

Employee options forfeited ( 307,380 ) $ 3.47 $ -

Outstanding as of March 31, 2025 39,274 $ 11.38 $ -

Options vested and exercisable 29,274 $ 14.12 $ -

Stock-based compensation associated with the amortization

of stock option expense was approximately $ 0.1 million and $ 5,000 for the three months ended September 30, 2024, and 2023, respectively,

and $ 0.3 million and $ 26,000 for the nine months ended September 30, 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 $ 0.2 million.

of stock option expense was approximately $ 37,500 and $ 0.1 million for the three months ended March 31, 2025, and 2024, 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 $ 100,000 .

The following table presents our total revenue

disaggregated by revenue type for the three and nine months ended September 30, 2024 and 2023 (in thousands):

disaggregated by revenue type for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended

September 30,

Nine Months Ended

September 30,

Advisory fees

Account advisory and management fees

Commitments and Contingencies

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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.

not believe that the results of these 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

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by Rule 15c3-1.

As of September 30, 2024, Dominari Securities had net capital of approximately $ 12.46 million, which was approximately

As of March 31, 2025, Dominari Securities had net capital of approximately $ 9.39 million, which was approximately $ 8.98

million in excess of net capital requirement of $ 0.41 million.

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On such transactions, the Company earned $ 368,000 and $ 20,000

in the nine months ending September 30, 2024 and 2023, respectively.

The Company incurred referral fees of approximately $ 45,000 and $ 80,000

during the three months ending September 30, 2024 and 2023, respectively.

These fees were included in general and administrative expenses

in the unaudited condensed consolidated statements of operations.

in the three months ending March 31, 2025 and 2024, respectively.

The Company incurred fees on behalf of Series

which were intended for future expenses of each Series entity.

As of March 31, 2025, such amount was approximately $ 52,000 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 period ended March 31, 2025 was approximately

As of March 31, 2025, the total outstanding balance of the employee loans was $ 2.0 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 March 31, 2025, 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.

In addition to managing these related party pooled investment vehicles, the Company also acts as placement agent and earns placement fees,

of which $ 2.8 million is included in underwriting revenues.

Additionally, on February 4, 2025 the Company

deposited $ 2.5 million from brokerage accounts on behalf of SPV Series XII for the purchase of 1,752 .

shares of xAI common stock.

is amount is reflected in the due from related party balance on the consolidated balance sheet.

The deposit was subsequently repaid to

the Company during April, 2025.

Segment Reporting

The Company operates in two reportable

business segments:

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 business segments:

(1) Dominari Financial and (2) Legacy AIkido.

The Dominari Financial reportable business segment represents the Company’s

broker-dealer business, which is composed of mostly underwriting and transactional service activities.

The Legacy AIkido reportable business

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

The Dominari Financial reportable business segment represents the Company’s broker-dealer

business, which is composed of mostly underwriting and transactional service activities.

The Legacy AIkido reportable business segment

includes Aikido Labs, which manages the investments holdings of the legacy entity.

Prior to the FPS Acquisition, the Company operated

as a single operating segment comprised of Legacy AIkido.

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 Policies.

The measures of segment profitability that are

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.

Nine Months Ended September 30, 2024

Dominari Financial

Legacy AIkido Pharma

Additionally, the CODM views the expenses listed below to be significant in their analysis.

Three Months Ended March 31, 2025

Operating Costs

General and administrative

Research and development

Compensation and benefits

Professional and consulting fees

Data processing

Other expenses

Loss from operations

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Total other (expenses) income

Three Months Ended September 30, 2024

Dominari Financial

Legacy AIkido Pharma

Three Months Ended March 31, 2024

Operating Costs

General and administrative

Research and development

Compensation and benefits

Professional and consulting fees

Data processing

Other expenses

Loss from operations

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The Company recorded no income tax expense for

the three months ended September 30, 2024 and 2023 because the estimated annual effective tax rate was zero.

the three months ended March 31, 2025 and 2024 because the estimated annual effective tax rate was zero .

In determining the estimated

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and net operating loss carry forwards, and available tax planning alternatives.

As of September 30, 2024, and December 31, 2023,

As of March 31, 2025, and December 31, 2024,

the Company provided a full valuation allowance against its net deferred tax assets since the Company believes it is more likely than

1 unchanged sentence

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

What changed 10-Q

Item 1. Financial Statements