Dominari Holdings Inc. 10-Q

Item 1. Financial Statements DOMINARI HOLDINGS INC. Condensed Consolidated Balance Sheets ($ in thousands except share and per share amounts) (Unaudited) March 31, 2025 December 31, 2024 ASSETS (Unaudited) Current assets Cash and cash equivalents $ 6,315 $ 4,079 Marketable securities 12,555 5,773 Receivable from clearing brokers 12,431 17,279 Prepaid expenses and other assets 899 1,019 Due from related party 2,500 - Total current assets 34,700 28,150 Property and equipment, net 213 239 Notes receivable, at fair value - non-current portion - 902 Long term equity investments 12,064 12,282 Loans to employees 2,008 2,150 Right-of-use assets 2,892 2,944 Security deposit 458 458 Total assets $ 52,335 $ 47,125 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable and accrued expenses $ 1,439 $ 919 Accrued commissions 3,267 2,057 Lease liability - current 410 410 Contract liabilities - current 380 240 Other current liabilities 552 157 Total current liabilities 6,048 3,783 Lease liability, less current portion 2,507 2,629 Contract liabilities, less current portion 1,352 860 Total liabilities 9,907 7,272 Stockholders’ equity 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 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 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; 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 305,963 263,820 Treasury stock, as of cost, 60,148 shares as of March 31, 2025 and December 31, 2024 ( 501 ) ( 501 ) Accumulated deficit ( 263,034 ) ( 223,466 ) Total stockholders’ equity 42,428 39,853 Total liabilities and stockholders’ equity $ 52,335 $ 47,125 See accompanying notes to unaudited condensed consolidated financial statements. 1 DOMINARI HOLDINGS INC. Condensed Consolidated Statements of Operations ($ in thousands except share and per share amounts) (Unaudited) Three Months Ended March 31, 2025 2024 Revenues $ 8,112 $ 1,367 Operating costs and expenses General and administrative $ 40,122 $ 4,172 Total operating expenses 40,122 4,172 Loss from operations ( 32,010 ) ( 2,805 ) Other income (expenses) Interest income 59 164 Gain (loss) on marketable securities, net ( 1,078 ) 574 Realized and unrealized loss on note receivable, net 221 ( 915 ) Change in carrying value of investments 320 ( 2,459 ) Total other expenses ( 478 ) ( 2,636 ) Net loss $ ( 32,488 ) $ ( 5,441 ) Net loss per share, basic and diluted Basic and Diluted $ ( 3.02 ) $ ( 0.91 ) Weighted average number of shares outstanding, basic and diluted Basic and Diluted 10,775,219 5,995,065 See accompanying notes to unaudited condensed consolidated financial statements. 2 DOMINARI HOLDINGS INC. Condensed Consolidated Statements of Changes in Stockholders’ Equity ($ in thousands except share and per share amounts) (Unaudited) For the Three Months Ended March 31, 2025 and 2024 Additional Total Preferred Stock Common Stock Paid-in Treasury Stock Accumulated Stockholders’ Shares Amount Shares Amount Capital Shares Amount Deficit Equity Balance at December 31, 2024 4,659 $ - 7,037,022 $ - $ 263,820 60,148 $ ( 501 ) $ ( 223,466 ) $ 39,853 Stock-based compensation 1,240,969 7,682 7,682 Issuance of common stock 3,876,054 13,517 13,517 Advisory shares issued 2,550,000 20,944 20,944 Dividends issued ( 7,080 ) ( 7,080 ) Net loss - - - - - - - ( 32,488 ) ( 32,488 ) Balance at March 31, 2025 4,659 $ - 14,704,045 $ - $ 305,963 60,148 $ ( 501 ) $ ( 263,034 ) $ 42,428 Additional Total Preferred Stock Common Stock Paid-in Treasury Stock Accumulated Stockholders’ Shares Amount Shares Amount Capital Shares Amount Deficit Equity Balance at December 31, 2023 4,659 $ - 5,995,065 $ - $ 262,187 60,148 $ ( 501 ) $ ( 208,763 ) $ 52,923 Stock-based compensation - - - 187 - - - 187 Net loss - - - - - - - ( 5,441 ) ( 5,441 ) Balance at March 31, 2024 4,659 $ - 5,995,065 $ - $ 262,374 60,148 $ ( 501 ) $ ( 214,204 ) $ 47,669 See accompanying notes to unaudited condensed consolidated financial statements 3 DOMINARI HOLDINGS INC. Condensed Consolidated Statements of Cash Flows ($ in thousands) (Unaudited) Three Months Ended March 31, 2025 2024 Cash flows from operating activities Net loss $ ( 32,488 ) $ ( 5,441 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Amortization of right-of-use assets 52 93 Depreciation 26 26 Change in carrying value of long-term investment ( 320 ) 2,459 Non-cash warrant revenue ( 697 ) - Stock-based compensation 28,626 187 Realized loss on marketable securities 1,384 93 Unrealized (gain) on marketable securities ( 210 ) ( 473 ) Realized and unrealized (gain) loss on note receivable ( 221 ) 915 Changes in operating assets and liabilities: Prepaid expenses and other assets 120 6 Due from related party ( 2,500 ) - Receivable from clearing brokers 4,848 ( 6,407 ) Accounts payable and accrued expenses 520 ( 196 ) Accrued salaries and benefits - ( 51 ) Accrued commissions 1,210 218 Lease liabilities ( 122 ) ( 101 ) Contract liabilities 632 - Other current liabilities 395 20 Notes receivable, at fair value – net interest accrued ( 20 ) 58 Net cash provided by (used in) operating activities 1,235 ( 8,594 ) Cash flows from investing activities Purchase of marketable securities ( 9,035 ) ( 24 ) Sale of marketable securities 1,776 8,829 Collection of principal on note receivable 1,143 250 Sale of long-term equity investments 538 - Loans to employees - ( 1,340 ) Collection of loans to employees 142 2 Net cash (used in) provided by investing activities ( 5,436 ) 7,717 Cash flows from financing activities Cash paid for dividends ( 7,080 ) - Cash received from issuance of common stock 13,517 - Net cash provided by financing activities 6,437 - Net increase (decrease) in cash and cash equivalents and restricted cash 2,236 ( 877 ) Cash and cash equivalents, beginning of period 4,079 2,833 Cash and cash equivalents, end of period $ 6,315 $ 1,956 See accompanying notes to unaudited condensed consolidated financial statements. 4 DOMINARI HOLDINGS INC. Notes to Condensed Consolidated Financial Statements (Unaudited) Note 1. 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 industries. 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 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 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. 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. Note 2. Liquidity and Capital Resources 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 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 statements. 5 Note 3. Summary of Significant Accounting Policies 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 The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), and in conformity with the rules and regulations of the SEC. In the opinion of management, these financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the results of the interim periods presented. The condensed 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 entities that it controls by ownership of a majority of the membership interest or outstanding voting stock. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Aikido Labs, Dominari Financial, and Dominari Securities. All significant intercompany balances and transactions have been eliminated in consolidation. 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 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. The Company has determined it is not the primary beneficiary of DFH and thus will not consolidate the activities in its consolidated financial statements. The Company 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 The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP. This requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenue and expenses during the period. The Company’s significant estimates and assumptions include stock-based compensation, the valuation of investments, the valuation of notes receivable and the valuation allowance related to the Company’s deferred tax assets. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates and assumptions. 6 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 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 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. Leases 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 ). Revenue 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. 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 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. 7 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 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. 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. As of March 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 in time. 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 accounts. 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 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 prices. 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 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. Recently adopted accounting standards 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 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. 8 Effect of new accounting pronouncements to be adopted in future periods The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on these unaudited condensed consolidated financial statements. Note 4. Marketable Securities The realized gain or loss, unrealized gain or 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 March 31, 2025 2024 Realized gain (loss) $ ( 1,384 ) $ ( 93 ) Unrealized gain (loss) 210 473 Dividend income 96 193 Total $ ( 1,078 ) $ 574 Note 5. 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 March 31, 2025, and December 31, 2024 ($ in thousands): December 31, 2024 March 31, 2025 Carrying Carrying Cost Basis Value Cost Basis Value Investment in Kerna Health $ 2,140 $ 4,940 $ 2,140 $ 4,940 Investment in Revere Master SPV Series 1 (Qxpress Pte Ltd)* 1,000 1,000 1,000 1,000 Investment in MW LSV MasterClass, LLC (Yanka Industries, Inc. d.b.a. Masterclass)* 170 170 170 170 Investment in Payward, Inc. and MWSI VC Kraken-II, LLC (Payward, Inc. d.b.a. Masterclass)** 597 364 597 364 Investment in Aeon Partners Fund Series EG (Epic Games, Inc.)* 3,500 2,248 3,500 2,248 Investment in Tesspay, Inc. and Revere Master SPV Series VI (TessPay, Inc.) ** 1,240 1,240 1,240 1,240 Investment in Aeon Partners Fund Series DB (Databricks, Inc.)* 716 538 - - Investment in Discord Inc. 476 476 476 476 Investment in Thrasio, Inc. 300 - 300 - Investment in Automation Anywhere, Inc. 476 397 476 397 Investment in Dominari Master SPV LLC Series VI (X.AI Corp. d.b.a. xAI)* 100 109 100 109 Investment in Dominari Master SPV LLC Series XI (Cerebras Systems Inc.)* 25 25 25 25 Investment in Dominari Master SPV LLC Series XII (Groq, Inc.)* 25 25 25 25 Investment in AdvEn Inc. 750 750 750 750 Investment in American Bitcoin Corp. - - - 320 Total $ 11,515 $ 12,282 $ 10,799 $ 12,064 * Investments made in these companies are through a Special Purpose Vehicle (“SPV”). The SPV is the holder of the actual stock. The Company does not hold these stock certificates directly. ** Investments made in these companies are through both an SPV and direct investments. 9 The Company recorded an increase in the carrying 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. 10 Note 6. Notes Receivable 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 Raefan Industries LLC 06/30/2025 8 % $ - $ - $ - American Innovative Robotics 04/01/2027 8 % $ - $ - $ - Notes receivable, at fair value - current portion $ - Notes receivable, at fair value - non-current portion $ - December 31, 2024 Maturity Date Stated Interest Rate Principal Amount Interest Receivable Fair Value Notes receivable, at fair value 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 American Innovative Robotics, LLC The Company recorded interest income of approximately $ 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 31, 2024. Note 7. Fair Value of Financial Assets and Liabilities 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. 11 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 March 31, 2025, and December 31, 2024 ($ in thousands): Fair value measured as of March 31, 2025 Significant Quoted other Significant Total at prices in observable unobservable March 31, active markets inputs inputs 2025 (Level 1) (Level 2) (Level 3) Assets Marketable securities: Equities $ 12,555 $ 12,081 $ 474 $ - Total marketable securities $ 12,555 $ 12,081 $ - $ - Notes receivable at fair value, current portion $ - $ - $ - $ - Notes receivable at fair value, non-current portion $ - $ - $ - $ - Fair value measured as of December 31, 2024 Significant Quoted other Significant Total at prices in observable unobservable December 31, active markets inputs inputs 2024 (Level 1) (Level 2) (Level 3) Assets Marketable securities: Equities $ 5,773 $ 4,156 $ 1,617 $ - Total marketable securities $ 5,773 $ 4,156 $ - $ - Notes receivable at fair value, current portion $ - $ - $ - $ 3,177 Notes receivable at fair value, non-current portion $ 902 $ - $ - $ 1,129 12 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): Notes receivable at fair value, non-current portion at December 31, 2024 $ 902 Unrealized gain (loss) on notes receivable 221 Change in interest receivable 20 Collection of principal and interest outstanding ( 1,143 ) Notes receivable at fair value, non-current portion at March 31, 2025 $ - Notes receivable at fair value, current portion at December 31, 2023 $ 3,177 Collection of principal outstanding ( 250 ) Realized and unrealized gain and loss on note receivable, net ( 915 ) Change in interest receivable ( 57 ) Notes receivable at fair value, current portion at March 31, 2024 $ 1,955 Notes receivable at fair value, non-current portion at December 31, 2023 $ 1,129 Unrealized loss on notes receivable ( 1 ) Notes receivable at fair value, non-current portion at March 31, 2024 $ 1,128 Notes Receivable at fair value 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. Note 8. Leases On December 1, 2021, the Company entered into a Lease Agreement (the “Company’s Lease”) with Trump Tower Commercial LLC, a New York limited liability company. Under the Company’s Lease, the Company 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 March 31, 2025: March 31, 2025 Assets: Operating lease right-of-use-assets $ 2,892 Liabilities: Current Operating 410 Long-term Operating 2,507 $ 2,917 13 The following tables summarize quantitative information about the Company’s operating leases, under the adoption of ASC 842: March 31, 2025 Weighted-average remaining lease term – operating leases (in years) 5.2 Weighted-average discount rate – operating leases 10.0 % 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. Three Months Ended March 31, 2025 Operating leases Operating lease cost $ 152 Short-term lease rent expense 23 Net rent expense $ 175 Three Months Ended March 31, 2024 Operating leases Operating lease cost $ 178 Short-term lease rent expense 22 Net rent expense $ 200 As of March 31, 2025, future minimum payments during the next five years and thereafter are as follows: Operating Leases Remaining Period Ended December 31, 2025 539 Year Ended December 31, 2026 685 Year Ended December 31, 2027 685 Year Ended December 31, 2028 766 Year Ended December 31, 2029 784 Thereafter 376 Total 3,835 Less present value discount ( 918 ) Operating lease liabilities $ 2,917 14 Note 9. Net Loss per Share Basic loss per share of common stock is computed by dividing the net loss allocable to common stockholders by the weighted-average number of shares of common stock or common stock equivalents 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 three months ended March 31, 2025, and 2024 are as follows: As of March 31, 2025 2024 Convertible preferred stock 34 34 Warrants to purchase common stock 8,175,188 444,796 Restricted stock awards 50,000 136,309 Options to purchase common stock 346,654 420,168 Total 8,571,876 1,001,307 Note 10. Stockholders’ Equity and Convertible Preferred Stock Common 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”). 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. 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 party. 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. 15 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 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. Dividends 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 March 31, 2025. Warrants 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 (in years) Outstanding as of December 31, 2024 444,796 $ 29.25 - 1.20 Granted 7,752,108 3.97 Expired ( 21,716 ) $ 36.24 - - Outstanding as of March 31, 2025 8,175,188 $ 5.26 - 4.67 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. Anthony Hayes. 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. 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. 16 A summary of restricted stock awards activity for the three months ended March 31, 2025, is presented below: Weighted Number of Average Restricted Grant Day Stock Awards Fair Value Nonvested at December 31, 2024 50,000 $ 0.98 Granted 1,210,969 $ 7.68 Vested ( 1,210,969 ) $ 2.20 Forfeited - $ - Nonvested at March 31, 2025 50,000 $ 0.98 Stock-based compensation associated with the amortization 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 three months ended March 31, 2025, is presented below: Weighted Average 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 $ - 8.2 Employee options expired ( 30,000 ) $ 3.36 Employee options forfeited ( 307,380 ) $ 3.47 $ - - Outstanding as of March 31, 2025 39,274 $ 11.38 $ - 6.7 Options vested and exercisable 29,274 $ 14.12 $ - 6.1 Stock-based compensation associated with the amortization 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 . Note 11. Revenue The following table presents our total revenue disaggregated by revenue type for the three months ended March 31, 2025 and 2024 (in thousands): Three Months Ended March 31, 2025 2024 Underwriting $ 5,607 $ 409 Commissions 2,191 310 Account advisory and management fees 132 341 Other 182 307 Total $ 8,112 $ 1,367 17 Note 12. 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 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 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. In the past, in the ordinary course of business, the Company actively pursued legal remedies to enforce its intellectual property rights and to stop unauthorized use of the Company’s technology. Other than ordinary routine litigation incidental to the business, the Company is not aware of any material, active or pending legal proceedings brought against it. Note 13. Regulatory Dominari Securities, the Company’s broker-dealer subsidiary, is registered with the SEC as an introducing broker-dealer and is a member of FINRA. The Company’s broker-dealer subsidiary is subject to SEC Uniform Net Capital Rule (Rule 15c3-1) which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. As such, the subsidiary is subject to the minimum net capital requirements promulgated by the SEC and has elected to calculate minimum capital requirements using the basic method permitted by Rule 15c3-1. As of March 31, 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. Note 14. Related Party Transaction In 2021, the Company engaged the services of Revere Securities, LLC (“Revere”) to assist in the management and building of the Company’s investment processes. Kyle Wool, 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, 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 $ 368,000 and $ 20,000 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. 18 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 $ 21,000 . 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 (X.AI Corp. d.b.a. 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. This 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. Note 15. 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. 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 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. Prior to the FPS Acquisition, the Company operated as a single operating segment comprised of Legacy AIkido. 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. ” 19 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. Additionally, the CODM views the expenses listed below to be significant in their analysis. Three Months Ended March 31, 2025 Legacy Dominari AIkido Financial Pharma Consolidated Revenue $ 8,112 $ - $ 8,112 Operating Costs Compensation and benefits 6,869 28,805 35,695 Professional and consulting fees 647 775 1,422 Data processing 182 - 182 Other expenses 1,475 1,348 2,823 Loss from operations ( 1,082 ) ( 30,928 ) ( 32,010 ) Other (expenses) income Interest income 17 42 59 Gain on marketable securities ( 910 ) ( 168 ) ( 1,078 ) Unrealized loss on note receivable - 221 221 Change in fair value of investments - 320 320 Total other (expenses) income ( 893 ) 415 ( 478 ) Net loss $ ( 1,975 ) $ ( 30,513 ) $ ( 32,488 ) Total assets 19,202 33,103 52,335 Three Months Ended March 31, 2024 Legacy Dominari AIkido Financial Pharma Consolidated Revenue $ 1,367 $ - $ 1,367 Operating Costs Compensation and benefits 1,422 727 2,149 Professional and consulting fees 468 489 957 Data processing 148 33 181 Other expenses 523 362 885 Loss from operations ( 1194 ) ( 1,611 ) ( 2,805 ) Other (expenses) income Interest income ( 29 ) 193 164 Gain on marketable securities - 574 574 Unrealized loss on note receivable - ( 915 ) ( 915 ) Change in fair value of investments - ( 2,459 ) ( 2,459 ) Total other (expenses) income ( 29 ) ( 2,607 ) ( 2,636 ) Net loss $ ( 1,223 ) $ ( 4,218 ) $ ( 5,441 ) Total assets 15,337 36,857 52,194 Note 16. Income Taxes The Company recorded no income tax expense for the three months ended March 31, 2025 and 2024 because the estimated annual effective tax rate was zero . In determining the estimated annual effective income tax rate, the Company analyzes various factors, including projections of the Company’s annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, the ability to use tax credits and net operating loss carry forwards, and available tax planning alternatives. 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 not that its deferred tax assets will not be realized. 20