What changed in this filing

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Item 1. Financial Statements

2025-11-10 compared with 2025-08-11 · 802 added, 627 removed, 426 unchanged (77% of the section changed)

3 unchanged sentences

($ in thousands except share and per share amounts)

September 30,

Current assets

14 unchanged sentences

Accrued commissions

Lease liability - current

Contract liabilities - current

Lease liability - current

Other current liabilities

6 unchanged sentences

Convertible Preferred Series D:

5,000,000 shares designated; 3,825 shares issued and outstanding as of June 30, 2025 and December 31, 2024; liquidation value of $ 0.0001 per share

5,000,000 shares designated; 3,825 shares issued and outstanding as of September 30, 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 June 30, 2025 and December 31, 2024; liquidation value of $ 0.0001 per share

Common stock, $ 0.0001 par value, 100,000,000 shares authorized; 15,295,930 and 7,037,022 shares issued as of June 30, 2025 and December 31, 2024, respectively; 15,235,782 and 6,976,874 shares outstanding as of June 30, 2025 and December 31, 2024

5,000,000 shares designated; 834 shares issued and outstanding as of September 30, 2025 and December 31, 2024; liquidation value of $ 0.0001 per share

Common stock, $ 0.0001 par value, 100,000,000 shares authorized; 15,817,323 and 7,037,022 shares issued as of September 30, 2025 and December 31, 2024, respectively 15,817,323 and 6,976,874 shares outstanding as of September 30, 2025 and December 31, 2024

Additional paid-in capital

Treasury stock, as of cost, 60,148 shares as of June 30, 2025 and December 31, 2024

Treasury stock, as of cost, 0 shares as of September 30, 2025 and 60,148 as of December 31, 2024

Accumulated deficit

Total Dominari stockholders’ equity

Non-controlling interests

1 unchanged sentence

Total liabilities and stockholders’ equity

See accompanying notes to unaudited condensed consolidated financial

See accompanying notes to unaudited condensed

consolidated financial statements.

DOMINARI HOLDINGS INC.

Consolidated Statements of Operations

Condensed Consolidated Statements of Operations

($ in thousands except share and per share amounts)

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Operating costs and expenses

4 unchanged sentences

Interest income

Gain on marketable securities, net

Gain (loss) on marketable securities, net

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

Change in fair value of investments

Change in carrying value of investments

Total other income (expenses)

Net income (loss)

Net profit attributable to non-controlling interests

Net income attributable to non-controlling interests

Net income (loss) attributable to common stockholders of Dominari Holdings Inc.

Net income (loss) per share, basic and diluted

Basic and Diluted

Weighted average number of shares outstanding, basic and diluted

Basic and Diluted

See accompanying notes to unaudited condensed

1 unchanged sentence

DOMINARI HOLDINGS INC.

Condensed Consolidated Statements

of Changes in Stockholders’ Equity

Condensed Consolidated Statements of Changes

in Stockholders’ Equity

($ in thousands except share and per share amounts)

For the Three Months

Ended June 30, 2025 and 2024

Stockholders’

at March 31, 2025

For the Three Months Ended September 30, 2025

Preferred Stock

Treasury Stock

Dominari Holding Stockholders’

Non controlling

Total Stockholders’

Balance at June 30, 2025

$ ( 246,424 )

of common stock

issued under Advisory Agreements

at June 30, 2025

Stock-based compensation

Issuance of common stock for cash

Retirement of treasury stock

Dividends Issued

Distribution to Non Controlling Interest

Balance at September 30, 2025

$ ( 126,124 )

Stockholders’

at March 31, 2024

Preferred Stock

Treasury Stock

Dominari Holding Stockholders’

Non controlling

Total Stockholders’

Balance at June 30, 2024

$ ( 220,324 )

at June 30, 2024

Stock-based compensation

Balance at September 30, 2024

$ ( 224,535 )

accompanying notes to unaudited condensed consolidated financial statements

the Six Months Ended June 30, 2025 and 2024

See accompanying notes to

unaudited condensed consolidated financial statements.

For the Nine Months Ended September 30, 2025

Preferred Stock

Treasury Stock

Stockholders’

Dominari Holding Stockholders’

Non controlling

Total Stockholders’

Balance at December 31, 2024

1 unchanged sentence

Stock-based compensation

Issuance of Common Stock

Issuance of Common Stock for cash

Issuance of Common Stock from warrants exercised

Shares issued under Advisory Agreements

Retirement of treasury stock

Distribution to Non Controlling Interest

Dividends issued

Net (loss)/income

Balance at June 30, 2025

Net income (loss)

Balance at September 30, 2025

$ ( 126,124 )

1 unchanged sentence

Treasury Stock

Stockholders’

Dominari Holding Stockholders’

Non controlling

Total Stockholders’

Balance at December 31, 2023

1 unchanged sentence

Stock-based compensation

Balance at June 30, 2024

Balance at September 30, 2024

$ ( 224,535 )

2 unchanged sentences

DOMINARI HOLDINGS INC.

Condensed Consolidated Statements

of Cash Flows

Condensed Consolidated Statements of Cash Flows

($ in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities

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

Net income/(loss)

Adjustments to reconcile net income/ (loss) to net cash used in operating activities:

Amortization of right-of-use assets

Change in carrying value of long-term investment

Non-cash warrant revenue

Unrealized (gain) loss on marketable securities

Change in carrying value of long-term equity investments

Non-cash underwriting revenue

Non-cash commissions expense

Stock-based compensation

Realized loss (gain) on marketable securities

Unrealized (gain) loss on marketable securities

Realized and unrealized (gain) loss on note receivable

2 unchanged sentences

Receivable from clearing brokers

Security Deposits

Accounts payable and accrued expenses

5 unchanged sentences

Notes receivable, at fair value - net interest accrued

Net cash provided by (used in) operating activities

Net cash (used in) operating activities

Cash flows from investing activities

2 unchanged sentences

Collection of principal on note receivable

Sale of long-term equity investments

Loans to employees

Purchase of short-term and long-term investments

Collection of loans to employees

Net cash (used in) provided by investing activities

Purchase of long-term investments

Sale of long term investments

Net cash provided by investing activities

Cash flows from financing activities

Cash paid for dividends

Distribution to Non Controlling Interest

Cash received from issuance of common stock

4 unchanged sentences

Cash and cash equivalents, end of period

See accompanying notes to unaudited condensed

consolidated financial statements.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated

Financial Statements

and Description of Business and Recent Developments

See accompanying notes

to unaudited condensed consolidated financial statements.

HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

Organization and Description of Business and Recent Developments

Organization and Description of Business

15 unchanged sentences

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”).

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 Financials’

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.

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

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 unaudited condensed consolidated financial statements

of Dominari Holdings Inc.

7 unchanged sentences

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.

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.

On June 17, 2025, the Company entered

into two Limited Liability Agreements with American Ventures Management LLC (“AV Manager”) and American Ventures IM LLC (“AV

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.

On June 17, 2025, the Company entered into two

Limited Liability Agreements with American Ventures Management LLC (“AV Manager”) and American Ventures IM LLC (“AV

Investment Manager”).

The Company holds a ninety percent ( 90 %) Membership Interest in each, and their operations are included within

the consolidated financial statements of Dominari Holdings Inc.

AV Manager was named as the manager of American Ventures LLC (the “AV

Master SPV”), a series limited liability company formed by AV Manager and owned by the investors of each fund series, and is responsible

for the day-to-day operations of the AV Master SPV.

AV Investment Manager was named the investment manager of the AV Master SPV and is

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

AV Manager and AV Investment Manager are the

managing members of AV Master SPV and may not be removed without their respective consent.

The other members of AV Master SPV are the

passive investing members of each series of funds (the “AV Series”) established under the AV Master SPV.

The AV Manager established

various AV Series of the AV Master SPV for the purpose of making investments in companies identified by the AV Investment Manager with

proceeds generated by the sale of non-voting interests in such AV Series by the AV 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.

the unaudited condensed consolidated financial statements of Dominari Holdings Inc.

AV Manager was named as the manager of American Ventures

LLC (the “AV Master SPV”), a series limited liability company formed by AV Manager and owned by the investors of each fund

series, and is responsible for the day-to-day operations of the AV Master SPV.

AV Investment Manager was named the investment manager

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

AV Manager and AV

Investment Manager are the managing members of AV Master SPV and may not be removed without their respective consent.

The other members

of AV Master SPV are the passive investing members of each series of funds (the “AV Series”) established under the AV Master

The AV Manager established various AV Series of the AV Master SPV for the purpose of making investments in companies identified by

the AV Investment Manager with proceeds generated by the sale of non-voting interests in such AV Series by the AV 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.

Liquidity and Capital Resources

The Company continues to incur ongoing administrative and other expenses,

including public company expenses, in excess of corresponding cash flows from operating and investing activities.

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 June 30, 2025, the Company has approximately $ 9.5 million

of cash and cash equivalents and $ 18.8 million of marketable securities.

Additionally, the Company had approximately $ 31.0 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.

The Company monitors its liquidity position on

a regular basis.

The Company continues to incur significant ongoing administrative and other expenses, including public company expenses,

while the Company continues to implement its business strategy.

The Company intends to fund its activities through cash flows from investments

and financing activities along with managing current cash on hand and other liquid assets.

As of September 30, 2025, the Company has approximately

$ 5.4 million of cash and cash equivalents and $ 170.8 million of marketable securities.

Included in marketable securities is $ 156.4 million

related to American Bitcoin shares that is subject to a lock-up period until March 1, 2026 ( See Note 5) along with approximately $ 1.2

million of marketable securities that are subject to lock-up periods that will end in November 2025 and another $ 4.0 million of marketable

securities with lock-up periods that will end by March 1, 2026 as well.

Additionally, the Company had approximately $ 28.9 million in receivable

from clearing brokers.

Unless otherwise noted, all such funds are available to fund the Company’s operations.

Additionally, the

Company’s working capital balance at September 30, 2025, totaled $ 198.8 million.

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 unaudited condensed consolidated financial statements.

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.

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

6 unchanged sentences

The condensed

consolidated balance sheet as of June 30, 2025, condensed consolidated statements of operations for the three and six months ended June

30, 2025 and 2024, condensed consolidated statements of stockholders’ equity for the three and six months ended June 30, 2025 and

2024, and the condensed consolidated statements of cash flows for the six months ended June 30, 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 and six months ended June 30,

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.

consolidated balance sheet as of September 30, 2025, condensed consolidated statements of operations for the three and nine months ended

September 30, 2025 and 2024, condensed consolidated statements of stockholders’ equity for the three and nine months ended September

30, 2025 and 2024, and the condensed consolidated statements of cash flows for the nine months ended September 30, 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 and nine months ended

September 30, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025 or for any future interim

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.

5 unchanged sentences

The accompanying unaudited

condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Dominari Labs LLC (formerly,

Aikido Labs LLC), Dominari Financial, and Dominari Securities.

All significant intercompany balances and transactions have been eliminated

in consolidation.

condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Dominari Labs LLC

(formerly, Aikido Labs LLC), Dominari Financial Inc., Dominari IM LLC, Dominari Manager LLC and Dominari Securities along with American

Ventures IM LLC and American Ventures Manager LLC, both of which are owned 90 % by the Company.

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.

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

As of June 30, 2025, there has been

no material activity in DFHS.

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 unaudited condensed consolidated financial statements.

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

As of September 30, 2025,

there has been no material activity in DFHS.

Use of Estimates

5 unchanged sentences

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.

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

of non-cash consideration received, 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.

Receivable from Clearing Brokers

Receivable from Dominari Securities’ clearing

brokers consisted of approximately $ 0.5 million in good faith deposits maintained by the Company with its clearing brokers as of June

The Company also has amounts with the clearing brokers held in cash in the amount of $ 19.1 million which consisted of $ 15.5

million of liquid insured deposits and $ 3.6 million of commissions receivable and $ 10.5 million of carried interest fees receivable as

of June 30, 2025.

The carried interest receivable was received during Q3 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

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 June 30, 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 ).

brokers totaling $ 28.9 million consisted of approximately $ 23.9 million of liquid insured deposits, $ 4.5 million of commissions receivable,

and $ 0.5 million in good faith deposits maintained by the Company with its clearing brokers as of September 30, 2025.

Receivable from

Dominari Securities’ clearing brokers consisted of approximately $ 15.4 million of liquid insured deposits, $ 1.3 million of commissions

receivable and $ 0.6 million of good faith deposits maintained by the Company with its clearing brokers as of December 31, 2024.

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 creditworthiness, 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 September 30, 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 ).

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

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

control and benefit of the underwriting offering at that point.

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

offering at that point.

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 unaudited condensed consolidated statements of operations as the Company is acting

as a principal in the arrangement.

The Company applies the practical expedient under ASC 606 and expenses these costs immediately, 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.

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.

Similarly, any commissions or compensation expense from providing non-cash consideration provided to employees as is recognized at fair

value in accordance with ASC 820 on the same date.

● 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

unaudited condensed 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

In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that

a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable

consideration is resolved.

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.

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.

o Contract liabilities relate to payments

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

● 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.

In determining the transaction price, an entity may include variable consideration

only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur, or

when the uncertainty associated with the variable consideration is resolved.

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.

● 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, and 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

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 September

30, 2025, the Company recognized $ 4.0 million of contract liabilities of which $ 0.8 million is expected to be recognized within a year.

The remaining balance is expected to be recognized through 2030.

During the six months ended June 30, 2025, the Company recognized revenue

of $ 0.2 million that was included in contract liabilities as of June 30, 2025.

During the three months ended June 30, 2025, the Company

recognized revenue of $ 0.1 million that was included in contract liabilities as of June 30, 2025.

There was no revenue associated with

contract liabilities for the period ended June 30, 2024.

o Carried interest fees are earned based on performance of the vehicle during the period, subject to the achievement of minimum return levels, or high water marks, in accordance with the respective terms set out in each vehicle’s governing agreements.

Carried interest is a form of variable consideration in the Company’s contracts with investment management customers and is fully constrained at contract inception.

Carried interest fees are not recognized as revenue until (a) it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, or (b) the uncertainty associated with the variable consideration is subsequently resolved.

Incentive Fees are typically recognized as revenue when realized at the end of the measurement period.

Once realized, such fees are not subject to clawback or reversal.

During the six months ended June 30, 2025 the Company recognized carried interest of $ 10.5 million which had not been received as of June 30, 2025.Such amount is included in receivable from broker on the accompanying consolidated balance sheet.

● 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

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

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.

As the value of the eligible assets in an advisory account is susceptible

to changes due to customer activity, this revenue includes variable consideration and is constrained until the date that the fees are

determinable.

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.

The remaining balance is expected to be recognized through

During the nine months ended September 30, 2025, the Company recognized revenue of $ 0.3 million that was included in contract liabilities

as of December 31, 2024.

During the three months ended September 30, 2025, the Company recognized revenue of $ 0.2 million that was included

in contract liabilities as of December 31, 2024.

There was no revenue associated with contract liabilities recognized during the period

ended September 30, 2024.

● Carried interest fees are earned

based on performance of the vehicle during the period, subject to the achievement of minimum return levels, or high-water marks, in accordance

with the respective terms set out in each vehicle’s governing agreements.

Carried interest is a form of variable consideration

in the Company’s contracts with investment management customers and is fully constrained at contract inception.

Carried interest

fees are not recognized as revenue until (a) it is probable that a significant reversal in the amount of cumulative revenue recognized

will not occur, or (b) the uncertainty associated with the variable consideration is subsequently resolved.

Carried Interest

Fees are typically recognized as revenue when realized at the end of the measurement period.

Once realized, such fees are not subject

to claw back or reversal.

During the nine months ended September 30, 2025, the Company recognized carried interest of $ 19.2 million.

● 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.

As the value of the eligible assets in an advisory account is susceptible to changes due to customer

activity, this revenue includes variable consideration and is constrained until the date that the fees are 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

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.

The Company accounts for long-term equity investments

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

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

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

condensed 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.

Warrant Investments

Warrant fair values are primarily determined using

a Black Scholes option pricing model, which include the underlying stock price, warrant strike price, expected remaining term, volatility,

and risk-free rate as the primary inputs to the model.

Increases or decreases in any of these inputs could result in a material change

in fair value.

Additionally, for warrants that have periods of contractual trading restrictions, marketability discounts were considered

in determining fair value.

● The underlying stock price is equal to the closing price

of the underlying stock as of the measurement date.

● The expected remaining term is equal to the time to expiration

of the warrant investment.

● Volatility, or the amount of uncertainty or risk about the

size of the changes in the warrant investment price.

● The risk-free interest rates are derived from the U.S.

The risk-free interest rates are calculated based on a weighted average of the risk-free interest rates that correspond

closest to the expected remaining term of the warrant investment.

● Marketability discounts are applied for warrants that have

sales restrictions (or lock up periods).

These discounts are calculated using a combination of the Finnerty Model and the Asian Put Model

using a term equal to the period of such restriction.

Recently adopted accounting standards

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“Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” The standard requires all entities subject to

income taxes to disclose disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information

Improvements to Income Tax Disclosures.” The standard requires all entities subject to income

taxes to disclose disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information

on income taxes paid.

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Early adoption is permitted.

The Company does not expect

the adoption of ASU 2023-09 to have a material impact on the consolidated financial statements.

Management is currently evaluating

the effects this guidance will have on its unaudited condensed consolidated financial statements.

In November 2024, the FASB issued ASU No.

2024-03, “Income Statement

- Reporting Comprehensive Income - Expense Disaggregation Disclosures.” This ASU requires that each interim and annual reporting

period, an entity disclose more information about the components of certain expense captions that is currently disclosed in the financial

“Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures.” This ASU requires that each interim

and annual reporting period, an entity discloses more information about the components of certain expense captions that is currently disclosed

in the financial statements.

This update is effective for annual reporting periods beginning after December 15, 2026.

Early adoption is permitted.

is currently evaluating the effects this guidance will have on its consolidated financial statements

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.

Early adoption is

Management is currently evaluating the effects this guidance will have on its unaudited condensed consolidated financial statements.

Effect of new accounting pronouncements to be adopted in future

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.

Marketable Securities

The realized gain or loss, unrealized

gain or loss, and dividend income related to marketable securities for the three and six months ended June 30, 2025 and 2024, which are

The realized gain or loss, unrealized gain or

loss, and dividend income related to marketable securities for the three and nine months ended September 30, 2025 and 2024, which are

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

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Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Realized gain (loss)

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Dividend income

The unrealized gain for the three and nine months

ended September 30, 2025, includes an unrealized gain of $ 156.4 million from the Company’s investment in American Bitcoin Corp.

During prior quarters in 2025, the Company’s investment in ABTC was included within the long-term equity investments

caption of the unaudited condensed consolidated balance sheet.

In September 2025, ABTC became publicly listed on the Nasdaq (Ticker:

and accordingly, the Company’s investment in ABTC was reclassified to marketable securities.

Refer to Note 5 “Long Term Equity

Investments” for additional information regarding ABTC.

Long Term Equity Investments

The Company holds interests in several privately held companies

as long-term investments.

The following table presents the Company’s long-term investments as of June 30, 2025, and December 31,

2024 ($ in thousands):

The Company holds interests in several privately

held companies as long-term investments.

The following table presents the Company’s long-term investments as of September 30, 2025,

and December 31, 2024 ($ in thousands):

December 31, 2024

June 30, 2025

September 30, 2025

Investment in Kerna Health

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Investment in Payward, Inc.

and MWSI VC Kraken-II, LLC

(Payward, Inc.

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

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

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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

The Company does not hold these stock certificates directly.

** Investments made in these companies are through both an SPV

and direct investments.

The Company recorded an increase in the carrying values of

approximately $ 31.7 million and a decrease of approximately $ 3.0 million for the three month period ended June 30, 2025 and 2024, respectively.

The Company recorded an increase in the carrying values of approximately $ 32.0 million and a decrease of approximately $ 5.5 million for

the six month period ended June 30, 2025 and 2024, respectively.

Investment in Aeon Partners Fund Series DB (Databricks,

During the first quarter of 2025, the

Company redeemed its interest in Databricks, Inc.

* 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.

The Company recorded a $ 32.0 million decrease to the carrying

value for the three-month period ended September 30, 2025 as a result of the reclassification of the ABTC investment to marketable securities

and no change for the nine months ended September 30, 2025.

The Company recorded a decrease of approximately $ 0.9 million.

for the three

months ended September 30, 2024 and a decrease of approximately $ 6.5 million for the nine-month period ended September 30, 2024.

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.

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 (“Transactions”),

wherein ADC, Hut 8 Corp., a Delaware corporation, and certain of its subsidiaries (“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.

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 became

a subsidiary of Hut 8 in which the Company held a 3.17 % minority interest in American Bitcoin.

On June 27, 2025, American Bitcoin

consummated a private placement (the “Private Placement”) pursuant to which it raised gross proceeds of approximately

$ 220 million from the sale of American Bitcoin’s Class A common stock at a per share purchase price of $ 20 .

Company’s wholly owned subsidiary, Dominari Securities, acted as placement agent for the transaction.

The Company holds 1.6

million shares of American Bitcoin Class B common stock.

The Class A and Class B common stock have the same rights, powers and

privileges and are identical in all respects as to all matters.

As a result of the Private Placement, the Company holds an

approximate 2.6 % minority interest in American Bitcoin and adjusted the carrying value of its 1.6 million shares of American

Bitcoin’s Class B common stock, which is exchangeable with the Class A common stock on a one for one basis, to $ 32 million as

of June 30, 2025.

On May 9, Gryphon Digital Mining, Inc.

(NASDAQ:GRYP), a bitcoin mining

company that offers carbon-neutral bitcoin mining and digital mining operations, entered into a definitive merger agreement with American

Bitcoin Corp.

to form a combined company that would operate under the brand American Bitcoin and be led by the board of directors of American

The transaction is expected to close as early as Q3 2025, and management anticipates the combined company to trade on NASDAQ

under the ticker symbol “ABTC”.

In connection with the Transactions, American Bitcoin and Hut 8 entered into definitive agreements for Hut 8 to provide exclusive management

back-office operational and ASIC colocation services to American Bitcoin.

As a result of the Transactions, American Bitcoin became a subsidiary

of Hut 8 in which the Company held a 3.17 % minority interest in American Bitcoin represented by 23,199,205 shares of common stock.

Company also entered into a lock-up agreement (“Lock-Up Agreement) restricting the Company’s sale of any shares owned, until

a pre-determined amount of time after any merger or other go-public events of American Bitcoin.

On June 27, 2025, American Bitcoin consummated a private placement

pursuant to which it raised gross proceeds of approximately $ 220 million from the sale of American Bitcoin’s Class A common stock

at a per share purchase price of $ 20 (the “Private Placement”) for which Dominari Securities acted as placement agent.

Class A and Class B common stock had the same rights, powers and privileges and were identical in all respects as to all matters.

result of the Private Placement, the Company held an approximate 2.6 % minority interest in American Bitcoin and adjusted the carrying

value of its 1.6 million shares of American Bitcoin’s Class B common stock, which was exchangeable with the Class A common stock

on a one for one basis, to $ 32.0 million at June 30, 2025.

As of June 30, 2025, the carrying value of the American Bitcoin investment

was recorded within the long-term equity investments caption of the Company’s unaudited condensed consolidated balance sheet.

On September 2, 2025, Gryphon Digital Mining,

(NASDAQ:GRYP), a bitcoin mining company that offers carbon-neutral bitcoin mining and digital mining operations, entered into a definitive

merger agreement with American Bitcoin Corp.

to form a combined company that would operate under the brand American Bitcoin and be led

by the board of directors of American Bitcoin and would be listed for trading on NASDAQ under the ticker symbol “ABTC”.

part of the Merger, a 14.4995-for-1 stock split was completed, resulting in the Company receiving 23,199,205 shares of ABTC common stock.

ABTC began trading on NASDAQ for $ 8.00 per share, on September 3, 2025.

As of September 30, 2025, the Company valued its investment in ABTC

using the quoted market price of $ 6.74 per share resulting in a fair value of approximately $ 156.4 million, recorded within the marketable

securities caption of the condensed consolidated balance sheet.

The Company recorded the entire associated unrealized gain of $ 156.4 million

within the gain (loss) on marketable securities” caption of the unaudited condensed consolidated statement of operations for the

three and nine months ended September 30, 2025.

As a result of the Lock-Up Agreement, the Company is restricted from selling, transferring,

or otherwise disposing of any ABTC shares until March 1, 2026.

Notes Receivable

The following table presents the Company’s notes receivable

as of June 30, 2025 and December 31, 2024 ($ in thousands):

June 30, 2025

The following table presents the Company’s notes receivable as

of September 30, 2025 and December 31, 2024 ($ in thousands):

September 30, 2025

Rate Principal

2 unchanged sentences

Notes receivable, at fair value

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

American Innovative Robotics 04/01/2027 8 % $ -

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Notes receivable, at fair value

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

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

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The Company recorded interest income of approximately

and an unrealized gain on the note of approximately $ 221,000 on the American Innovative Robotics Promissory Note for the six months ended

June 30, 2025.

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

months ended September 30, 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 June 30, 2025 and December 31, 2024.

June 30, 2025, the Company executed a Note Modification Agreement to extend the maturity date of the note to December 31, 2025 .

June 30, 2025, the Company maintained the note as uncollectible and fully written off.

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.

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

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

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 September 30, 2025 and December 31, 2024.

On June 30, 2025, the Company executed a Note Modification Agreement to extend the maturity date of the note to December 31, 2025 .

of September 30, 2025, the Company maintained the note as uncollectible and fully written off.

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.

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

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(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.

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.

Included in the September 30, 2025 warrants in

level 2 financial assets that were acquired in connection with fees related to the Company’s underwriting services is approximately

$ 1.2 million of warrants for purchasing shares in publicly traded that are subject to lock-up periods that will end in November 2025 and

another $ 4.0 million of warrants for purchasing shares in publicly traded companies with lock-up periods that will end by March 1, 2026.

The fair value of these warrants was measured considering the lock-up periods and applying a discount for lack of marketability (DLOM).

The DLOM calculation incorporated observable inputs including each company’s historical volatility, applicable treasury rates, and

the remaining duration of the lock-up period.

Notes Receivable at fair value

As of September 30, 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.

The following table presents the Company’s

assets and liabilities that are measured at fair value as of June 30, 2025, and December 31, 2024 ($ in thousands):

Fair value measured as of June 30, 2025

assets and liabilities that are measured at fair value as of September 30, 2025, and December 31, 2024 ($ in thousands):

Fair value measured as of September 30, 2025

September 30,

Marketable securities:

Total marketable securities

Notes receivable at fair value, current portion

Notes receivable at fair value, non-current portion

Fair value measured as of December 31, 2024

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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):

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

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Collection of principal and interest outstanding

Notes receivable at fair value, non-current portion at June 30, 2025

Notes receivable at fair value, non-current portion at September 30, 2025

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

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Change in interest receivable

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

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

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

Unrealized loss on notes receivable

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

Notes Receivable at fair value

As of June 30, 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 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

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

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 “22nd

Floor Premises”).

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

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

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 Company currently uses the 22nd 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 22nd Floor Premises on the Commencement Date.

On September 23, 2022, Dominari Financial entered

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

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

(the “Premises”).

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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 .

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

Under Dominari Financials’ 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.

seventh years of Dominari Financials’ 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 June 30, 2025:

On September 2, 2025, the Company entered into a Lease Agreement (the

“Company’s Florida Lease”) with Blue Diamond Towers, LLC, a Delaware limited liability company.

Under the Company’s

Florida Lease, the Company rents a portion of the first floor designated as Suite 103 of the North Building at 3835 PGA Boulevard in Palm

Beach Gardens, Florida, (the “Florida Premises”).

The Company will use the Florida Premises as Executive Offices.

term of the Company’s Florida Lease is two ( 2 ) years commencing on October 1, 2025.

Under the Company’s Florida Lease, the

Company is required to pay monthly rent, commencing on October 1, 2025, equal to $ 10,000 .

Effective for the second year of the Company’s

Florida Lease, the rent shall increase to $ 10,300 .

The Company took possession of Florida Premises in October 2025.

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

as of September 30, 2025:

September 30,

Operating lease right-of-use-assets

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

The following tables summarize quantitative information

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

September 30,

Weighted-average remaining lease term - operating leases (in years) 4.5

Weighted-average discount rate - operating leases 10.0 %

During the three and six months ended June 30, 2025 and 2024,

During the three and nine months ended September 30, 2025, and 2024,

the Company recorded approximately $ 0.2 million and $ 0.4 million, respectively, of lease expense to current period operations.

September 30,

Operating leases

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Net rent expense

September 30,

Operating leases

2 unchanged sentences

Net rent expense

Supplemental cash

flow information related to leases were as follows:

Supplemental cash flow information related to leases were as follows:

September 30,

Operating cash flows - operating leases

As of June 30, 2025, future minimum payments during the next five years and thereafter are as follows:

As of September 30, 2025, future minimum payments during the next five

years and thereafter are as follows:

Remaining Period Ended December 31, 2025

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Net Income (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 six months ended June 30, 2025,

and 2024 are as follows:

As of June 30,

Basic income (loss) per share of common stock

is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock

outstanding for the period.

Diluted net income (loss) per common share is computed similar to basic income (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.

The calculation of the Company’s diluted number of shares for the three and nine months ended September 30, 2025 is as follows:

ended September 30,

Weighted average shares - basic

Effect of dilutive potential common shares:

Convertible preferred stock

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Restricted stock awards

Options to purchase common stock

Stockholders’ Equity and Convertible Preferred

As of June 30, 2025, there are 15,295,930 shares of common

stock issued and 15,235,782 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.

Weighted average shares – diluted

Warrants to purchase 357,198 shares of common

stock were outstanding during the three- and nine-months period ended September 30, 2025 that were not included in the computation of

diluted EPS because the exercise price was greater than the average market price of the common shares.

As of September 30, 2025, 253,670

warrants expire in February 2026 and 103,528 warrants expire in February 2027.

All such warrants were still outstanding at the end of

September 30, 2025.

Options to purchase 10,036,333 shares

of common stock that were outstanding during the three and nine months period ended September 30, 2025 were not included in the computation

of diluted EPS because either the exercise price was greater than the average market price of the common shares or those where the exercise

price was below the average market price of the common shares were antidilutive.

These options, which expire between August 2026 in February

2035, were still outstanding at the end of September 30, 2025.

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 included 34 shares of convertible preferred stock, 444,796 warrants to purchase common stock, 40,000 shares of restricted stock awards,

and 419,988 stock options totaling to 904,818 shares.

Stockholders’ Equity and Convertible

Preferred Stock

As of September 30, 2025, 15,817,323 shares of

common stock were issued and 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

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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.

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.

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.

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.

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.

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.

During the period April 1, 2025 to June

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 $ 20.9 million and is presented

in general and administrative expenses on the unaudited condensed consolidated statement of operations.

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.

During the period April 1, 2025 to September 30,

2025 warrants were exercised by various individuals resulting in additional common stock issuance of 1,173,429 shares generating cash

proceeds of $ 2.3 million which is included in additional paid-in capital on the statement of equity.

proceeds of $ 4.6 million which is included in additional paid-in capital on the unaudited condensed consolidated statements of changes

in stockholders’ equity.

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 June 30, 2025 and December 31, 2024,

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 September 30, 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.

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

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D-1 Preferred Stock on a one-for-one basis.

As of June 30, 2025 and December 31, 2024,

As of September 30, 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.

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.

On September 9, 2025, the board of directors approved a special cash dividend of $ 0.22 per share payable on September

26, 2025, to holders of common stock and certain warrant holders as of close of business on September 3, 2025.

Cash dividends paid in

2025 totaled $ 12.0 million and have been charged to accumulated deficit.

Dividends paid for the three months ended March 31, 2025, totaled

$ 7.1 million, and dividends paid for the three months ended September 30, 2025 totaled $ 4.9 million.

Treasury Stock

There are 60,148 shares of treasury stock as of June 30, 2025.

A summary of warrant activity for the six months ended June 30, 2025, is presented below:

There were 60,148 shares of treasury stock on December 31, 2024.

Company retired such shares in July 2025 and there were no shares of treasury stock as of September 30, 2025.

A summary of warrant activity for the nine months ended September 30,

2025, is presented below:

Weighted Weighted

Exercise Total Intrinsic Contractual

Exercise Total

Intrinsic Contractual

Warrants Price Value (in years)

3 unchanged sentences

Exercised ( 1,173,426 ) 3.96

Outstanding as of June 30, 2025 7,517,421 $ 5.22 -

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.

Outstanding as of September 30, 2025 6,935,880 $ 5.33 -

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 .

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

351,851 shares of the Company’s common stock to Messr.

shares of the Company’s common stock to Messrs.

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 12, 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.

Upon issuance,

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

On February 12, 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

Anthony Hayes.

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

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.

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

3 unchanged sentences

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

Additionally,

on February 10, 2025, the Company granted an additional 5 million fully vested nonqualified stock options (each, a “Performance

Award” and collectively, the “Performance Awards”) each to Anthony Hayes and Kyle Wool conditioned upon either the Company’s

shareholders approving the Performance Awards or approving an increase in the share reserve of the Company’s 2022 Equity Incentive

Plan (the “Plan”) such that the full number of shares underlying the Performance Awards could be delivered under the Plan.

On April 1, 2025, following a special meeting of shareholders, the Company’s shareholders voted to approve an increase in the Plan’s

share reserve allowing the Performance Awards to be delivered under the Plan.

As of June 30, 2025, the Company recorded an expense of

$ 26.1 million for the Performance Awards.

See Restricted Stock roll-forward below.

A summary of restricted stock awards activity for the six months ended June 30, 2025, is presented below:

A summary of restricted stock awards activity for the nine months ended

September 30, 2025, is presented below:

Nonvested at December 31, 2024

( 1,210,969 )

Nonvested at June 30, 2025

Stock-based compensation associated with

the amortization of restricted stock awards expense was approximately $ 7,657,000 and $ 75,000 for the six months ended June 30, 2025, and

2024, respectively.

Stock-based compensation associated with the amortization of restricted stock awards expense was approximately $ 12,000

and $ 75,000 for the three months ended June 30, 2025, and 2024, respectively All stock compensation was recorded as a component of general

Nonvested at September 30, 2025

Stock-based compensation associated with the amortization of restricted

stock awards expense was approximately $ 7.7 million and $ 0.8 million for the nine months ended September 30, 2025, and 2024, respectively.

Stock-based compensation associated with the amortization of restricted stock awards expense was approximately $ 12,000 and approximately

$ 41,000 for the three months ended September 30, 2025, and 2024, respectively All stock compensation was recorded as a component of general

and administrative expenses.

As of June 30, 2025, there is approximately $ 25,000 unrecognized

stock-based compensation expense related to restricted stock awards.

As of September 30, 2025, there is approximately

$ 12,000 unrecognized stock-based compensation expense related to restricted stock awards.

Stock Options

On February 10, 2025, the Company granted an additional

5.0 million fully vested nonqualified stock options (each, a “Performance Award” and collectively, the “Performance

Awards”) each to Anthony Hayes and Kyle Wool conditioned upon either the Company’s shareholders approving the Performance

Awards or approving an increase in the share reserve of the Company’s 2022 Equity Incentive Plan (the “Plan”) such that

the full number of shares underlying the Performance Awards could be delivered under the Plan.

On April 1, 2025, following a special meeting

of shareholders, the Company’s shareholders voted to approve an increase in the Plan’s share reserve allowing the Performance

Awards to be delivered under the Plan.

As of September 30, 2025, the Company recorded an expense of $ 26.1 million for the Performance

A summary of option activity under the Company’s

stock option plan for the six months ended June 30, 2025, is presented below:

stock option plan for the nine months ended September 30, 2025, is presented below:

Weighted Total Remaining

Number of Average Intrinsic Contractual

Shares Exercise Price Value Life (in years)

Average Intrinsic Contractual

Shares Exercise

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

Employee options granted 10,000,000 $ 3.85 9.8

Employee options exercised ( 30,000 ) 3.36

Employee options expired ( 128,652 ) $ 3.68

Employee options forfeited ( 181,669 ) $ 3.50 $ 4 -

Outstanding as of June 30, 2025 10,346,654 $ 3.87 $ 123,633 9.7

Outstanding as of September 30, 2025 10,036,333 $ 6.18 $ 9,336 9.4

Options vested and exercisable 10,021,333 $ 6.18 $ 9,330 9.4

Stock-based compensation associated with

the amortization of stock option expense was approximately $ 26,198,600 and $ 0.1 million for the three months ended June 30, 2025, and

2024, respectively.

Stock-based compensation associated with the amortization of stock option expense was approximately $ 33,855,000 and

$ 0 million for the six months ended June 30, 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 $ 68,000 .

Stock-based compensation associated with the

amortization of stock option expense was $ 0.0 million and $ 0.1 million for the three months ended September 30, 2025, and 2024, respectively.

Stock based compensation associated with the amortization of stock option expense was approximately $ 26.2 million and $ 0.3 million for

the nine months ended September 30, 2025, and 2024 respectively.

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

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 %

Estimated future stock-based compensation expense relating to unvested

stock options is approximately $ 52,000

Non-controlling Interest

2 unchanged sentences

As such, 10 % of any profits earned by

these entities are attributable to non-controlling interests and are presented in the statement of changes in equity.

After June 30, 2025

the entire amount of $ 1.05 million attributable to non-controlling interests was distributed.

The following table presents our total revenue disaggregated

by revenue type for the three and six months ended June 30, 2025 and 2024 (in thousands):

these entities are attributable to non-controlling interests and are presented in the unaudited condensed consolidated statements of

changes in stockholders’ equity.

As of September 30, 2025, the amount attributable to non-controlling interest was $ 1.9 million

out of which $ 0.1 million is still outstanding payable to non-controlling interests.

The following table presents our total revenue

disaggregated by revenue type for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Account advisory and management fees

2 unchanged sentences

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.

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’

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.

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.

7 unchanged sentences

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.

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 June 30, 2025, Dominari Securities had net capital of approximately $ 16.77 million, which was approximately$ 15.68

million in excess of net capital requirement of $ 1.09 million.

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

held approximately 30 % of Revere’s outstanding equity until May 20, 2025.

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 $ 310,405 and $ 103,470 in the three months ending June 30, 2025 and 2024, respectively.

On such transactions, the Company earned

$ 318,405 and $ 123,470 in the six months ending June 30, 2025 and 2024, respectively.

As of May 20, 2025, Kyle Wool no longer holds an

equity interest in Revere.

The Company collected fees on behalf of

Series which were intended for future expenses of each Series entity.

As of June 30, 2025, such amount was approximately $ 53,000 and is

included in other current liabilities on the accompanying consolidated balance sheet.

During the year ended 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 June 30, 2025

was approximately $ 41,000 .

As of June 30, 2025, the total outstanding balance of the employee loans was $ 1.87 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 Revere Master SPV Series

VI (TessPay, Inc.), investment in Dominari Master SPV LLC Series VI (X.AI Corp.

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 ($ 0.2 million)

included within the advisory and management fees caption within the statement of operations.

As of June 30, 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

In the past, in the ordinary course of business,

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

Other than ordinary routine litigation incidental to the business, the Company is not aware of any material, active or pending

legal proceedings brought against it.

Dominari Securities, the Company’s broker-dealer

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 September 30, 2025, Dominari Securities had net capital of approximately $ 15.8 million in excess of net capital

requirement of $ 0.7 million.

Related Party Transactions

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.

one of the Company’s board members, was previously a member of the board of directors of Revere until June 2023 and held approximately

30 % of Revere’s outstanding equity until May 20, 2025.

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 $ 0 and $ 103,470

in the three months ending September 30, 2025, and 2024, respectively.

On such transactions, the Company earned $ 318,405 and $ 313,960

in the nine months ending September 30, 2025, and 2024, respectively.

As of May 20, 2025, Kyle Wool no longer holds an equity interest

The Company collected fees on behalf of Series

which were intended for future expenses of each Series entity.

As of September 30, 2025, such amount was approximately $ 53,000 and is

included in other current liabilities on the accompanying unaudited condensed consolidated balance sheet.

During the year ended 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 three months ended September 30, 2024 and 2025 was approximately

$ 11,000 and $ 20,000 respectively and for the nine month ended September 30, 2024 and 2025 was approximately $ 32,000 and $ 58,000 respectively.

As of September 30, 2025 and December 31, 2024, the total outstanding balance of the employee loans was $ 1.9 million and $ 2.2 million

respectively included in loans to employees on the accompanying unaudited condensed consolidated balance sheets.

Certain of the Company’s investments are

made through related party special purpose vehicles.

These are included within Note 5 of the unaudited condensed consolidated financial

statements and include the following investments:

investment in Revere Master SPV Series 1 (Qxpress Pte Ltd), investment in Revere Master

SPV Series VI (TessPay, Inc.), investment in Dominari Master SPV LLC Series VI (X.AI Corp.

xAI), investment in Dominari Master

SPV LLC Series XI (Cerebras Systems Inc.), investment in Dominari Master SPV LLC Series XII (Groq, Inc.).

These investments are classified

in long term equity investments on the balance sheet.

The Company’s investments in American Ventures

LLC Series XIX (Skyline Builders Group Holdings Ltd.), and American Ventures LLC Series XIV (JFB Construction Holdings) are classified

as marketable securities.

The Company owns 90 % of AV Manager and AV Investment

Manager, the remaining 10 % is owned by non-controlling parties.

As such, 10 % of any profits earned by these entities are attributable

to non-controlling interests and are presented in the unaudited condensed consolidated statements of changes in stockholders’ equity.

As of September 30, 2025, the amount attributable to non-controlling interest was $ 1.9 million out of which $ 0.1 million is still outstanding

payable to non-controlling interests.

The Company earns revenues for managing certain

pooled investment vehicles which are related parties.

These include the entirety of the carried interest fees revenues, and management

fee revenues included within the advisory and management fees caption, of the unaudited condensed consolidated statements of operations.

As of September 30, 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.

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”),

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.

3 unchanged sentences

are most relied upon by the CODM are gross revenues and net loss.

The Company operates in two reportable business segments:

The Company operates in two reportable business

(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 Dominari Labs (formerly 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 Dominari Labs (formerly Aikido Labs), which manages the investments holdings of the legacy entity.

Prior to the FPS Acquisition,

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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 June 30, 2025

that are most relied upon by the CODM are gross revenue and net income (loss), as presented within the table below and reconciled to the

unaudited condensed consolidated statements of operations.

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

their analysis.

Three Months Ended September 30, 2025

Dominari Financial

Legacy AIkido Pharma

Operating Costs

2 unchanged sentences

Data processing

Other (income)/expenses

Loss from operations

Other expenses

Income (loss) from operations

Other (expenses) income

1 unchanged sentence

Gain on marketable securities

Unrealized loss on note receivable

Change in fair value of investments

Total other (expenses) income

Noncontrolling interests

Net gain attributable to common stock holders of Dominari Holdings

Six Months Ended June 30, 2025

Net income attributable to non-controlling interests

Net income attributable to common stockholders of Dominari Holdings

Three Months Ended September 30, 2024

Dominari Financial

Legacy AIkido Pharma

Operating Costs

10 unchanged sentences

Total other (expenses) income

Noncontrolling interests

Net gain attributable to common stock holders of Dominari Holdings

Three Months Ended June 30, 2024

Dominari Financial

Legacy AIkido Pharma

Nine Months Ended September 30, 2025

Operating Costs

3 unchanged sentences

Other expenses

Loss from operations

Income (loss) from operations

Other (expenses) income

1 unchanged sentence

Gain on marketable securities

Unrealized loss on note receivable

Unrealized gain on note receivable

Change in fair value of investments

Total other (expenses) income

Six Months Ended June 30, 2024

Total other income

Net income (loss)

Net income attributable to noncontrolling interests

Net income attributable to common stockholders of Dominari Holdings

Nine Months Ended September 30, 2024

Operating Costs

11 unchanged sentences

The Company recorded no income tax expense for

the six months ended June 30, 2025 and 2024 because the estimated annual effective tax rate was zero .

the nine months ended September 30, 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 June 30, 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.

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 September 30, 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.

The One Big Beautiful Bill Act (OBBBA) was enacted

on July 4, 2025.

The Company has evaluated whether OBBBA has a material impact on its 2025 unaudited condensed consolidated financial

The only provision of OBBBA that impacts the Company’s income tax accounting under ASC740 is the new IRC.

which permanently allows taxpayers to fully expense domestic research or experimental (R&E) expenditures paid or incurred in taxable

years beginning after December 31, 2024.

The requirement to capitalize foreign Sec.

174 expenses over 15 years has not changed.

28, 2025, the IRS released procedural guidance (Rev.

2025-28) for implementing Section 174A and related elections for domestic

research or experimental expenditures.

Transition rules provide taxpayers with options to account for any remaining unamortized domestic

R&E expenditures paid or incurred in taxable years beginning after December 31, 2021, and before January 1, 2025.

Taxpayers may continue

to amortize such unamortized amounts over the remaining five-year period;

alternatively, they may elect to deduct any remaining unamortized

domestic R&E expenditures either entirely in the first tax year beginning after December 31, 2024, or ratably over two taxable years

(e.g., 2025 or ratably in 2025 and 2026).

The Company plans to elect to deduct the remaining unamortized costs entirely in 2025.

December 31, 2024, the Company has approximately $ 415,000 of remaining unamortized domestic R&D expenditures eligible for immediate

deduction, representing approximately $ 119,000 of its December 31, 2024 gross Deferred Tax Assets.

The impact of deducting these costs

is reclassifying approximately $ 119,000 from Capitalized Sec.

174 to Net Operating Loss Carryforward, with zero net impact on the Company’s

gross deferred tax assets or effective tax rate.

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