What changed in this filing

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Item 1. Financial Statements

2026-05-13 compared with 2025-11-10 · 785 added, 791 removed, 437 unchanged (78% of the section changed)

3 unchanged sentences

($ in thousands except share and per share amounts)

September 30,

Current assets

Cash and cash equivalents

Marketable securities

Securities owned

Receivable from clearing brokers

Prepaid expenses and other assets

Total current assets

Property and equipment, net

Notes receivable, at fair value - non-current portion

Long-term equity investments

1 unchanged sentence

Right-of-use assets

Security deposit

Prepaid expenses and other assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Accounts payable and accrued expenses

Accrued commissions

Contract liabilities - current

Lease liability - current

Other current liabilities

Total current liabilities

Lease liability, less current portion

Contract liabilities, less current portion

Accrued compensation and commissions

Accrued dividends payable

Contract liabilities

Lease liability

Income taxes payable

Other liabilities

Total liabilities

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Convertible Preferred Series D:

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

5,000,000 shares designated;

3,825 shares issued and outstanding as of March 31, 2026 and December 31, 2025;

liquidation value of $ 0.0001 per share

Convertible Preferred Series D-1:

5,000,000 shares designated; 834 shares issued and outstanding as of September 30, 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

5,000,000 shares designated;

834 shares issued and outstanding as of March 31, 2026 and December 31, 2025;

liquidation value of $ 0.0001 per share

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

22,613,781 and 16,067,435 shares issued as of March 31, 2026, and December 31, 2025, respectively;

22,613,781 and 16,067,435 shares outstanding as of March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital

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

Accumulated deficit

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Total liabilities and stockholders’ equity

See accompanying notes to unaudited condensed

consolidated financial statements.

See accompanying notes to unaudited condensed consolidated

financial statements.

DOMINARI HOLDINGS INC.

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Three Months Ended

September 30,

Nine Months Ended

September 30,

Underwriting services

Carried interest

Interest income

Principal transactions

Other revenue

Total revenue

Operating costs and expenses

General and administrative

Compensation and benefits

Advisory fees

Professional and consulting fees

Other expenses

Total operating expenses

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Gain (loss) on marketable securities, net

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

Realized and unrealized gain loss on notes receivable, net

Change in carrying value of investments

Total other income (expenses)

Net income (loss)

Net loss before income tax expense

Provision for income taxes

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

Net loss attributable to common stockholders of Dominari

Holdings Inc.

Net loss per share, basic and diluted

Basic and Diluted

Weighted average number of shares outstanding, basic and diluted

See accompanying notes to unaudited condensed

consolidated financial statements.

Basic and Diluted

See accompanying notes to unaudited condensed consolidated

financial statements.

DOMINARI HOLDINGS INC.

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($ in thousands except share and per share amounts)

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 )

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 )

Preferred Stock

Treasury Stock

Dominari Holding Stockholders’

Non controlling

Total Stockholders’

Balance at June 30, 2024

$ ( 220,324 )

Stock-based compensation

Balance at September 30, 2024

$ ( 224,535 )

See accompanying notes to

unaudited condensed consolidated financial statements.

For the Nine Months Ended September 30, 2025

Preferred Stock

Treasury Stock

Dominari Holding Stockholders’

Non controlling

Total Stockholders’

Stockholders’

Balance at December

$ ( 268,134 )

Stock-based compensation

Issuance of Common Stock for cash

Stock-based compensation - employees

Issuance of common stock from warrants exercised

Shares issued under Advisory Agreements

Retirement of treasury stock

Distribution to Non Controlling Interest

Dividends issued

Net income (loss)

Balance at September 30, 2025

Stock-based compensation- advisors

Distributions to non-controlling interest

at March 31, 2026

$ ( 325,492 )

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Treasury Stock

Dominari Holding Stockholders’

Non controlling

Total Stockholders’

Stockholders’

Balance at December 31, 2024

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Stock-based compensation

Balance at September 30, 2024

Issuance of common stock

Advisory shares issued

Dividends issued

Balance at March 31, 2025

$ ( 263,034 )

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($ in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities

Net income/(loss)

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

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

Amortization of right-of-use assets

Change in carrying value of long-term investment

Non-cash underwriting revenues

Non-cash commission expense

Stock-based compensation – employees

Stock-based compensation – advisors

Realized (gain) loss on securities owned

Unrealized loss on securities owned

Realized loss on marketable securities

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

Realized and unrealized (gain) loss on note receivable

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Receivable from clearing brokers

Security Deposits

Accounts payable and accrued expenses

Accrued salaries and benefits

Accrued commissions

Lease liabilities

Accrued compensation and commissions

Right of use asset and liability, net

Contract liabilities

Other current liabilities

Notes receivable, at fair value - net interest accrued

Net cash (used in) operating activities

Income taxes payable

Other liabilities

Net cash (used in) provided by operating activities

Cash flows from investing activities

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Sale of marketable securities

Purchase of securities owned

Sale of securities owned

Purchase of long-term investments

Redemption of long-term investments

Collection of principal on note receivable

Loans to employees

Collection of loans to employees

Purchase of long-term investments

Sale of long term investments

Net cash provided by investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities

Cash paid for dividends

Distribution to Non Controlling Interest

Cash received from issuance of common stock

Cash received from issuance of common stock for warrants exercised

Net cash provided by financing activities

Net increase in cash and cash equivalents and restricted cash

Distributions to non-controlling interest

Cash from issuance common stock, net of offering cost

Cash from issuance common stock for exercised warrants

Net cash (used in) provided by financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

See accompanying notes

to unaudited condensed consolidated financial statements.

HOLDINGS INC.

Cash paid for interest and taxes

See accompanying notes to unaudited

condensed consolidated financial statements.

DOMINARI HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements

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third-party investors.

On May 21, 2024, Dominari Financial and Heritage

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

Financial Heritage Strategies LLC (“DFHS”).

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

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

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

Pursuant to the

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

percent ( 50 %) ownership interests in DFHS.

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

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

On June 17, 2025, the Company entered into two

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

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.

the 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 SPV.

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 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.

a regular basis The Company continues to incur ongoing administrative and other expenses, including public company expenses, in excess

of corresponding (non-financing related) revenue.

While the Company continues to implement its business strategy, it intends to fund its

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

As of March 31, 2026, the Company has approximately $ 27.5 million of

cash and cash equivalents and $ 6.9 million of marketable securities as well as $ 11.1 million of securities owned.

Additionally, the Company

had approximately $ 21.9 million in receivable from clearing brokers.

Additionally, the Company’s working capital balance at March

31, 2026, totaled $ 21.9 million.

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.

projected cash flow requirements, the Company has adequate cash and cash equivalents and marketable securities, together with the anticipated

cash flow 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

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The condensed

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.

consolidated balance sheets as of March 31, 2026, condensed consolidated statements of operations for the three months ended March 31,

2026 and 2025, condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2026 and 2025, and

the condensed consolidated statements of cash flows for the three months ended March 31, 2026 and 2025 are unaudited, but include all

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

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

The results for the three months ended March 31, 2026 are not necessarily

indicative of results to be expected for the year ending December 31, 2026 or for any future interim period.

The condensed consolidated

balance sheets as of December 31, 2025 has been derived from audited financial statements; however, it does not include all of the

information and notes required by U.S.

GAAP for complete financial statements.

The accompanying unaudited

condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes

thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2024.

The Company’s policy is to consolidate

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

The accompanying unaudited condensed consolidated financial

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

annual report on Form 10-K for the year ended December 31, 2025.

The Company’s policy is to consolidate all

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

The accompanying unaudited

condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, 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.

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

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

As of September 30, 2025,

As of March 31, 2026,

there has been no material activity in DFHS.

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The Company’s significant

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 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

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 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.

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:

● 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 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.

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”).

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.

estimates and assumptions include stock-based compensation, marketable securities, securities owned, the valuation of long-term equity

investments, the valuation of notes receivable and the valuation allowance related to the Company’s deferred tax assets.

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

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.

Securities owned

Securities owned consist of equity securities

including, common stock and warrants of publicly traded companies which are held by Dominari Securities.

Securities owned and securities

sold, but not yet purchased are recorded in the balance sheet at fair value, with the change in fair value and any realized gains or losses

upon purchase or sale recorded within the statement of operations as principal transactions.

Dominari Securities may receive securities, including

common or preferred stock and stock purchase warrants, from companies as part of its compensation for underwriting services.

These instruments

are stated at fair value in accordance with GAAP, and recorded within the balance sheet as securities owned.

Such securities that the

Company receives may be subject to contractual or instrument specific restrictions which prevent Dominari Securities from reselling the

securities within the open market.

Under ASC 820 only those restrictions which are an attribute of the instrument, and do not arise from

any contractual agreement, are considered when determining fair value.

A portion of the Company’s equity securities,

which are held by Dominari Securities, are subject to restrictions as disclosed in Note 7.

Equities that have periods of contractual trading

restrictions, discounts were considered in determining fair value The Company’s significant unobservable inputs, included the implied

probability of 15 % of certain marketplace transactions and events occurring, which would permit the sale of equities held.

These equities

are included in securities owned.

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,

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

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

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in determining fair value.

Warrants held by Dominari Securities are included in securities owned and other warrants are included in marketable

The following inputs are considered for determining

the fair values of warrants:

● The underlying stock price is equal to the closing price

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using a term equal to the period of such restriction.

Recently adopted accounting standards

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

“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

on income taxes paid.

The new requirement is effective for annual periods beginning after December 15, 2024.

The guidance will be applied

on a prospective basis with the option to apply the standard retrospectively.

Early adoption is permitted.

Management is currently evaluating

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

Receivable from Clearing Brokers

Receivable from Dominari Securities’ clearing brokers totaling

$ 21.9 million consisted of approximately $ 0.5 million of liquid insured deposits $ 3.7 million of commission receivable and $ 17.7 million

of liquid deposits maintained by the Company with its clearing brokers as of March 31, 2026.

Receivable from Dominari Securities’

clearing brokers consisted of approximately $ 1.4 million of liquid insured deposits, $ 2.1 million of commissions receivable and $ 0.5 million

of liquid deposits maintained by the Company with its clearing brokers as of December 31, 2025.

Such amount is stated at the amount the

Company expects to collect.

The Company maintains allowances for credit losses for estimated losses resulting from the inability of its

clearing brokers to make required payments.

Management considers the following factors when determining the collectability of specific

customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer

payment terms.

If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make

payments, additional allowances would be required.

Based on management’s assessment, the Company provides for estimated uncollectible

amounts through a charge to earnings and a credit to a valuation allowance.

As of March 31, 2026 and December 31, 2025 an allowance for

credit losses was deemed not necessary.

Long-term Equity Investments and marketable securities

The Company holds certain strategic investments

that are not part of its broker-dealer trading activities.

The Company accounts for long-term equity investments under Accounting Standards

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

In accordance with ASC 321,

equity securities with readily determinable fair values are accounted for at fair value based on quoted market prices.

Any equity securities

with a readily determinable fair value are included within marketable securities on the accompanying unaudited condensed 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.

These investments are accounted for under ASC 321 using the measurement alternative.

Equity method investments and other long-term investments

that are not part of our broker-dealer trading activities are included in “long term equity investment” on the unaudited condensed

consolidated balance sheet.

These investments are generally strategic in nature and are not actively traded.

Unrealized gains and losses

on these investments are recognized in earnings when impairment is identified or when observable price changes occur and are classified

in other income (loss) in the unaudited condensed consolidated statement of operations.

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 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

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

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

rent expense over the lease term.

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

in front-loaded expense over the lease term.

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

The Company recognizes revenue under ASC 606 -

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

Revenue is recognized when control of the promised goods

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

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

The following provides detailed information on the recognition of the

Company’s revenue from contracts with customers:

● Underwriting services include underwriting and private placement

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

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

Underwriting and placement agent revenue are recognized

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

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

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

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

The Company also provides investment

banking services.

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

or similar transactions.

These services provided by the Company are not distinct from the potential transaction that may occur.

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

The Company records such Non-Cash Consideration on the date at which its performance obligation is fulfilled using the date

of contract inception as the fair value measurement date, as required by FASB ASC 606-10-32-21 and recorded as underwriting revenues.

Any changes resulting from the form of the consideration after contract inception (e.g.

fair value) are not included in the transaction

price and, therefore, are included in principal transactions.

To the extent changes in the noncash consideration occur for reasons other

than the form of the consideration (e.g., notional quantity of instruments provided is based upon the Company’s performance), the

Company applies relevant guidance on variable consideration, constraining such amounts until the associated uncertainty is resolved.

any commissions or compensation expense from providing non-cash consideration provided to employees and 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.

● 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.

● Account advisory and management fees are two revenue streams

which are both recognized over time.

Please see further description below:

o The Company earns revenue for performing account advisory

and investment advisory services for customers based on contractually fixed rates applied, as a percentage, to the market value of assets

in a customer’s account.

The performance obligation for investment advisory services is considered a series of distinct services

that are substantially the same and are satisfied each day of the contract and are recognized as revenue over time.

Investment advisory

fees are payable in arrears on a quarterly basis.

o Management fees represent asset-based fees received in exchange

for providing management services to certain related party pooled investment vehicles (funds).

These fees are charged based upon contractually

fixed rates applied, as a percentage, to the total assets of those pooled investment vehicles managed by the Company at the date upon

which an investor subscribes into the fund, subsequently deferred.

The Company recognizes these revenues over time as the Company has

determined that the customer simultaneously receives and consumes the benefits of the management services as they are provided.

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.

Principal transactions are recorded on

a trade-date basis (as if they had settled).

Realized and unrealized gains and losses arising from all securities transactions entered

into for the account and risk of the Company are recorded in principal transactions in the accompanying statement of operations.

gains and losses are not in scope for ASC 606 as they are not generated from contracts with customers.

● Contract liabilities relate to payments received in advance

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

Contract liabilities

are recognized as revenues when the Company provides ongoing investment management As of March 31, 2026, the Company recognized $ 4.7

million of contract liabilities of which $ 1.1 million is expected to be recognized within a year.

The remaining balance is expected to

be recognized through 2031.

During the three months ended March 31, 2026, the Company recognized revenue of $ 0.3 million that was included

in contract liabilities as of March 31, 2026.

● 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.

Compensation and benefits

Compensation and benefits includes fixed salaries,

commissions (paid in either cash or in securities), related benefits and stock-based compensation incurred on an accrual basis.

has a defined contribution 401(k) plan that covers all employees and allows an employer contribution of up to 50 % of the first 3 % of each

participating employee’s eligible compensation contributed to the plan and 50 % of the next two percent of each participating employee’s

eligible compensation.

Participants are 100 % vested in these matching contributions when they are made.

Eligible employees may elect to

defer pre-tax contributions regulated under Section 401(k) of the Internal Revenue Code.

The Company’s matching contributions are

included in compensation and benefits in the unaudited condensed consolidated statements of operations.

Please see “Stock based

compensation” section below for additional information on stock-based compensation accounting policies.

Stock-based Compensation

The Company accounts for share-based payment awards

exchanged for services at the estimated grant date fair value of the award.

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

plans are granted with an exercise price equal to no less than the market price of the Company’s stock at the date of grant and

expire up to ten years from the date of grant.

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

The Company estimates the fair value of stock

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

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

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

tranche of each award.

Expected Term - The expected term of options represents

the period that the Company’s stock-based awards are expected to be outstanding based on either the simplified method, if applicable,

which is the half-life from vesting to the end of its contractual term or when applicable, probability estimates of expected exercises

of such options.

Expected Volatility - The Company computes stock

price volatility over expected terms based on its historical common stock trading prices.

Risk-Free Interest Rate - The Company bases the

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

Treasury zero-coupon issues with an equivalent remaining term.

The Company accounts for forfeitures as they occur.

Income tax expense for interim periods is calculated in accordance

with ASC 740, Income Taxes, and ASC 740 270, Interim Reporting.

Interim periods are treated as integral parts of the annual reporting

period, and income tax expense is recognized using estimates that reflect management’s best assessment of the expected annual tax

position, including discrete items recognized in the period incurred.

Effect of new accounting pronouncements to be adopted in future

In November 2024, the FASB issued ASU No.

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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

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

The Company reviewed all other recently issued

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condensed consolidated financial statements.

Reclassification of prior year amounts

Certain reclassifications have been made to the

prior years’ financial statements to conform to the current year presentation.

These reclassifications had no effect on previously

reported results of operations or stockholders’ equity.

Marketable Securities

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,

are as follows ($ in thousands):

loss, and dividend income related to marketable securities for the three months ended March 31, 2026 and 2025, which are recorded as a

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

($ in thousands):

Three Months Ended

September 30,

Nine Months Ended

September 30,

Realized gain / (loss)

Unrealized gain / (loss)

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.

Interest and dividend income

Long-Term Equity Investments

The Company holds interests in several privately

held companies as long-term investments.

The following table presents the Company’s long-term investments as of September 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 March 31, 2026, and December 31, 2025

($ in thousands):

March 31, 2026

December 31, 2025

September 30, 2025

Investment in Kerna Health

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

d.b.a.Kraken)* *

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

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

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

Investment in Discord Inc.

Investment in Thrasio, Inc.

Investment in Automation Anywhere, Inc.

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Investment in AdvEn Inc.

* Investments made in these companies

are through a Special Purpose Vehicle (“SPV”).

Investment in American Ventures LLC Series XX (TracX Logis Pte Ltd..)

* 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 (“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 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.

The Company does not hold these stock certificates directly.

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

and direct investments.

The Company had no changes to the carrying values

for the three months ended March 31, 2026, and recorded an increase in the carrying values of approximately $ 0.3 million for the three

months ended March 31, 2025.

Please see below details of the changes in carrying value by investment.

Investment in Dominari Master SPV LLC Series

XII (Groq, Inc.)

On July 25, 2024, the Company entered into an

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

Units for $ 25 thousand.

As of March 31, 2026, there was no change to the carrying value.

On April 6, 2026, the Company received a payment

of $ 58 thousand as a payment related to the Company’s investment.

Investment in TracX.

On January 13, 2026, the Company entered into

an agreement (the “TracX Agreement”) with American Ventures LLC whereby the Company agreed to purchase Series XX TracX Logis

units for $ 102 thousand.

Notes Receivable

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

Amount Interest

Receivable Fair

Notes receivable, at fair value

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

Notes receivable, at fair value - current portion $ -

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

December 31, 2024

Rate Principal

Amount Interest

Receivable Fair

Notes receivable, at fair value

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

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

Notes receivable, at fair value - current portion $ -

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

As of March 31, 2026, and December 31, 2025, the

Company had no notes receivable.

American Innovative Robotics, LLC

The Company recorded interest income of approximately

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

$ 20,000 , and a realized gain on the note of approximately $ 221,000 on the American Innovative Robotics Promissory Note in the 31, 2025.

The note was fully paid off as of March 24, 2025, with proceeds totaling $ 1.1 million, resulting in an ending value of $ 0 .

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

assets and liabilities in active markets or inputs that are observable

Level 3 - inputs that are unobservable

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

equivalents, accounts payable and accrued expenses and accrued compensation and commissions 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

Level 1 - quoted prices in active markets for identical

assets or liabilities

Level 2 - quoted prices for similar assets and liabilities

in active markets or inputs that are observable

Level 3 - inputs that are unobservable (for example, cash

flow modeling inputs based on assumptions)

Observable inputs are based on market data obtained

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

Fair value measured as of September 30, 2025

September 30,

The following table presents the Company’s assets and liabilities

that are measured at fair value as of March 31, 2026 and December 31, 2025 ($ in thousands):

Fair value measured as of March 31, 2026

Securities owned

Marketable securities

Total marketable securities

Fair value measured as of December 31, 2025

Significant unobservable

Securities owned

Marketable securities

Total marketable securities

Notes receivable at fair value, current portion

Notes receivable at fair value, non-current portion

The fair value of level 3 securities owned totaling $ 1.7 million shown

above at March 31, 2026 are subject to an initial lock-up period until approximately June 30, 2026, and further restrictions to which

the Company cannot liquidate its investment until such restrictions are met.

Additionally, approximately $ 1.1 million of fair value of

level 2 securities owned shown above at March 31, 2026 represents warrants that are subject to lock-up periods that will end by June 30,

2026 and another $ 4.3 million of fair value of warrant securities with lock-up periods that will end by September 30, 2026 as well.

Level 3 Measurement

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

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

Unrealized gain (loss) on notes receivable

Change in interest receivable

Collection of principal and interest outstanding

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

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

Collection of principal outstanding

Realized and unrealized gain and loss on note receivable, net

Change in interest receivable

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

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

Unrealized loss on notes receivable

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 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 .

Securities owned at fair value as of December 31, 2025

Unrealized loss included in principal transactions

Securities owned at fair value as of March 31, 2026

The Company’s Level 3 fair value measurements at March 31, 2026

were determined by the following quantitative inputs:

● The underlying stock price of $ 10.01 per share as of the

measurement date.

● Implied success rates of similar type instruments from other comparable

entities’ recent historical results of 15 % of the underlying value of the stock price.

Prepaid expenses and other assets

Other assets consist of the following as of March 31, 2026, and December

31, 2025 ($ in thousands):

Prepaid expenses

Security deposits

Property and equipment, net

On December 1, 2021, the Company entered

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

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

York (the “22 nd Floor Premises”).

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

day-to-day operations.

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

(“Commencement Date).

Under the Company’s Lease, the Company is required to pay monthly rent, commencing on January 11,

2023, equal to $ 12,874 .

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

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

On September 23, 2022, Dominari Financial entered

into a Lease Agreement (“Dominari 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”).

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

The initial term of Dominari

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 Financials’ Lease, the rent shall increase to $ 51,868 per month.

The Company took possession of the Premises

in February 2023.

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,

On September 23, 2022, Dominari Financial entered into a Lease Agreement

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

Under Dominari

Financial’s Lease, Dominari Financial rents a portion of a floor at 725 Fifth Avenue, New York, New York (the “23 rd

Floor Premises”).

Dominari Financial currently uses the 23rd Floor Premises to run its day-to-day operations.

The initial term of

Dominari Financial’s Lease is seven (7) years commencing on the date that possession of the 23 rd Floor Premises is delivered to

Dominari Financial.

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

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

The Company took possession

of the 23rd Floor Premises in February 2023.

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.

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

Company’s Florida Lease, the Company is required to pay monthly rent, commencing on October 1, 2025, equal to $ 10,000 .

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 March 31, 2026:

Operating lease right-of-use-assets

The following tables summarize quantitative information

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

September 30,

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

Weighted-average remaining lease term - operating leases (in years) 4.0

Weighted-average discount rate - operating leases 10.0 %

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

During the years ended March 31, 2026 and 2025,

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

September 30,

Operating leases

Operating lease cost

Short-term lease rent expense

Net rent expense

September 30,

Three Months Ended

Operating leases

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Net rent expense

Supplemental cash flow information related to leases were as follows:

September 30,

Operating cash flows - operating leases

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

years and thereafter are as follows:

of March 31, 2026, future minimum payments during the next five years and thereafter are as follows:

Remaining period Ended December 31, 2026

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Operating lease liabilities

Net Income (Loss) per Share

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

Net Loss per Share

Basic loss per share of common stock is computed

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

outstanding for the period.

Diluted 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:

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

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

as of the first day of the period.

Securities that could potentially dilute

loss per share in the future that were not included in the computation of diluted loss per share for the years ended March 31, 2026,

and 2025 are as follows:

As of March 31,

Convertible preferred stock

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Restricted stock awards

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.

Options to purchase common stock

Stockholders’ Equity and Convertible Preferred Stock

As of March 31, 2026, there are 22,613,781 shares

of common stock issued and outstanding This includes 316,346 unvested shares issued that are subject to forfeiture through September 30,

2026, and 80,000 unvested shares issued that are subject to forfeiture through December 11, 2026.

On February 10, 2025, the Company entered into

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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.

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

in stockholders’ equity.

During the period January 1, 2026 to March 31,

2026, various individuals exercised warrants, resulting in the additional issuance of 75,000 shares of common stock and cash proceeds

of $ 0.3 million, which were recorded in additional paid-in capital and are reflected in the unaudited condensed consolidated statements

of changes in stockholders’ equity.

Series D Convertible Preferred Stock

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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.

As of March 31, 2026, and December 31, 2025, 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

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

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.

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 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,

As of March 31, 2026 and December 31, 2025, 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.

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.

11, 2025, the board of directors approved a special cash dividend of $ 0.432 per share payable on January 26, 2026, to holders of common

stock and certain warrant holders as of close of business on January 5, 2026, Cash dividends declared in 2025 totaled $ 22.2 million and

have been charged to accumulated deficit.

Dividends paid for the three months ended March 31, 2025, totaled $ 7.0 million, and dividends

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

Dividends declared totaled $ 10.3 million during the three months

ended December 31, 2025, of which $ 9.9 million were paid during the three months ended March 31, 2026, resulting in a dividend payable

of $ 0.4 million as of March 31, 2026.

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

2026, is presented below:

Weighted Weighted

Exercise Total

Intrinsic Contractual

Warrants Price Value (in years)

Weighted Average

Average Remaining

Exercise Total Intrinsic Contractual

Warrants Price Value ($ 000s) Life (in years)

Outstanding as of December 31, 2025 6,690,768 $ 5.38 $ 6,186 3.9

Granted 7,752,108 3.97

Expired ( 253,670 ) $ 34.00 -

Exercised ( 75,000 ) $ 4.22 -

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

Outstanding as of March 31, 2026 6,362,098 $ 4.25 $ -

Restricted Stock Awards and Stock Options

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The 2022 Plan expires on January

1, 2032, and is administered by Dominari Holdings Board of Directors.

1, 2032, and is administered by the Dominari Holdings’ board of directors.

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

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

See Restricted Stock roll-forward below.

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

September 30, 2025, is presented below:

On December 10, 2025, the Company issued 316,346

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

These shares will vest on September 30,

provided that in the event of a change in control prior to any such vesting date, the shares, which have not yet vested shall vest

and become nonforfeitable upon the effective date of such change in control, with a total fair value of $ 1.3 million.

On December 11, 2025, the Company issued 80,000

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

These shares will vest on the one-year

anniversary of the grant date;

provided that in the event of a change in control prior to any such vesting date, the shares, which have

not yet vested shall vest and become nonforfeitable upon the effective date of such change in control, with a total fair value of $ 381

On January 9, 2026, the Company issued 75,000

shares of the Company’s common stock under the Company’s 2022 Equity Incentive Plan to members of the board of directors.

Upon issuance, the shares were fully-vested and nonforfeitable with a total fair value of $ 320 thousand.

On March 4, 2026, the Committee determined that it is in the best interests

of the Company and its stockholders to make a special equity grant of 3.0 million shares of the Company’s common stock each to Messrs.

Anthony Hayes and Kyle Wool, pursuant to shareholder approval to increase the shares of common stock reserved for issuance under the Company’s

2022 Equity Incentive Plan, which was approved on March 4, 2026 at a Special Meeting of Shareholders Upon issuance, the shares were fully-vested

and nonforfeitable with a total fair value of approximately $ 18.4 million.

Restricted Stock roll-forward below.

A summary of restricted stock awards activity for the three months ended March 31, 2026, is presented

Nonvested at December 31, 2025

( 6,075,000 )

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 September 30, 2025, there is approximately

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

Nonvested at March 31, 2026

Stock-based compensation associated with restricted stock awards was

approximately $ 19.2 million and $ 7.6 million for the three months ended March 31, 2026, and 2025, respectively.

All stock compensation

was recorded as a component of compensation and benefits expenses.

The 396,346 nonvested restricted stock units that were approved in

December 2025 in the table above are reflected as being issued in the unaudited Condensed Consolidated Statements of Changes in Stockholders’

Equity for the three months ended March 31, 2026.

As of March 31, 2026, there is approximately $ 1.1 million unrecognized

stock-based compensation expense related to restricted stock awards.

Stock Options

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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 nine months ended September 30, 2025, is presented below:

Weighted Total Remaining

Average Intrinsic Contractual

The Company recorded an expense of $ 26.1 million for the Performance Awards during the second quarter

On December 1, 2025, the Company entered into

an advisory agreement with a certain individual who was issued 50,000 nonqualified stock options (“Advisor Options”).

party reserves the right to terminate the agreement at any time, with or without cause, upon five (5) days prior written notice to the

One half of the Advisor Options shall vest and become exercisable during its term on December 1, 2025, and one half of the

Advisor Options shall vest and become exercisable during its term on June 1, 2026, in the manner and subject to the terms and conditions

of the Plan and the Stock Option Grant Agreement (the “Option Grant Agreement”).

The Company used a Black Scholes valuation

to calculate the grant date fair value of the Advisor Options.

The fair value of the Advisor Options amounted to $ 146 thousand and the

Company recorded an expense of $ 36 thousand during the three months ended 2026 related to such options.

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

plan for the three months ended March 31, 2026, is presented below:

Weighted Average

Average Total Remaining

Shares Exercise

Price Intrinsic

Value Contractual

Life (in years)

Outstanding as of December 31, 2025 10,072,646 $ 6.16 $ 26 9.1

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Employee options exercised -

Employee options expired ( 128,652 ) $ 3.68

Employee options forfeited -

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

Outstanding as of March 31, 2026 10,072,646 $ 6.16 $ - 8.8

Options vested and exercisable 10,064,313 $ 6.17 $ - 8.8

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 %

Stock-based compensation associated with stock options was approximately

$ 36 thousand and $ 38 thousand for the three months ended March 31, 2026, and 2025, respectively.

All stock compensation was recorded as

a component of compensation and benefits expenses.

Estimated future stock-based compensation expense relating to unvested

stock options is approximately $ 52,000

stock options is approximately $ 24 thousand.

Non-controlling Interest

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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 following table presents our total revenue

disaggregated by revenue type for the three and nine months ended September 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 March 31, 2026, the revenue attributable to non-controlling interest was $ 23 thousand of which the

Company owes $ 21 thousand at March 31, 2026.

During the three months ended March 31, 2026, the Company distributed $ 55 thousand to non-controlling

Disaggregation of Revenue

For the three months ended March 31, 2026, and

2025 total revenue and revenue related to contracts with customers within the scope of Topic 606 were ($ in thousands):

Three Months Ended

Nine Months Ended

September 30,

Account advisory and management fees

Carried interest fees

Underwriting services

Carried interest

Interest income – customers

Other revenue

Management fees

Total revenue from contracts with customers

Principal transactions

Interest income – noncustomer

Total revenue

Revenue Recognized at a Point in Time

The Company recognizes revenue that is transactional

in nature and such revenue is earned at a point in time.

For the three months ended March 31, 2026, revenue that was recognized at a point

in time includes underwriting services of $ 32.9 .

million, carried interest of $ 1.1 million, commissions of $ 2.5 million and principal

transactions losses of $ 1.5 million consisting of $ 0.6 million of realized gains and $ 2.1 million of unrealized losses.

For the three

months ended March 31, 2025, revenue that is recognized at a point in time includes underwriting services of $ 5.6 million, commissions

of $ 2.2 million, and principal transactions losses of $ 0.9 million consisting of $ 0.3 million of realized gains and $ 1.2 million of unrealized

Revenue Recognized Over Time

The Company recognizes revenue over a period of

time, generally monthly on a straight-line basis, as services are performed, and performance obligations are satisfied.

For the three

months ended March 31, 2026, revenue that is recognized over time includes other revenue of $ 230 thousand, management fees of $ 265 thousand,

interest income from customers of $ 72 thousand, and interest income-noncustomers of $ 235 thousand.

For the three months ended March 31,

2025, revenue that was recognized over time includes other revenue of $ 233 thousand, management fees of $ 66 thousand, and interest income

from customers of $ 53 thousand.

Commitments and Contingencies

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certainty what the eventual outcome of potential litigation or other claims will be.

Notwithstanding this uncertainty, the Company does

not believe that the results of these potential claims are likely to have a material effect on its financial position or results of operations.

In March 2024, the Company received a notice of

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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.

The Company’s income tax expense (benefit) for the three months

ended March 31, 2026 is as follows ($ in thousands):

Current income tax expense (benefit)

Deferred income tax expense (benefit)

Total income tax expense (benefit)

The Company accounts for income taxes in accordance

with ASC 740, Income Taxes.

For interim periods, the Company applies the estimated annual effective tax rate (“AETR”) method

in accordance with ASC 740-270.

Under this method, income tax expense for interim periods is computed by applying the estimated annual

effective tax rate to year-to-date ordinary pretax income (loss) and adjusting for the tax effects of discrete items recognized in the

For the three months ended March 31, 2026, the

Company recorded income tax expense despite reporting a pretax loss.

This result is primarily attributable to a significant permanent

difference related to the limitation on the deductibility of certain executive compensation under Internal Revenue Code Section 162(m).

The Company currently expects that a substantial portion of executive compensation will not be deductible for income tax purposes for

the full fiscal year.

As a result, the Company’s estimated annual taxable income is forecasted to be positive, despite an expected

pretax book loss.

Accordingly, the Company’s estimated annual effective tax rate is negative, as the projected annual income tax

expense is divided by an expected pretax book loss.

The application of this negative AETR to year-to-date ordinary pretax loss results

in the recognition of income tax expense in the interim period, rather than a tax benefit that would otherwise be expected based on the

In addition, the Company recognized the tax effect of a discrete item

during the three months ended March 31, 2026, which further impacted income tax expense in the period.

Discrete items are excluded from

the determination of the AETR and are recorded in the period in which they occur.

During the period, the Company recognized a book loss

of approximately $ 6.9 million related to the sale of the Company’s marketable securities in American Bitcoin Corp (“ABTC”)

For income tax purposes, the majority of the approximate $ 32.5 million of proceeds from the sale of the Company’s ABTC stock

resulted in a $ 32.5 million were taxable ordinary income which is treated as a discrete item in the interim period.

The income tax effect

of this transaction increased current income tax expense by approximately $ 9.5 million.

The Company’s effective tax rate for the

three months ended March 31, 2026, was ( 9.0 %).

The primary drivers of the variance from the statutory rate were state taxes, Sec.

disallowed compensation, and valuation allowance.

The Company will continue to assess its estimated annual effective tax rate each reporting

Changes in forecasted pretax income, the amount of non-deductible compensation under Section 162(m), or other factors could result

in significant adjustments to the Company’s interim income tax provision in future periods.

During the three months ended March 31, 2025,

the Company did not record any income tax expense or benefit.

In assessing the realization of deferred tax assets,

management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized.

realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary

differences become deductible.

Management considers the Company’s history of cumulative net losses, the scheduled reversal of deferred

tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

The Company has determined that,

based on objective positive and negative evidence currently available, it is more likely than not that the Company will not realize the

benefits of all deferred tax assets.

Accordingly, the Company has provided a full valuation allowance for the deferred tax assets of approximately

$ 49.4 million as of March 31, 2026 and $ 38.3 million as of December 31, 2025.

For the three-month period ended March 31, 2026, the change

in valuation allowance is approximately $ 11.1 million.

As of March 31, 2026, the Company has federal,

state post-apportioned, and foreign net operating loss (“NOL”) carryforwards of approximately $ 76.7 million, $ 74.5 million,

and $ 0 , respectively.

Of the federal amount, $ 29.8 million have a limited carryforward period and will begin to expire in 2026, and $ 47.0

million will have an indefinite carryforward period.

Of the state post-apportioned amount, $ 74.5 million have a limited carryforward period

and will begin to expire in 2038.

Utilization of the U.S.

NOL carryforwards may

be subject to a substantial annual limitation under Section 382 of the Internal Revenue Code of 1986, and corresponding provisions of

state law, due to ownership changes that have occurred previously or that could occur in the future.

These ownership changes may limit

the amount of carryforwards that can be utilized annually to offset future taxable income.

In general, an ownership change, as defined

by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation

by more than 50% over a three-year period.

The Company completed a Section 382 study through

December 31, 2025, and concluded that it underwent ownership changes as defined by the Code on September 10, 2013, March 31, 2014, May

24, 2016, December 5, 2019, March 31, 2020, March 31, 2021, and February 10, 2025.

The Company had a net unrealized built-in loss (“NUBIL”)

position at each ownership change date.

As a result, the Company’s utilization of certain tax attributes, including amortization

of acquired intangible assets, is subject to the Section 382 limitation.

The Company has approximately $ 76 million of acquired intangible

assets capitalized between 2013 and 2023 that are subject to this limitation.

Any future ownership changes that may occur after

December 31, 2025, may limit the Company’s ability to utilize remaining tax attributes.

Due to the existence of the valuation allowance,

limitations created by the 2013 ownership change and any potential future ownership changes will not impact the Company’s effective

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 Dominari

Securities 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 Rule15c3-1.

As of March 31, 2026, Dominari Securities had net capital of approximately $ 23.4 million in excess of

minimum net capital requirement of $ 0.7 million.

Dominari Securities customers’ securities transactions

are introduced on a fully-disclosed basis with its clearing broker/dealers.

The clearing broker/dealers are responsible for execution,

collection of and payment of funds and, receipt and delivery of securities relative to customer transactions.

Off-balance-sheet risk exists

with respect to these transactions due to the possibility that customers may be unable to fulfill their contractual commitments.

broker/dealers may charge any losses it incurs on customers to Dominari Securities.

The Company seeks to minimize this risk through procedures

designed at Dominari Securities to monitor the creditworthiness of its customers and to ensure that customer transactions are executed

properly by the clearing brokers, by monitoring all customer activity and reviewing information it receives from its clearing broker on

a daily basis.

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.

In 2021, the Dominari Holdings engaged the services

of Revere Securities, LLC (“Revere”) to assist in the management and building of the Company’s investment processes.

Kyle Wool, Chief Executive Officer and 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, 2025.

From time to time, the Company

participates in offerings of securities as an underwriter in transactions in which Revere also participates as an underwriter.

three months ended March 31, 2026, there were no such transactions.

The Company earned $ 368,000 in the three months ended March 31, 2025

in transactions, which Revere also participated as an underwriter.

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

During the year December 31, 2024, the Company

entered into employee loans with various employees totaling $ 2.4 million.

The terms of the loan agreements range from 3 years to 7 years,

with an average annual interest rate of approximately 3.2 %.

The total interest received for the three months ended March 31, 2026 and

2025 was approximately $ 17 thousand and $ 21 thousand, respectively.

As of March 31, 2026 and 2025, the total outstanding balance of the

employee loans was $ 1.7 million and $ 2.0 million, respectively and are 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.

made through related party special purpose vehicles (the “Series Funds”).

Those Company investments in the Series Funds without

readily determinable fair values are accounted for using the measurement alternative and are are classified as long-term equity investments.

Approximate carrying values of such related party long-term equity investments was $ 261 thousand and $ 150 thousand as of March 31, 2026

and December 31, 2025 respectively.

Those Company investments in the Series Funds which have readily determinable fair values are classified

as marketable securities with an approximate fair value of $ 2.3 million as March 31, 2026 and December 31, 2025.

The Company owns 90 % of AV Manager and AV Investment

2 unchanged sentences

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.

As of March 31, 2026, the amount attributable to non-controlling interest was $ 23 thousand.

There is $ 21 thousand payable to non-controlling

interests as of March 31, 2026.

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.

These include the entirety of the management fee revenues totaling $ 0.3 million

and $ 0.1 million for the three months ended March 31, 2026 and 2025, respectively and are classified as management fees in Note 12 and

included in other revenue within the statement of operations.

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 and are listed as contract liabilities

in the unaudited condensed statement of financial condition totaling $ 4.7 million as of March 31, 2026 and $ 4.5 million as of December

In the normal course of business, Dominari Securities

provides underwriting and brokerage services to the Series Funds.

As a result of services provided, the Company recognized approximately

$ 0.4 million in underwriting revenue, $ 1.1 million in carried interest revenue, and $ 1.0 million of commission revenue during the three

months ended 2026.

Segment Reporting

11 unchanged sentences

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,

the Company operated as a single operating segment comprised of Legacy AIkido.

The CODM has access to and regularly reviews

internal financial reporting for each business and uses that information to make operational decisions and allocate resources.

policies applied by the reportable segments are the same as those used by the Company and described in the “ Summary of Significant

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

Prior to the FPS Acquisition, the Company operated

as a single operating segment comprised of Legacy Aikido.

The CODM has access to and regularly reviews internal

financial reporting for each business and uses that information to make operational decisions and allocate resources.

Accounting policies

The measures of segment profitability

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

Compensation and benefits

Professional and consulting fees

Data processing

Other expenses

Income (loss) from operations

Other (expenses) income

Interest income

Gain on marketable securities

Unrealized loss on note receivable

Change in fair value of investments

Total other (expenses) income

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

Compensation and benefits

Professional and consulting fees

Data processing

Other expenses

Loss from operations

Other (expenses) income

Interest income

Gain on marketable securities

Unrealized loss on note receivable

Change in fair value of investments

Total other (expenses) income

Nine Months Ended September 30, 2025

applied by the reportable segments are the same as those used by the Company and described in the “ Summary of Significant Accounting

The measures of segment profitability that are

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

condensed consolidated statement of operations.

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

Three Months Ended March 31, 2026

Operating Costs

1 unchanged sentence

Professional and consulting fees

Data processing

Other expenses

Other operating expenses

Income / (loss) from operations

1 unchanged sentence

Interest income

Gain on marketable securities

Unrealized gain on note receivable

Change in fair value of investments

Loss on marketable securities

Total other income

Net income (/loss) before income taxes

Provision for income taxes

Net income (loss)

Net income attributable to noncontrolling interests

Net income attributable to common stockholders of Dominari Holdings

Nine Months Ended September 30, 2024

Non-controlling interests

Net loss attributable to stockholders

Three Months Ended March 31, 2025

Operating Costs

Compensation and benefits

Compensation, benefits and advisory fees

Professional and consulting fees

Data processing

Other expenses

4 unchanged sentences

Unrealized loss on note receivable

Change in fair value of investments

Change in carrying value of investments

Total other (expenses) income

The Company recorded no income tax expense for

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 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.

Subsequent Events

On May 4, 2026, the Company’s board of directors authorized a

special cash dividend of, in aggregate, approximately $ 9.0 million, or approximately $ 0.31 per share.

The dividend is payable on or about

May 29, 2026, to the Company’s common stock shareholders and certain warrant holders (on an as-exercised basis) of record as of

the close of business on May 15, 2026.

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