UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark one)
For the quarterly period ended
or
For the transition period from ________to ________
Commission File Number:
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The |
Indicate by check mark whether the registrant
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(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
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Indicate by check mark whether the registrant
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| ☒ | Smaller reporting company | |||
| Emerging growth company |
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As of May 12, 2026 there were
DOMINARI HOLDINGS INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026
TABLE OF CONTENTS
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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
DOMINARI HOLDINGS INC.
Condensed Consolidated Balance Sheets
($ in thousands except share and per share amounts)
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Marketable securities | ||||||||
| Securities owned | ||||||||
| Receivable from clearing brokers | ||||||||
| Long-term equity investments | ||||||||
| Loans to employees | ||||||||
| Right-of-use assets | ||||||||
| Prepaid expenses and other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accrued compensation and commissions | ||||||||
| Accrued dividends payable | ||||||||
| Contract liabilities | ||||||||
| Lease liability | ||||||||
| Income taxes payable | ||||||||
| Other liabilities | ||||||||
| Total liabilities | ||||||||
| Stockholders’ equity | ||||||||
| Preferred stock, $ | ||||||||
| Convertible Preferred Series D: | ||||||||
| Convertible Preferred Series D-1: | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Dominari stockholders’ equity | ||||||||
| Non-controlling interests | ( | ) | ||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to unaudited condensed consolidated financial statements.
1
DOMINARI HOLDINGS INC.
Condensed Consolidated Statements of Operations
($ in thousands except share and per share amounts)
(Unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues | ||||||||
| Underwriting services | $ | $ | ||||||
| Carried interest | ||||||||
| Commissions | ||||||||
| Interest income | ||||||||
| Principal transactions | ( | ) | ( | ) | ||||
| Other revenue | ||||||||
| Total revenue | ||||||||
| Operating costs and expenses | ||||||||
| Compensation and benefits | ||||||||
| Advisory fees | ||||||||
| Legal fees | ||||||||
| Professional and consulting fees | ||||||||
| Other expenses | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expenses) | ||||||||
| Other income | ||||||||
| Interest income | ||||||||
| Gain (loss) on marketable securities, net | ( | ) | ( | ) | ||||
| Realized and unrealized gain loss on notes receivable, net | ||||||||
| Change in carrying value of investments | ||||||||
| Total other income (expenses) | ( | ) | ||||||
| Net loss before income tax expense | $ | ( | ) | $ | ( | ) | ||
| Provision for income taxes | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Less: Net income attributable to non-controlling interests | ||||||||
| 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 | ||||||||
| Basic and Diluted | ||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
2
DOMINARI HOLDINGS INC.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
($ in thousands except share and per share amounts)
(Unaudited)
| Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Dominari Holding Stockholders’ | Non- Controlling | Total Stockholders’ | ||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity | Interests | Equity | ||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | - | $ | - | $ | $ | ( | ) | $ | | $ | - | $ | | ||||||||||||||||||||||
| Stock-based compensation - employees | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock from warrants exercised | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation- advisors | - | - | ||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interest | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
| Preferred Stock | Common Stock | Additional Paid-in | Treasury Stock | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Shares | Amount | Deficit | Equity | ||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | | |||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||||||||||||||
| Issuance of common stock | - | |||||||||||||||||||||||||||||||||||
| Advisory shares issued | - | |||||||||||||||||||||||||||||||||||
| Dividends issued | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | - | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
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DOMINARI HOLDINGS INC.
Condensed Consolidated Statements of Cash Flows
($ in thousands)
(Unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Amortization of right-of-use assets | ||||||||
| Depreciation | ||||||||
| 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 | ( | ) | ||||||
| Realized and unrealized (gain) loss on note receivable | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other assets | ( | ) | ||||||
| Receivable from clearing brokers | ( | ) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Accrued compensation and commissions | ||||||||
| Right of use asset and liability, net | ( | ) | ( | ) | ||||
| Contract liabilities | ||||||||
| Income taxes payable | ||||||||
| Other liabilities | ( | ) | ||||||
| Net cash (used in) provided by operating activities | ( | ) | ||||||
| Cash flows from investing activities | ||||||||
| Purchase of marketable securities | ( | ) | ( | ) | ||||
| 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 | ||||||||
| Collection of loans to employees | ||||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Cash flows from financing activities | ||||||||
| Cash paid for dividends | ( | ) | ( | ) | ||||
| 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 | $ | $ | ||||||
| Cash paid for interest and taxes | $ | $ | ||||||
See accompanying notes to unaudited condensed consolidated financial statements.
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DOMINARI HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1. Organization and Description of Business and Recent Developments
Organization and Description of Business
Dominari Holdings Inc. (the “Company”), formerly Aikido Pharma, Inc., was founded in 1967 as Spherix Incorporated. Since 2017, the Company operated as a biotechnology company with a diverse portfolio of small-molecule anticancer and antiviral therapeutics and their related patent technology. The Company is in the process of winding down its historical pipeline of biotechnology assets held by Dominari Labs, LLC (formerly Aikido Labs, LLC). In an effort to enhance shareholder value, in June of 2022, the Company formed a wholly owned financial services subsidiary, Dominari Financial Inc. (“Dominari Financial”), with the intent of shifting the Company’s primary operating focus away from biotechnology to the fintech and financial services industries. Through Dominari Financial, the Company acquired Dominari Securities LLC (“Dominari Securities”), an introducing broker- dealer, a member of the Financial Industry Regulatory Authority (“FINRA”) and an investment adviser registered with the Securities and Exchange Commission (“SEC”). Dominari Securities is also licensed to provide investment advisory services and annuity and insurance products of certain insurance carriers as an insurance agency through independent and affiliated brokers.
On September 9, 2022, Dominari Financial entered
into a membership interest purchase agreement, as amended and restated on March 27, 2023 (the “FPS Purchase Agreement”) with
Fieldpoint Private Bank & Trust (“Seller”), a Connecticut bank, for the purchase of its wholly owned subsidiary, Fieldpoint
Private Securities, LLC, a Connecticut limited liability company (“FPS”), that is a broker-dealer, a member of FINRA and an
investment adviser registered with the SEC. Pursuant to the terms of the FPS Purchase Agreement, Dominari Financial purchased from the
Seller
On October 13, 2023, the Company entered into two separate Limited Liability Agreements with Dominari Manager LLC (“Manager”) and Dominari IM LLC (“Investment Manager”), which are both wholly owned subsidiaries and whose operations are included within the unaudited condensed consolidated financial statements of Dominari Holdings Inc. Manager was named as the manager of Dominari Master SPV LLC (the “Master SPV”), a limited liability company formed by the Company in 2022, and is responsible for the day-to-day operations of the Master SPV. Investment Manager was named the investment manager of Master SPV and is responsible for providing investment advice and decisions on behalf of the Master SPV. Beginning in March 2024, the Manager established various series of funds (the “Series”) of the Master SPV for the purpose of making investments in companies identified by the Investment Manager with proceeds generated by the sale of non-voting interests in such Series by the Master SPV to investors, in which the Company may, from time to time as it deems appropriate, also invest in such series alongside third-party investors.
On June 17, 2025, the Company entered into two
Limited Liability Agreements with American Ventures Management LLC (“AV Manager”) and American Ventures IM LLC (“AV
Investment Manager”). The Company holds a ninety percent (
Note 2. Liquidity and Capital Resources
The Company monitors its liquidity position on 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 $
5
Note 3. Summary of Significant Accounting Policies
There have been no material changes in the Company’s significant accounting policies from those previously disclosed in the 2025 Annual Report.
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), and in conformity with the rules and regulations of the SEC. In the opinion of management, these financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the results of the interim periods presented. The condensed consolidated balance 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, 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
Joint Ventures
On May 21, 2024, the Company entered into a limited
liability company operating agreement to form Dominari Financial Heritage Strategies LLC (“DFHS”). The Company has a
Use of Estimates
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP. This requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenue and expenses during the period. The Company’s significant estimates and assumptions include stock-based compensation, 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. 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.
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.
6
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
Warrant Investments
Warrant fair values are primarily determined using 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. Increases or decreases in any of these inputs could result in a material change in fair value. Additionally, for warrants that have periods of contractual trading restrictions, marketability discounts were considered in determining fair value. Warrants held by Dominari Securities are included in securities owned and other warrants are included in marketable securities.
The following inputs are considered for determining the fair values of warrants:
| ● | The underlying stock price is equal to the closing price of the underlying stock as of the measurement date. |
| ● | The expected remaining term is equal to the time to expiration of the warrant investment. |
| ● | Volatility, or the amount of uncertainty or risk about the size of the changes in the warrant investment price. |
| ● | The risk-free interest rates are derived from the U.S. Treasury yield curve. The risk-free interest rates are calculated based on a weighted average of the risk-free interest rates that correspond closest to the expected remaining term of the warrant investment. |
| ● | Marketability discounts are applied for warrants that have sales restrictions (or lock-up periods). These discounts are calculated using a combination of the Finnerty Model and the Asian Put Model using a term equal to the period of such restriction. |
Receivable from Clearing Brokers
Receivable from Dominari Securities’ clearing brokers totaling
$
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 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. 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.
7
Leases
The Company accounts for its leases under ASC 842, Leases (“ASC 842”). Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the 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 9 - Leases).
Revenue
The Company recognizes revenue under ASC 606 - Revenue from Contracts with Customers (“ASC 606”). Revenue is recognized when control of the promised goods or performance obligations for services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the goods or services.
The following provides detailed information on the recognition of the Company’s revenue from contracts with customers:
| ● | Underwriting services include underwriting and private placement agent services in both the public and private equity and debt capital markets, including private equity placements, initial public offerings, follow-on offerings, and underwriting and distributing public and private debt. Underwriting and placement agent revenue are recognized at a point in time on trade-date, as the client obtains the control and benefit of the underwriting offering at that point. The Company expenses any costs associated with underwriting transactions and they are recorded on a gross basis within the general and administrative line item in the 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, 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. 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. Similarly, 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. |
8
| ● | 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. 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. |
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. These 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 $ |
| ● | 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. The Company
has a defined contribution 401(k) plan that covers all employees and allows an employer contribution of up to
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
The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. The Company recognizes stock-based compensation expense on a graded-vesting basis over the requisite service period for each separately vesting tranche of each award.
Expected Term - The expected term of options represents the period that the Company’s stock-based awards are expected to be outstanding based on 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.
9
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. S. Treasury zero-coupon issues with an equivalent remaining term.
The Company accounts for forfeitures as they occur.
Income Taxes
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 periods
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures.” This ASU requires that each interim and annual reporting period, an entity discloses more information about the components of certain expense captions that is currently disclosed in the financial statements. This update is effective for annual reporting periods beginning after December 15, 2026. Early adoption is permitted. Management is currently evaluating the effects this guidance will have on its financial statements.
The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on these unaudited condensed consolidated financial statements.
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.
Note 4. Marketable Securities
The realized gain or loss, unrealized gain or loss, and dividend income related to marketable securities for the three months ended March 31, 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 | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Realized gain / (loss) | $ | ( | ) | $ | ( | ) | ||
| Unrealized gain / (loss) | ( | ) | ||||||
| Interest and dividend income | ||||||||
| Total | $ | ( | ) | $ | ( | ) | ||
10
Note 5. Long-Term Equity Investments
The Company holds interests in several privately held companies as
long-term investments.
| March 31, 2026 | December 31, 2025 | |||||||||||||||
| Carrying | Carrying | |||||||||||||||
| Cost Basis | Value | Cost Basis | Value | |||||||||||||
| Investment in Kerna Health | $ | $ | $ | $ | ||||||||||||
| Investment in Revere Master SPV Series 1 (Qxpress Pte Ltd)* | ||||||||||||||||
| Investment in MW LSV MasterClass, LLC (Yanka Industries, Inc. d.b.a. | ||||||||||||||||
| Masterclass)* | ||||||||||||||||
| Investment in Payward, Inc. and MWSI VC Kraken-II, LLC (Payward, Inc. d.b.a.Kraken)* * | ||||||||||||||||
| Investment in Aeon Partners Fund Series EG (Epic Games, Inc.)* | ||||||||||||||||
| Investment in Tesspay, Inc. and Revere Master SPV Series VI (TessPay, Inc.)** | ||||||||||||||||
| Investment in Discord Inc. | ||||||||||||||||
| Investment in Automation Anywhere, Inc. | ||||||||||||||||
| Investment in Dominari Master SPV LLC Series VI (X.AI Corp. d.b.a. xAI)* | ||||||||||||||||
| Investment in Dominari Master SPV LLC Series XI (Cerebras Systems Inc.)* | ||||||||||||||||
| Investment in Dominari Master SPV LLC Series XII (Groq, Inc.)* | ||||||||||||||||
| Investment in AdvEn Inc. | ||||||||||||||||
| Investment in American Ventures LLC Series XX (TracX Logis Pte Ltd..) | - | - | ||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| * |
| ** |
The Company had changes to the carrying values
for the three months ended March 31, 2026, and recorded an increase in the carrying values of approximately $
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
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 $
Note 6. Notes Receivable
As of March 31, 2026, and December 31, 2025, the Company had notes receivable.
American Innovative Robotics, LLC
The Company recorded interest income of approximately
$
11
Note 7. Fair Value of Financial Assets and Liabilities
Financial instruments, including cash and cash 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 fair value:
Level 1 - quoted prices in active markets for identical assets or liabilities
Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable
Level 3 - inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)
Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management judgment.
The following table presents the Company’s assets and liabilities that are measured at fair value as of March 31, 2026 and December 31, 2025 ($ in thousands):
| Fair value measured as of March 31, 2026 | ||||||||||||||||
| Quoted | Significant | |||||||||||||||
| Total at | prices in Active | other observable | Significant unobservable | |||||||||||||
| March 31, | Markets | inputs | inputs | |||||||||||||
| 2026 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
| Assets | ||||||||||||||||
| Securities owned | $ | $ | $ | $ | ||||||||||||
| Marketable securities | $ | $ | $ | $ | ||||||||||||
| Fair value measured as of December 31, 2025 | ||||||||||||||||
| Quoted | Significant | |||||||||||||||
| Total at | prices in active | other observable | Significant unobservable | |||||||||||||
| December 31, | markets | inputs | inputs | |||||||||||||
| 2025 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
| Assets | ||||||||||||||||
| Securities owned | $ | $ | $ | $ | ||||||||||||
| Marketable securities | $ | $ | $ | $ | ||||||||||||
The fair value of level 3 securities owned totaling $
12
Level 3 Measurement
The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial assets that are measured at fair value on a recurring basis ($ in thousands):
| 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 $ |
| ● | Implied success rates of similar type instruments from other comparable
entities’ recent historical results of |
Note 8. Prepaid expenses and other assets
Other assets consist of the following as of March 31, 2026, and December 31, 2025 ($ in thousands):
| March 31, 2026 | December 31, 2025 | |||||||
| Prepaid expenses | $ | $ | ||||||
| Security deposits | ||||||||
| Property and equipment, net | ||||||||
| Other | ||||||||
| Total | $ | $ | ||||||
Note 9. Leases
On December 1, 2021, the Company entered
into a Lease Agreement (the “Company’s Lease”) with Trump Tower Commercial LLC, a New York limited liability
company. Under the Company’s Lease, the Company rents a portion of the twenty-second floor at 725 Fifth Avenue, New York, New
York (the “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 (
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 “23rd
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
13
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 (
The tables below represent the Company’s lease assets and liabilities as of March 31, 2026:
| March 31, | ||||
| 2026 | ||||
| Assets: | ||||
| Operating lease right-of-use-assets | $ | |||
| Liabilities: | ||||
| Current | ||||
| Operating | $ | |||
| Long-term | ||||
| Operating | ||||
| $ | ||||
The following tables summarize quantitative information about the Company’s operating leases, under the adoption of ASC 842:
| March 31, | ||||
| 2026 | ||||
| Weighted-average remaining lease term - operating leases (in years) | ||||
| Weighted-average discount rate - operating leases | % | |||
During the years ended March 31, 2026 and 2025,
the Company recorded approximately $
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Operating leases | ||||||||
| Operating lease cost | $ | $ | ||||||
| Short-term lease rent expense | ||||||||
| Net rent expense | $ | $ | ||||||
As
of March 31, 2026, future minimum payments during the next
| Operating | ||||
| Leases | ||||
| Remaining period Ended December 31, 2026 | $ | |||
| Year Ended December 31, 2027 | ||||
| Year Ended December 31, 2028 | ||||
| Year Ended December 31, 2029 | ||||
| Year Ended December 31, 2030 | ||||
| Thereafter | ||||
| Total | ||||
| Less present value discount | ( | ) | ||
| Operating lease liabilities | $ | |||
14
Note 10. Net Loss per Share
Basic loss per share of common stock is computed by dividing the net loss allocable to common stockholders by the weighted-average number of shares of common stock or common stock equivalents outstanding for the period. Diluted loss per common share is computed similar to basic loss per share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock as of the first day of the period.
Securities that could potentially dilute loss per share in the future that were not included in the computation of diluted loss per share for the years ended March 31, 2026, and 2025 are as follows:
| As of March 31, | ||||||||
| 2026 | 2025 | |||||||
| Convertible preferred stock | ||||||||
| Warrants to purchase common stock | ||||||||
| Restricted stock awards | ||||||||
| Options to purchase common stock | ||||||||
| Total | ||||||||
Note 11. Stockholders’ Equity and Convertible Preferred Stock
Common Stock
As of March 31, 2026, there are
On February 10, 2025, the Company entered into
securities purchase agreements with certain accredited investors for the sale by the Company of
On February 10, 2025, the Company entered into
advisory agreements with various individuals who were issued shares of common stock. The agreements are for a term of two years but are
cancellable by either party. As part of these agreements,
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.
15
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 January 1, 2026 to March 31,
2026, various individuals exercised warrants, resulting in the additional issuance of
Series D Convertible Preferred Stock
In connection with the acquisition of North South’s
patent portfolio in September 2013, the Company issued
As of March 31, 2026, and December 31, 2025,
Series D-1 Convertible Preferred Stock
The Company’s Series D-1 Convertible Preferred
Stock (“Series D-1 Preferred Stock”) was established on November 22, 2013. Each share of Series D-1 Preferred Stock has a
stated value of $
As of March 31, 2026 and December 31, 2025,
Dividends
On February 11, 2025, the board of directors approved
a special cash dividend of $
16
Warrants
A summary of warrant activity for the three months ended March 31, 2026, is presented below:
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Remaining | |||||||||||||||
| Exercise | Total Intrinsic | Contractual | ||||||||||||||
| Warrants | Price | Value ($000s) | Life (in years) | |||||||||||||
| Outstanding as of December 31, 2025 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Expired | ( | ) | $ | |||||||||||||
| Exercised | ( | ) | $ | - | ||||||||||||
| Outstanding as of March 31, 2026 | $ | $ | ||||||||||||||
Restricted Stock Awards and Stock Options
On October 7, 2022, the Company adopted the 2022
Equity Incentive Plan (“2022 Plan”). The 2022 Plan provided for the issuance of up to
On February 10, 2025, the Company issued
On February 10, 2025, the Company issued
On February 12, 2025 in connection with the closing
of the PIPE, the Committee determined that it is in the best interests of the Company and its stockholders to make a special equity grant
to Messrs. Anthony Hayes. Pursuant to the Committee’s decision, he received
On March 11, 2025, the Company executed grant
agreements with each of Messrs. Anthony Hayes and Kyle Wool pursuant to their employment agreements with the Company, and in accordance
with the Company’s 2022 Equity Incentive Plan. Pursuant to the grant agreements, each received
On December 10, 2025, the Company issued
On December 11, 2025, the Company issued
On January 9, 2026, the Company issued
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
17
See Restricted Stock roll-forward below.
A summary of restricted stock awards activity for the three months ended March 31, 2026, is presented below:
| Weighted | ||||||||
| Number of | Average | |||||||
| Restricted | Grant Day | |||||||
| Stock Awards | Fair Value | |||||||
| Nonvested at December 31, 2025 | $ | |||||||
| Granted | $ | |||||||
| Vested | ( | ) | $ | |||||
| Forfeited | $ | |||||||
| Nonvested at March 31, 2026 | $ | |||||||
Stock-based compensation associated with restricted stock awards was
approximately $
As of March 31, 2026, there is approximately $
Stock Options
On February 10, 2025, the Company granted an additional
On December 1, 2025, the Company entered into
an advisory agreement with a certain individual who was issued
A summary of option activity under the Company’s stock option plan for the three months ended March 31, 2026, is presented below:
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Total | Remaining | ||||||||||||||
| Number of Shares | Exercise Price | Intrinsic Value | Contractual Life (in years) | |||||||||||||
| Outstanding as of December 31, 2025 | $ | $ | ||||||||||||||
| Employee options granted | $ | $ | - | - | ||||||||||||
| Employee options exercised | $ | $ | - | - | ||||||||||||
| Employee options forfeited | $ | $ | - | - | ||||||||||||
| Outstanding as of March 31, 2026 | $ | $ | - | |||||||||||||
| Options vested and exercisable | $ | $ | - | |||||||||||||
Stock-based compensation associated with stock options was approximately
$
18
Estimated future stock-based compensation expense relating to unvested
stock options is approximately $
Non-controlling Interest
As previously discussed, the Company owns
Note 12. Revenue
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 | ||||||||
| March 31, | ||||||||
| Revenues | 2026 | 2025 | ||||||
| Underwriting services | $ | $ | ||||||
| Carried interest | ||||||||
| Commissions | ||||||||
| 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 $
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 $
19
Note 13. Commitments and Contingencies
Legal Proceedings
The Company may be subject to certain legal and other claims that arise in the ordinary course of its business. In particular, the Company and its subsidiaries may be named in and subject to various proceedings and claims arising primarily from the Company’s securities business activities, including lawsuits, arbitration claims, class actions, and regulatory matters. Some of these claims may seek substantial compensatory, punitive, or indeterminate damages. The Company and its subsidiaries may also be subject to other reviews, investigations, and proceedings by governmental and self-regulatory organizations regarding the Company’s business, which may result in adverse judgments, settlements, fines, penalties, injunctions, and other relief. Due to the inherent difficulty of predicting the outcome of litigation and other claims the Company cannot state with certainty what the eventual outcome of potential litigation or other claims will be. Notwithstanding this uncertainty, the Company does not believe that the results of these potential claims are likely to have a material effect on its financial position or results of operations.
In March 2024, the Company received a notice of petition of a filed action seeking relief related to the hiring in March 2024 of new registered representatives from the representatives’ former employer. This notice was filed against the Company’s subsidiary, Dominari Securities. The Company does not agree with the plaintiff’s claims. While the Company intends to defend itself vigorously from this claim, it is unable to predict the outcome of such legal proceeding. Any potential loss as a result of this legal proceeding cannot be reasonably estimated. As a result, the Company has not recorded a loss contingency for the aforementioned claim.
In the past, in the ordinary course of business, the Company actively pursued legal remedies to enforce its intellectual property rights and to stop unauthorized use of the Company’s technology. Other than ordinary routine litigation incidental to the business, the Company is not aware of any material, active or pending legal proceedings brought against it.
Note 14. Income Taxes
The Company’s income tax expense (benefit) for the three months ended March 31, 2026 is as follows ($ in thousands):
| U.S. Federal | $ | |||
| State | ||||
| Foreign | ||||
| Current income tax expense (benefit) | $ | |||
| U.S. Federal | ||||
| State | ||||
| Foreign | ||||
| 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 period.
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 pretax loss.
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 $
The Company’s effective tax rate for the
three months ended March 31, 2026, was (
During the three months ended March 31, 2025, the Company did not record any income tax expense or benefit.
20
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. The ultimate
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
$
As of March 31, 2026, the Company has federal,
state post-apportioned, and foreign net operating loss (“NOL”) carryforwards of approximately $
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 $
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 tax rate.
Note 15. Regulatory
Dominari Securities, the Company’s broker-dealer subsidiary,
is registered with the SEC as an introducing broker-dealer and is a member of FINRA. The Company’s broker-dealer subsidiary is 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 $
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. The clearing 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.
Note 16. Related Party Transactions
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
During the year December 31, 2024, the Company
entered into employee loans with various employees totaling $
21
Certain of the Company’s investments are
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 $
The Company owns
The Company earns revenues for managing certain
pooled investment vehicles which are related parties. These include the entirety of the management fee revenues totaling $
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
$
Note 17. Segment Reporting
The Company operates in
The CODM has access to and regularly reviews internal financial reporting for each business and uses that information to make operational decisions and allocate resources. Accounting policies applied by the reportable segments are the same as those used by the Company and described in the “Summary of Significant Accounting Policies”.
22
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.
| Three Months Ended March 31, 2026 | ||||||||||||
| Dominari Financial | Legacy Holding Co. | Consolidated | ||||||||||
| Revenue | $ | $ | $ | |||||||||
| Operating Costs | ||||||||||||
| Compensation and benefits | ||||||||||||
| Professional and consulting fees | ||||||||||||
| Other operating expenses | ||||||||||||
| Income / (loss) from operations | ( | ) | ( | ) | ||||||||
| Other (expenses) income | ||||||||||||
| Other income | ||||||||||||
| Interest income | ||||||||||||
| Loss on marketable securities | ( | ) | ( | ) | ||||||||
| Total other income | ( | ) | ( | ) | ||||||||
| Net income (/loss) before income taxes | ( | ) | ( | ) | ||||||||
| Provision for income taxes | ||||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | ( | ) | |||||
| Non-controlling interests | ||||||||||||
| Net loss attributable to stockholders | $ | ( | ) | $ | ( | ) | ||||||
| Total assets | $ | $ | $ | |||||||||
| Three Months Ended March 31, 2025 | ||||||||||||
| Dominari Financial |
Legacy Holding Co. |
Consolidated | ||||||||||
| Revenue | $ | |
$ | $ | ||||||||
| Operating Costs | ||||||||||||
| Compensation, benefits and advisory fees | ||||||||||||
| Professional and consulting fees | ||||||||||||
| Other expenses | ||||||||||||
| Loss from operations | ( |
) | ( |
) | ( |
) | ||||||
| Other (expenses) income | ||||||||||||
| Interest income | ||||||||||||
| Gain on marketable securities | ( |
) | ( |
) | ||||||||
| Unrealized loss on note receivable | ||||||||||||
| Change in carrying value of investments | ||||||||||||
| Total other (expenses) income | ||||||||||||
| Net loss | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||
| Total assets | $ | $ | $ | |||||||||
Note 19. Subsequent Events
Dividend
On May 4, 2026, the Company’s board of directors authorized a
special cash dividend of, in aggregate, approximately $
23
Item 2. Management’s Discussion and analysis of Financial Condition and Results of Operations
You should read this discussion together with the Financial Statements, related Notes and other financial information included elsewhere in this Form 10-Q. All references to “we,”“us,” “our” and the “Company” refer to Dominari Holdings Inc., a Delaware corporation and its consolidated subsidiaries unless the context requires otherwise.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q (“Quarterly Report”) contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements relating to expectations for future financial performance, business strategies or expectations for the Company’s business. These statements are based on the beliefs and assumptions of the management of the Company. Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, it cannot provide assurance that it will achieve or realize these plans, intentions or expectations. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Quarterly Report, words such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “strive,” “target,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. You should not place undue reliance on these forward-looking statements. Should one or more of a number of known and unknown risks and uncertainties materialize, or should any of our assumptions prove incorrect, the Company’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements.
Overview
Dominari Holdings Inc. (“Dominari”)is a holding company that, through its various subsidiaries, is engaged in wealth management, investment banking, sales and trading, asset management and insurance. In addition to capital investment, Dominari provides management support to the executive teams of its subsidiaries, helping them to operate efficiently and reduce cost under a streamlined infrastructure. Dominari and its subsidiaries are collectively referred to herein as “Company,” “we,” “our” or “us.”
Dominari Financial Inc. (“Dominari Financial”),a wholly owned subsidiary of Dominari Holdings Inc., executes the Company’s growth strategy in the financial services industry. In addition to organic growth, Dominari Financial seeks partnership opportunities and acquisitions of third-party financial assets such as registered investment advisors and businesses, broker dealers, asset management and fintech firms, and insurance brokers. Our first transaction in furtherance of our growth in the financial services industry, the acquisition of 100% of a dually registered broker dealer and investment advisor from Fieldpoint Private Bank & Trust (“Fieldpoint”), was consummated on March 27, 2023. The newly acquired dually registered broker-dealer and investment adviser was renamed Dominari Securities LLC (“Dominari Securities”) and is a wholly owned subsidiary of Dominari Financial.
On October 13, 2023, the Company entered into two separate Limited Liability Company Agreements with Dominari Manager LLC (“Manager”) and Dominari IMLLC (“Investment Manager”), which are both wholly owned subsidiaries and whose operations are included within the unaudited condensed consolidated financial statements of Dominari. Manager was named as the manager of Dominari Master SPV LLC (the “Master SPV”), a limited liability company formed by the Company in 2022, and is responsible for the day-to-day operations of the Master SPV. Investment Manager was named the investment manager of Master SPV and is responsible for providing investment advice and decisions on behalf of the Master SPV. Beginning in March 2024, the Manager established various series of funds (the “Series”) of the Master SPV for the purpose of making investments in companies identified by the Investment Manager with proceeds generated by the sale of non-voting interests in such Series by the Master SPV to investors, in which the Company may, from time to time as it deems appropriate, also invest in such series alongside third-party investors.
On June 17, 2025, the Company entered into two Limited Liability Agreements with American Ventures Management LLC (“AV Manager”) and American Ventures IM LLC (“AV Investment Manager”) and was assigned ninety percent (90%) Membership Interest in each, which are both ninety percent (90%)majority owned subsidiaries of the Company and whose 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 SPV. The AV Manager established various AV Series of the AV Master SPV for the purpose of making investments in companies identified by the AV Investment Manager with proceeds generated by the sale of non-voting interests in such AV Series by the AV Master SPV to investors, in which the Company may, from time to time as it deems appropriate, also invest in such series alongside third-party investors.
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Critical Accounting Estimates
We prepare our unaudited condensed consolidated financial statements in accordance with GAAP. The preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. We base our estimates on historical experience and other assumptions that we believe are reasonable under the circumstances. Our actual results could differ significantly from these estimates under different assumptions and conditions.
There have been no material changes to our critical accounting estimates as compared to the critical accounting estimates discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Refer to Note 3 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, for a discussion of our significant accounting policies.
Recently Issued Accounting Pronouncements
See Note 3 to the unaudited condensed consolidated financial statements for a discussion of recent accounting standards.
Results of Operations
Three months ended March 31, 2026, compared to the three months ended March 31, 2025
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues | ||||||||
| Underwriting services | $ | 32,949 | $ | 5,606 | ||||
| Carried interest | 1,096 | - | ||||||
| Commissions | 2,490 | 2,190 | ||||||
| Interest income | 308 | 39 | ||||||
| Principal transactions | (1,532 | ) | (910 | ) | ||||
| Other revenue | 494 | 315 | ||||||
| Total revenue | 35,805 | 7,240 | ||||||
| Operating costs and expenses | ||||||||
| Compensation and benefits | 68,159 | 15,457 | ||||||
| Advisory fees | 36 | 20,944 | ||||||
| Legal fees | 1,485 | 704 | ||||||
| Professional and consulting fees | 876 | 829 | ||||||
| Other expenses | 2,871 | 2,188 | ||||||
| Total operating expenses | 73,427 | 40,122 | ||||||
| Loss from operations | (37,622 | ) | (32,882 | ) | ||||
| Other income (expenses) | ||||||||
| Other income | 108 | - | ||||||
| Interest income | 61 | 21 | ||||||
| Loss on marketable securities, net | (7,014 | ) | (168 | ) | ||||
| Realized and unrealized gain loss on notes receivable, net | - | 221 | ||||||
| Change in carrying value of investments | - | 320 | ||||||
| Total other income (expenses) | (6,845 | ) | 394 | |||||
| Net loss before income tax expense | $ | (44,467 | ) | $ | (32,488 | ) | ||
| Provision for income taxes | 12,868 | - | ||||||
| Net loss | (57,335 | ) | (32,488 | ) | ||||
| Less: Net income attributable to non-controlling interests | 23 | - | ||||||
| Net loss attributable to common stockholders of Dominari Holdings Inc. | $ | (57,358 | ) | $ | (32,488 | ) | ||
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During the three months ended March 31, 2026, we recognized approximately $35.8 million in revenue from operations, an increase of approximately $28.6 million or 395% as compared to the three months ended March 31, 2025, primarily driven by the increase in our activities of Dominari Securities. The increase in revenue was primarily attributable to the following:
| i. | Underwriting service revenue increased by $27.3 million or 488% from $5.6 million to $32.9 million in the three months ended March 31, 2026 as compared to the comparable period 2025, reflecting the impact of it increased efforts in both private placement and registered offering underwriting activities and deal flow. |
| ii. | Carried interest revenue totaled $1.1 million in first quarter of 2026 as compared to no such revenue in the first quarter of 2025 as a result of receiving variable consideration from investment management customers. |
| iii. | Commission revenues increased by $0.3 million, or 14% in the first three months of 2026 as compared to the same period in 2025, as a result of the increased customer trading activity. |
During the three months ended March 31, 2026, we recognized $73.4 million in operating costs and expenses representing an increase of $33.3 million or 83% as compared to the three months ended March 31, 2026. The increase in operating costs and expenses is primarily a result of the following:
| i. | Compensation and benefits increased by $52.7 million or 341%for the three months ended March 31, 2026 as compared to the same period in 2025 primarily as a result of increased commissions expenses of approximately $17.1 million and increases in bonus expense of approximately $34.1 million (of which $18.2 million of stock based compensation is included). Increases in compensation and benefits costs were primarily incurred to compensate employees for generation of the significantly increased revenues. |
| ii. | The Company recorded $36 thousand of advisory fees in three months ending March 31, 2026, as compared to $20.9 million in the comparable period in 2025 primarily as a result of the issuance of approximately 2.55 million shares of common stock to certain advisors in February 2025. |
During the three months ended March 31, 2026, , other expense was approximately $(6.8) million as compared to other income of $394 thousand for the three months ended March 31, 2025. The 2026 other expense primarily is as a result of the loss on the sale of the Company’s ABTC stock for cash proceeds of approximately $32.5 million in January 2026 which was lower than the approximate December 31, 2025, book value of $39.4 million. During the three months ending March 31, 2025, the Company recorded a realized gain of approximately $0.2 million on a note that was satisfied during the period and an approximate $0.3 million increase in the carrying value of its long-term investments.
During the three months ended March 31, 2026, the Company recorded income tax expense of $12.9 million as compared to $0 in comparable period in 2025 primarily as a result of the increased revenues, taxable gain on the sale of the Company’s ABTC stock in January 2026, and certain income tax limitations under Internal Revenue Code Sections 162(m) and 382 the tax impact of certain expenses related to compensation that are not allowable which limit available deductions for income tax purposes.
Net loss of $57.3 million in the three months ended March 31, 2026, was $24.8 million or 76% higher than the $32.5 million loss reported in the comparable period of 2025. In the first three months of 2026, non-controlling interest of $23 thousand was recorded slightly increasing the net loss attributable to common stockholders’ of the Company.
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Non-GAAP Comparison of Results for the Three Months Ended March 31, 2026, and March 31, 2025
To supplement its consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), the table below summarizes the additional non-GAAP financial measures of loss from operations, net income (loss) applicable to common stockholders’ of Dominari Holdings and earnings per share as adjusted from excluding non-cash stock-based compensation. Such noncash stock-based compensation represents charges included in compensation and benefits expense and advisory expense as reported on the Company’s consolidated statement of operations. The Company believes that these non-GAAP financial measures are appropriate to enhance understanding of its past performance as well as prospects for future performance. The non-GAAP financial measures should be considered in addition to, not as a substitute for, measures of financial performance prepared in accordance with U.S. GAAP. A reconciliation of the differences between these non-GAAP financial measures with the most directly comparable financial measure calculated in accordance with GAAP is shown in the table below ($ thousands):
| Three Months Ended | Three Months Ended | |||||||
| March 31, 2026 | March 31, 2025 | |||||||
| Loss from operations | $ | (37,622 | ) | $ | (32,882 | ) | ||
| Non-cash stock-based compensation | 19,279 | 28,626 | ||||||
| Adjusted loss from operations | $ | (18,343 | ) | $ | (4,256 | ) | ||
| Net loss attributable to common stockholders’ of Dominari Holdings | $ | (57,358 | ) | $ | (32,488 | ) | ||
| Non-cash stock-based compensation | 19,279 | 28,626 | ||||||
| Adjusted net loss before income tax expense | $ | (38,079 | ) | $ | (3,862 | ) | ||
| Adjustment to the provision for income taxes | - | 4,427 | ||||||
| Adjusted net loss to common stockholders’ of Dominari Holdings | (38,079 | ) | (8,289 | ) | ||||
| Adjusted net loss per share, basic | $ | (2.11 | ) | $ | (0.77 | ) | ||
| Weighted average number of shares outstanding, basic | 18,068,269 | 10,775,219 | ||||||
Liquidity and Capital Resources
We continue to incur ongoing administrative and other expenses, including public company expenses. While we continue to implement our business strategy, we intend to finance our activities through:
| ● | managing current cash and cash equivalents on hand from our past debt and equity offerings; |
| ● | seeking additional funds raised through the sale of additional securities in the future; and |
| ● | seeking additional liquidity through credit facilities or other debt arrangements. |
Our ultimate success is dependent on our ability to generate sufficient cash flow to meet our obligations on a timely basis. Our business may require significant amounts of capital to sustain operations that we need to execute our business plan to support our transition into the financial services industry. Our working capital amounted to approximately $21.9 million as of March 31, 2026. As of March 31, 2026, we had approximately $27.5 million of cash and cash equivalents, $6.9 million of marketable securities and $11.1 million of securities owned. Additionally, we had approximately $21.9 million in receivable from clearing brokers. All of such funds are available to fund our operations. We believe our cash and cash equivalents and marketable securities, together with the anticipated cash flow from operations will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months. In the event that cash flow from operations is not sufficient to fund our operations, as expected, or if our plans or assumptions change, including if inflation begins to have a greater impact on our business or if we decide to move forward with any activities that require more outlays of cash than originally planned, we may need to raise additional capital sooner than expected. We may raise this additional capital by obtaining additional debt or equity financing, especially if we experience downturns in our business that are more severe or longer than anticipated, or if we experience significant increases in expense levels resulting from being a publicly traded company or from continuing operations.
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Our ability to obtain capital to implement our growth strategy over the longer term will depend on our future operating performance, financial condition and, more broadly, on the availability of equity and debt financing. Capital availability will be affected by prevailing conditions in our industry, the global economy, the global financial markets, and other factors, many of which are beyond our control. Specifically, as a result of recent volatility and weakness in the public markets, due to, among other factors, uncertainty in the global economy and financial markets, it may be much more difficult to raise additional capital, if and when it is needed, unless the public markets become less volatile and stronger at such time that we seek to raise additional capital. In addition, any additional debt service requirements we take on could be based on higher interest rates and shorter maturities and could impose a significant burden on our results of operations and financial condition, and the issuance of additional equity securities could result in significant dilution to stockholders.
The following table summarizes our net cash flows from operating, investing and financing activities for the periods indicated (in thousands):
| As of March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash provided by (used in) | ||||||||
| Operating activities | $ | (28,942 | ) | $ | 1,235 | |||
| Investing activities | 32,123 | (5,436 | ) | |||||
| Financing activities | (9,709 | ) | 6,437 | |||||
| Net increase (decrease) in cash | $ | (6,528 | ) | $ | 2,236 | |||
Cash Flows from Operating Activities
For the three months ended March 31, 2026, net cash (used in) operations was approximately $(28.9) million as compared to net cash provided by operations of $1.2 million for the three months ended March 31, 2025. The cash used in operating activities for the three months ending March 31, 2026, is primarily attributable to net loss of approximately $55.7 million, increases in receivable from clearing brokers of approximately $17.9 million and non-cash underwriting revenue of approximately $10.1 million, offset primarily by non-cash commission expense of approximately $7.6 million, increases in income taxes payable of approximately $12.9 million and stock-based compensation of approximately $19.3 million, and a realized gain on marketable securities of approximately $6.9 million. The cash provided by operating activities for the three months ended March 31, 2025, was primarily attributable to decreases in receivable from clearing brokers of $4.8 million, increase in accrued commissions of approximately $1.2 million, increase in stock based compensation of approximately $28.6 million, changes in operating assets and liabilities of approximately $3.7 million, realized loss on marketable securities of approximately $0.7 million, offset by a net loss of approximately $32.4 million.
Cash Flows from Investing Activities
For the three months ended March 31, 2026 and 2025, net cash provided by (used in) investing activities was approximately $32.1 million and $(5.4) million, respectively. The cash provided by investing activities for the three months ended March 31, 2026, primarily resulted from our sale of marketable securities of approximately $41.7 that included the sale of the Company’s ABTC shares for $32.4 million in net proceeds, partially offset by our purchase of marketable securities of approximately $10.0 million. The cash used in investing activities for the three months ended March 31, 2025, primarily resulted from our purchases of marketable securities of approximately $9.0 million, partially offset by sale of marketable securities of approximately $1.8 million and collection of principal on notes receivable of $1.1 million.
Cash Flows from Financing Activities
For the three months ended March 31, 2026 and 2025, net cash (used in) provided by financing activities was approximately $(9.7) million and $6.4 million, respectively. The cash used in financing activities for the three months ended March 31, 2026, was resulted from dividends paid of approximately $9.9 million and distributions to non-controlling interest of approximately $55 thousand, offset by the issuance of common stock for warrants exercised of approximately $0.3 million. The cash provided by financing activities for the three months ended March 31, 2025, was primarily driven by fund raising related to issuance of common stock of $13.5 million, partially offset by payment of dividends $(7.1) million.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed or submitted under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Our disclosure controls and procedures are also designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act are accumulated and communicated to our management, including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.
We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)under the Exchange Act. Based upon that evaluation, as of March 31, 2026, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective due to the material weakness in our internal controls.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
Material Weaknesses in Internal Controls
During the period ended March 31, 2026, due to staffing and resource constraints, the Company required significant additional effort to close the books and records, and record appropriate account adjustments. As such, information technology, business processes and financial reporting controls were deemed to be ineffective due to (a) the lack of personnel to ensure the books and records are closed accurately and on a timely basis, (b) lack of sufficient review over the accounting for certain transactions recorded at fair value, (c) the lack of appropriate segregation of duties, (d) certain general information technology control deficiencies regarding user access provisioning and administrative access review, and (e) insufficient documentation to support and evidence the design and implementation of controls.
Remedial Actions
As a result, our management performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with accounting principles generally accepted in the United States of America. Management understands that the accounting standards applicable to our financial statements are complex and will seek to enhance controls over its experienced third-party professionals with whom management can consult with respect to accounting issues and remediate this material weakness. The Company has engaged an outside consulting firm to assist in the closing process to ensure that steps are taken to remediate the control environment and to specifically improve the timeliness and accuracy of its financial reporting process. Additionally, the Company is planning to implement certain information technology related changes over the year ending December 31, 2026.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting for the quarter ended March 31, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls
Our management does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.
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Part II – Other Information
Item 1. Legal Proceedings
Many aspects of the Company’s business involve substantial risks of liability. In the ordinary course of business, the Company may be named as defendant or co-defendant in various legal actions, including arbitrations, class actions and other litigation, which could create substantial exposure and periodic expenses. The Company may also be involved, from time to time, in other reviews, investigations and proceedings (both formal and informal) by governmental and self-regulatory agencies regarding the Company’s business, which may result in expenses, adverse judgments, settlements, fines, penalties, injunctions or other relief. In the past in the ordinary course of business, we actively pursued legal remedies to enforce our intellectual property rights and to stop unauthorized use of our technology.
In March 2024, the Company received a notice of petition of a filed action seeking relief related to the March 2024 affiliates of new registered representatives. This notice was filed against the Company’s subsidiary Dominari Securities. The Company does not agree with the claim of the plaintiff and will defend itself accordingly. While the Company intends to defend itself vigorously from this claim, it is unable to predict the outcome of such legal proceeding. Any potential loss as a result of this legal proceeding cannot be reasonably estimated. As a result, the Company has not recorded a loss contingency for the aforementioned claim.
Item 1A. Risk Factors
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item. Our current risk factors are set forth in our Annual Report on Form 10-K, which was filed with the SEC on March 31, 2026. Any of our previously disclosed risk factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Other Information.
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Item 6. Exhibits
| * | Filed herewith. |
| ** | Furnished herewith. |
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Signatures
Pursuant to the requirements of the Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| DOMINARI HOLDINGS INC. | ||
| Date: May 12, 2026 | By: | /s/ Anthony Hayes |
| Anthony Hayes | ||
| Chief Executive Officer | ||
| Date: May 12, 2026 | By: | /s/ Tim Ledwick |
| Tim Ledwick | ||
| Chief Financial Officer | ||
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