Dominari (DOMH) - 2025 Q1 - Quarterly Report

Part I - Financial Information This section presents the unaudited financial statements, management's discussion and analysis, market risk disclosures, and internal controls for the reporting period Financial Statements (Unaudited) Dominari Holdings Inc. reported increased assets and revenues, but a significant $32.5 million net loss driven by G&A, with positive operating cash flow Condensed Consolidated Balance Sheets Presents the company's financial position, including assets, liabilities, and equity, at specific reporting dates Condensed Consolidated Balance Sheet Highlights ($ in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $6,315 | $4,079 | | Marketable securities | $12,555 | $5,773 | | Total current assets | $34,700 | $28,150 | | Total assets | $52,335 | $47,125 | | Liabilities & Equity | | | | Total current liabilities | $6,048 | $3,783 | | Total liabilities | $9,907 | $7,272 | | Total stockholders' equity | $42,428 | $39,853 | | Total liabilities and stockholders' equity | $52,335 | $47,125 | Condensed Consolidated Statements of Operations Details the company's revenues, expenses, and net loss over the reporting period Condensed Consolidated Statements of Operations ($ in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $8,112 | $1,367 | | General and administrative | $40,122 | $4,172 | | Loss from operations | $(32,010) | $(2,805) | | Net loss | $(32,488) | $(5,441) | | Net loss per share, basic and diluted | $(3.02) | $(0.91) | | Weighted average shares outstanding | 10,775,219 | 5,995,065 | Condensed Consolidated Statements of Changes in Stockholders' Equity Outlines changes in equity components, including net loss, stock-based compensation, and stock issuances - Stockholders' equity increased from $39.9 million at the end of 2024 to $42.4 million as of March 31, 2025. Key activities included stock-based compensation of $7.7 million, issuance of common stock raising $13.5 million, and advisory shares valued at $20.9 million. These were offset by a net loss of $32.5 million and dividends of $7.1 million[14] Condensed Consolidated Statements of Cash Flows Summarizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows Highlights ($ in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $1,235 | $(8,594) | | Net cash (used in) provided by investing activities | $(5,436) | $7,717 | | Net cash provided by financing activities | $6,437 | $0 | | Net increase (decrease) in cash | $2,236 | $(877) | | Cash and cash equivalents, end of period | $6,315 | $1,956 | Notes to the Condensed Consolidated Financial Statements (Unaudited) Provides detailed explanations and additional information supporting the financial statements - The company is shifting its primary focus from biotechnology to the fintech and financial services industries through its subsidiary, Dominari Financial Inc., which acquired broker-dealer Dominari Securities LLC[18] - As of March 31, 2025, the company had $6.3 million in cash and cash equivalents and $12.6 million in marketable securities, which management believes is adequate to fund operations for at least the next twelve months[23][24] Revenue by Type ($ in thousands) | Revenue Type | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Underwriting | $5,607 | $409 | | Commissions | $2,191 | $310 | | Account advisory and management fees | $132 | $341 | | Other | $182 | $307 | | Total | $8,112 | $1,367 | - In February 2025, the company raised net proceeds of approximately $13.5 million through a direct offering and concurrent private placement of common stock and warrants[65] - The company operates in two reportable business segments: Dominari Financial (broker-dealer business) and Legacy AIkido (investment holdings). For Q1 2025, Dominari Financial generated $8.1 million in revenue and had a net loss of $2.0 million, while Legacy AIkido had no revenue and a net loss of $30.5 million[98][101] Management's Discussion and Analysis of Financial Condition and Results of Operations Revenue increased to $8.1 million, but loss from operations widened to $32.0 million due to stock-based compensation, with $28.5 million working capital - The increase in loss from operations to $32.0 million in Q1 2025 from $2.8 million in Q1 2024 was primarily driven by increased stock-based compensation expense of $7.7 million for restricted stock and $20.9 million for advisory agreement shares[113] - The company's business strategy is focused on growth in the financial services industry through its subsidiary Dominari Financial Inc., which includes wealth management, investment banking, and asset management[106] - As of March 31, 2025, the company had working capital of approximately $28.5 million and believes its cash, marketable securities, and anticipated cash flow from operations will be sufficient to meet its needs for at least the next 12 months[116] Cash Flow Summary (Three Months Ended March 31, $ in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Cash from Operating Activities | $1.2 | $(8.6) | | Cash from Investing Activities | $(5.4) | $7.7 | | Cash from Financing Activities | $6.4 | $0.0 | Quantitative and Qualitative Disclosures About Market Risk The company has indicated that this section is not applicable - This item is not applicable for the reporting period[122] Controls and Procedures Management concluded that disclosure controls and procedures were not effective due to a material weakness in internal controls, with remediation efforts underway - As of March 31, 2025, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were not effective due to a material weakness in internal controls[124] - The material weakness stems from staffing constraints, lack of proper review over certain fair value accounting, inadequate segregation of duties, IT general control deficiencies, and insufficient documentation of controls[126] - The company is actively remediating the material weakness by increasing accounting personnel and engaging external specialists. However, the weakness will not be considered fully remediated until the new controls are tested and proven effective over time[127][128] Part II - Other Information This section provides disclosures on legal proceedings, risk factors, equity sales, defaults, mine safety, and other relevant information Legal Proceedings Dominari Securities is involved in a legal action regarding hiring practices, with the company intending to defend itself vigorously, and no loss contingency recorded due to unpredictable outcome - In March 2024, the company's subsidiary, Dominari Securities, received a notice of a filed action related to the hiring of new registered representatives from their former employer[132] - The company plans to defend itself vigorously but cannot predict the outcome or reasonably estimate any potential loss. Consequently, no loss contingency has been recorded[132] Risk Factors As a "smaller reporting company," Dominari Holdings Inc. is not required to provide risk factor disclosures in its Form 10-Q, directing investors to its Annual Report on Form 10-K - As a "smaller reporting company," the registrant is not required to provide the information requested by this item. Current risk factors are detailed in the Annual Report on Form 10-K[133] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds for the period - None[134] Defaults Upon Senior Securities The company reported no defaults upon senior securities for the period - None[135] Mine Safety Disclosures This item is not applicable to the company - Not Applicable[136] Other Information The company reported no other information for the period - None[137] Exhibits The report includes CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906, along with Inline XBRL documents - The report includes CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906, along with various Inline XBRL instance and taxonomy documents[138]