Financial Performance - Total revenue for the three months ended March 31, 2024, was $1,367,000, compared to $0 for the same period in 2023[11] - Operating expenses increased to $4,172,000 for Q1 2024, up from $3,834,000 in Q1 2023, representing a 9% increase[11] - Net loss for the three months ended March 31, 2024, was $5,441,000, compared to a net loss of $3,762,000 in Q1 2023, indicating a 44.7% increase in losses[11] - The company recorded a net rent expense of $200,000 for the three months ended March 31, 2024, compared to $164,000 for the same period in 2023, indicating an increase of approximately 21.9%[55] - The company incurred a loss from operations of approximately $2.8 million for the three months ended March 31, 2024, compared to a loss of $3.8 million for the same period in 2023, indicating a $1.0 million decrease in net operating loss[85] - Other expenses for the three months ended March 31, 2024, were approximately $(2.6) million, primarily due to volatility in investment valuations[85] Cash and Assets - Cash and cash equivalents decreased to $1,956,000 as of March 31, 2024, down from $2,833,000 at the end of 2023, a decline of 30.8%[9] - Total assets decreased to $52,194,000 as of March 31, 2024, from $57,558,000 at the end of 2023, a reduction of 9.4%[9] - Stockholders' equity decreased to $47,669,000 as of March 31, 2024, down from $52,923,000 at the end of 2023, a decline of 10%[9] - As of March 31, 2024, the Company held approximately $14.1 million in deposits with its clearing broker[27] - As of March 31, 2024, the company's working capital amounted to approximately $23.8 million, which is expected to be sufficient to meet its working capital and capital expenditure requirements for at least the next 12 months[87] Investments - The company reported a change in fair value of long-term equity investments resulting in a loss of $2,459,000 for Q1 2024[11] - The Company’s long-term equity investments totaled $20.9 million as of March 31, 2024, down from $24.2 million as of December 31, 2023[36] - The investment in Unusual Machines, which went public on February 14, 2024, was valued based on its market price as of March 31, 2024[39] - The Company recognized revenue under ASC 606, with various revenue streams including underwriting services, commissions, and account advisory fees[29] - The unrealized gain on the Convergent Convertible Note for the three months ended March 31, 2024, was approximately $60,000[42] - The company reported a gain of approximately $0.6 million on marketable securities for the three months ended March 31, 2024, driven by market improvement and increased sale activity[86] Shareholder Information - The weighted average number of shares outstanding increased to 5,995,065 for Q1 2024, compared to 5,305,513 for Q1 2023, reflecting a 13% increase[11] - As of March 31, 2024, the company had 5,995,065 shares of common stock issued and 5,934,917 shares outstanding[57] - The company has approximately $0.2 million in unrecognized stock-based compensation expense related to restricted stock awards as of March 31, 2024[61] - The company has 444,796 warrants outstanding as of March 31, 2024, with a weighted average exercise price of $29.25 and a remaining contractual life of 1.95 years[59] Legal and Compliance - The company is currently involved in a legal proceeding related to the hiring of new registered representatives, but it cannot predict the outcome or estimate any potential loss[65] - A material weakness was identified in the accounting for certain notes receivable and long-term investments, leading to incorrect initial accounting[95] - Management plans to enhance controls by consulting experienced third-party professionals to remediate the identified material weakness[95] - The company's disclosure controls and procedures were found to be ineffective due to a material weakness in internal controls[93] - The company is involved in legal proceedings related to the hiring of new registered representatives, with potential exposure that cannot be reasonably estimated[101] Strategic Initiatives - Dominari Financial acquired Dominari Securities LLC for a total of $3.4 million, enhancing its position in the financial services sector[20] - Dominari Financial seeks partnership opportunities and acquisitions of third-party financial assets to execute its growth strategy in the financial services industry[78] - The company is winding down its historical pipeline of biotechnology assets held by Aikido Labs, LLC, which includes patented technology for various treatments[79] Cash Flow - Net cash used in operations for the three months ended March 31, 2024, was approximately $8.6 million, primarily due to a net loss of approximately $5.4 million[89] - Net cash provided by investing activities for the three months ended March 31, 2024, was approximately $7.7 million, resulting from sales of marketable securities[90] - The company had no cash flows from financing activities for the three months ended March 31, 2024, compared to approximately $0.9 million used in financing activities for the same period in 2023[91]
Dominari (DOMH) - 2024 Q1 - Quarterly Report