UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, ~~2022~~2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number 000-05576

~~AIKIDO PHARMA~~DOMINARI HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware		52-0849320
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~One Rockefeller Plaza, 11~~725 5^th Avenue, 22^nd Floor, New York, NY ~~10020~~10022

(Address of Principal Executive Offices, including zip code)

(703) 992-9325

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files.) Yes ☒ No ☐

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 definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-accelerated Filer	☒	Smaller Reporting Company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.0001 par value		DOMH	~~AIKI~~		The Nasdaq Capital Market LLC

As of August ~~12, 2022,~~8, 2023, there were ~~5,246,852~~5,345,312 shares of the Company’s common stock issued and outstanding.

~~AIKIDO PHARMA~~DOMINARI HOLDINGS INC.

Form 10-Q

For the Quarter Ended June 30, ~~2022~~2023

Index

~~Index~~

		Page No.

Part I. Financial Information

Item 1.	Financial Statements (Unaudited)	1

	Condensed Consolidated Balance Sheets as of June 30, ~~2022~~2023 (Unaudited) and December 31, ~~2021~~2022	1

	Condensed Consolidated Statements of Operations for the three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 (Unaudited)	2

	Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity for the three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 (Unaudited)	3

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, ~~2022~~2023 and ~~2021~~2022 (Unaudited)	5


	Notes to the Condensed Consolidated Financial Statements (Unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1920

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2324

Item 4.	Controls and Procedures	2324

Part II. Other Information

Item 1.	Legal Proceedings	2425

Item 1A.	Risk Factors	2425

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2425

Item 3.	Defaults Upon Senior Securities	25

Item 4.	Mine Safety Disclosures	25

Item 5.	Other Information	25

Item 6.	Exhibits	2425

Signatures		2526

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

~~AIKIDO PHARMA~~DOMINARI HOLDINGS INC.

Condensed Consolidated Balance Sheets

($ in thousands except share and per share amounts)

	June 30,			December 31,			June 30,			December 31,
	2022			2021			2023			2022
	(Unaudited)						(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	38,791		$	65,562		$	3,598		$	33,174
Marketable securities		9,779			11,427			20,675			7,130
Deposits with clearing broker								7,082			-
Prepaid expenses and other assets		196			442			715			564
Short-term investments at fair value		104			2,273
Notes receivable at fair value		8,500			6,984
Deposits		4,193			4,201
Prepaid acquisition cost								-			301
Short-term investments, at fair value								13			13
Notes receivable, at fair value - current portion								6,339			7,474
Investment in Fieldpoint Securities								-			2,000
Total current assets		61,563			90,889			38,422			50,656

Convertible note receivable at fair value		-			2,147
Notes receivable at fair value		1,100			-
Property and equipment, net								387			-
Notes receivable, at fair value - non-current portion								1,622			1,100
Employee forgivable loan receivable								98			-
Investments		25,478			9,465			23,178			23,103
Right-of-use assets								3,530			919
Security deposit		155			155			458			458
Total assets	$	88,296		$	102,656		$	67,695		$	76,236

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	142		$	381		$	232		$	447
Accrued salaries and benefits		687			680			632			1,260
Income taxes withheld								1,300			-
Accrued Commissions								17			-
Lease liability - current								353			82
Other Current liability								124			-
Total current liabilities		829			1,061			2,658			1,789

Lease liability								3,259			680
Total liabilities		829			1,061			5,917			2,469

Stockholders’ equity
Preferred stock, $.0001 par value, 50,000,000 Authorized
Series D: 5,000,000 shares designated; 3,825 shares issued and outstanding at June 30, 2022 and December 31, 2021; liquidation value of $0.0001 per share		-			-
Series D-1: 5,000,000 shares designated; 834 shares issued and outstanding at June 30, 2022 and December 31, 2021; liquidation value of $0.0001 per share		-			-
Common stock, $0.0001 par value, 100,000,000 shares authorized; 5,246,852 and 5,275,329 shares issued at June 30, 2022 and December 31, 2021, respectively; 4,953,950 and 5,275,329 shares outstanding at June 30, 2022 and December 31, 2021, respectively		-			-
Series D: 5,000,000 shares designated; 3,825 shares issued and outstanding at June 30, 2023 and December 31, 2022; liquidation value of $0.0001 per share								-			-
Series D-1: 5,000,000 shares designated; 834 shares issued and outstanding at June 30, 2023 and December 31, 2022; liquidation value of $0.0001 per share								-			-
Common stock, $0.0001 par value, 100,000,000 shares authorized; 5,345,312 and 5,485,096 shares issued at June 30, 2023 and December 31, 2022, respectively; 5,285,164 and 5,017,079 shares outstanding at June 30, 2023 and December 31, 2022, respectively								-			-
Additional paid-in capital		261,603			265,633			260,585			262,970
Treasury stock, at cost, 242,902 and 0 shares at June 30, 2022 and December 31, 2021, respectively		(1,750	)		(264	)
Treasury stock, at cost, 60,148 and 468,017 shares at June 30, 2023 and December 31, 2022, respectively								(501	)		(3,322	)
Accumulated deficit		(172,386	)		(163,774	)		(198,306	)		(185,881	)
Total stockholders’ equity		87,467			101,595			61,778			73,767
Total liabilities and stockholders’ equity	$	88,296		$	102,656		$	67,695		$	76,236

See accompanying notes to unaudited condensed consolidated financial statements.

DOMINARI HOLDINGS INC.

Condensed Consolidated Statements of Operations

($ in thousands except share and per share amounts)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Revenues	$	71		$	-		$	71		$	-

Operating costs and expenses
General and administrative	$	9,080		$	2,262		$	12,913		$	4,049
Research and development		2			36			3			2,052
Total operating expenses		9,082			2,298			12,916			6,101
Loss from operations		(9,011	)		(2,298	)		(12,845	)		(6,101	)

Other income (expenses)
Other income		-			-			-			64
Interest income		160			220			297			399
Gain (loss) on marketable securities		400			(2,239	)		335			(2,736	)
Unrealized loss on note receivable		(212	)		-			(212	)		-
Change in fair value of investments		-			(760	)		-			(238	)
Total other income (expenses)		348			(2,779	)		420			(2,511	)
Net loss	$	(8,663	)	$	(5,077	)	$	(12,425	)	$	(8,612	)
Deemed dividends related to Series O and Series P Redeemable Convertible Preferred Stock		-			(1,100	)		-			(4,109	)
Net Loss Attributable to Common Shareholders	$	(8,663	)	$	(6,177	)	$	(12,425	)	$	(12,721	)

Net loss per share, basic and diluted
Basic and Diluted	$	(1.79	)	$	(1.18	)	$	(2.45	)	$	(2.42	)

Weighted average number of shares outstanding, basic and diluted
Basic and Diluted		4,827,239			5,251,023			5,065,055			5,251,766

See accompanying notes to unaudited condensed consolidated financial statements.

DOMINARI H~~AIKIDO PHARMA~~OLDINGS INC.

Condensed Consolidated Statements of ~~Operations~~Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity

($ in thousands except share and per share amounts)

(Unaudited)

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Operating costs and expenses
General and administrative $ 2,262 $ 2,343 $ 4,049 $ 3,555
Research and development 36 325 2,052 397
Research and development - license acquired - 91 - 1,125
Total operating expenses 2,298 2,759 6,101 5,077
Loss from operations (2,298 ) (2,759 ) (6,101 ) (5,077 )

Other income (expenses)
Other income - - 64 135
Interest income 220 40 399 67
(Loss) gain on marketable securities (2,239 ) 1,798 (2,736 ) 459
Change in fair value of investment (760 ) (431 ) (238 ) (898 )
Total other income (expenses) (2,779 ) 1,407 (2,511 ) (237 )
Net loss $ (5,077 ) $ (1,352 ) $ (8,612 ) $ (5,314 )
Deemed dividends related to Series O and Series P Redeemable Convertible Preferred Stock (1,100 ) - (4,109 ) -
Net Loss Attributable to Common Shareholders $ (6,177 ) $ (1,352 ) $ (12,721 ) $ (5,314 )

Net loss per share, basic and diluted
Basic and Diluted $ (1.18 ) $ (0.26 ) $ (2.42 ) $ (1.20 )

Weighted average number of shares outstanding, basic and diluted
Basic and Diluted 5,251,023 5,270,293 5,251,766 4,412,889
~~See accompanying notes to condensed consolidated financial statements.~~

~~AIKIDO PHARMA INC.~~
~~Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity~~
~~($ in thousands except share and per share amounts)~~
~~(Unaudited)~~
~~For the Three Months Ended June 30, 2022~~
Redeemable Convertible
Preferred Stock Additional Total
Series O Series P Common Stock Preferred Stock Paid-in Treasury Stock Accumulated Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Capital Shares Amount Deficit Equity
Balance at March 31, 2022 11,000 $ 11,000 11,000 $ 11,000 5,252,517 $     - 4,659 $ - $ 262,624 - $ (264 ) $ (167,309 ) $ 95,051
Redemption of Series O Redeemable Convertible Preferred Stock (11,000 ) (11,000 ) - - - - - - - - - - -
Redemption of  Series P Redeemable Convertible Preferred Stock - - (11,000 ) (11,000 ) - - - - - - - - -
Deemed dividends related to Series O and Series P Redeemable Convertible Preferred Stock - - - - - - - - (1,100 ) - - - (1,100 )
Repurchase of treasury stock - - - - - - - - - 242,902 (1,486 ) (1,486 )
Stock-based compensation - - - - - - - - 105 - - - 105
Fractional shares adjusted for reverse split - - - - (5,665 ) - - - (26 ) - - - (26 )
Net loss - - - - - - - - - - - (5,077 ) (5,077 )
Balance at June 30, 2022 - $ - - $ - 5,246,852 $ - 4,659 $ - $ 261,603 242,902 $ (1,750 ) $ (172,386 ) $ 87,467
For the Three Months Ended June 30, ~~2021~~2023 and 2022
Common Stock Preferred Stock Additional
Paid-in Treasury Stock Accumulated Total Stockholders’ Preferred Stock Common Stock Additional
Paid-in Treasury Stock Accumulated Total
Stockholders’
Shares Amount Shares Amount Capital Shares Amount Deficit Equity Shares Amount Shares Amount Capital Shares Amount Deficit Equity
Balance at March 31, 2021 5,266,500 $     - 5,559 $     - $ 265,201     - $ (264 ) $ (160,565 ) $ 104,372
Balance at March 31, 2023 4,659 $      - 4,815,597 $        - $ 259,215 60,148 $ (501 ) $ (189,643 ) $ 69,071
Stock-based compensation - - - - 63 - - - 63 - - 529,715 - 1,370 - - - 1,370
Net loss - - - - - - - (1,352 ) (1,352 ) - - - - - - - (8,663 ) (8,663 )
Balance at June 30, 2021 5,266,500 $ - 5,559 $ - $ 265,264 - $ (264 ) $ (161,917 ) $ 103,083
Balance at June 30, 2023 4,659 $ - 5,345,312 $ - $ 260,585 60,148 $ (501 ) $ (198,306 ) $ 61,778

Redeemable Convertible
Preferred Stock
Preferred Additional Total
Series O Series P Common Stock Stock Paid-in Treasury Stock Accumulated Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Capital Shares Amount Deficit Equity
Balance at March 31, 2022 11,000 $ 11,000 11,000 $ 11,000 5,252,517 $            - 4,659 $        - $ 262,624 - $ (264 ) $ (167,309 ) $    95,051
Redemption of Series O Redeemable Convertible Preferred Stock (11,000 ) (11,000 ) - - - - - - - - - - -
Redemption of Series P Redeemable Convertible Preferred Stock - - (11,000 ) (11,000 ) - - - - - - - - -
Deemed dividends related to Series O and Series P Redeemable Convertible Preferred Stock - - - - - - - - (1,100 ) - - - (1,100 )
Repurchase of treasury stock - - - - - - - - - 242,902 (1,486 ) (1,486 )
Stock-based compensation - - - - - - - - 105 - - - 105
Fractional shares adjusted for reverse split - - - - (5,665 ) - - - (26 ) - - - (26 )
Net loss - - - - - - - - - - - (5,077 ) (5,077 )
Balance at June 30, 2022 - $ - - $ - 5,246,852 $ - 4,659 $ - $ 261,603 242,902 $ (1,750 ) $ (172,386 ) $ 87,467

For the Six Months Ended June 30, 2023 and 2022
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, 2022 4,659 $         - 5,485,096 $          - $ 262,970 468,017 $ (3,322 ) $ (185,881 ) $ 73,767
Stock-based compensation - - 529,715 - 1,375 - - - 1,375
Cancellation of common stock - - (25,000 ) - - - - - -
Purchase of treasury stock - - - - - 236,630 (939 ) - (939 )
Retirement of treasury stock - - (644,499 ) - (3,760 ) (644,499 ) 3,760 - -
Net loss - - - - - - - (12,425 ) (12,425 )
Balance at June 30, 2023 4,659 $ - 5,345,312 $ - $ 260,585 60,148 $ (501 ) $ (198,306 ) $ 61,778

Redeemable Convertible
Preferred Stock
Preferred Additional Total
Series O Series P Common Stock Stock Paid-in Treasury Stock Accumulated Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Capital Shares Amount Deficit Equity
Balance at December 31, 2021 - $ - - $ - 5,275,329 $       - 4,659 $       - $ 265,633 - $ (264 ) $ (163,774 ) $ 101,595
Issuance of Series O redeemable convertible preferred stock for cash 11,000 11,000 - - - - - - - - -
Issuance of Series P redeemable convertible preferred stock for cash 11,000 11,000 - - - - - - - - -
Cost on issuance of Series O and Series P Redeemable Convertible Preferred Stock - (1,504 ) - (1,505 ) - - - - - - - - -
Deemed dividends related to Series O and Series P Redeemable Convertible Preferred Stock - 1,504 - 1,505 - - - - (4,109 ) - - - (4,109 )
Redemption of Series O Redeemable Convertible Preferred Stock (11,000 ) (11,000 ) - - - - - - - - - - -
Redemption of Series P Redeemable Convertible Preferred Stock - - (11,000 ) (11,000 ) - - - - - - - - -
Repurchase of treasury stock - - - - - - - - - 242,902 (1,486 ) - (1,486 )
Stock-based compensation - - - - - - - - 105 - - - 105
Cancellation of common stock related to investment in CBM - - - - (22,812 ) - - - - - - - -
Fractional shares adjusted for reverse split - - - - (5,665 ) - - - (26 ) - - - (26 )
Net loss - - - - - - - - - - - (8,612 ) (8,612 )
Balance at June 30, 2022 - $ - - $ - 5,246,852 $ - 4,659 $ - $ 261,603 242,902 $ (1,750 ) $ (172,386 ) $ 87,467

See accompanying notes to unaudited condensed consolidated financial statements.

DOMINARI HOLDINGS INC.
Condensed Consolidated Statements of Cash Flows
($ in thousands)
(Unaudited)
Six Months Ended
June 30,
2023 2022
Cash flows from operating activities
Net loss $ (12,425 ) $ (8,612 )
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of right-of-use assets 182 -
Depreciation 32 -
Change in fair value of short-term investment - 1,646
Change in fair value of long-term investment - (1,408 )
Stock-based compensation 2,675 105
Realized loss on marketable securities 487 568
Unrealized (gain) loss on marketable securities (514 ) 2,299
Unrealized loss on note receivable 212 -
Changes in operating assets and liabilities:
Prepaid expenses and other assets (229 ) 153
Prepaid acquisition cost 301 -
Deposits with clearing broker (3,532 ) -
Accounts payable and accrued expenses (428 ) (239 )
Accrued salaries and benefits (628 ) 7
Accrued commissions (8 ) -
Lease liabilities 58 -
Other current liabilities 3 -
Notes receivable, at fair value – net interest accrued (99 ) (377 )
Deposit - 8
Net cash used in operating activities (13,913 ) (5,850 )

Cash flows from investing activities
Purchase of marketable securities (34,014 ) (27,460 )
Sale of marketable securities 20,494 28,272
Proceeds from sale of digital currencies - 93
Purchase of fixed assets (419 ) -
Acquisition of FPS, net of cash acquired and receivable owed from FPS (1,112 ) -
Collection of principal on note receivable 502 -
Funds to employee forgivable loan (100 ) -
Purchase of short-term and long-term investments (75 ) (14,605 )
Purchase of short-term and long-term promissory notes - (1,600 )
Net cash used in investing activities (14,724 ) (15,300 )

Cash flows from financing activities
Proceeds from issuance of Series O and Series P Redeemable Convertible Preferred Stock, net of discount and offering cost - 17,891
Payment for fractional shares - (26 )
Redemption of Series O and Series P Redeemable Convertible Preferred Stock - (22,000 )
Purchase of treasury stock (939 ) (1,486 )
Net cash used in financing activities (939 ) (5,621 )

Net decrease in cash and cash equivalents and restricted cash (29,576 ) (26,771 )
Cash and cash equivalents, beginning of period 33,174 65,562
Cash and cash equivalents, end of period $ 3,598 $ 38,791

Non-cash investing and financing activities
Transfer from short-term investment to marketable securities $ - $ 1,482
Reclassify from convertible note receivable to notes receivable at fair value $ - $ 2,147
Promissory convertible note receivable conversion into common shares $ - $ 1,508

On March 27, 2023, the Company acquired all assets and liabilities of FPS as disclosed in Note 4:
Net assets acquired, net of cash acquired and receivable owed from FPS $ 3,112
Less - Deposit previously transferred in October 2022 to FPS $ (2,000 )
Net cash paid $ 1,112
See accompanying notes to unaudited condensed consolidated financial statements.

~~For the Six Months Ended June 30, 2022~~
Redeemable Convertible
Preferred Stock Additional Total
Series O Series P Common Stock Preferred Stock Paid-in Treasury Stock Accumulated Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Capital Shares Amount Deficit Equity
Balance at December 31, 2021 - - - - 5,275,329 $ - 4,659 $ - $ 265,633 - $ (264 ) $ (163,774 ) $ 101,595
Issuance of Series O redeemable convertible preferred stock for cash 11,000 11,000 - - - - - - - - -
Issuance of Series P redeemable convertible preferred stock for cash 11,000 11,000 - - - - - - - - -
Cost on issuance of Series O and Series P Redeemable Convertible Preferred Stock - (1,504 ) - (1,505 ) - - - - - - - - -
Deemed dividends related to Series O and Series P Redeemable Convertible Preferred Stock - 1,504 - 1,505 - - - - (4,109 ) - - - (4,109 )
Redemption of Series O Redeemable Convertible Preferred Stock (11,000 ) (11,000 ) - - - - - - - - - - -
Redemption of  Series P Redeemable Convertible Preferred Stock - - (11,000 ) (11,000 ) - - - - - - - - -
Repurchase of treasury stock - - - - - - - - - 242,902 (1,486 ) - (1,486 )
Stock-based compensation - - - - - - - - 105 - - - 105
Cancellation of common stock related to investment in CBM - - - - (22,812 ) - - - - - - - -
Fractional shares adjusted for reverse split - - - - (5,665 ) - - - (26 ) - - - (26 )
Net loss - - - - -       - -       - - - - (8,612 ) (8,612 )
Balance at June 30, 2022 - $ - - $ - 5,246,852 $ - 4,659 $   - $ 261,603 242,902 $ (1,750 ) $ (172,386 ) $ 87,467
~~For the Six Months Ended June 30, 2021~~
Common Stock Preferred Stock Additional
Paid-in Treasury Stock Accumulated Total
Stockholders’
Shares Amount Shares Amount Capital Shares Amount Deficit Equity
Balance at December 31, 2020 2,054,096 $      - 5,559 $      - $ 186,485      - $ (264 ) $ (156,603 ) $ 29,618
Issuance of common stock and warrants (net of offering costs of $8,260) 3,170,935 - - - 77,989 - - - 77,989
Exercise of warrants 4,705 - - - 84 - - - 84
Issuance of common stock for research and development license acquired 36,764 - - - 531 - - - 531
Stock-based compensation - - - - 175 - - - 175
Net loss - - - - - - - (5,314 ) (5,314 )
Balance at June 30, 2021 5,266,500 $ - 5,559 $ - $ 265,264 - $ (264 ) $ (161,917 ) $ 103,083
~~See accompanying notes to condensed consolidated financial statements.~~

~~AIKIDO PHARMA INC.~~
~~Condensed Consolidated Statements of Cash Flows~~
~~($ in thousands)~~
~~(Unaudited)~~
Six Months Ended
June 30,
2022 2021
Cash flows from operating activities
Net loss $ (8,612 ) $ (5,314 )
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of short-term investment 1,646 898
Change in fair value of long-term investment (1,408 ) -
Research and development-acquired license, expensed - 1,125
Stock-based compensation 105 175
Realized loss (gain) on marketable securities 568 (1,084 )
Unrealized loss on marketable securities 2,299 1,395
Realized gain on sale of digital currencies - -
Changes in operating assets and liabilities:
Prepaid expenses and other assets 153 39
Accounts payable and accrued expenses (239 ) (248 )
Accrued salaries and benefits 7 423
Interest receivable on convertible note (399 ) (67 )
Deposits 8 -
Net cash used in operating activities (5,872 ) (2,658 )

Cash flows from investing activities
Purchase of marketable securities (27,460 ) (86,497 )
Sale of marketable securities 28,272 23,155
Proceeds from sale of digital currencies 93 -
Proceeds from promissory note receivable interest received 22 -
Funds to deposit accounts, net - (4,476 )
Purchase of short-term and long-term investments (14,605 ) -
Purchase of research and development licenses - (594 )
Purchase of short-term and long-term promissory notes (1,600 ) -
Purchase of convertible note - (2,000 )
Net cash used in investing activities (15,278 ) (70,412 )

Cash flows from financing activities
Proceeds from issuance of common stock and warrants, net of offering cost - 77,989
Proceeds from issuance of Series O and Series P Redeemable Convertible Preferred Stock, net of discount and offering cost 17,891 -
Proceeds from exercise of warrants - 84
Payment for fractional shares (26 ) -
Redemption of Series O and Series P Redeemable Convertible Preferred Stock (22,000 ) -
Purchase of treasury stock (1,486 ) -
Net cash (used in) provided by financing activities (5,621 ) 78,073

Net (decrease) increase in cash and cash equivalents and restricted cash (26,771 ) 5,003
Cash and cash equivalents, beginning of period 65,562 2,715

Cash and cash equivalents, end of period $ 38,791 $ 7,718

Non-cash investing and financing activities
Transfer from short-term investment to marketable securities $ 1,482 $ -
Reclassify from convertible note receivable to notes receivable at fair value $ 2,147 $ -
Promissory convertible note receivable conversion into common shares $ 1,508 $ -
~~See accompanying notes to condensed consolidated financial statements.~~

~~AIKIDO PHARMA~~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
~~AIkido Pharma~~Dominari Holdings Inc. (the “Company”), formerly ~~known~~AIkido Pharma, Inc., was founded in 1967 as Spherix ~~Incorporated, was initially formed in 1967.~~Incorporated. Since 2017, the Company has operated as a biotechnology company with a diverse portfolio of small-molecule anticancer and antiviral therapeutics and their related patent technology. In an effort to enhance shareholder value, in ~~development. The~~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, registered with the Financial Industry Regulatory Authority (“FINRA”) and an investment adviser registered with the Securities and Exchange Commission (“SEC”). Dominari Securities provides investment advisory services and annuity and insurance products of certain insurance carriers as an insurance agency through independent and affiliated brokers.
Additionally, AIkido Labs, LLC (“Aikido Labs”), another wholly owned subsidiary of the Company, is in the process of winding down its historical pipeline ~~consists~~of biotechnology assets consisting of patented ~~technology~~technologies from leading universities and ~~researchers. The Company’s innovative therapeutic drug pipeline is currently being advanced through strong collaborations with renowned educational institutions,~~researchers, including ~~the University of Texas at Austin, the University of Maryland, Baltimore and Wake Forest University. The Company’s oncology therapeutics include~~ prospective treatments for pancreatic cancer, acute myeloid leukemia, ~~(AML)~~ and acute lymphoblastic ~~leukemia (ALL). The Company is also developing a broad-spectrum antiviral platform,~~leukemia. Aikido Labs has historically explored opportunities in ~~which the lead compounds have activity in cell-based assays against multiple viruses including Influenza virus, Ebolavirus and Marburg virus, SARS-CoV, MERS-CoV, and SARS-CoV-2, the cause of COVID-19.~~
As a result of the Company’s biotechnology research and development and associated investments and acquisitions, its business portfolio now focuses on the treatment of three different cancers and multiple types of viral infections. The Company’s pancreatic drug candidate, DHA-dFdC, developed at and licensed from the University of Texas at Austin, is a new compound that it hopes will become the next generation of chemotherapy treatment for advanced pancreatic cancer. DHA-dFdC overcomes tumor cell resistance to current chemotherapeutic drugs and is well tolerated in preclinical toxicity tests. Preclinical studies have also indicated that DHA-dFdC inhibits pancreatic cancer cellhigh growth ~~(up to 100,000-fold more potent that gemcitabine, a current standard therapy), accumulates preferentially in pancreatic tissue~~industries and has ~~demonstrated activities against other cancers,~~equity holdings including ~~leukemia, lung~~Anduril Industries, Inc, Databricks, Inc., Discord, Inc., Epic Games, Inc., Payward, Inc. dba Kraken, Space Exploration Technologies Corp. dba SpaceX, Tevva Motors Ltd., Thrasio, LLC, and melanoma. The Company’s AML and ALL compound, developed at the Wake Forest University, is a targeted therapeutic designed to overcome multiple resistance mechanisms observed with the current standard of care.
The Company’s broad-spectrum antiviral platform was developed at the University of Maryland Baltimore (“UMB”), which granted the Company an exclusive worldwide Master License Agreement (MLA”) to technology covered by three separate patent applications. The licensed technology comprises broadly acting pan-viral inhibitory compounds targeting multiple viral pathogens. The technology was invented by UMB scientists Drs. Matthew Frieman, Alexander MacKerell and Stuart Watson. The Company has also executed a Sponsored Research Agreement with UMB to support the development of the technology under the direction of these inventors at UMB.
~~Reverse Stock Split~~
On June 7, 2022, the Company effected a seventeen-for-one (17-for-1) reverse stock split of its class of common stock (the “Reverse Stock Split”). The Reverse Stock Split, which was approved by stockholders at an annual stockholder meeting on May 20, 2022, was consummated pursuant to a Certificate of Amendment filed with the Secretary of State of Delaware on June 2, 2022 (the “Certificate of Amendment”). The Reverse Stock Split was effective on June 7, 2022 (the “Effective Date”). All references to common stock, convertible preferred stock, warrants to purchase common stock, options to purchase common stock, restricted stock units, restricted stock awards, share data, per share data and related information contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. Payment for fractional shares resulting from the reverse stock split amounted to $26 thousand.Yanka Industries, Inc. dba Masterclass.
Note 2. Liquidity and Capital Resources
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 finance its activities through managing current cash on hand from the Company’s past ~~debt and~~ equity offerings.
Based upon projected cash flow requirements, the Company has adequate cash and cash equivalents and marketable securities to fund its operations for at least the next twelve months from the date of the issuance of these unaudited condensed consolidated financial statements.

~~AIKIDO PHARMA INC.~~
~~Notes to Condensed Consolidated Financial Statements~~
~~(Unaudited)~~

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 2022 Annual Report other than those discussed below.
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 balance sheet at December 31, 2022, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. Accordingly, these 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, 2022.

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 subsidiary, AIkido~~wholly owned subsidiaries, Aikido Labs, ~~LLC.~~Dominari Financial, and Dominari Securities. All significant intercompany balances and transactions have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”)Results for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual audited consolidated financial statements. The condensed consolidated balance sheet as of June 30, 2022, condensed consolidated statements of operations for the three and six months ended June 30, 2022 and 2021, condensed consolidated statements of stockholders’ equity for the three and six months ended June 30, 2022 and 2021, and the condensed consolidated statements of cash flows for the six months ended June 30, 2022 and 2021 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods ~~presented. The results for the three and six months ended June 30, 2022~~ are not necessarily indicative of results to be expected for ~~the~~a full year ~~ending December 31, 2022~~ or ~~for~~ any future ~~interim~~ period. The condensed consolidated balance sheet at December 31, 2021 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 consolidated financial statements for the year ended December 31, 2021 and notes thereto included in the Company’s annual report on Form 10-K, which was filed with the SEC on March 28, 2022.

Use of Estimates
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with USU.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, the valuation of investments, the valuation of ~~convertible note~~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.
Deposits with clearing broker
Deposits with Dominari Securities’ clearing broker consisted of approximately $7.1 million held in money market funds and liquid insured deposits maintained by the Company with its clearing broker as of June 30, 2023.
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 unaudited condensed consolidated balance sheet as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. For finance leases, interest on the lease liability and the amortization of the right-of-use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred (see Note 10 - Leases).
Revenue
The Company recognizes revenues under ASC 606 - Revenue from Contracts with Customers (“ASC 606”). Revenues are 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.

~~Significant Accounting Policies~~
The following provides detailed information on the recognition of the Company’s revenues from contracts with customers:

● Underwriting services include underwriting and placement agent services in both the equity and debt capital markets, including private equity placements, initial public offerings, follow-on offerings, and underwriting and distributing public and private debt. Underwriting and placement agent revenues are recognized at a point in time on trade-date, as the client obtains the control and benefit of the underwriting offering at that point. Costs associated with underwriting transactions are deferred until the related revenue is recognized or the engagement is otherwise concluded and are recorded on a gross basis within the general and administrative line item in the unaudited condensed consolidated statements of operations as the Company is acting as a principal in the arrangement. Any expenses reimbursed by the Company’s clients are recognized as other income.
● Commissions are earned by executing, transactions for clients primarily in equity, equity-related, and debt products. Commission revenues associated with trade execution are recognized at a point in time on trade-date. Commissions revenues are generally paid on settlement date and the Company records receivables to account for timing between trade-date and payment on settlement date.
Recently adopted accounting standards
In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). This update amends Topic 805 to add contract assets and contract liabilities to the list of exceptions to the recognition and measurement principles that apply to business combinations and to require that an entity (acquirer) recognize and measure contract assets and contract liabilities in accordance with ASC 606. The Company adopted ASU 2021-08 on January 1, 2023. There ~~have been~~was no material ~~changes in~~impact to the Company’s ~~significant~~unaudited condensed consolidated financial statements from the implementation of ASU 2021-08.
Effect of new accounting ~~policies~~pronouncements not yet adopted
In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to ~~those previously disclosed~~Contractual Sale Restrictions, to clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring the ~~Company’s annual report on Form 10-K, which was filed with~~fair value of the ~~SEC on March 28, 2022.~~
~~Treasury Stock~~
~~Treasury stock is recorded at cost~~equity security. ASU 2022-03 also clarifies that an entity cannot recognize and ~~is presented~~measure a contractual sale restriction as a ~~reduction~~separate unit of ~~stockholders’ equity.~~
~~Recent accounting pronouncements~~
~~Management does not believe that any recently issued, but not yet~~account. The amendments in ASU 2022-03 may be early adopted and are effective ~~accounting pronouncements, if~~on a prospective basis for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently ~~adopted, would have an effect~~evaluating the impact of the amendments on the Company’s consolidated financial statements and whether it will early adopt the amendments in ASU 2022-03.
In March 2023, the FASB issued ASU 2023-01, Leases, to require entities to classify and account for leases with related parties on the basis of legally enforceable terms and conditions of the arrangement. The amendments are effective in periods beginning after December 15, 2023, including interim periods within those fiscal years. The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated financial statements and whether it will early adopt the amendments in ASU 2023-01.
Effect of new accounting pronouncements to be adopted in future periods
The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on these unaudited condensed consolidated financial statements.

Note 4. FPS Acquisition
~~AIKIDO PHARMA INC.~~
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 registered with FINRA and an investment adviser registered with the SEC (the “FPS Acquisition”). Pursuant to the terms of the FPS Purchase Agreement, Dominari Financial purchased from the Seller 100% of the membership interests in FPS (the “FPS Membership Interests”). FPS’s registered broker-dealer and investment adviser businesses were renamed and will operate as Dominari Securities, a wholly owned subsidiary of Dominari Financial. The FPS Purchase Agreement provides for Dominari Financial’s acquisition of FPS’s Membership Interests in two closings, the first of which occurred on October 4, 2022 (the “Initial Closing”), at which Dominari Financial paid to the Seller $2.0 million in consideration for a transfer by the Seller to Dominari Financial of 20% of the FPS Membership Interests. Following the Initial Closing, FPS filed a continuing membership application requesting approval for a change of ownership, control, or business operations with FINRA in accordance with FINRA Rule 1017 (the “Rule 1017 Application”). The Rule 1017 Application was approved by FINRA on March 20, 2023. The second closing (the “Second Closing”) occurred on March 27, 2023. Dominari Financial paid to the Seller an additional approximate $1.6 million consideration for a transfer by the Seller to Dominari Financial of the remaining 80% of the FPS Membership Interests.
Consideration Transferred
The FPS Acquisition was accounted for as a business combination under ASC 805.
Under the terms of the FPS Purchase Agreement and subsequent Amendments and Side Letters, 100% of the FPS Membership Interests were acquired for cash consideration of approximately $3.4 million, which reflected the fair value of net assets acquired, plus a $1 purchase price. At March 31, 2023, Dominari Financial had not finalized the purchase accounting related to the fair value of assets acquired in the FPS Acquisition. Pursuant to the Initial Closing and Second Closing, Dominari Financial had wired a total of approximately $3.6 million in cash to the Seller. The purchase price allocation identified net assets of approximately $3.4 million, resulting in a receivable due from the Seller for approximately $0.2 million. The receivable is not included within the consideration transferred as part of the FPS Acquisition but is included within prepaid expenses and other assets within the unaudited condensed consolidated balance sheet as of March 31, 2023.
Under the acquisition method of accounting, the assets acquired, and liabilities assumed of FPS were recorded as of the acquisition date, at their respective fair values, and consolidated with those of the Company. Acquisition-related costs are not included as a component of consideration transferred but are expensed in the periods in which costs are incurred. The Company incurred approximately $0.3 million of transaction costs associated with the FPS Acquisition. The transaction costs are included in general and administrative expenses in the unaudited condensed consolidated statement of operations.
Fair Value of Net Assets Acquired
The following table summarizes the fair values of the assets acquired and liabilities assumed of FPS at the date of acquisition:
March 27,
2023
(Unaudited)
ASSETS
Cash and cash equivalents $ 92
Deposits with Clearing Broker-Dealer 3,550
Other receivables 53
Prepaid and other current assets 89
Total assets acquired 3,784

Liabilities
Accrued expenses $ 273
Accrued commissions 25
Wealth management liabilities 62
Total liabilities assumed 360

Total net assets of FPS Acquisition 3,424

~~Notes~~Dominari Securities reported a net loss of approximately $7.7 million for the three-months ended June 30, 2023. Revenue for the period ended June 30, 2023, was approximately $0.07 million. The net loss was primarily a result of approximately $5.4 million of bonus and employee compensation expense and professional services of approximately $0.9 million. The bonus and compensation expense and professional service fees related to ~~Condensed Consolidated Financial Statements~~
~~(Unaudited)~~establishing the operations of the broker-dealer and are included in the general and administrative expenses line item within the unaudited condensed consolidated statement of operations.

Note 4.5. Investments in Marketable Securities
The realized gain or loss, unrealized gain or loss, and dividend income related to marketable securities for the three and six months ended June 30, ~~2022~~2023 and ~~2021,~~2022, 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
June 30, Six Months Ended
June 30,
2023 2022 2023 2022
Realized loss $ (432 ) $ (344 ) $ (487 ) $ (568 )
Unrealized gain (loss) 643 (1,967 ) 514 (2,299 )
Dividend income 188 72 308 131
Total $ 400 $ (2,239 ) $ 335 $ (2,736 )
Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Realized (loss) gain $ (344 ) $ 661 $ (568 ) $ 1,084
Unrealized (loss) gain (1,967 ) 653 (2,299 ) (1,395 )
Dividend income 72 484 131 770
$ (2,239 ) $ 1,798 $ (2,736 ) $ 459
Note 5.6. Short-term investments
The following table presents the Company’s short-term investments atas of June 30, ~~2022~~2023, and December 31, ~~2021~~2022 ($ in thousands):
June 30,
2022 December 31,
2021 June 30,
2023 December 31,
2022
Investment in Hoth Therapeutics, Inc. 15 770
Investment in DatChat, Inc. - 1,084
Investment in Vicinity Motor Corp. 89 419 13 13
Total 104 2,273 13 13
~~The~~There was no change in the fair value of the short-term investments for the six months ended June 30, ~~2022 is summarized as follows: ($ in thousands):~~2023.
Beginning balance $ 2,273
Transfer to marketable securities (1,481 )
Change in fair value of investment (1,646 )
Realized gain recognized through sale of marketable securities 958
Ending balance $ 104

~~AIKIDO PHARMA INC.~~
~~Notes to Condensed Consolidated Financial Statements~~
~~(Unaudited)~~
~~Investment in Hoth Therapeutics, Inc.~~
~~On March 11, 2022, 1,130,701 shares of Hoth common stock were transferred to marketable securities account and were sold for net proceeds of approximately $0.9 million.~~
~~The following summarizes the Company investment in Hoth as of June 30, 2022 and December 31, 2021:~~
Security Name Shares
Owned as of
June 30,
2022 Fair value
per Share
as of
June 30,
2022 Fair value
as of
June 30,
2022
(in thousands)
HOTH 35,714 $ 0.42 $ 15
Security Name Shares
Owned as of
December 31, 2021 Fair value
per Share
as of December 31, 2021 Fair value
as of
December 31, 2021
(in thousands)
HOTH 1,166,415 $ 0.66 $ 770
~~Investment in DatChat, Inc.~~
~~On February 14, 2022, 357,916 shares (valued at $2.21 per share) of DatChat common stock were transferred to marketable securities account and were sold for net proceeds of approximately $0.8 million.~~
~~Investment in Vicinity Motor Corp.~~
On October 25, 2021, the Company entered into a warrant agreement with Vicinity Motor Corp. (“Vicinity”) that entitles the Company to purchase up to 246,399 shares of Vicinity common stock at $5.10 per share. The warrant expires on October 25, 2024. The fair value was determined using a Black-Scholes simulation. The Company recorded the fair value of the Vicinity warrant of approximately $89,000 and $0.4 million in the consolidated balance sheet as of June 30, 2022 and December 31, 2021, respectively, reflecting the benefit received as part of its purchase of Vicinity common shares through its brokerage account. The initial investment in Vicinity was measured at approximately $0.6 million. Gains or losses associated with changes in the fair value of investments in Vicinity warrants are recognized as Change in fair value of investment on the consolidated statements of operations. During the six months ended June 30, 2022, the Company recorded approximately $0.3 million of change in fair value of investment for this investment.
The following table provides quantitative information regarding Level 3 fair value ~~measurements~~measurement inputs at their measurement dates:
June 30,
2023 December 31,
2022
Option term (in years) 1.3 1.8
Volatility 76.9 % 76.90 %
Risk-free interest rate 4.47 % 4.47 %
Expected dividends 0.00 % 0.00 %
Stock price $ 0.96 $ 0.96

June 30,
2022 December 31,
2021
Option term (in years) 2.3 2.8
Volatility 97.47 % 95.52 %
Risk-free interest rate 3.08 % 0.97 %
Expected dividends 0.00 % 0.00 %
Stock price $ 1.37 $ 3.50
Note 6.7. Long-Term Investments
~~Effective January 1, 2018,~~The Company holds interests in several privately held companies as long-term investments that the Company adopted Accounting Standards Update (“ASU”) 2016-01 and related ASU 2018-03 concerning recognition and measurement of financial assets and financial liabilities. In adopting this guidance, the Company has made an accounting policy election to adopt an adjusted cost method measurement alternative for investments in equity securities without readily determinable fair values.

~~AIKIDO PHARMA INC.~~
~~Notes to Condensed Consolidated Financial Statements~~
~~(Unaudited)~~
For equity investments that are accounted for using the measurement alternative, the Company initially records equity investments at cost but is required to adjust the carrying value of such equity investments through earnings when there is an observable transaction involving the same or a similar investment with the same issuer or upon an impairment.
perceives as potential IPO candidates. The following table presents the Company’s ~~other investments at June 30, 2022 and December 31, 2021 ($ in thousands):~~
June 30,
2022 December 31,
2021
Investment in Kerna Health Inc $ 4,940 $ 3,800
Investment in Kaya Holding Corp 2,340 1,665
Investment in Tevva Motors 3,364 2,000
Investment in ASP Isotopes 1,000 1,000
Investment in AerocarveUS Corporation 1,000 1,000
Investment in Qxpress 1,000 -
Investment in Masterclass 170 -
Investment in Kraken 486 -
Investment in Epic Games 3,500 -
Investment in Tesspay 1,250 -
Investment in SpaceX 3,500 -
Investment in Databricks 1,200 -
Investment in Discord 476 -
Investment in Thrasio 300 -
Investment in Automation Anywhere 476 -
Investment in Anduril 476 -
Total $ 25,478 $ 9,465
~~The change in the value of the~~ long-term investments ~~for the six months ended June 30, 2022 is summarized as follows: ($ in thousands):~~
Beginning balance $ 9,465
Purchase of investments 14,605
Change in fair value of long-term investments 1,408
Ending balance $ 25,478
~~Investment in Kerna Health Inc~~
~~In May 2022, the Company purchased additional 400,000 shares of common stock of Kerna Health Inc, (“Kerna”) for approximately $1.1 million. The investment in Kerna was valued at $4.9 million~~ as of June 30, ~~2022.~~2023, and December 31, 2022 ($ in thousands):
Cost Basis June 30,
2023 December 31,
2022
Investment in Kerna Health Inc $ 2,140 $ 4,940 $ 4,940
Investment in Kaya Now 1,500 - -
Investment in Tevva Motors 1,972 2,794 2,794
Investment in ASP Isotopes 1,300 - -
Investment in AerocarveUS Corporation 1,075 1,075 1,000
Investment in Qxpress 1,000 1,000 1,000
Investment in Masterclass 170 170 170
Investment in Kraken 597 597 597
Investment in Epic Games 3,500 3,500 3,500
Investment in Tesspay 1,240 2,500 2,500
Investment in SpaceX 3,500 3,674 3,674
Investment in Databricks 1,200 1,200 1,200
Investment in Discord 476 476 476
Investment in Thrasio 300 300 300
Investment in Automation Anywhere 476 476 476
Investment in Anduril 476 476 476
Total $ 20,922 $ 23,178 $ 23,103
~~Investment in Kaya Holding Corp~~
On March 2, 2022, the Company purchased additional 3,375,000 shares of common stock of Kaya Holding Corp., (“Kaya”) for approximately $0.6 million. The Company recorded approximate $34,000 in unrealized gain on this investment during the six months ended June 30, 2022. The investment in Kaya was valued at approximately $2.3 million as of June 30, 2022.
~~Investment in Tevva Motors~~
Tevva Motors (“Tevva”), a private company, raised capital during the first quarter of 2022, increasing its share price value to $58.0 per share. Therefore, the Company recorded a $1.4 million unrealized gain on this investment during the six months ended June 30, 2022. The investment in Tevva was valued at approximately $3.4 million as of June 30, 2022.
~~Investment in ASP Isotopes~~
~~The investment in ASP Isotopes Inc. was valued at $1.0 million as of June 30, 2022.~~

~~AIKIDO PHARMA INC.~~
~~Notes to Condensed Consolidated Financial Statements~~
~~(Unaudited)~~
Investment in AerocarveUS Corporation

~~The investment in AerocarveUS Corporation was valued at $1.0 million as of June 30, 2022.~~
~~Investment in Qxpress~~
On ~~January 27, 2022,~~November 22, 2021, the Company entered into ~~a securities purchase~~an agreement (the ~~“Qxpress Securities Purchase~~“AerocarveUS Agreement”) with ~~Qxpress.~~AerocarveUS Corporation, (“AerocarveUS”). Under the ~~Qxpress Securities Purchase~~AerocarveUS Agreement, the Company agreed to purchase ~~46,780~~250,000 shares of common stock of ~~Qxpress~~AerocarveUS for $1.0 million. AerocarveUS changed its name to “Unusual Machines, Inc.” on July 5, 2022. In March of 2023, the Company was issued an additional 64,377 shares at no cost. In June 2023, the Company purchased an additional 150,000 shares of common stock for approximately $0.08 million. The investment in ~~Qxpress~~AerocarveUS Corporation (a.k.a. Unusual Machines, Inc.) was valued at ~~$1.0~~approximately $1.08 million as of June 30, ~~2022.~~
2023.
~~Investment in Masterclass~~
In March of 2022, the Company entered into a securities purchase agreement (the “Masterclass Securities Purchase Agreement”) with Masterclass. Under the Masterclass Securities Purchase Agreement, the Company agreed to purchase 4,841 shares of common stock of Masterclass for approximately $0.2 million. The investment in Masterclass was valued at approximately $0.2 million as of June 30, 2022.
~~Investment in Kraken~~
In March of 2022, the Company entered into a securities purchase agreement (the “Kraken Securities Purchase Agreement”) with Kraken. Under the Kraken Securities Purchase Agreement, the Company agreed to purchase a total of 8,409 shares of common stock of Kraken for approximately $0.5 million. The investment in Kraken was valued at approximately $0.5 million as of June 30, 2022.
~~Investment in Epic Games~~
On March 22, 2022, the Company entered into a securities purchase agreement (the “Epic Games Securities Purchase Agreement”) with Epic Games. Under the Epic Games Securities Purchase Agreement, the Company agreed to purchase an aggregate of 901 shares of common stock of Epic Games for a total $1.5 million. In April 2022, the Company invested an additional $2M for the purchase of additional shares of common stock of Epic Games. The investment in Epic Games was valued at $3.5 million as of June 30, 2022.
~~Investment in Tesspay~~
On March 23, 2022, the Company entered into a securities purchase agreement (the “Tesspay Securities Purchase Agreement”) with Tesspay. Under the Tesspay Securities Purchase Agreement, the Company agreed to purchase 1,000,000 shares of common stock of Tesspay for approximately $0.2 million. The Company also invested an additional $1.0 million for pre-IPO. Tesspay, a private company, raised capital during the first quarter of 2022, increasing its share price value to $0.25 per share. Therefore, the Company recorded $10,000 in unrealized gain on this investment during the six months ended June 30, 2022. The investment in Tesspay was valued at approximately $1.3 million as of June 30, 2022.
~~Investment in SpaceX~~
On March 30, 2022, the Company entered into a securities purchase agreement (the “SpaceX Securities Purchase Agreement”) with SpaceX, under which the company agreed to purchase shares of common stock of SpaceX for $1.5M. In April 2022, the Company invested an additional $2M for the purchase of additional shares of common stock of SpaceX. The investment in SpaceX was valued at $3.5 million as of June 30, 2022.

~~AIKIDO PHARMA INC.~~
~~Notes to Condensed Consolidated Financial Statements~~
~~(Unaudited)~~
~~Investment in Databricks~~
On March 25, 2022, the Company entered into a securities purchase agreement (the “Databricks Securities Purchase Agreement”) with Databricks. Under the Databricks Securities Purchase Agreement, the Company agreed to purchase an aggregate of 3,830 shares of common stock of Databricks for a total $1.2 million. The investment in Databricks was valued at $1.2 million as of June 30, 2022.
~~Investment in Discord, Inc.~~
In May 2022, the Company entered into a securities purchase agreement (the “Discord Securities Purchase Agreement”) with privately-held company Discord, Inc., a social communications platform provider that is particularly popular with gamers, as one of the Company’s pursuits of potentially high growth interests with near term monetization events. Under the Discord Securities Purchase Agreement, the Company agreed to purchase a total of 618 shares of common stock of Discord for approximately $0.5 million. The investment in Discord was valued at $0.5 million as of June 30, 2022.
~~Investment in Thrasio, LLC~~
In April 2022, the Company entered into a securities purchase agreement (the “Thrasio Securities Purchase Agreement”) with privately-held company Thrasio, LLC, an aggregator of private brands of top Amazon businesses and direct-to-consumer brands, as one of the Company’s pursuits of potentially high growth interests with near term monetization events. Under the Thrasio Securities Purchase Agreement, the Company agreed to purchase a total of 20,000 shares of common stock of Thrasio for $0.3 million. The investment in Thrasio was valued at $0.3 million as of June 30, 2022.
~~Investment in Automation Anywhere, Inc.~~
In April 2022, the Company entered into a securities purchase agreement (the “Automation Anywhere Securities Purchase Agreement”) with privately-held company Automation Anywhere, Inc., a provider of business automation solutions, as one of the Company’s pursuits of potentially high growth interests with near term monetization events. Under the Automation Anywhere Securities Purchase Agreement, the Company agreed to purchase a total of 18,490 shares of common stock of Automation Anywhere for approximately $0.5 million. The investment in Automation Anywhere was valued at $0.5 million as of June 30, 2022.
~~Investment in Anduril Industries, Inc.~~
In April 2022, the Company entered into a securities purchase agreement (the “Anduril Securities Purchase Agreement”) with privately-held company Anduril Industries, Inc., a defense products company, as one of the Company’s pursuits of potentially high growth interests with near term monetization events. Under the Anduril Securities Purchase Agreement, the Company agreed to purchase a total of 14,880 shares of common stock of Anduril for approximately $0.5 million. The investment in Anduril was valued at $0.5 million as of June 30, 2022.
Note 7.8. Notes Receivable
The following table presents the Company’s notes receivable atas of June 30, ~~2022~~2023 ($ in thousands):
Maturity Date Stated Interest Rate Principal Amount Interest Receivable Fair Value
Notes receivable, at fair value
Convergent convertible note - current 01/29/2023 8 % $ 1,000 $ 199 $ 1,199
Convergent convertible note - non-current 01/29/2023 8 % $ 500 $ - $ 500
Raefan Industries LLC Investment 12/31/2023 8 % $ 4,518 $ 623 $ 5,141
American Innovative Robotics Investment 04/01/2027 8 % $ 1,100 $ 22 $ 1,122

Notes receivable, at fair value - current portion $ 6,339

Notes receivable, at fair value - non-current portion $ 1,622
Maturity Date Stated Interest Rate Principal Amount Interest Receivable Fair Value
Shor-term convertible notes receivable
Convergent Investment 01/29/2023 8 % $ 2,000 $ 227 $ 2,227
Nano Innovations Inc Investment 12/26/2022 10 % $ 750 $ 38 $ 787

Short-term notes receivable
Mr. Jeffrey Cooper Investment 03/11/2023 8 % $ 2,780 $ 158 $ 2,038
Raefan Industries LLC Investment 12/06/2022 8 % $ 1,950 $ 88 $ 2,938
Kaya Now Investment 2/1/2023 8 % $ 500 $ 10 $ 510
Total $ 8,500

Long-term notes receivable
American Innovative Robotics Investment 04/01/2027 8 % $ 1,100 $ - $ 1,100

~~AIKIDO PHARMA INC.~~
~~Notes to Condensed Consolidated Financial Statements~~
~~(Unaudited)~~
Convergent Therapeutics, Inc. Investment
The Company’s 8% convertible promissory note (“Convergent Convertible Note”) issued by Convergent Therapeutics, Inc. (“Convergent”) in the principal amount of approximately $1.8 million pursuant to a Note Purchase Agreement matured on January 29, 2023. Upon maturity, Convergent entered into a contractual repayment schedule with the Company. Pursuant to the schedule, Convergent will make a total of eight payments in the amount of $250 thousand and accrued interest, every three months until fully satisfied.
The principal balance of the Convergent Convertible Note was approximately $1.8 million as of June 30, 2023. The Company recorded principal repayment of $0.5 million and interest income of approximately $0.1 million on the Convergent Convertible Note for the six months ended June 30, 2023.
Raefan Industries LLC Investment
The Company recorded an interest income receivable of approximately ~~$0.2~~$0.6 million ~~on the Convergent Convertible Note as of June 30, 2022.~~
~~Mr. Jeffrey Cooper Investment~~
Raefan Group LLC promissory note was satisfied and replaced with a personal note issued to Mr. Jeffrey Cooper, of Raefan Industries. The Company recorded an interest income receivable of approximately $0.2 million on the Mr. Jeffrey Cooper Promissory Note as of June 30, 2022.
~~Raefan Industries LLC Investment~~
~~The Company recorded an interest income receivable of approximately $88,000~~ on the Raefan Industries Promissory Note as of June 30, ~~2022.~~2023 and an unrealized loss on the note of approximately $0.2 million.
~~Slinger Bag Inc~~American Innovative Robotics, LLC Investment
The Company recorded an interest income ~~receivable~~ of approximately ~~$63,000~~$44,000 on the ~~Slinger Bag Convertible~~Robotics Promissory Note asfor the six months ended June 30, 2023.
Kaya Now Inc. Investment
During the fourth quarter of ~~June 17, 2022. On June 17,~~ 2022, the Company ~~received 558,659 shares~~identified indicators of ~~common stock of Connexa Sports Technologies Inc (also known as Slinger Bag)~~impairment for the Kaya investment as a result of ~~conversion of principal and accrued interest on the Slinger Bag Convertible Note. All the 558,659 shares of common stock of Connexa Sports received were transferred to marketable securities account.~~
~~Kaya Now Investment~~
~~On April 5, 2022,~~adverse changes in Kaya’s business operations, including liquidity concerns. As a result, the Company ~~purchased~~recorded an ~~8% promissory note (“Kaya Now Promissory Note”) issued by Kaya Now Inc (“Kaya Now”) in the principal amount~~impairment charge of $0.5 million ~~pursuant to a Note Purchase Agreement with Kaya Now.~~in the fourth quarter of 2022. The Company paid a purchase price for the Kaya Now Promissory Note of $0.5 million. The Company will receive interest on the Kaya Now Promissory Note at the rate of 8% per annum payable upon conversion or maturityimpairment charge represents an impairment loss of the ~~Kaya Now Promissory Note. The Kaya Now Promissory Note shall mature on February 1, 2023.~~
~~The Company recorded an interest income receivable of approximately $0.1 million on~~total investment held as a promissory note resulting in a $0 balance for the Kaya Now Promissory Note as of June 30, ~~2022.~~2023.
~~American Innovative Robotics Investment~~
On April 1, 2022, the Company purchased an 8% promissory note (“Robotics Promissory Note”) issued by American Innovative Robotics, LLC (“Robotics”) in the principal amount of $1.1 million pursuant to a Note Purchase Agreement with Robotics. The Company ~~paid a purchase price for~~received and recorded interest income related to the ~~Robotics~~Kaya Now Promissory Note of ~~$1.1 million. The Company will receive interest on~~approximately $10,000 for the ~~Robotics Promissory Note at the rate of 8% per annum payable every three~~six months ~~starting from July 1, 2022. The Robotics Promissory Note shall mature on April 1, 2027.~~
~~The Company recorded an interest income receivable of approximately $20,000 on the Robotics Promissory Note as of~~ended June 30, ~~2022.~~2023.
Note 8.9. Fair Value of Financial Assets and Liabilities
Financial instruments, including cash and cash equivalents, accounts payable and accrued liabilities are carried at cost, which management believes approximates fair value due to the short-term nature of these instruments. The Company measures the fair value of financial assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

~~AIKIDO PHARMA INC.~~
~~Notes to Condensed Consolidated Financial Statements~~
~~(Unaudited)~~
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 atas of June 30, ~~2022~~2023, and December 31, ~~2021~~2022 ($ in thousands):
Fair value measured at June 30, 2022 Fair value measured as of June 30, 2023
Total at
June 30, Quoted prices
in active
markets Significant
other
observable
inputs Significant
unobservable
inputs Total at
June 30, Quoted
prices in
active markets Significant other
observable inputs

Significant unobservable
inputs

2022 (Level 1) (Level 2) (Level 3) 2023 (Level 1) (Level 2) (Level 3)
Assets
Marketable securities:
Equities $ 9,779 $ 9,779 $                   - $       - $ 20,675 $ 20,675 $        - $ -
Total marketable securities $ 9,779 $ 9,779 $ - $ - $ 20,675 $ 20,675 $ - $ -
Short-term investment $ 104 $ 15 $ - $ 89 $ 13 $ - $ - $ 13
Short-term notes receivable at fair value $ 8,500 $ - $ - $ 8,500
Long-term notes receivable at fair value $ 1,100 $ - $ - $ 1,100
Notes receivable at fair value, current portion $ 6,339 $ - $ - $ 6,339
Notes receivable at fair value, non-current portion $ 1,622 $ - $ - $ 1,622
Fair value measured at December 31, 2021 Fair value measured as of December 31, 2022
Total at
December 31, Quoted prices
in active
markets Significant other
observable
inputs Significant
unobservable
inputs Total at
December 31, Quoted
prices in
active
markets Significant other
observable inputs Significant
unobservable
inputs
2021 (Level 1) (Level 2) (Level 3) 2022 (Level 1) (Level 2) (Level 3)
Assets
Marketable securities:
Equities $ 11,427 $ 11,427 $                  - $ - $ 7,130 $ 7,130 $     - $ -
Total marketable securities $ 11,427 $ 11,427 $ - $ - $ 7,130 $ 7,130 $ - $ -
Short-term investment $ 2,273 $ 1,854 $ - $ 419 $ 13 $ - $ - $ 13
Notes receivable at fair value $ 6,984 $ - $ - $ 6,984
Convertible note receivable $ 2,147 $ - $ - $ 2,147
Notes receivable at fair value, current portion $ 7,474 $ - $ - $ 7,474
Notes receivable at fair value, non-current portion $ 1,100 $ - $ - $ 1,100

~~AIKIDO PHARMA INC.~~
~~Notes to Condensed Consolidated Financial Statements~~
~~(Unaudited)~~

Level 3 Measurement

The following ~~tables set~~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):

Short-term notes receivable at fair value at December 31, 2021 $ 6,984
Accrued interest receivable 377
Reclassify from convertible note receivable to notes receivable at fair value 2,147
Purchase of notes receivable 500
Change in fair value of note receivable 280
Conversion of note receivable to marketable securities (1,788 )
Short-term notes receivable at fair value at June 30, 2022 $ 8,500
Short-term investment at December 31, 2022 $ 13
Short-term investment at June 30, 2023 $ 13

Notes receivable at fair value, current portion at December 31, 2022 $ 7,474
Collection of principal outstanding (500 )
Note receivable, Convergent Therapeutics, non-current portion (500 )
Unrealized loss on note receivable (212 )
Accrued interest receivable 77
Notes receivable at fair value, current portion at June 30, 2023 $ 6,339

Long-term notes receivable at fair value at December 31, 2021 $ -
Purchase of notes receivable 1,100
Long-term notes receivable at fair value at June 30, 2022 $ 1,100
Short-term investment at December 31, 2021 $ 419
Change in fair value of investment (330 )
Short-term investment at June 30, 2022 $ 89
Notes receivable at fair value, non-current portion at December 31, 2022 $ 1,100
Note receivable, Convergent Therapeutics, non-current portion 500
Accrued interest receivable 22
Notes receivable at fair value, non-current portion at June 30, 2023 $ 1,622

~~Long term and Short-term~~ Note Receivable ~~and Convertible Notes Receivable~~at fair value

The Company has elected to measure the purchases of the notes using the fair value option at each reporting date. Under the fair value option, bifurcation of an embedded derivative is not necessary, and all related gains and losses on the host contract and derivative due to change in the fair value will be reflected in interest income and other, net in the consolidated statements of operations.
The value at which the Company’s convertible note is carried on its books is adjusted to estimated fair value at the end of each quarter, taking into account general economic and stock market conditions and those characteristics specific to the underlying investments.
~~Interest accrues on the unpaid principal balance on a quarterly basis and is recognized in interest income in the consolidated statements of operations.~~
~~Convergent Investment~~
As of June 30, ~~2022,~~2023, the fair value of the ~~Convergent Convertible Note~~notes receivable was measured ~~at $2.2 million,~~ taking into consideration cost of the investment, market participant inputs, market conditions, liquidity, operating results and other qualitative and quantitative factors. No material change was noted in the fair value of the notes receivable during the three months ended June 30, 2023.
Note 10. 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 “22^ndFloor Premises”). The Company currently uses the 22^nd Floor Premises to run its day-to-day operations. The initial term of the Company’s Lease is seven (7) years commencing on July 11, 2022 (“Commencement Date). Under the Company’s Lease, the Company is required to pay monthly rent, commencing on January 11, 2023, equal to $12,874. Effective for ~~principal was recorded during~~the sixth and seventh years of the Company’s Lease, the rent shall increase to $13,502. The Company took possession of the 22^nd Floor Premises on the Commencement Date.

On September 23, 2022, Dominari Financial entered into a Lease Agreement (“Dominari Financial’s Lease”) with Trump Tower Commercial LLC, a New York limited liability company. Under Dominari Financial’s Lease, Dominari Financial rents a portion of a floor at 725 Fifth Avenue, New York, New York (the “Premises”). Dominari Financial currently uses the Premises to run its day-to-day operations. The initial term of Dominari Financial’s Lease is seven (7) years commencing on the date that possession of the Premises is delivered to Dominari Financial. Under Dominari Financial’s Lease, Dominari Financial is required to pay monthly rent equal to $49,368. Effective for the sixth and seventh years of Dominari Financial’s Lease, the rent shall increase to $51,868 per month. The Company took possession of the Premises in February 2023.
The tables below represent the Company’s lease assets and liabilities as of June 30, 2023:
June 30,
2023
Assets:
Operating lease right-of-use-assets $ 3,530

Liabilities:
Current
Operating 353
Long-term
Operating 3,259
$ 3,612
The following tables summarize quantitative information about the Company’s operating leases, under the adoption of ASC 842:
June 30,
2023
Weighted-average remaining lease term – operating leases (in years) 7.0
Weighted-average discount rate – operating leases 10.0 %
During the six months ended June 30, ~~2022.~~2023, the Company recorded approximately $0.4 million of lease expense to current period operations.
Three Months Ended Six Months Ended
June 30,
2023 June 30,
2023
Operating leases
Operating lease cost $ 179 $ 313
Operating lease expense 179 313
Short-term lease rent expense 33 63
Net rent expense $ 212 $ 376
Supplemental cash flow information related to leases were as follows:
Six Months
Ended
June 30,
2023
Operating cash flows - operating leases $ 72
Right-of-use assets obtained in exchange for operating lease liabilities $ 2,796

~~Mr. Jeffrey Cooper Investment~~

As of June 30, 2022, the fair value of the Mr. Jeffrey Cooper Promissory Note was measured at approximately $2.9 million, taking into consideration cost of the investment, market participant inputs, market conditions, liquidity, operating results and other qualitative and quantitative factors. No change in fair value for principal was recorded2023, future minimum payments during the ~~six months ended June 30, 2022.~~next five years and thereafter are as follows:

~~Raefan Industries LLC Investment~~
As of June 30, 2022, the fair value of the Raefan Industries Promissory Note was measured at approximately $2.0 million, taking into consideration cost of the investment, market participant inputs, market conditions, liquidity, operating results and other qualitative and quantitative factors. No change in fair value for principal was recorded during the six months ended June 30, 2022.
~~Nano Innovations Inc Investment~~
As of June 30, 2022, the fair value of the Nano Convertible Note was measured at approximately $0.8 million, taking into consideration cost of the investment, market participant inputs, market conditions, liquidity, operating results and other qualitative and quantitative factors. No change in fair value for principal was recorded during the six months ended June 30, 2022.
~~The Company believes that the fair value of the warrant of Nano is immaterial.~~
Operating
Leases
Remaining Period Ended December 31, 2023 $ 327
Year Ended December 31, 2024 750
Year Ended December 31, 2025 688
Year Ended December 31, 2026 688
Year Ended December 31, 2027 688
Year Ended December 31, 2028 770
Thereafter 1,166
Total 5,077
Less present value discount (1,465 )
Operating lease liabilities $ 3,612

~~AIKIDO PHARMA INC.~~
~~Notes to Condensed Consolidated Financial Statements~~
~~(Unaudited)~~
~~Kaya Now Investment~~
~~As of June 30, 2022, the fair value of the Kaya Now Promissory~~ Note was measured at $0.5 million, taking into consideration cost of the investment, market participant inputs, market conditions, liquidity, operating results and other qualitative and quantitative factors. No change in fair value for principal was recorded during the six months ended June 30, 2022.
~~The Company believes that the fair value of the warrant of Kaya Now is immaterial.~~
~~American Innovative Robotics Investment~~
As of June 30, 2022, the fair value of the Slinger Bag Convertible Note was measured at $1.1 million, taking into consideration cost of the investment, market participant inputs, market conditions, liquidity, operating results and other qualitative and quantitative factors. No change in fair value for principal was recorded during the six months ended June 30, 2022.
~~Note 9.~~11. Net Loss per Share ~~Attributable to Common Stockholders~~

Basic loss per share of common ~~share~~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. 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. Securities that could potentially dilute loss per share in the future that were not included in the computation of diluted loss per share ~~at June 30, 2022 and 2021 are as follows:~~
As of June 30,
2022 2021
Convertible preferred stock 34 40
Warrants to purchase common stock 444,796 341,268
Options to purchase common stock 27,980 25,255
Total 472,810 366,563
~~Note 10. Redeemable Convertible Preferred Stock~~
~~Series O and Series P Redeemable Convertible Preferred Stock~~
On February 24, 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional investors (the “Investors”), pursuant to which the Company agreed to issue and sell, in concurrent registered direct offerings (the “Offerings”), (i) 11,000 shares of the Company’s Series O Redeemable Convertible Preferred Stock, par value $0.001 per share (the “Series O Preferred Stock”), and (ii) 11,000 shares of the Company’s Series P Redeemable Convertible Preferred Stock, par value $0.001 per share (the “Series P Preferred Stock” and together with the Series O Preferred Stock, the “Preferred Stock”), in each case, at an offering price of $952.38 per share, representing a 5% original issue discount to the stated value of $1,000 per share of Preferred Stock, for gross proceeds of each Offering of $10,476,180, or approximately $21.0 million in the aggregate for the Offerings, before the deduction of the placement agent’s fee and offering expenses. The shares of Series O Preferred Stock will have a stated value of $1,000 per share and will be convertible, at a conversion price of $1.00 per share, into 11,000,000 shares of common stock (subject in certain circumstances to adjustments). The shares of Series P Preferred Stock will have a stated value of $1,000 per share and will be convertible, at a conversion price of $1.00 per share, into 11,000,000 shares of common stock (subject in certain circumstances to adjustments). The Series O Preferred Stock and the Series P Preferred Stock are being offered by the Company pursuant to a registration statement on Form S-3 (File No. 333-238172) (the “Registration Statement”) filed under the Securities Act of 1933, as amended (the “Securities Act”). The Purchase Agreement contains customary representations, warranties and agreements by the Company and customary conditions to closing. The closing of the Offerings occurred on March 2, 2022. In connection with this transaction, the Company received net proceeds of $21.0 million, which was deposited in an escrow account.
In connection with the Offerings, the Company has entered into an engagement agreement (the “Engagement Agreement Agreement”) with H.C Wainwright & Company, LLC, as placement agent (“HCW”), pursuant to which the Company agreed to pay HCW an aggregate cash fee equal to 8% of the aggregate gross proceeds raised in the offerings and issue HCW common stock purchase warrants to purchase up to 1,760,000 shares of common stock in the aggregate at an exercise price of $1.25. The warrants were recorded as a component of stockholders’ equity in accordance with FASB Accounting Standards Codification (“ASC”) 815.

~~AIKIDO PHARMA INC.~~
~~Notes to Condensed Consolidated Financial Statements~~
~~(Unaudited)~~
~~Redemption Rights~~
After (i) the earlier of (1) the receipt of stockholder approval and (2) the date that is 90 days following the Original Issue Date (the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred Stock) and (ii) before the date that is 120 days after the Original Issue Date (the “~~Redemption Period”), each Holder shall have the right to cause the Company to redeem all or part of such Holder’s shares of Preferred Stock at a price per share equal to 105% of the Stated Value.~~
As a result, the Preferred Stock were recorded separately from stockholders’ equity because they are redeemable upon the occurrence of redemption events that are considered not solely within the Company’s control.
During the second quarter of 2022, the Company redeemed for cash at a price equal to 105% of the $1,000 stated value per share all of its 11,000 outstanding shares of Series O Preferred Stock and its 11,000 Series P Preferred Stock. The total redemption amount was $23.1 million. As a result, all shares of the Series O Preferred Stock and Series P Preferred Stock have been retired and are no longer outstanding.
~~During~~ the six months ended June 30, 2023, and 2022 the Company recognized approximately $3.0 in deemed dividends related to the Preferred Stock in the condensed consolidated statements of operations and the condensed consolidated statements of changes in redeemable preferred stock and stockholders’ equity.are as follows:
As of June 30,
2023 2022
Convertible preferred stock 34 34
Warrants to purchase common stock 444,796 444,796
Options to purchase common stock 30,336 198,574
Total 475,166 643,404

Note ~~11.~~12. Stockholders’ Equity and Convertible Preferred Stock

Common Stock
On March 6, 2023, the Company cancelled 644,499 shares of common stock as a result of retirement of 644,499 shares of treasury stock.
On March 20, 2023, the Company cancelled 25,000 shares of common stock owned by a board member.
June 27, 2023, pursuant to Soo Yu’s employment agreement and the Company’s 2022 Equity Incentive Plan, the Company executed a Grant Agreement, through which Soo Yu was granted 1,033,591 shares of the Company’s common stock. Upon issuance, the shares were fully-vested and nonforfeitable with a total fair value of approximately $2.7 million. Pursuant to the Grant Agreement, the Company withheld 503,876 of the shares granted to satisfy Soo Yu’s tax obligation of approximately $1.3 million and recorded as income taxes withheld within the unaudited condensed consolidated balance sheet. See Restricted Stock roll-forward below.
One June 5, 2020, CBM Biopharma, Inc. (“CBM”) approved a distribution to its stockholders of 1,939,058 the Company’s common shares. The Company, as 1 of CBM’s shareholder, received 387,812 shares of its common stock. The Company cancelled 387,812 shares received on January 1, 2022.

Treasury Stock

On January 21, 2022, the Company’s board of directors authorized a share buyback program (the “Share Buyback Program”), pursuant to which the Company authorized the ~~Repurchase~~Share Buyback Program in an amount of up to three million dollars. During the ~~second quarter of 2022,~~six months ended June 30, 2023, the Company repurchased ~~242,902~~236,630 shares at a cost of approximately ~~$1.5~~$0.9 million or ~~$6.12~~$3.97 per share through marketable securities account under the Share Buyback Program. The Company records treasury stock using the cost method.

On March 6, 2023, the Company retired 644,499 shares of treasury stock with original cost of approximately $3.8 million.
Warrants

A summary of warrant activity for the six months ended June 30, ~~2022~~2023, is presented below:

Warrants Weighted
Average
Exercise Price Total
Intrinsic
Value Weighted
Average
Remaining
Contractual
Life
(in years)
Outstanding as of December 31, 2022 444,796 $ 29.25    - 3.20
Outstanding as of June 30, 2023 444,796 $ 29.25 - 2.71

Warrants Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life
(in years)
Outstanding as of December 31, 2021 341,268 $       31.68           -      3.87
Issued 103,528 21.25 - 4.90
Outstanding as of June 30, 2022 444,796 $ 29.25 - 3.95

~~AIKIDO PHARMA INC.~~
~~Notes to Condensed Consolidated Financial Statements~~
~~(Unaudited)~~
Restricted Stock ~~Options~~Awards

A summary of restricted stock ~~option~~awards activity for the six months ended June 30, ~~2022~~2023, is presented below:

Number of Shares Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2021 28,196 $        32.24 $ 230,258       8.2
Employee options granted 170,525 0.35 902,077 9.8
Outstanding as of June 30, 2022 198,721 $ 32.24 $ 1,017,002 9.5
Options vested and exercisable 27,980 $ 32.46 $ 114,925 7.8
Number of Restricted
Stock Awards Weighted Average
Grant Day Fair Value
Nonvested at December 31, 2022 8,068 $ 5.64
Granted 529,715 $ 2.58
Vested (537,783 ) 2.63
Nonvested at June 30, 2023 - $ -

As of June 30, 2023, there is no unrecognized stock-based compensation expense related to restricted stock awards.
Stock Options
A summary of option activity under the Company’s stock option plan for the six months ended June 30, 2023 is presented below:
Number of Shares Weighted Average
Exercise Price Total Intrinsic Value Weighted Average
Remaining Contractual
Life (in years)
Outstanding as of December 31, 2022 31,193 $ 302.97 $      - 7.9
Employee options expired (857 ) $ 9,719.07
Outstanding as of June 30, 2023 30,336 $ 36.97 $ - 7.6
Options vested and exercisable 26,578 $ 41.35 $ - 7.5
Stock-based compensation associated with the amortization of stock option expense was approximately ~~$0.1 million for the three months ended June 30, 2022~~$8,000 and ~~2021. Stock-based compensation associated with the amortization of stock option expense was approximately $0.1 million and $0.2 million~~$0 for the six months ended June 30, ~~2022~~2023, and ~~2021,~~2022, respectively. All stock compensation was recorded as a component of general and administrative expenses.

Estimated future stock-based compensation expense relating to unvested stock options is approximately ~~$0.8 million.~~$7,000.

Note 13. Revenue
The following table presents our total revenues disaggregated by revenue type for the three and six months ended June 30, 2023 and 2022 (in thousands):
Three Months Ended
June 30, Six Months Ended
June 30,
2023 2022 2023 2022
Underwriting $ 43 $ - $ 43 $ -
Commissions 14 - 14 -
Other 14 - $ 14 -
Total $ 71 $ - $ 71 $ -
Note ~~12.~~14. Commitments and Contingencies

Legal Proceedings

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 ~~our~~the Company’s technology. Other than ordinary routine litigation incidental to the business, ~~we know~~the Company is not aware of noany material, active or pending legal proceedings brought against ~~us.~~
~~Risks and Uncertainties - COVID-19~~
Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for drug candidates, the specific impact is not readily determinable as of the date of these consolidated financial statements. The COVID-19 pandemic has slowed down some drug development efforts and has slowed the acquisition of new drugs. However, the impact of the pandemic and ensuing lockdowns are easing. The process of drug development and further acquisitions is now continuing. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.it.

Note ~~13. Subsequent Events~~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 subject to SEC Uniform Net Capital Rule (Rule 15c3-1) which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. As such, the subsidiary is subject to the minimum net capital requirements promulgated by the SEC and has elected to calculate minimum capital requirements using the basic method permitted by Rule 15c3-1. As of June 30, 2023, Dominari Securities had net capital of approximately $7.3 million, which was approximately $7.2 million in excess of required minimum net capital of $0.1 million.

AsNote 16. Related Party Transaction
In 2021, the Company engaged the services of ~~August 1, 2022 Anthony Hayes divested all shares of common stock that he owed in~~ Revere Securities, ~~LLC.~~
~~On July 22, 2022, Carlos Aldavero entered into an employment agreement with~~LLC (“Revere”) to strategically manage and build the Company (the “Employment Agreement”). The Employment Agreement provides for payment of an annual base salary of $450,000.00 to Mr. Aldavero, to be paid in equal semi-monthly or bi-weekly installments,Company’s investment processes. Kyle Wool, Board Member, is also a ~~cash signing bonus of $213,000.00, and an annual cash bonus in an amount determined by the Board in its discretion if the Company meets or exceeds criteria adopted by the Board.~~
~~On July 21, 2022, the Company and Kaya Now Inc. executed an amendment~~member of the ~~Kaya Now Promissory Note (“Amendment”) such that the Kaya Now Promissory Note shall mature on February 1, 2023. In consideration~~board of ~~the Amendment, Kaya Now has agreed to issue to the~~directors of Revere. The Company ~~1,000,000 additional shares at 20 cents per share~~incurred fees of ~~Kaya Now’s common stock. Under the amendment, interest on the Note~~approximately $0.08 million and $0.6 million during the ~~extended term shall be paid on October 1,~~six months ending June 30, 2023, and 2022, respectively. These fees were included in general and ~~January 1, 2023 at~~administrative expense in the ~~rate~~unaudited condensed consolidated statements of ~~8% per annum.~~
On August 10, 2022 we agreed to extend the term of our employment agreement with our chief executive officer, Anthony Hayes, for an additional five years, renewable thereafter for one year increments on 6 months notice.operations.

Note 17. Segment Reporting
The Company operates in two reportable business segments: (1) Dominari Securities and (2) Legacy AIkido Pharma. The Dominari Securities reportable business segment represents the Company’s broker-dealer business, which is composed of underwriting and transactional service activities. The Legacy AIkido Pharma reportable business segment includes Aikido Labs, which manages the investments holdings of the legacy entity. Prior to the FPS Acquisition, the Company operated as a single operating segment comprised of Legacy AIkido Pharma.
The chief operating decision-maker (“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.” While assets are primarily held within the Legacy AIkido Pharma reportable business segment, total assets by segment is not disclosed as the CODM does not assess performance, make strategic decisions, or allocate resources based on assets.
The measures of segment profitability that are most relied upon by the CODM are gross revenues and net loss, as presented within the table below and reconciled to the statement of operations.
Three Months Ended June 30, 2023
Dominari Securities Legacy AIkido Pharma Consolidated
Revenue $ 71 $ -   $ 71
Operating Costs
General and administrative 6,957 2,123 $ 9,080
Research and development 2 2
Loss from operations $ (6,886 ) $ (2,125 ) $ (9,011 )

Other (expenses) income
Other income -
Interest income 44 116 160
Loss on marketable securities 400 400
Unrealized loss on note receivable (212 ) (212 )
Total other (expenses) income $ 44 $ 304 $ 348
Net loss $ (6,842 ) $ (1,821 ) $ (8,663 )
Six Months Ended June 30, 2023
Dominari Securities Legacy AIkido Pharma Consolidated
Revenue $ 71 $ -   $ 71
Operating Costs
General and administrative 8,056 4,857 12,913
Research and development 3 3
Loss from operations $ (7,985 ) $ (4,860 ) $ (12,845 )

Other (expenses) income
Other income -   -
Interest income 44 253 297
Loss on marketable securities 335 335
Unrealized loss on note receivable (212 ) (212 )
Total other (expenses) income $ 44 $ 376 $ 420
Net loss $ (7,941 ) $ (4,484 ) $ (12,425 )

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

You should read this discussion together with the Financial Statements, related Notes and other financial information included elsewhere in this Form 10-Q. The following discussion contains assumptions, estimates and other forward-looking statements that involve a number of risks and uncertainties. These risks could cause our actual results to differ materially from those anticipated in these forward-looking statements. All references to “we,” “us,” “our” and the “Company” refer to ~~Aikido Pharma~~Dominari Holdings Inc., a Delaware corporation and its consolidated subsidiaries unless the context requires otherwise.

Overview

Dominari Holdings Inc. (the “Company”), formerly AIkido Pharma, Inc., was ~~initially formed~~founded in 1967 ~~and is currently~~as Spherix Incorporated. Since 2017, the Company has operated as a biotechnology company with a diverse portfolio of small-molecule ~~anti-cancer~~anticancer and antiviral therapeutics and their related patent technology. In an effort to enhance shareholder value, in ~~development. The~~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 ~~platform consists~~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, registered with the Financial Industry Regulatory Authority (“FINRA”) and an investment adviser registered with the Securities and Exchange Commission (“SEC”). Dominari Securities provides investment advisory services and annuity and insurance products of certain insurance carriers as an insurance agency through independent and affiliated brokers.
Additionally, AIkido Labs, LLC (“Aikido Labs”), another wholly owned subsidiary of the Company, is in the process of winding down its historical pipeline of biotechnology assets consisting of patented ~~technology~~technologies from leading universities and researchers, ~~and our innovative therapeutic drug platform is currently being advanced through strong collaborations with world-renowned educational institutions,~~ including ~~the University of Texas at Austin, the University of Maryland, Baltimore and Wake Forest University. Our diverse pipeline of therapeutics includes therapies~~prospective treatments for pancreatic cancer, acute myeloid leukemia, ~~(“AML”)~~ and acute lymphoblastic ~~leukemia (“ALL”). The Company is also developing broad-spectrum antiviral compounds with the potential to inhibit replication of multiple viruses~~leukemia. Aikido Labs has historically explored opportunities in high growth industries and has equity holdings including ~~Influenza virus, SARS-CoV (coronavirus)~~Anduril Industries, Inc, Databricks, Inc., ~~MERS-CoV, Ebolavirus~~Discord, Inc., Epic Games, Inc., Payward, Inc. dba Kraken, Space Exploration Technologies Corp. dba SpaceX, Tevva Motors Ltd., Thrasio, LLC, and ~~Marburg virus.~~Yanka Industries, Inc. dba Masterclass.
Reverse Stock Split

~~The Company previously focused its efforts on owning, developing, acquiring and monetizing intellectual property assets. Since May 2016,~~On June 7, 2022, the Company ~~has received limited funds from~~effected a seventeen-for-one (17-for-1) reverse stock split of its ~~intellectual property monetization. In addition~~class of common stock (the “Reverse Stock Split”). The Reverse Stock Split, which was approved by stockholders at an annual stockholder meeting on May 20, 2022, was consummated pursuant to ~~its patent monetization efforts, since~~a Certificate of Amendment filed with the ~~fourth quarter~~Secretary of ~~2017,~~State of Delaware on June 2, 2022. The Reverse Stock Split was effective on June 7, 2022. All references to common stock, convertible preferred stock, warrants to purchase common stock, options to purchase common stock, restricted stock units, restricted stock awards, share data, per share data and related information contained in the ~~Company has~~unaudited condensed consolidated financial statements have been ~~transitioning~~retrospectively adjusted to ~~focus its efforts as a technology and biotechnology development company. These efforts have focused mainly on biotechnology research and development.~~
~~Outside~~reflect the effect of the biotechnology space, the Company has put capital into a series of small investments in private companies that are expected to go public in next 24 months. These investments include, but are not limited to, an investment in Tevva Motors, an electric truck producer, a space with recent Rivian Automotive (NASDAQ: RIVN) IPO. Additionally, the Company has invested in Kerna Health, a growing tele-health business with recurring revenue and large contract backlog, as well an investment in Kaya Holding Corp., a holding company with a portfolio of wholly-owned subsidiaries focused on emerging technologies and social networkingReverse Stock Split for cannabis enthusiasts. The Company’s investments now also include interests in privately-held companies Discord, Inc., a social communications platform provider that is particularly popular with gamers; Thrasio, LLC, an aggregator of private brands of top Amazon businesses and direct-to-consumer brands; Automation Anywhere, Inc. a provider of business automation solutions, and Anduril Industries, Inc., a defense products company.

As a result of the Company’s biotechnology research development and associated investments and acquisitions, our business portfolio now focuses on the treatment of three different cancers, including pancreatic cancer, AML and ALL. DHA-dFdC, our pancreatic drug candidate developed at the University of Texas at Austin (“UTA”), is a new compound that we hope will become the next generation of chemotherapy treatmentall periods presented. Payment for advanced pancreatic cancer. DHA-dFdC is designed to overcome tumor cell resistance to current chemotherapeutic drugs and is well tolerated in preclinical toxicity tests. Preliminary studies have also indicated that DHA-dFdC inhibits pancreatic cancer cell growth in culture (up to 100,000-fold more potent that gemcitabine, a current standard therapy), has documented efficacy against pancreatic tumors in a clinically relevant transgenic mouse model and has demonstrated activities against other cancers, including leukemia, lung and melanoma. Ultimately, we plan to develop DHA-dFdC for oral and intravenous administration in a solid lipid nanoparticle carrier matrix, which has also been licensed from UTA, and is intended to be a second-line treatment for advanced pancreatic cancer. The Company has entered into an agreement with Parimer Scientific, which is working with other third parties, to assist in researching, developing and optimizing the manufacturing process of the active ingredient, formulating the dosage formulation and performing drug stability tests. The Company’s license with UTA (the “License”) is a royalty-bearing exclusive license that, unless terminated earlier, continues until the last date of expiration or termination of the patent rights granted under the License (the “Patent Rights”). With regard to DHA-dFdC, the Patent Rights include two issued U.S. Patents, several filed U.S. patent applications and an application filed under the Patent Cooperation Treaty (“PCT”) that is currently being prosecuted to secure rights in foreign countries. So far, two patents have issued, U.S. Patent No. 10,463,684 (the “684 Patent”) and U.S. Patent No. 11,219,633 (the “633 Patent”), which contain claims covering the compound DHA-dFdC. Assuming all maintenance fees are timely paid, the 684 Patent is expected to expire on October 27, 2035 and the 633 Patent is expected to expire on May 28, 2035. The Company’s license with UTA also covers a U.S. provisional patent application relating to the solid lipid nanoparticle carrier matrix for the drug, which was filed on June 6, 2019. In June of 2020, at the request of the Company, UTA filed both a U.S. non-provisional utility patent application as well as a PCT application relating to the lipid nanoparticle carrier matrix claiming the June 6, 2019 priority date of the provisional application. The PCT application has now entered the national phase in Europe, China and India. Patent prosecution on all pending patent applications is currently underway. The Company is currently engaged in research and development activities related to the manufacture of DHA-dFdC, which have thus far confirmed the critical chemical steps required for the manufacturing and scalability of the process. In collaboration with our contract manufacturing organization, Parimer Scientific, we are currently optimizing the manufacturing procedure for DHA-dFdC. Our manufacturing activities were initially delayed several months due to COVID-19 because Parimer was recruited by the U.S. and South Carolina governments to manufacture hand sanitizer for use in hospitals. For that reason, our manufacturing activities did not begin in earnest until the beginning of the third quarter of 2020. Once manufacturing began, shipping delays due to the pandemic further slowed progress. Further delay resultedfractional shares resulting from the inherent difficulty in producing scalable quantities of the key intermediate compound in the process. Despite these delays, we now have successfully replicated the synthesis as reported in the literature, have developed a new procedure for the production of the key intermediate on a large scale, and are currently optimizing the procedurereverse stock split amounted to ensure that incorporation of our new procedure into the overall manufacturing process will result in levels of DHA-dFdC on an acceptably large scale. In tandem, the Company will also develop the solid lipid nanoparticle delivery system containing DHA-dFdC to optimize the manufacturing process for size and consistency of the particles. We plan to then develop the drug formulation for oral and intravenous delivery via the solid lipid nanoparticles for use in future animal testing. We do not currently have FDA approval, which will eventually be required to begin administering DHA-dFdC to patients as part of any clinical trials. Animal studies will be a necessary prerequisite to filing an Investigational New Drug Application (“IND”) with the FDA. Depending upon the success of the animal studies, the Company’s development activities will also include preparing the IND for submission to the FDA. The Company’s formulation is a new chemotherapy oral dosage form “repurposing” the chemotherapeutic agent gemcitabine, which we believe enables it to be developed for use in patients following a special regulatory pathway codified in Section 505(b)(2) of the FDA rules. Section 505(b)(2) was enacted to enable sponsors to seek New Drug Application (“NDA”) approval for novel repurposed drugs without the need for such sponsors to undertake certain time consuming and expensive safety studies. Proceeding under this regulatory pathway, we hope to be able to rely upon all of the publicly available safety and toxicology data with respect to gemcitabine in our FDA submissions. We believe that this path will dramatically reduce the required clinical development efforts, costs and risks as compared to what would be required of us if we were required to conduct the entire scope of trials required for new chemical entities that are not eligible to be reviewed pursuant to the Section 505(b)(2) regulatory pathway. We estimate that by using the Section 505(b)(2) regulatory pathway, the clinical development process may be several years shorter than is required for a new chemical entity, and the FDA approval process may be six to nine months shorter than the typical eighteen-month period, which we believe may result in lower development costs and shorter development time. As of the date hereof, we have not submitted an IND or an NDA to the FDA. Our AML and ALL compounds, developed at Wake Forest University, are targeted therapeutics designed to overcome multiple resistance mechanisms observed with the current standard of care. In addition, we are constantly seeking to grow our pipeline to treat unmet medical needs in oncology.

In addition, the Company owns an exclusive world-wide license to patented technology from the University of Maryland Baltimore (“UMB”). Our license is for a broad-spectrum antiviral drug platform. The licensed technology is a broadly acting pan-viral inhibitory compound with efficacy against multiple viral pathogens. The technology works to inhibit replication of multiple viruses including Influenza virus, SARS-CoV (coronavirus), MERS-CoV, Ebolavirus and Marburg virus. The technology is covered by two patent applications already on file with the United States Patent and Trademark Office. The Company’s license covers two U.S. provisional applications, which were consolidated and timely filed as a PCT application on June 5, 2020, commencing patent prosecution. Any patents issued from this application are expected to expire 20 years later, on June 5, 2040, unless the term is extended by the patent office. The PCT application describing the technology to which the Company is licensed was published on December 12, 2020 by the World Intellectual Property Organization under International Publication Number WO 2020/247860 A1. The PCT application has now entered the national phase in the USPTO (U.S. Application Serial No. 17/616,586) and is currently under active prosecution. The Company’s license has been amended to cover a second PCT application, which was published on June 9, 2022 by the World Intellectual Property Organization under International Publication Number WO 2022/120207 A1. Currently, the Company and UMB are collaborating to identify chemical structures that are as effective as, or more effective than, the lead compounds covered in the PCT application. The UMB inventors are Drs. Matthew Frieman, Alexander MacKerell and Stuart Watson. The Company has also executed a Sponsored Research Agreement with UMB to support the development of the technology.
Effective March 23, 2020, and as amended and restated on November 24, 2020, the Company and Continental Stock Transfer & Trust Co. entered into a rights agreement (the “Rights Agreement”) The Rights Agreement provides each stockholder of record a dividend distribution of one “right” for each outstanding share of common stock. Rights become exercisable at the earlier of ten days following: (1) a public announcement that an acquirer has purchased or has the right to acquire 4.99% or more of our common stock, in connection with, (x) the Company consolidating, or merging into any other person, (y) any person consolidates or merges with or into the Company or (z) the Company sells or otherwise transfers to any person or persons, in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Company, or (2) the commencement of a tender offer which would result in an offer or beneficially owning 10% or more of our outstanding common stock. All rights held by an acquirer or offer or expire on the announced acquisition date, and all rights expire at the close of business on March 23, 2023, subject to further extension. Each right entitles a stockholder to acquire, at a price of $5.00 per one one-thousandth of a share of our Series A preferred stock, subject to adjustments, which carries voting and dividend rights similar to one share of our common stock. The purchase price of the preferred stock fractional amount is subject to adjustment for certain events as described in the Rights Agreement. At the discretion of a majority of the Board and within a specified time period, we may redeem all of the rights at a price of $0.0001 per right. The Board may also amend any provisions of the Rights Agreement prior to exercise.$26,000.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements. We have identified the accounting policies that we believe require application of management’s most subjective judgments, often requiring the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Our actual results may differ substantially from these estimates under different assumptions or conditions. There have been no significant changes to our critical accounting policies ~~are disclosed in our annual report on Form 10K for the year ended~~and estimates since December 31, ~~2021~~2022. The following represent those critical accounting policies that we believe most significantly impact the judgments and ~~there have been no material changes to such policy or~~ estimates ~~during~~used in the ~~six months ended June 30, 2022.~~preparation of our unaudited condensed consolidated financial statements.

~~Critical Accounting Estimates~~

Long-term investments

~~The preparation~~Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2016-01 and related ASU 2018-03 and ASU 2019-04 concerning recognition and measurement of financial ~~statements in accordance with accounting principles generally accepted in~~assets and financial liabilities. In adopting this guidance, the ~~United States of America requires management to make estimates and assumptions that affect the reported amounts and related disclosures in the financial statements. Management considers~~Company has made an accounting ~~estimate~~policy election to ~~be critical if:~~
● ~~it requires assumptions to be made that were uncertain at the time the estimate was made, and~~
● ~~changes in the estimate or different estimates that could have been selected could have material impact in our results of operations or financial condition.~~
While we base our estimates and judgments on our experience and on various other factors that we believe to be reasonable under the circumstances, actual results could differ from those estimates and the differences could be material.adopt an adjusted cost method measurement alternative for investments in equity securities without readily determinable fair values.

~~See~~For equity investments that are accounted for using the measurement alternative, the Company initially records equity investments at cost but is required to adjust the carrying value of such equity investments through earnings when there is an observable transaction involving the same or a similar investment with the same issuer or upon an impairment.
Refer to Note ~~2 to our condensed consolidated financial statements~~3 of the Annual Report for a discussion of ~~our significant~~all 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~~Months Ended June 30, ~~2022~~2023, compared to ~~three months ended~~the Three Months Ended June 30, ~~2021~~2022

During the three months ended June 30, 2023, we recognized approximately $0.07 million in revenue from operations, primarily driven by the underwriting revenue earned by Dominari Securities. During the three months ended June 30, 2023, and 2022, we incurred a loss from operations of approximately $9.0 million and $2.3 million, ~~as compared to $2.8 million during the comparable prior~~respectively. The consistent loss in operations year ~~period. The decrease in loss~~over year was primarily ~~attributed~~attributable to $81,000 decrease in in general and administrative expenses, $0.3 million decrease research and development expense, and $91,000 decrease in research and development expense related to development of our license technology.the following:
i. An approximate $6.8 million increase in general and administrative expenses – driven by approximately $0.02 million and $0.8 million of professional fees (legal, consulting, accounting, etc.) incurred to establish and operate Dominari Financial and Dominari Securities, respectively. In addition, the Company also incurred increased compensation expenses of approximately $6.3 million due to growing operations.
ii. An approximate $0.03 million decrease in research and development expenses – attributable to the Company’s strategic business decision to transition away from the biotechnology industry and into financial services. The result is a decrease in research and development related expenses by almost 100%.

During the three months ended June 30, 2023 and 2022, other ~~expense~~income (expenses) was approximately ~~$2.8 million as compared to other income of approximately $1.4 million during the comparable prior year period. The increase in other expense was primarily attributed to a~~ $0.3 million ~~decrease~~and $(2.8) million, respectively. The activity for the three months ended June 30, 2023 and 2022, is primarily a result of overall volatility in investment valuations due to macroeconomic uncertainty (i.e. inflation, global tensions in the Ukraine, etc.) impacting marketable securities and the change in fair value of ~~investment~~short and ~~$4.0 million increase in loss on marketable securities.~~long-term investments. Specifically:
i. Marketable securities – we recognized a gain of approximately $0.4 million for the three months ended June 30, 2023. The decrease of approximately $2.6 million in losses over prior year is a direct result of a decrease in unrealized losses of approximately $2.6 million and increase in dividend income of approximately $0.1 million, offset by an increase in realized loss of approximately $0.08 million. The decreases were driven by both market improvement and decrease in sale activity resulting in fewer realized losses.
ii. Short-term and long-term investments –The changes over the three months ended June 30, 2023 and 2022 are a function of observable market transactions which resulted in a decrease in unrealized loss of approximately $0.8 million on the adjusted fair value of the investments during the three months ended June 30, 2023 and 2022, respectively.

Six Months Ended June 30, 2023, compared to the Six months ended June 30, 2022 ~~compared to six months ended June 30, 2021~~

During the six months ended June 30, 2023, we recognized approximately $0.07 million in revenue from operations, primarily driven by the underwriting revenue earned by Dominari Securities. During the six months ended June 30, 2023, and 2022, we incurred a loss from operations of approximately $12.8 million and $6.1 million, ~~as compared to $5.1 million during the comparable prior~~respectively. The consistent loss in operations year ~~period. The increase in loss~~over year was primarily ~~attributed~~attributable to $0.5 million increase in in general and administrative expenses and $1.7 million increase research and development expense, and was partially offset by $1.1 million decrease in research and development expense related with license acquisition.the following:
i. An approximate $8.9 million increase in general and administrative expenses – driven by approximately $0.1 million and $0.9 million of professional fees (legal, consulting, accounting, etc.) incurred to establish and operate Dominari Financial and Dominari Securities, respectively. In addition, the Company also incurred increased compensation expenses of approximately $6.3 million due to growing operations.
ii. An approximate $2.0 million decrease in research and development expenses – attributable to the Company’s strategic business decision to transition away from the biotechnology industry and into financial services. The result is a decrease in research and development related expenses by almost 100%.

During the six months ended June 30, 2023 and 2022, other ~~expense~~income (expenses) was approximately ~~$2.5~~$0.4 million ~~as compared~~and $(2.5) million, respectively. The activity for the six months ended June 30, 2023 and 2022, is primarily a result of overall volatility in investment valuations due to ~~other expense of approximately $0.2 million during~~macroeconomic uncertainty (i.e. inflation, global tensions in the ~~comparable prior year period. The increase in other expense was primarily attributed to a $3.2 million decrease in loss on~~Ukraine, etc.) impacting marketable securities and ~~was partially offset by $0.7 million increase in~~ the change in fair value of ~~investment.~~short and long-term investments. Specifically:

i. Marketable securities – we recognized a gain of approximately $0.3 million for the six months ended June 30, 2023. The decrease of approximately $3.1 million in losses over prior year is a direct result of a decrease in unrealized losses of approximately $2.8 million and increase in dividend income of approximately $0.2 million, offset by an increase in realized loss of approximately $0.08 million. The decreases were driven by both market improvement and decrease in sale activity resulting in fewer realized losses.
~~The Company experienced very little or no revenue in the last two years and we don’t expect any revenue until a biotechnology product is fully developed which may not occur for many years.~~
ii. Short-term and long-term investments –The changes over the six months ended June 30, 2023 and 2022 are a function of observable market transactions which resulted in a decrease in unrealized loss of approximately $0.2 million on the adjusted fair value of the investments during the six months ended June 30, 2023 and 2022, respectively.

Liquidity and Capital Resources

We continue to incur ongoing administrative and other expenses, including public company ~~expenses, in excess of corresponding (non-financing related) revenue.~~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; and~~
● ~~increasing revenue from its patent portfolios, license fees and new business ventures.~~arrangements.

Our ultimate success is dependent on our ability to ~~obtain additional financing and~~ generate sufficient cash flow to meet our obligations on a timely basis. Our business ~~will~~may require significant amounts of capital to sustain operations ~~and make the investments it needs~~that we need to execute ~~its~~our longer-term business plan to support ~~new technologies and help advance innovation.~~our transition into the financial services industry. Our working capital amounted to approximately ~~$60.7~~$35.7 million atas of June 30, ~~2022.~~2023. 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 ~~obtain~~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 ~~operations. If we attempt to obtain additional debt or equity financing, we cannot assume that such financing will be available to the Company on favorable terms, or at all.~~
The Company plans to pursue its plans regarding research and development of our two pre-clinical products which will require resources beyond those currently, ultimately requiring third party capital. During this time, the Company does not expect to generate revenue and there is substantial doubt about the Company’s ability to continue as a going concern within one year from the date of this filing. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result from the outcome of this uncertainty.continuing operations.

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.

Cash Flows from Operating Activities -
For the six months ended June 30, ~~2022~~2023 and ~~2021,~~2022, net cash used in operations was approximately $13.9 million and $5.9 million, respectively. The cash used in operating activities for the six months ended June 30, 2023, is primarily attributable to a net loss of approximately $11.7 million, approximately $0.5 million of realized gain on marketable securities and changes in operating assets and liabilities of $4.6 million, partially offset by $2.7 million ~~respectively.~~stock-based compensation expense and approximately $0.5 million in unrealized losses on marketable securities. The cash used in operating activities for the three months ended June 30, 2022 primarily resulted from a net loss of $8.6 million and change in fair value of long-term investment of $1.4 million and is partially offset by change in fair value of short-term investment of $1.6 million and unrealized loss on marketable securities of $2.3 million.
Cash Flows from Investing Activities
For the six months ended June 30, 2023 and 2022, net cash used in investing activities was approximately $14.7 million and $15.3 million, respectively. The cash used in ~~operating~~investing activities for the six months ended June 30, ~~2021~~2023, primarily resulted from ~~a net loss~~our purchase of ~~$5.3~~marketable securities of approximately $34.0 million and the acquisition of FPS of approximately $1.1 million, ~~realized gain on marketable securities, and~~ partially offset by ~~$1.4 million unrealized loss on~~our sale of marketable securities ~~and $1.1~~of approximately $20.5 million. The Company also collected approximately $0.5 million ~~research and development expense~~in principal related ~~with license acquired.~~
~~Cash Flows from Investing Activities - For the six months ended June 30, 2022 and 2021, net cash used in investing activities was approximately $15.3 million and $70.4 million, respectively.~~to its short-term notes. The cash used in investing activities for the six months ended June 30, 2022 primarily resulted from our purchase of marketable securities of $27.5 million, purchase of promissory notes of $1.6 million and purchase of investments of $14.6 million, partially offset by our sale of marketable securities of $28.3 million since we invest excess cash into marketable securities until additional cash is needed. The cash used in investing activities for the six months ended June 30, 2021 primarily resulted from our purchase of marketable securities of $86.5 million, funds to deposit accounts of $4.5 million (net of fee) and purchase of convertible note of $2.0 million, partially offset by our sale of marketable securities of $23.2 million since we invest excess cash into marketable securities until additional cash is needed.

Cash Flows from Financing Activities -
For the six months ended June 30, 2023, cash used in financing activities was approximately $0.9 million, which reflects the cost for purchase of treasury stock of approximately $0.9 million. Cash used in financing activities for the six months ended June 30, 2022 was ~~$15.3~~$5.6 million, which reflects the cost for redemption of Series O and Series P Redeemable Convertible Preferred Stock of ~~$23.1~~$22.0 million and cost for purchase of treasury stock of $1.5 million, partially offset by net proceeds of ~~$19.0~~$17.9 million from investors in exchange of issuance of issuance of Series O and Series P Redeemable Convertible Preferred Stock. Cash provided by financing activities for the six months ended June 30, 2021 was $78.1 million, which reflects the net proceeds of $78.0 million from investors in exchange of issuance of common stock and warrants and net proceeds of $84,000 from the exercise of common warrants.

~~Off-balance sheet arrangements.~~

~~None.~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures
We maintain ~~“disclosure~~disclosure controls and procedures~~” as such term is defined~~ that are designed to ensure that material information required to be disclosed in ~~Rules 13a-15(e) and 15d-15(e)~~our periodic reports filed or submitted under the Securities Exchange Act of 1934, as amended, ~~(the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in reports that we file~~ or ~~submit under~~ the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in ~~Securities and Exchange Commission~~the SEC’s rules and ~~forms,~~forms. Our disclosure controls and procedures are also designed to ensure that ~~such~~ information isrequired to be disclosed in the reports we file or submit under the Exchange Act are accumulated and communicated to our management, including our ~~Chief Executive Officer,~~principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure. ~~In designing~~
During the quarter ended June 30, 2023, we carried out an evaluation, under the supervision and ~~evaluating~~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, ~~management recognized~~as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective, as of the end of the period covered by this report.
Changes in Internal Control Over Financial Reporting
We have not made any changes to our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2023 that have 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 ~~disclosure controls and procedures~~control system are met. ~~Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating~~Further, the ~~cost-benefit relationship of possible disclosure controls and procedures.~~
~~The~~ design of ~~any disclosure~~a control system must reflect the fact that there are resource constraints, and the benefits of controls ~~and procedures also is based~~must be considered relative to their costs. Because of the inherent limitations in ~~part upon certain assumptions about the likelihood~~all control systems, no evaluation of ~~future events, and there~~controls can ~~be no~~provide absolute assurance that all control issues and instances of fraud, if any, ~~design will succeed in achieving its stated goals under all potential future conditions.~~
~~With respect to the quarter ended June 30, 2022, under the supervision and with the participation of~~within our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer has concluded that our disclosure controls and procedures were not effective as of June 30, 2022 due to the material weaknesses in our internal controls over financial reporting. Wecompany have a lack of segregation of duties, and a lack of controls in place to ensure that all material transactions and developments impacting the financial statements are reflected. The Company is working to change internal controls to address material weaknesses and adding additional employees as part of a plan to discuss with FINRA.
C~~hanges in Internal Control over Financial Reporting:~~
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended June 30, 2022 which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.been detected.


Part II. Other Information

Item 1. Legal Proceedings

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. Other than ordinary routine litigation incidental to the business, we know of no material, active or pending legal proceedings against us.

Item 1A. Risk Factors

~~There have been no material changes~~Investing in our ~~risk factors from those disclosed~~common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below, together with all of the other information contained in this Quarterly Report on Form 10-Q and in the other periodic and current reports and other documents we file with the Securities and Exchange Commission, including but not limited to our ~~Annual Report~~annual report on Form 10-K for the fiscal year ended December 31, ~~2021 and~~2022, before deciding to invest in our ~~Quarterly Reports on Form 10-Q for~~common stock. If any of the ~~quarterly periods ended March 31, 2022~~following risks materialize, our business, financial condition, results of operation and ~~June 30, 2022.~~future prospects will likely be materially and adversely affected. In that event, the market price of our common stock could decline and you could lose all or part of your investment. This list is not exhaustive and the order of presentation does not reflect management’s determination of priority or likelihood.

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.

None.

Item 6. Exhibits

~~31.1~~10.1 Employment Agreement, made and entered into as of April 3, 20234, by and between Dominari Securities LLC and Soo Yu filed with the Securities and Exchange Commission on May 11, 2023, as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023
10.2 Amendment to Employment Agreement, made and entered into as of April 19, 2023, by and between Dominari Securities LLC and Soo Yu filed with the Securities and Exchange Commission on May 11, 2023, as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023
31.1* Certification of Principal Executive Officer ~~and Principal Financial Officer~~ of ~~AIkido Pharma~~Dominari Holdings Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2* Certification of Principal Financial Officer of Dominari Holdings Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1* Certification of Principal Executive Officer ~~and Principal Financial Officer~~ of ~~AIkido Pharma~~Dominari Holdings Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2* Certification of Principal Financial Officer of Dominari Holdings Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS Inline XBRL Instance Document
101.SCH Inline XBRL Taxonomy Extension Schema Document.
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Filed herewith

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.

~~Aikido Pharma Inc.~~
~~(Registrant)~~DOMINARI HOLDINGS INC.

Date: August ~~12, 2022~~9, 2023 By: /s/ Anthony Hayes
Anthony Hayes
Chief Executive Officer
(Principal Executive Officer)
Date: August 9, 2023 By: /s/ George Way
George Way
Chief Financial Officer
(Principal Financial ~~Officer~~ and
~~Principal~~ Accounting Officer)

25
26

1.18 1.79 2.42 2.45 4827239 5065055 5251023 5251766 false --12-31 Q2 0000012239 iso4217:USD xbrli:shares

	Redeemable Convertible Preferred Stock																					Additional											Total
	Series O						Series P						Common Stock					Preferred Stock				Paid-in			Treasury Stock					Accumulated			Stockholders’
	Shares			Amount			Shares			Amount			Shares			Amount		Shares		Amount		Capital			Shares		Amount			Deficit			Equity
Balance at March 31, 2022		11,000		$	11,000			11,000		$	11,000			5,252,517		$	-		4,659	$	-	$	262,624			-	$	(264	)	$	(167,309	)	$	95,051
Redemption of Series O Redeemable Convertible Preferred Stock		(11,000	)		(11,000	)		-			-			-			-		-		-		-			-		-			-			-
Redemption of Series P Redeemable Convertible Preferred Stock		-			-			(11,000	)		(11,000	)		-			-		-		-		-			-		-			-			-
Deemed dividends related to Series O and Series P Redeemable Convertible Preferred Stock		-			-			-			-			-			-		-		-		(1,100	)		-		-			-			(1,100	)
Repurchase of treasury stock		-			-			-			-			-			-		-		-		-			242,902		(1,486	)					(1,486	)
Stock-based compensation		-			-			-			-			-			-		-		-		105			-		-			-			105
Fractional shares adjusted for reverse split		-			-			-			-			(5,665	)		-		-		-		(26	)		-		-			-			(26	)
Net loss		-			-			-			-			-			-		-		-		-			-		-			(5,077	)		(5,077	)
Balance at June 30, 2022		-		$	-			-		$	-			5,246,852		$	-		4,659	$	-	$	261,603			242,902	$	(1,750	)	$	(172,386	)	$	87,467

	Common Stock				Preferred Stock				Additional Paid-in		Treasury Stock					Accumulated			Total Stockholders’			Preferred Stock				Common Stock				Additional Paid-in		Treasury Stock					Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Shares		Amount			Deficit			Equity			Shares		Amount		Shares		Amount		Capital		Shares		Amount			Deficit			Equity
Balance at March 31, 2021		5,266,500	$	-		5,559	$	-	$	265,201		-	$	(264	)	$	(160,565	)	$	104,372
Balance at March 31, 2023																							4,659	$	-		4,815,597	$	-	$	259,215		60,148	$	(501	)	$	(189,643	)	$	69,071
Stock-based compensation		-		-		-		-		63		-		-			-			63			-		-		529,715		-		1,370		-		-			-			1,370
Net loss		-		-		-		-		-		-		-			(1,352	)		(1,352	)		-		-		-		-		-		-		-			(8,663	)		(8,663	)
Balance at June 30, 2021		5,266,500	$	-		5,559	$	-	$	265,264		-	$	(264	)	$	(161,917	)	$	103,083
Balance at June 30, 2023																							4,659	$	-		5,345,312	$	-	$	260,585		60,148	$	(501	)	$	(198,306	)	$	61,778

	Redeemable Convertible Preferred Stock																		Preferred				Additional											Total
	Series O						Series P							Common Stock					Stock				Paid-in			Treasury Stock					Accumulated			Stockholders’
	Shares			Amount			Shares				Amount			Shares			Amount		Shares		Amount		Capital			Shares		Amount			Deficit			Equity
Balance at March 31, 2022		11,000		$	11,000			11,000		$		11,000			5,252,517		$	-		4,659	$	-	$	262,624			-	$	(264	)	$	(167,309	)	$	95,051
Redemption of Series O Redeemable Convertible Preferred Stock		(11,000	)		(11,000	)		-				-			-			-		-		-		-			-		-			-			-
Redemption of Series P Redeemable Convertible Preferred Stock		-			-			(11,000	)			(11,000	)		-			-		-		-		-			-		-			-			-
Deemed dividends related to Series O and Series P Redeemable Convertible Preferred Stock		-			-			-				-			-			-		-		-		(1,100	)		-		-			-			(1,100	)
Repurchase of treasury stock		-			-			-				-			-			-		-		-		-			242,902		(1,486	)					(1,486	)
Stock-based compensation		-			-			-				-			-			-		-		-		105			-		-			-			105
Fractional shares adjusted for reverse split		-			-			-				-			(5,665	)		-		-		-		(26	)		-		-			-			(26	)
Net loss		-			-			-				-			-			-		-		-		-			-		-			(5,077	)		(5,077	)
Balance at June 30, 2022		-		$	-			-			$	-			5,246,852		$	-		4,659	$	-	$	261,603			242,902	$	(1,750	)	$	(172,386	)	$	87,467

	March 27,
	2023
	(Unaudited)
ASSETS
Cash and cash equivalents	$	92
Deposits with Clearing Broker-Dealer		3,550
Other receivables		53
Prepaid and other current assets		89
Total assets acquired		3,784

Liabilities
Accrued expenses	$	273
Accrued commissions		25
Wealth management liabilities		62
Total liabilities assumed		360

Total net assets of FPS Acquisition		3,424

	June 30, 2022		December 31, 2021		June 30, 2023		December 31, 2022
Investment in Hoth Therapeutics, Inc.		15		770
Investment in DatChat, Inc.		-		1,084
Investment in Vicinity Motor Corp.		89		419		13		13
Total		104		2,273		13		13

Beginning balance	$	2,273
Transfer to marketable securities		(1,481	)
Change in fair value of investment		(1,646	)
Realized gain recognized through sale of marketable securities		958
Ending balance	$	104

Security Name		Shares Owned as of June 30, 2022				Fair value per Share as of June 30, 2022				Fair value as of June 30, 2022 (in thousands)
HOTH			35,714			$	0.42			$	15

Security Name		Shares Owned as of December 31, 2021				Fair value per Share as of December 31, 2021				Fair value as of December 31, 2021 (in thousands)
HOTH			1,166,415			$	0.66			$	770

	June 30, 2023			December 31, 2022
Option term (in years)		1.3			1.8
Volatility		76.9	%		76.90	%
Risk-free interest rate		4.47	%		4.47	%
Expected dividends		0.00	%		0.00	%
Stock price	$	0.96		$	0.96

	June 30, 2022		December 31, 2021
Investment in Kerna Health Inc	$	4,940	$	3,800
Investment in Kaya Holding Corp		2,340		1,665
Investment in Tevva Motors		3,364		2,000
Investment in ASP Isotopes		1,000		1,000
Investment in AerocarveUS Corporation		1,000		1,000
Investment in Qxpress		1,000		-
Investment in Masterclass		170		-
Investment in Kraken		486		-
Investment in Epic Games		3,500		-
Investment in Tesspay		1,250		-
Investment in SpaceX		3,500		-
Investment in Databricks		1,200		-
Investment in Discord		476		-
Investment in Thrasio		300		-
Investment in Automation Anywhere		476		-
Investment in Anduril		476		-
Total	$	25,478	$	9,465

Beginning balance	$	9,465
Purchase of investments		14,605
Change in fair value of long-term investments		1,408
Ending balance	$	25,478

	Cost Basis		June 30, 2023		December 31, 2022
Investment in Kerna Health Inc	$	2,140	$	4,940	$	4,940
Investment in Kaya Now		1,500		-		-
Investment in Tevva Motors		1,972		2,794		2,794
Investment in ASP Isotopes		1,300		-		-
Investment in AerocarveUS Corporation		1,075		1,075		1,000
Investment in Qxpress		1,000		1,000		1,000
Investment in Masterclass		170		170		170
Investment in Kraken		597		597		597
Investment in Epic Games		3,500		3,500		3,500
Investment in Tesspay		1,240		2,500		2,500
Investment in SpaceX		3,500		3,674		3,674
Investment in Databricks		1,200		1,200		1,200
Investment in Discord		476		476		476
Investment in Thrasio		300		300		300
Investment in Automation Anywhere		476		476		476
Investment in Anduril		476		476		476
Total	$	20,922	$	23,178	$	23,103

	Maturity Date	Stated Interest Rate			Principal Amount		Interest Receivable		Fair Value
Notes receivable, at fair value
Convergent convertible note - current	01/29/2023		8	%	$	1,000	$	199	$	1,199
Convergent convertible note - non-current	01/29/2023		8	%	$	500	$	-	$	500
Raefan Industries LLC Investment	12/31/2023		8	%	$	4,518	$	623	$	5,141
American Innovative Robotics Investment	04/01/2027		8	%	$	1,100	$	22	$	1,122

Notes receivable, at fair value - current portion									$	6,339

Notes receivable, at fair value - non-current portion									$	1,622

	Fair value measured at June 30, 2022								Fair value measured as of June 30, 2023
	Total at June 30,		Quoted prices in active markets		Significant other observable inputs		Significant unobservable inputs		Total at June 30,		Quoted prices in active markets		Significant other observable inputs		Significant unobservable inputs
	2022		(Level 1)		(Level 2)		(Level 3)		2023		(Level 1)		(Level 2)		(Level 3)
Assets
Marketable securities:
Equities	$	9,779	$	9,779	$	-	$	-	$	20,675	$	20,675	$	-	$	-
Total marketable securities	$	9,779	$	9,779	$	-	$	-	$	20,675	$	20,675	$	-	$	-
Short-term investment	$	104	$	15	$	-	$	89	$	13	$	-	$	-	$	13
Short-term notes receivable at fair value	$	8,500	$	-	$	-	$	8,500
Long-term notes receivable at fair value	$	1,100	$	-	$	-	$	1,100
Notes receivable at fair value, current portion									$	6,339	$	-	$	-	$	6,339
Notes receivable at fair value, non-current portion									$	1,622	$	-	$	-	$	1,622

	Fair value measured at December 31, 2021								Fair value measured as of December 31, 2022
	Total at December 31,		Quoted prices in active markets		Significant other observable inputs		Significant unobservable inputs		Total at December 31,		Quoted prices in active markets		Significant other observable inputs		Significant unobservable inputs
	2021		(Level 1)		(Level 2)		(Level 3)		2022		(Level 1)		(Level 2)		(Level 3)
Assets
Marketable securities:
Equities	$	11,427	$	11,427	$	-	$	-	$	7,130	$	7,130	$	-	$	-
Total marketable securities	$	11,427	$	11,427	$	-	$	-	$	7,130	$	7,130	$	-	$	-
Short-term investment	$	2,273	$	1,854	$	-	$	419	$	13	$	-	$	-	$	13
Notes receivable at fair value	$	6,984	$	-	$	-	$	6,984
Convertible note receivable	$	2,147	$	-	$	-	$	2,147
Notes receivable at fair value, current portion									$	7,474	$	-	$	-	$	7,474
Notes receivable at fair value, non-current portion									$	1,100	$	-	$	-	$	1,100

Short-term notes receivable at fair value at December 31, 2021	$	6,984
Accrued interest receivable		377
Reclassify from convertible note receivable to notes receivable at fair value		2,147
Purchase of notes receivable		500
Change in fair value of note receivable		280
Conversion of note receivable to marketable securities		(1,788	)
Short-term notes receivable at fair value at June 30, 2022	$	8,500

Short-term investment at December 31, 2022	$	13
Short-term investment at June 30, 2023	$	13

Notes receivable at fair value, current portion at December 31, 2022	$	7,474
Collection of principal outstanding		(500	)
Note receivable, Convergent Therapeutics, non-current portion		(500	)
Unrealized loss on note receivable		(212	)
Accrued interest receivable		77
Notes receivable at fair value, current portion at June 30, 2023	$	6,339

	June 30, 2023
Assets:
Operating lease right-of-use-assets	$	3,530

Liabilities:
Current
Operating		353
Long-term
Operating		3,259
	$	3,612

	Three Months Ended		Six Months Ended
	June 30, 2023		June 30, 2023
Operating leases
Operating lease cost	$	179	$	313
Operating lease expense		179		313
Short-term lease rent expense		33		63
Net rent expense	$	212	$	376

	Six Months Ended
	June 30, 2023
Operating cash flows - operating leases	$	72
Right-of-use assets obtained in exchange for operating lease liabilities	$	2,796

	Operating
	Leases
Remaining Period Ended December 31, 2023	$	327
Year Ended December 31, 2024		750
Year Ended December 31, 2025		688
Year Ended December 31, 2026		688
Year Ended December 31, 2027		688
Year Ended December 31, 2028		770
Thereafter		1,166
Total		5,077
Less present value discount		(1,465	)
Operating lease liabilities	$	3,612

	As of June 30,
	2022		2021
Convertible preferred stock		34		40
Warrants to purchase common stock		444,796		341,268
Options to purchase common stock		27,980		25,255
Total		472,810		366,563

	Warrants		Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2022		444,796	$	29.25		-		3.20
Outstanding as of June 30, 2023		444,796	$	29.25		-		2.71

	Warrants		Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2021		341,268	$	31.68		-		3.87
Issued		103,528		21.25		-		4.90
Outstanding as of June 30, 2022		444,796	$	29.25		-		3.95

	Number of Shares		Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2021		28,196	$	32.24	$	230,258		8.2
Employee options granted		170,525		0.35		902,077		9.8
Outstanding as of June 30, 2022		198,721	$	32.24	$	1,017,002		9.5
Options vested and exercisable		27,980	$	32.46	$	114,925		7.8

	Number of Restricted Stock Awards			Weighted Average Grant Day Fair Value
Nonvested at December 31, 2022		8,068		$	5.64
Granted		529,715		$	2.58
Vested		(537,783	)		2.63
Nonvested at June 30, 2023		-		$	-

	Number of Shares			Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2022		31,193		$	302.97	$	-		7.9
Employee options expired		(857	)	$	9,719.07
Outstanding as of June 30, 2023		30,336		$	36.97	$	-		7.6
Options vested and exercisable		26,578		$	41.35	$	-		7.5

	Three Months Ended June 30, 2023
	Dominari Securities			Legacy AIkido Pharma			Consolidated
Revenue	$	71		$	-		$	71
Operating Costs
General and administrative		6,957			2,123		$	9,080
Research and development					2			2
Loss from operations	$	(6,886	)	$	(2,125	)	$	(9,011	)

Other (expenses) income
Other income								-
Interest income		44			116			160
Loss on marketable securities					400			400
Unrealized loss on note receivable					(212	)		(212	)
Total other (expenses) income	$	44		$	304		$	348
Net loss	$	(6,842	)	$	(1,821	)	$	(8,663	)

	Six Months Ended June 30, 2023
	Dominari Securities			Legacy AIkido Pharma			Consolidated
Revenue	$	71		$	-		$	71
Operating Costs
General and administrative		8,056			4,857			12,913
Research and development					3			3
Loss from operations	$	(7,985	)	$	(4,860	)	$	(12,845	)

Other (expenses) income
Other income					-			-
Interest income		44			253			297
Loss on marketable securities					335			335
Unrealized loss on note receivable					(212	)		(212	)
Total other (expenses) income	$	44		$	376		$	420
Net loss	$	(7,941	)	$	(4,484	)	$	(12,425	)

●	~~it requires assumptions to be made that were uncertain at the time the estimate was made, and~~

●	~~changes in the estimate or different estimates that could have been selected could have material impact in our results of operations or financial condition.~~