Dominari Holdings Inc. Fair Value Disclosure
Note 7. Fair Value of Financial Assets and Liabilities
The following table presents the Company’s assets and liabilities that are measured at fair value as of December 31, 2025 and 2024 ($ in thousands):
| Fair value measured as of December 31, 2025 | ||||||||||||||||
| Total at December 31, | Quoted prices in active markets | Significant other observable inputs | Significant unobservable inputs | |||||||||||||
| 2025 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
| Assets | ||||||||||||||||
| Securities owned | $ | 9,756 | $ | $ | 8,014 | $ | 1,742 | |||||||||
| Marketable securities | $ | 46,516 | $ | 45,049 | $ | 1,467 | $ | |||||||||
| Fair value measured as of December 31, 2024 | ||||||||||||||||
| Total at December 31, | Quoted prices in active markets | Significant other observable inputs | Significant unobservable inputs | |||||||||||||
| 2024 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
| Assets | ||||||||||||||||
| Securities owned | $ | 1,616 | $ | $ | 1,616 | $ | ||||||||||
| Marketable securities | $ | 4,157 | $ | 4,157 | $ | $ | ||||||||||
| Notes receivable at fair value, non-current portion | $ | 902 | $ | $ | $ | 902 | ||||||||||
The fair value of level 3 securities owned totaling $1.7 million shown above at December 31, 2025 are subject to an initial lock-up period until June 5, 2026, and further restrictions to which the Company cannot liquidate its investment until such restrictions are met. Additionally, approximately $ 6.6 million of fair value of level 2 securities owned shown above at December 31, 2025 represents warrants that are subject to lock-up periods that will end by March 31, 2026 and another $1.2 million of fair value of warrant securities with lock-up periods that will end by June 30, 2026 as well.
Level 3 Measurement
The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial assets that are measured at fair value on a recurring basis ($ in thousands):
| Securities owned at fair value as of December 31, 2024 | $ | |||
| Securities received included in underwriting services | 1,650 | |||
| Unrealized gain included in principal transactions | 91 | |||
| Securities owned at fair value as of December 31, 2025 | $ | 1,741 | ||
| Notes receivable at fair value, non-current portion at December 31, 2024 | $ | 902 | ||
| Realized gain on note receivable | 221 | |||
| Change in interest receivable | 20 | |||
| Collection of principal and interest outstanding | (1,143 | ) | ||
| Notes receivable at fair value, non-current portion at December 31, 2025 | $ |
December 31, 2024
| Notes receivable at fair value, current portion at December 31, 2023 | $ | 3,177 | ||
| Collection of principal outstanding | (1,000 | ) | ||
| Realized and unrealized loss on note receivable | (2,121 | ) | ||
| Change in interest receivable | (56 | ) | ||
| Notes receivable at fair value, current portion at December 31, 2024 | $ | |||
| Notes receivable at fair value, non-current portion at December 31, 2023 | $ | 1,129 | ||
| Unrealized gain (loss) on notes receivable | (227 | ) | ||
| Notes receivable at fair value, non-current portion at December 31, 2024 | $ | 902 |
The Company’s Level 3 fair value measurements at December 31, 2025, were determined by the following quantitative inputs:
| ● | The underlying stock price of $10.00 per share as of the measurement date. |
| ● | Success rates of similar type instruments from other comparable entities’ recent historical results of 15% of the underlying value of the stock price. |
Notes Receivable at fair value
As of December 31, 2025, the fair value of the notes receivable was measured taking into consideration cost basis, market participant inputs, market conditions, liquidity, operating results and other qualitative and quantitative factors. For the year ended December 31, 2025, the Company had realized gains on notes receivable of $0.2 million.
The following table provides quantitative information regarding the Company’s Level 3 fair value measurements at December 31, 2025, and 2024:
| 2025 | 2024 | |||||||
| Valuation technique | Discounted cash flow | Discounted cash flow | ||||||
| Unobservable input and range: | ||||||||
| Probability of default | 20 | % | ||||||
| Discount rate | 8 | % | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Apr 15, 2025 | |
| 2023 | Apr 1, 2024 | |
| 2022 | Mar 31, 2023 | |
| 2021 | Mar 28, 2022 | |
| 2020 | Mar 25, 2021 | |
| 2019 | Feb 3, 2020 | |
| 2018 | Mar 12, 2019 | |
| 2017 | Mar 30, 2018 | |
| 2016 | Mar 31, 2017 | |
| 2015 | Mar 29, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.