Dominari (DOMH) - 2019 Q3 - Quarterly Report

Business Focus and Strategy - The company has transitioned to a technology development focus since 2017, emphasizing biotechnology and blockchain research[85] - The company is focusing on monetizing intellectual property through licensing and litigation strategies[83] - The company has been acquiring existing rights to intellectual property, including patents related to cancer treatments and other technologies[84] Investments and Acquisitions - The company invested $350,000 to acquire a 20$300,000[86] - The company agreed to pay $8,000,000 for the acquisition of CBM's assets, including$7,000,000 in stock and $1,000,000 in cash[91] - The stock consideration for the CBM acquisition is based on a per-share price of$3.61, limiting CBM's voting control to 9.9%[91] - The proposed merger with CBM was restructured into an Asset Purchase Agreement, terminating the previous merger agreement[92] Financial Performance - The Company incurred a loss from operations of approximately $0.9 million for the three months ended September 30, 2019, a decrease from a loss of$2.0 million in the same period of 2018[103] - For the nine months ended September 30, 2019, the Company reported a loss from operations of approximately $2.5 million, down from$4.8 million in the prior year[105] - The Company recorded a $2.4 million unrealized loss on its investment in Hoth, with the stock price decreasing from$5.82 to $4.41 during the three months ended September 30, 2019[104] Cash Flow and Liquidity - Cash used in operating activities for the nine months ended September 30, 2019 was approximately$2.2 million, compared to $2.3 million in the same period of 2018[111] - The Company generated net cash provided by investing activities of approximately$1.2 million for the nine months ended September 30, 2019, compared to a net cash used of $0.5 million in the prior year[112] - Cash provided by financing activities for the nine months ended September 30, 2019 was$1.3 million, reflecting net proceeds of $0.8 million from the issuance of common stock and warrants[113] - The Company sold 221,000 shares of Common Stock at a purchase price of$2.60 per share, resulting in aggregate gross proceeds of approximately $799,991[101] - The Company has a working capital of approximately$0.5 million as of September 30, 2019, indicating potential liquidity challenges[109] - The Company plans to finance its activities through managing current cash, seeking additional funds, and increasing revenue from patent portfolios and new ventures[108] - There is substantial doubt about the Company's ability to continue as a going concern within one year from the date of this filing due to recurring operating losses and cash flow deficits[110] Shareholder Agreements - The company will retain the first $2,000,000 of gross proceeds from any future equity financing after the acquisition, with CBM receiving the excess[91] - The company has entered into a Leak-Out Agreement with CBM, restricting share sales to no more than 5$5.60 per share, with the company owning approximately 19% of Hoth[87]