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What changed in AtlasClear Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of AtlasClear Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+426 added−336 removedSource: 10-K (2025-09-29) vs 10-K (2024-04-16)

Top changes in AtlasClear Holdings, Inc.'s 2025 10-K

426 paragraphs added · 336 removed · 195 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

55 edited+13 added−50 removed70 unchanged
Biggest changeBusiness INTRODUCTION On February 9, 2024 (the “Closing Date”), we consummated the previously announced transactions contemplated by that certain Business Combination Agreement, dated November 16, 2022 (as amended, the “Business Combination Agreement”), by and among the Company, Quantum FinTech Acquisition Corporation (“Quantum”), Calculator Merger Sub 1, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub 1”), Calculator Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub 2”), AtlasClear, Inc., a Wyoming corporation (“AtlasClear”), Atlas FinTech Holdings Corp., a Delaware corporation (“Atlas FinTech”) and Robert McBey.
Biggest changePrior to the closing of the business combination pursuant to that certain Business Combination Agreement, dated November 16, 2022 (as amended, the “Business Combination Agreement”), by and among the Company, Quantum, Calculator Merger Sub 1, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company, Calculator Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company, AtlasClear, Inc., a Wyoming corporation (“AtlasClear”), Atlas FinTech Holdings Corp., a Delaware corporation (“Atlas FinTech”) and Robert McBey (the “Business Combination”), none of AtlasClear, Wilson-Davis or Quantum were managed on a combined basis with each other and had each historically operated independently.
We are a fintech driven business-to-business platform that expects to power innovation in fintech, investing, and trading . We believe we are positioned to provide a modern, mission-critical suite of solutions to our clients, enabling them to reduce their transactions costs and compete more effectively in their businesses.
We are a fintech driven business-to-business platform that expects to power innovation in fintech, investing, underwriting and trading . We believe we are positioned to provide a modern, mission-critical suite of solutions to our clients, enabling them to reduce their transactions costs and compete more effectively in their businesses.
We expect that customers that choose our white label solutions will also be able to take advantage of our “middle” and “back” office offerings to ensure smooth processes around risk management, profit and loss, and account maintenance. 5 Table of Contents Back and Middle Office Solutions Our full technology stack is expected to automate “back office” and “middle office” processes that were typically manual paper-based process, creating a seamless and unified experience for our clients.
We expect that customers that choose our white label solutions will also be able to take advantage of our “middle” and “back” office offerings to ensure smooth processes around risk management, profit and loss, and account maintenance. 3 Table of Contents Back and Middle Office Solutions Our full technology stack is expected to automate “back office” and “middle office” processes that were typically manual paper-based process, creating a seamless and unified experience for our clients.
Both expect a modern and frictionless financial services experience that we beleive AtlasClear Holdings is well positioned to deliver. Once integrated, we believe our technology platform and specialized clearing and banking services will be mission-critical to our clients, given the complexities of investing infrastructure, the complications around collateral and capital requirements, and the complicated regulatory landscape.
Both expect a modern and frictionless financial services experience that we believe AtlasClear Holdings is well positioned to deliver. Once fully integrated, we believe our technology platform and specialized clearing and banking services will be mission-critical to our clients, given the complexities of investing infrastructure, the complications around collateral and capital requirements, and the complicated regulatory landscape.
We expect to benefit as new fintech firms launch and existing firms scale, potentially outpacing legacy financial firms in their own categories. We believe consumer expectations for a one-stop shop for their investing, banking, spending, insurance and borrowing needs is driving the convergence of financial services.
We expect to benefit as new fintech firms launch and existing firms scale, potentially outpacing legacy financial firms in their own categories. ​ 2 Table of Contents We believe consumer expectations for a one-stop shop for their investing, banking, spending, insurance and borrowing needs is driving the convergence of financial services.
It derives its revenue from the liquidation of restricted and control microcap securities; clearing transactions on behalf of an introducing broker-dealer on a fully disclosed basis; and trading in equity securities for its own account. It receives limited revenues from fully paid stock lending and margin accounts.
It derives its 6 Table of Contents revenue from the liquidation of restricted and control microcap securities; clearing transactions on behalf of an introducing broker-dealer on a fully disclosed basis; and trading in equity securities for its own account. It receives limited revenues from fully paid stock lending and margin accounts.
The SEC and the SROs may conduct administrative proceedings that can result in censure, fine, suspension, or expulsion of a broker-dealer and its supervisors, officers, or employees. Wilson-Davis and its personnel have been and are subject to various such disciplinary proceedings. See “ Legal Proceedings ” below.
The SEC and the SROs may conduct administrative proceedings that can result in censure, fine, suspension, or expulsion of a broker-dealer and its supervisors, officers, or employees. Wilson-Davis and its personnel have been and are subject to various such disciplinary proceedings. See “ Item 3 – Legal Proceedings ”.
The technology is expected to provide the client with the possibility of executing most types of transactions, deliverable and non-deliverable, in the main global currencies and liquidating them in the market. Clearing and Settlement AtlasFX can also be used in conjunction with other technology, to offer clearing and settlement technology to its clients’ clients.
The technology is expected to provide the client with the 4 Table of Contents possibility of executing most types of transactions, deliverable and non-deliverable, in the main global currencies and liquidating them in the market. Clearing and Settlement AtlasFX can also be used in conjunction with other technology, to offer clearing and settlement technology to its clients’ clients.
Finally, AtlasClear’s risk, credit and margin managers may use Rubicon FX, in conjunction with other systems and technology, to manage and monitor the exposure, risk, credit and margin used by each client. 7 Table of Contents SURFACExchange Atlas FinTech acquired the SURFACExchange technology assets (“SE”) in December 2013, including the rights to operate its exchange. Currently, SE is not operational.
Finally, AtlasClear’s risk, credit and margin managers may use Rubicon FX, in conjunction with other systems and technology, to manage and monitor the exposure, risk, credit and margin used by each client. SURFACExchange Atlas FinTech acquired the SURFACExchange technology assets (“SE”) in December 2013, including the rights to operate its exchange. Currently, SE is not operational.
Strategy Wilson-Davis’ strategy is to: ● expand its principal securities liquidation activities through retail customer marketing; ● identify and pursue opportunities to provide and securities clearing services to additional broker-dealers, particularly those that deal in micro-cap securities to address needs that Wilson-Davis believes are under-served; 12 Table of Contents ● fully market its recently introduced fully paid stock lending and margin capabilities with existing and potential new customers; ● participate as agent, and not as principal, in selected at-the-market equity offerings and private placements, including expanded REITs and mutual funds; and ● broaden its range of services and products to reactivate historical offerings.
Marketing Wilson-Davis relies on its industry contacts and customer referrals to market its services. 8 Table of Contents Strategy Wilson-Davis’ strategy is to: ● expand its principal securities liquidation activities through retail customer marketing; ● identify and pursue opportunities to provide and securities clearing services to additional broker-dealers, particularly those that deal in micro-cap securities to address needs that Wilson-Davis believes are under-served; ● fully market its recently introduced fully paid stock lending and margin capabilities with existing and potential new customers; ● participate as agent, and not as principal, in selected at-the-market equity offerings and private placements, including expanded REITs and mutual funds; and ● broaden its range of services and products to reactivate historical offerings.
Through the acquisition of Wilson-Davis, a correspondent clearing company, and our anticipated acquisition of Commercial Bancorp, a federal reserve member, we expect to acquire the capabilities to provide specialized clearing and banking services to financial services firms, with an emphasis on global markets currently underserviced by larger vendors.
Through the acquisition of Wilson-Davis, a correspondent clearing company, our acquisition of Quantum FinTech Acquisition Corporation (“Quantum”), and our anticipated acquisition of Commercial Bancorp, a federal reserve member, we expect to acquire the capabilities to provide specialized clearing and banking services to financial services firms, with an emphasis on global markets currently underserviced by larger vendors.
Clearing Services As a member of the Depository Trust & Clearing Corporation, or “DTCC,” and the National Securities Clearing Corporation, or “NSCC,” Wilson-Davis clears securities transactions through these clearing firms. This includes Wilson-Davis’ own transactions and transactions cleared on a fully disclosed basis on behalf of Glendale, as introducing broker. Glendale is an indirect 20% stockholder of Wilson-Davis.
Clearing Services As a member of the Depository Trust & Clearing Corporation, or “DTCC,” and the National Securities Clearing Corporation, or “NSCC,” Wilson-Davis clears securities transactions through these clearing firms. This includes Wilson-Davis’ own transactions and transactions cleared on a fully disclosed basis on behalf of Glendale, as introducing broker.
SROs, particularly FINRA, conduct periodic detailed examinations of member firms’ operations. Securities firms are also subject to regulation by state securities commissions in the states in which they are registered. Wilson-Davis is registered in 43 states.
SROs, particularly FINRA, conduct periodic detailed examinations of member firms’ operations. Securities firms are also subject to regulation by state securities commissions in the states in which they are registered.
There is currently no regulatory requirement to maintain excess net capital. However, as noted above, under recently adopted NSCC rules, effective October 26, 2023, Wilson-Davis must maintain excess net capital of at least $10.0 million to continue to clear securities transactions for any broker-dealer on a fully disclosed basis.
However, as noted above, under recently adopted NSCC rules, effective October 26, 2023, Wilson-Davis must maintain excess net capital of at least $10.0 million to continue to clear securities transactions for any broker-dealer on a fully disclosed basis.
Custody and clearing businesses such as Wilson-Davis, which we acquired, and banking businesses such as Commercial Bancorp, which we are in the process of acquiring, are scale-driven businesses with high barriers to entry, including expansive overhead and technology costs, complicated capital and collateral management requirements, and a complex regulatory and legal environment.
Custody and clearing businesses such as Wilson-Davis, which we acquired, and banking businesses such as Commercial Bancorp, which we expect to acquire, are scale-driven businesses with high barriers to entry, including expansive overhead and technology costs, complicated capital and collateral management requirements, and a complex regulatory and legal environment.
As we assess international opportunities, we believe our core competencies and operational excellence position us well to win in new markets, many of which are experiencing secular tailwinds similar to what we are seeing in the U.S. (e.g., growth of mobile and digital solutions). Initially, we plan to focus on serving international clients seeking to access U.S. markets.
As we assess international opportunities, we believe our core competencies and operational excellence position us well to win in new markets, many of which are experiencing secular tailwinds similar to what we are seeing in the U.S. (e.g., growth of mobile and digital solutions).
The regulations to which broker-dealers are subject cover numerous aspects of the securities industry, including: ● conduct and supervision of operations; 13 Table of Contents ● capital requirements; ● qualifications and licensing of supervisory and other personnel; ● use and protection of customer funds and securities; ● recordkeeping; ● communications with current and prospective customers; ● business practices among broker-dealers; and ● the structure and operation of securities markets.
Wilson-Davis is registered in 50 states and two territories. 9 Table of Contents The regulations to which broker-dealers are subject cover numerous aspects of the securities industry, including: ● conduct and supervision of operations; ● capital requirements; ● qualifications and licensing of supervisory and other personnel; ● use and protection of customer funds and securities; ● recordkeeping; ● communications with current and prospective customers; ● business practices among broker-dealers; and ● the structure and operation of securities markets.
HISTORICAL BUSINESS OF WILSON-DAVIS Wilson-Davis is a self-clearing correspondent securities broker-dealer registered with the SEC, licensed in 52 states and territories, and a member in good standing of FINRA. Wilson-Davis has operated continuously since it was incorporated as a Utah corporation and obtained its license in December 1968.
WILSON-DAVIS Wilson-Davis is a self-clearing correspondent securities broker-dealer registered with the SEC, licensed in 52 states and territories, and a member in good standing of FINRA. Wilson-Davis has operated continuously since it was incorporated as a Utah corporation and obtained its license in December 1968. Wilson-Davis is engaged principally in the over-the-counter, or “OTC,” markets in microcap securities.
Pursuant to the Pacsquare Purchase Agreement, Pacsquare agreed to develop and provide, for the exclusive use of AtlasClear and its affiliates, the AtlasClear Platform and any future versions or modifications of the AtlasClear Platform and source code and any other materials necessary in connection with the services to be provided by Pacsquare for a period of six years, commencing on the date of execution of the Pacsquare Acquisition Agreement.
Pursuant to the Pacsquare Purchase Agreement, Pacsquare agreed to develop and provide, for the use of AtlasClear and its affiliates, the AtlasClear Platform and any future versions or modifications of the AtlasClear Platform and source code and any other materials necessary in connection with the services to be provided by Pacsquare.
Pacsquare Assets Pacsquare is a fintech-focused company which provides a suite of technologies aimed at enhancing the fintech ecosystem and making it easier for businesses to accelerate their business growth.
It utilizes multiple sources of data underlying a bond to calculate a risk rating. Pacsquare Assets Pacsquare is a fintech-focused company which provides a suite of technologies aimed at enhancing the fintech ecosystem and making it easier for businesses to accelerate their business growth.
Accordingly, Wilson-Davis’ customers typically withdraw proceeds from the liquidation of their securities for other uses, including perhaps deposit with full-service firms. Many of Wilson-Davis’ competitors have significantly greater financial, technical, marketing, and other resources than Wilson-Davis has.
Wilson-Davis does not offer a full array of financial services that may be offered by large, diversified financial services firms. Accordingly, Wilson-Davis’ customers typically withdraw proceeds from the liquidation of their securities for other uses, including perhaps deposit with full-service firms. Many of Wilson-Davis’ competitors have significantly greater financial, technical, marketing, and other resources than Wilson-Davis has.
This includes both client and broker portals. Includes routing trades to marker makers and exchanges through OMS. Revenue Sources We expect to generate revenue through transactional and recurring sources. Transactional revenue is reliant upon customer-driven activity that ultimately results in fees being paid to us. Examples of these are clearing, execution, banking, confirms, and more.
Revenue Sources We expect to generate revenue through transactional and recurring sources. Transactional revenue is reliant upon customer-driven activity that ultimately results in fees being paid to us. Examples of these are clearing, execution, banking, confirms, and more.
Once properly integrated, anticipated synergies between Commercial Bancorp and Wilson-Davis are expected to allow for lower cost of capital, higher net interest margins, expanded product development and greater credit extension.
Once properly integrated, anticipated synergies between Commercial Bancorp, Quantum, and Wilson-Davis are expected to allow for lower cost of capital, higher net interest margins, expanded product development and greater credit extension. In addition, we believe the AtlasClear Platform is cutting-edge, flexible and scalable.
In contrast to these legacy custodians, we believe that our systems make use of highly virtualized systems operating in a hybrid cloud model using cloud infrastructure as well as private data centers for redundancy.
For clients, this translates to slower account opening and funding, higher embedded costs and limited flexibility. In contrast to these legacy custodians, we believe that our systems make use of highly virtualized systems operating in a hybrid cloud model using cloud infrastructure as well as private data centers for redundancy.
Further, the regulations relating to AML compliance policies and procedures are subject to revision, supplementation, or evolving interpretations and application, and it can be difficult to predict how regulators will apply regulations to a given risk or situation. The National Defense Authorization Act (“NDAA”) passed by Congress in 2021 included various changes to the AML regulatory regime.
Further, the regulations relating to AML compliance policies and procedures are subject to revision, supplementation, or evolving interpretations and application, and it can be difficult to predict how regulators will apply regulations to a given risk or situation.
Net Capital Requirements Wilson-Davis is required under applicable rules of the SEC and FINRA to maintain net capital of at least $250,000. As of December 31, 2023, Wilson-Davis had net capital, computed in accordance with the applicable detailed calculation requirements, of $10.8 million or excess net capital of $10.6 million.
Net Capital Requirements Wilson-Davis is required under applicable rules of the SEC and FINRA to maintain net capital of at least $250,000. As of June 30, 2025 and 2024, Wilson-Davis had net capital, computed in accordance with the applicable detailed calculation requirements, of $11.2 million and $10.4 million, respectively or excess net capital by $10.9 million and $10.1 million, respectively.
Principal Accountant Fees and Services” relates to fees paid in respect of Quantum’s financial statements. 3 Table of Contents BUSINESS OF ATLASCLEAR HOLDINGS Our goal is to build a cutting-edge technology enabled financial services firm that would create a more efficient platform for trading, clearing, settlement and banking, with evolving and innovative financial products that focus on financial services firms.
Item 1. Business BUSINESS OF ATLASCLEAR HOLDINGS Our goal is to build a cutting-edge technology enabled financial services firm that would create a more efficient platform for trading, clearing, settlement and banking, with evolving and innovative financial products such as crypto that focus on financial services firms.
During its history, Wilson-Davis has underwritten at-the-market offerings for publicly traded companies, placed private offerings, sold mutual funds, introduced margin accounts cleared by other firms on a fully disclosed basis, and provided ancillary financial services.
During its history, Wilson-Davis has underwritten at-the-market offerings for publicly traded companies, placed private offerings, sold mutual funds, introduced margin accounts cleared by other firms on a fully disclosed basis, and provided ancillary financial services. During the year ended June 30, 2025, revenues from commissions and related vetting fees accounted for approximately 55% and 13%, of total revenue, respectively.
BondQuantum is a real time advance analytical program for the analysis of bonds. The system was designed to improve the accuracy of underwriting fixed income instruments by applying an up to the minute credit rating for fixed income securities. It utilizes multiple sources of data underlying a bond to calculate a risk rating.
BondQuantum Atlas FinTech also owns BondQuantum which was fully developed by Atlas FinTech. BondQuantum is a real time advance analytical program for the analysis of bonds. The system was designed to improve the accuracy of underwriting fixed income instruments by applying an up to the minute credit rating for fixed income securities.
It also has registered representatives who work remotely from California, New York, Arizona, Nevada, Oklahoma, and Florida. Securities Liquidations Wilson-Davis sells into the trading markets securities that have been acquired by customers through registration or in reliance on exemptions from registration under the Securities Act or corresponding provisions of Canadian provincial securities laws.
Securities Liquidations Wilson-Davis sells into the trading markets securities that have been acquired by customers through registration or in reliance on exemptions from registration under the Securities Act or corresponding provisions of Canadian provincial securities laws.
We believe AtlasClear Holdings is well positioned to provide the “investing-as-a-service” platform these firms require to develop such offerings. 4 Table of Contents In addition, we believe incumbents in the wealth ecosystem, such as traditional wealth advisors, are trying to modernize their investment management offerings and better meet the digital demands of their existing end customer and potential customers.
In addition, we believe incumbents in the wealth ecosystem, such as traditional wealth advisors, are trying to modernize their investment management offerings and better meet the digital demands of their existing end customer and potential customers.
Further, we anticipate increased interest from non-financial services firms (e.g., consumer retail firms) in leveraging their brand and customer reach to offer financial services as a means to drive incremental revenue and customer engagement.
Further, we anticipate increased interest from non-financial services firms (e.g., consumer retail firms) in leveraging their brand and customer reach to offer financial services as a means to drive incremental revenue and customer engagement. We believe AtlasClear Holdings is well positioned to provide the “investing-as-a-service” platform these firms may require to develop such offerings.
Under this agreement, Wilson-Davis (i) executes orders for Glendale customers, (ii) settles contracts and transactions in securities, (iii) prepares and distributes transaction confirmations and monthly account statements to Glendale’s customers, (iv) provides back-office services, (v) creates and maintain books and records of all transactions, and (vi) monitors all customer accounts for AML, Federal Reserve Regulation T violations. 11 Table of Contents The clearing houses through which Wilson-Davis clears securities transactions, DTCC and NSCC, require margin deposits in amounts determined by them to mitigate the risk to them of potential losses resulting from transactions that fail to clear for one reason or another.
Under this agreement, Wilson-Davis (i) executes orders for Glendale customers, (ii) settles contracts and transactions in securities, (iii) prepares and distributes transaction confirmations and monthly account statements to Glendale’s 7 Table of Contents customers, (iv) provides back-office services, (v) creates and maintain books and records of all transactions, and (vi) monitors all customer accounts for AML, Federal Reserve Regulation T violations.
Prior to the Business Combination, none of AtlasClear, Wilson-Davis, Commercial Bancorp or Quantum were managed on a combined basis with each other and have each historically operated independently. The future success of the Business Combination, including its anticipated benefits, depends, in part, on our ability to optimize our combined operations, which may be a complex, costly and time-consuming process.
The future success of the Business Combination, including its anticipated benefits, depends, in part, on our ability to optimize our combined operations, which may be a complex, costly and time-consuming process.
Since all revenue generating activities can be tied back to the account, we believe the best proxy for future revenue is the number of customer accounts on our platform. 9 Table of Contents AtlasClear Holdings Competition We believe that through our technology and source code acquisitions discussed herein, we have the capabilities to deliver a complete and modern platform that would give our clients the flexibility, speed, risk-management expertise and scale they need to grow.
AtlasClear Holdings Competition We believe that through our technology and source code acquisitions discussed herein, we have the capabilities to deliver a complete and modern platform that would give our clients the flexibility, speed, risk-management expertise and scale they need to grow.
While an investment has already been made in developing SE, the technology requires further development and investment before it can be deployed profitably in the market.
While an investment has already been made in developing SE, the technology requires further development and investment before it can be deployed profitably in the market. We cannot assure you that we would have sufficient funds to be able to successfully develop the SE technology to a point that it can be profitably deployed in the market.
For example, the NDAA mandated FinCEN to establish an information exchange platform for financial institutions, law enforcement, and national security agencies to share AML information. FinCEN will also revise customer due diligence standards. In addition, the NDAA expanded the scope of BSA violations and increased penalties for BSA violations.
The National Defense Authorization Act (“NDAA”) passed by Congress in 2021 included various changes to the AML regulatory regime. 10 Table of Contents For example, the NDAA mandated FinCEN to establish an information exchange platform for financial institutions, law enforcement, and national security agencies to share AML information. FinCEN will also revise customer due diligence standards.
For the six months ended December 31, 2023 and 2022, 10.3% and 15.8% of revenues, respectively, were attributable to Wilson-Davis’ securities liquidations of private placement and open market purchased securities for U.S. customers in Canadian traded securities in companies engaged in the legal cannabis industry in Canada and other businesses referred by Canaccord Genuity, a global full-service investment banking firm with principal activities in Canada. 10 Table of Contents Canaccord Genuity serves as an investment banker for the placement of securities eligible for resale after the passage of an applicable holding period or other compliance requirements.
During the year ended June 30, 2025, and for the transition period ended June 30, 2024, 13% and 25% of commissions respectively, were attributable to Wilson-Davis’ securities liquidations of private placement and open market purchased securities for U.S. customers in Canadian traded securities in companies engaged in the legal cannabis industry in Canada and other businesses referred by Canaccord Genuity, a global full-service investment banking firm with principal activities in Canada.
Competition among firms that clear microcap stocks may be affected by recently adopted NSCC rules that will require firms clearing for other introducing brokers to maintain at least $10.0 million in excess net capital, beginning October 26, 2023.
Competition among firms that clear microcap stocks may be affected by NSCC rules that require firms clearing for other introducing brokers to maintain at least $10.0 million in excess net capital. The failure of any firm, including Wilson-Davis, to maintain excess net capital as required by the new rule may limit access of firms liquidating microcap stocks to clearing services.
Following the Closing, however, the number of customers which are expected to utilize the Atlas FX and Rubicon FX systems is projected to increase from 6 in Year 1 to up to 30 in Year 5. 6 Table of Contents Direct Trading Application AtlasFX can be used in conjunction with other technology, to offer a trading application directly to its customers to execute and process foreign exchange transactions while processing the clearing and settlement of those transactions.
Direct Trading Application AtlasFX can be used in conjunction with other technology, to offer a trading application directly to its customers to execute and process foreign exchange transactions while processing the clearing and settlement of those transactions.
Human Capital Resources On December 31, 2023, Wilson-Davis had 45 full-time and six part-time employees and consultants, consisting of 28 full-time and one part-time registered representatives, or consultants, eight full-time and two part-time operating personnel, and seven executives and supervisors. No employees or consultants are represented by a collective bargaining agreement.
Human Capital Resources On June 30, 2025, Wilson-Davis had 39 full-time and four part-time employees and consultants, consisting of 27 full-time registered representatives, or consultants, thirteen full-time and one part-time operating personnel, and six executives and supervisors. No employees or consultants are represented by a collective bargaining agreement. Wilson-Davis emphasizes compliance and risk management principles to manage the day-to-day business.
Canaccord Genuity executes trades for Wilson-Davis that are not permitted in the United States. Wilson-Davis’ arrangement with Canaccord is to facilitate transactions with Canadian exchanges.
Canaccord Genuity serves as an investment banker for the placement of securities eligible for resale after the passage of an applicable holding period or other compliance requirements. Canaccord Genuity executes trades for Wilson-Davis that are not permitted in the United States. Wilson-Davis’ arrangement with Canaccord is to facilitate transactions with Canadian exchanges.
FinTech Assets Pursuant to the Contribution Agreement, Atlas FinTech and Atlas Financial Technologies Corp. contributed to AtlasClear all their rights, title and interest to the following software products and intellectual property assets upon the Closing (the “FinTech Assets”): AtlasFX and Rubicon AtlasFX is an order management system and trading application (front-end) for the automated management of currency exchange.
FinTech Assets Pursuant to the Contribution Agreement, Atlas FinTech and Atlas Financial Technologies Corp. contributed to AtlasClear all their rights, title and interest to the following software products and intellectual property assets upon the closing of the Business Combination (the “FinTech Assets”). At present, none of the FinTech assets are in production.
Rubicon FX Middle Office Services An institution can deploy Rubicon FX to act as the middle-office for its foreign exchange clearing and settlement business. The system manages, and controls quotes offered to customers in real time. In addition, Rubicon FX administers the rest orders created by clients and processes the pairing of them.
The system manages, and controls quotes offered to customers in real time. In addition, Rubicon FX administers the rest orders created by clients and processes the pairing of them. Liquidity groups and trade groups can also be managed with the Rubicon FX system.
When FinCEN passes the customer due diligence and information sharing rules, Wilson-Davis could incur substantial additional costs in complying with those rules. 14 Table of Contents Regulation regarding privacy and data protection continues to increase worldwide and is generally driven by the growth of technology and related concerns about the rapid and widespread dissemination and use of information.
Regulation regarding privacy and data protection continues to increase worldwide and is generally driven by the growth of technology and related concerns about the rapid and widespread dissemination and use of information.
The team has held leadership and operational roles at firms such ICE, Penson Clearing, Southwest Securities, NexTrade, Anderen Bank, Stonex and The Chicago Board of Trade, among others.
The team has held leadership and operational roles at firms such ICE, Penson Clearing, Southwest Securities, NexTrade, Anderen Bank, Stonex and The Chicago Board of Trade, among others. Clearing, custody and banking are highly regulated and complex businesses, and we believe that our team’s combined experience, coupled our technological capabilities provide us an advantage over our competitors.
Risk Management AtlasFX is also a risk management, margin, and back-office control system where an institution has the ability to control client exposure to different markets and its own credit limitations. Rubicon FX’s Risk Management Monitor is used by banks to manage collateral and trading risk via mark-to-market pricing.
Risk Management AtlasFX is also a risk management, margin, and back-office control system where an institution has the ability to control client exposure to different markets and its own credit limitations. Rubicon FX Middle Office Services An institution can deploy Rubicon FX to act as the middle-office for its foreign exchange clearing and settlement business.
As of December 31, 2023, Wilson-Davis’ net capital included $1,950,000 in subordinated loans. Wilson-Davis has not applied to repay these subordinated loans. Failure to maintain the required net capital may subject Wilson-Davis to fines, suspension, or expulsion by FINRA, the SEC, and other regulatory bodies and may require its liquidation.
Failure to maintain the required net capital may subject Wilson-Davis to fines, suspension, or expulsion by FINRA, the SEC, and other regulatory bodies and may require its liquidation. There is currently no regulatory requirement to maintain excess net capital.
Wilson-Davis completes vetting of proposed sales, deposits securities in the omnibus account, and executes the customer orders through the omnibus Canadian account. The transaction thereafter is non-cancelable. As of December 31, 2023, Wilson-Davis had approximately 300 customers referred by Canaccord Genuity with approximately $69 million in securities on deposit in its Wilson-Davis customer accounts.
Wilson-Davis completes vetting of proposed sales, deposits securities in the omnibus account, and executes the customer orders through the omnibus Canadian account. The transaction thereafter is non-cancelable. Wilson-Davis had approximately 4,652 active customer accounts as of June 30, 2025 and over 4,325 active customer accounts as of the transition period ended June 30, 2024.
During the six months ended December 31, 2023 and 2022, revenues from commissions and related vetting fees accounted for approximately 83% and 95% of total revenues, respectively.
For the transition period ended June 30, 2024, revenues from commissions and related vetting fees accounted for approximately 67% and 12% of total revenues, respectively.
OLA Digital Online Account Opening Online Account (“OLA”) will allow customers to open accounts online. This process is expected to allow Wilson-Davis to automate the entire customer on-boarding process while tracking compliance related activities such as customer identity verification, document retention and regulatory reporting.
This process allows Wilson-Davis to automate their entire customer on-boarding process while tracking compliance-related activities such as customer identity verification, document retention, and regulatory reporting. Customers typically fill out an online account application, provide an Electronic Signature, undergo identity verification and AML and Office of Foreign Assets Control screenings, and finally fund the account.
We believe their solutions are more limited, more expensive and less responsive for clients because of their legacy technology, analog processes, outdated compliance processes, and less flexible architecture. For clients, this translates to slower account opening and funding, higher embedded costs and limited flexibility.
Large trust banks as well as large financial firms have historically been the providers of clearing and custody services. We believe their solutions are more limited, more expensive and less responsive for clients because of their legacy technology, analog processes, outdated compliance processes, and less flexible architecture.
Wilson-Davis emphasizes compliance and risk management principles to manage the day-to-day business. In recruiting, training and retaining personnel, Wilson-Davis relies on industry training and competitive compensation. Wilson-Davis considers its relationship with its employees and consultants to be good.
In recruiting, training and retaining personnel, Wilson-Davis relies on industry training and competitive compensation. Wilson-Davis considers its relationship with its employees and consultants to be good. Facilities Our principal executive offices are located at 2203 Lois Avenue, Suite 814, Tampa, FL 33607 and our phone number is (727) 446 6660.
To meet these anticipated contingencies, Wilson-Davis maintains a margin deposit at NSCC larger than required. As of December 31, 2023, Wilson-Davis’ margin deposit at NSCC was $2.5 million, which was well over the requirement of $569,303.
As of June 30, 2025 and 2024, Wilson-Davis’ margin deposit at NSCC was $4.5 million and $2.9 million, respectively, which was well over the requirement of $2,303,839 and $535,045, respectively.
Wilson-Davis believes that its market making activities principally facilitate obtaining favorable execution terms for the securities liquidation transactions for its customers. Other On a limited basis, Wilson-Davis sells mutual funds and real estate investment trusts or “REIT” securities, Wilson-Davis has underwritten at-the-market public offerings of issuers whose securities are publicly traded.
Other On a limited basis, Wilson-Davis sells mutual funds and real estate investment trusts or “REIT” securities.
Removed
The transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Business Combination.” In connection with the consummation of the Business Combination (the “Closing”), the Company changed its name from “Calculator New Pubco, Inc.” to “AtlasClear Holdings, Inc.” (hereinafter referred to as “AtlasClear Holdings”).
Added
Further, due to limited capital contributions from the Quantum’s trust account, management views timelines for revenue recognition from the FinTech Assets to be unknowable and therefore has decided to write down the assets described below.
Removed
Prior to the Closing, pursuant to (i) the Assignment and Assumption Agreement and Bill of Sale, dated November 16, 2022, by and among AtlasClear, Atlas FinTech and Atlas Financial Technologies, Corp.
Added
Although the assets have been written down, Management anticipates integrating and deploying the technology timely upon adequate capitalization and in conjunction with the proposed acquisition of Commercial Bancorp of Wyoming. AtlasFX and Rubicon AtlasFX is an order management system and trading application (front-end) for the automated management of currency exchange.
Removed
(the “Contribution Agreement”), AtlasClear received certain assets from Atlas FinTech and Atlas Financial Technologies Corp., and (ii) the Stock Purchase Agreement, dated as of April 11, 2022, between Wilson-Davis & Co., Inc. (“Wilson-Davis”) and AtlasClear (as amended, the “Broker-Dealer Acquisition Agreement”), AtlasClear completed the acquisition of broker-dealer, Wilson-Davis.
Added
On June 10, 2025, the Company and Pacsquare entered into Software Development and License Agreement which supersedes and amends the terms under the Purchase Agreement.
Removed
In addition, at Closing, the Agreement and Plan of Merger between Commercial Bancorp, a Wyoming corporation and parent of Farmers State Bank (“Commercial Bancorp”) and AtlasClear (as amended, the “Bank Acquisition Agreement”), pursuant to which AtlasClear has agreed to acquire Commercial Bancorp (the “CB Merger”), continued to be in full force and effect.
Added
Under the 5 Table of Contents Software Development and License Agreement, Pacquare agreed to develop and provide services for a period of thirty six (36) months, commencing on the date of execution of the Software Development and License Agreement. OLA Digital Online Account Opening Online Account (“OLA”) is now implemented and in use, allowing customers to open accounts online.
Removed
On February 26, 2024, AtlasClear and Commercial Bancorp entered into an amendment to the Bank Acquisition Agreement pursuant to which Commercial Bancorp received 40,000 shares of common stock, par value $0.0001 per share (the “Common Stock”), in lieu of an escrow deposit. At Closing, AtlasClear stockholders received merger consideration in the form of 4,440,000 shares of Common Stock.
Added
Since all revenue generating activities can be tied back to the account, we believe the best proxy for future revenue is the number of customer accounts on our platform.
Removed
In addition, the AtlasClear stockholders will receive up to 5,944,444 shares of Common Stock (the “Earn Out Shares”). The Earn Out Shares will be issued to AtlasClear stockholders upon certain milestones (based on the achievement of certain price targets of Common Stock following the Closing).
Added
Wilson-Davis maintains its headquarters in Salt Lake City, Utah, a branch office in Denver, Colorado. It also has registered representatives who work remotely from California, New York, Arizona, Nevada, Oklahoma, and Florida.
Removed
In the event such milestones are not met within the first 18 months following the Closing, the Earn Out Shares will be cancelled.
Added
The clearing houses through which Wilson-Davis clears securities transactions, DTCC and NSCC, require margin deposits in amounts determined by them to mitigate the risk to them of potential losses resulting from transactions that fail to clear for one reason or another. To meet these anticipated contingencies, Wilson-Davis maintains a margin deposit at NSCC larger than required.
Removed
Atlas FinTech will also receive up to $20 million of Common Stock (“Software Products Earn Out Shares”), which will be issued to Atlas FinTech upon certain milestones based on the achievement of certain revenue targets of software products contributed to AtlasClear by Atlas FinTech and Atlas Financial Technologies Corp. following the Closing.
Added
Wilson-Davis believes that its market making activities principally facilitate obtaining favorable execution terms for the securities liquidation transactions for its customers. Underwriting Wilson Davis acts as an underwriter for securities offerings, it is anticipated that offers led by Wilson Davis will be generally limited to Best Effort underwritings.
Removed
The revenue targets will be measured yearly for the five years following Closing, with no catch-up between the years.
Added
The GENIUS Act, enacted in July 2025, is the United States’ first federal law establishing a comprehensive regulatory framework for payment stablecoins—digital tokens pegged to monetary value and intended for payments. The law authorizes only permitted financial institutions and approved nonbank issuers to create stablecoins, requires strict 1:1 reserve backing using U.S. dollars or U.S.
Removed
Pursuant to the transactions contemplated by a letter of intent, on February 16, 2024, AtlasClear and Pacsquare Technologies, LLC (“Pacsquare”) entered into a Source Code Purchase and Master Services Agreement (the “Pacsquare Purchase Agreement”), pursuant to which AtlasClear purchased a proprietary trading platform with clearing and settlement capabilities that will be developed by Pacsquare, including certain software and source code (the “AtlasClear Platform”).
Added
Treasuries, and mandates public disclosure and audits of reserves to protect consumers and ensure transparency. Issuers must comply with anti-money laundering laws, cannot promote stablecoins as federally insured or legal tender, and are subject to routine regulatory oversight and risk management rules.
Removed
Our Common Stock is now listed on the NYSE under the symbol “ATCH”.
Added
The GENIUS Act affirms that compliant stablecoins are neither securities nor commodities, and holders have prioritized claims in any issuer insolvency. The Act harmonizes federal and state oversight, helping position the U.S. as a leader in responsible digital asset innovation.
Removed
Warrants to purchase the Common Stock at an exercise price of $11.50 per share are listed on the over-the-counter market under the symbol “ATCHW.” Because we closed the Business Combination after the end of our fiscal year, this Annual Report principally describes our business and operations following the Closing, but includes the financial statements of Quantum and related Management’s Discussion and Analysis of Results of Operations, which describe the business, financial condition, results of operations, liquidity and capital resources of Quantum prior to the Business Combination, and disclosure in “Item 14.
Added
In addition, the NDAA expanded the scope of BSA violations and increased penalties for BSA violations. When FinCEN passes the customer due diligence and information sharing rules, Wilson-Davis could incur substantial additional costs in complying with those rules.
Removed
In addition, we believe the AtlasClear Platform that we are currently developing and integrating following the acquisition of the Pacsquare Assets and the Fintech Assets (as described below) are cutting-edge, flexible and scalable.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

120 edited+47 added−24 removed252 unchanged
Biggest changeAny cyber incident could result in information theft, data corruption, operational disruption, and/or a financial loss that has a material adverse impact on our business and that could subject us to legal claims. ● Issues in the use of artificial intelligence, including machine learning and computer vision (together, “AI”), in our analytics platforms may result in reputational harm or liability. ● Wilson-Davis is subject to extensive regulation from the SEC and FINRA, and the failure to comply with this regulation can result in significant penalties, fines, liability, and reputational harm. ● The misconduct of Wilson-Davis’ employees could expose the firm to significant legal liability and reputational harm. ● If the Pacsquare Assets are not successfully implemented or integrated into the Company’s business, or do not perform adequately, this could adversely affect the Company’s business, financial condition and results of operations, and could damage its reputation. ● The proposed acquisition of Commercial Bancorp (the “CB Merger”) may not be completed on the terms or timeline currently contemplated, or at all, as the parties may be unable to satisfy the conditions or obtain the approvals required to complete the CB Merger. ● Failure to complete the CB Merger may hinder the Company from achieving its anticipated business goals, and negatively impact the Company’s share price and its business, prospects, financial condition and results of operations. ● The requirements of being a public company may strain our resources, divert our management’s attention and affect our ability to attract and retain qualified independent board members. ● Stock trading volatility could impact our ability to recruit and retain employees. ● Our existing indebtedness, and any indebtedness we incur in the future, could adversely affect our financial condition, our ability to raise additional capital to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry and our ability to pay our debts and could divert our cash flow from operations for debt payments. ● Future sales of our Common Stock could cause the market price for our Common Stock to decline. ● An active market for our securities may not develop, which would adversely affect the liquidity and price of our securities. ● Issuances of shares of Common Stock pursuant to the Pacsquare Purchase Agreement, or to settle accrued expenses and obligations, and conversion of any amounts under the Seller Notes, Funicular Note and the Chardan Note, each as defined herein, would result in substantial dilution of our stockholders and may have a negative impact on the market price of our Common Stock. ● If we are not able to raise sufficient capital to satisfy our payment obligations under the Convertible Notes, or otherwise restructure the Convertible Notes, and payment of principal and accrued and unpaid interest thereon is demanded by the holders thereof, we will be in default, and may not be able to continue as a going concern. ● We cannot assure you that we will continue to be able to comply with the continued listing standards of the NYSE American. 17 Table of Contents Risks Related to AtlasClear Holdings’ Business Unless the context otherwise requires, all references in this section to “we,” “us” or “AtlasClear Holdings” refer to the business of AtlasClear Holdings following the consummation of the Business Combination.
Biggest changeAny cyber incident could result in information theft, data corruption, operational disruption, and/or a financial loss that has a material adverse impact on our business and that could subject us to legal claims. 12 Table of Contents ● Issues in the use of artificial intelligence, including machine learning and computer vision (together, “AI”), in our analytics platforms may result in reputational harm or liability. ● Wilson-Davis is subject to extensive regulation from the SEC and FINRA, and the failure to comply with this regulation can result in significant penalties, fines, liability, and reputational harm. ● The misconduct of Wilson-Davis’ employees could expose the firm to significant legal liability and reputational harm. ● The proposed acquisition of Commercial Bancorp (the “CB Merger”) may not be completed on the terms or timeline currently contemplated, or at all, as the parties may be unable to satisfy the conditions or obtain the approvals required to complete the CB Merger. ● Failure to complete the CB Merger may hinder the Company from achieving its anticipated business goals, and negatively impact the Company’s share price and its business, prospects, financial condition and results of operations. ● The requirements of being a public company may strain our resources, divert our management’s attention and affect our ability to attract and retain qualified independent board members. ● Stock trading volatility could impact our ability to recruit and retain employees. ● Our existing indebtedness, and any indebtedness we incur in the future, could adversely affect our financial condition, our ability to raise additional capital to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry and our ability to pay our debts and could divert our cash flow from operations for debt payments. ● Future sales of our Common Stock could cause the market price for our Common Stock to decline. ● An active market for our securities may not develop, which would adversely affect the liquidity and price of our securities. ● Issuances of shares of Common Stock pursuant to the Pacsquare Purchase Agreement, or to settle accrued expenses and obligations, and conversion of any amounts under the Seller Notes, Funicular Note and the Chardan Note, each as defined herein, and to Winston & Strawn LLP (“Winston & Strawn”), pursuant to a subscription agreement, dated as of February 9, 2024, between Winston & Strawn and the Company (the “Winston & Strawn Agreement”), or to Tau Investment Partners LLC (“Tau”), pursuant to the ELOC Agreement or the Second ELOC Agreement (each as defined herein), have resulted, and would result in substantial dilution of our stockholders and have, and may continue to have, a negative impact on the market price of our Common Stock. ● If we are not able to raise sufficient capital to satisfy our payment obligations under the Convertible Notes, or otherwise restructure the Convertible Notes, and payment of principal and accrued and unpaid interest thereon is demanded by the holders thereof, we will be in default, and may not be able to continue as a going concern. ● We cannot assure you that we will continue to be able to comply with the continued listing standards of the NYSE American. ● Terms of our promissory notes may result in likely non-compliance and default.
Any acquisitions that we may undertake in the future involve numerous risks, including, but not limited to, the following: ● difficulties in integrating and managing the operations, personnel, systems, technologies, and products of the companies we acquire; ● diversion of our management’s attention from normal daily operations of our business; ● our inability to maintain the key business relationships and the reputations of the businesses we acquire; ● uncertainty of entry into markets in which we have limited or no prior experience and in which competitors have stronger market positions; ● our inability to increase revenue from an acquisition; ● increased costs related to acquired operations and continuing support and development of acquired products; ● our responsibility for the liabilities of the businesses we acquire; ● potential goodwill and intangible asset impairment charges and amortization associated with acquired businesses; ● adverse tax consequences associated with acquisitions; ● changes in how we are required to account for our acquisitions under the GAAP, including arrangements that we assume from an acquisition; ● potential negative perceptions of our acquisitions by consumer and business members, financial markets or investors; ● failure to obtain required approvals from governmental authorities under competition and antitrust laws on a timely basis, if at all, which could, among other things, delay or prevent us from completing a transaction, or otherwise restrict our ability to realize the expected financial or strategic goals of an acquisition; ● our inability to apply and maintain our internal standards, controls, procedures and policies to acquired businesses; 21 Table of Contents ● potential loss of key employees of the companies we acquire; ● potential security vulnerabilities in acquired products that expose us to additional security risks or delay our ability to integrate the product into our service offerings; ● difficulties in increasing or maintaining security standards for acquired technology consistent with our other services, and related costs; ● ineffective or inadequate controls, procedures and policies at the acquired company; ● inadequate protection of acquired IP rights; and ● potential failure to achieve the expected benefits on a timely basis or at all.
Any acquisitions that we may undertake in the future involve numerous risks, including, but not limited to, the following: ● difficulties in integrating and managing the operations, personnel, systems, technologies, and products of the companies we acquire; ● diversion of our management’s attention from normal daily operations of our business; ● our inability to maintain the key business relationships and the reputations of the businesses we acquire; ● uncertainty of entry into markets in which we have limited or no prior experience and in which competitors have stronger market positions; ● our inability to increase revenue from an acquisition; ● increased costs related to acquired operations and continuing support and development of acquired products; ● our responsibility for the liabilities of the businesses we acquire; ● potential goodwill and intangible asset impairment charges and amortization associated with acquired businesses; ● adverse tax consequences associated with acquisitions; ● changes in how we are required to account for our acquisitions under the GAAP, including arrangements that we assume from an acquisition; ● potential negative perceptions of our acquisitions by consumer and business members, financial markets or investors; ● failure to obtain required approvals from governmental authorities under competition and antitrust laws on a timely basis, if at all, which could, among other things, delay or prevent us from completing a transaction, or otherwise restrict our ability to realize the expected financial or strategic goals of an acquisition; ● our inability to apply and maintain our internal standards, controls, procedures and policies to acquired businesses; ● potential loss of key employees of the companies we acquire; ● potential security vulnerabilities in acquired products that expose us to additional security risks or delay our ability to integrate the product into our service offerings; ● difficulties in increasing or maintaining security standards for acquired technology consistent with our other services, and related costs; ● ineffective or inadequate controls, procedures and policies at the acquired company; ● inadequate protection of acquired IP rights; and ● potential failure to achieve the expected benefits on a timely basis or at all.
In July 2019, FINRA initiated an enforcement proceeding against Wilson-Davis, certain principals of Wilson-Davis, and a registered representative/trader alleging that the firm and the registered representative manipulated the market of a designated security, responsible supervisory personnel failed to establish and maintain appropriate supervisory procedures, the firm and a principal failed to implement and maintain appropriate anti-money laundering procedures, and provided inaccurate documents to FINRA staff (the “2019 FINRA Action”).
In July 2019, FINRA initiated an enforcement proceeding against Wilson-Davis, certain former principals of Wilson-Davis, and a former registered representative/trader alleging that the firm and the registered representative manipulated the market of a designated security, responsible supervisory personnel failed to establish and maintain appropriate supervisory procedures, the firm and a former principal failed to implement and maintain appropriate anti-money laundering procedures, and provided inaccurate documents to FINRA staff (the “2019 FINRA Action”).
Although none of the holders of such promissory notes have elected to pursue remedies against us, we cannot assure you that they will not do so in the future. The institution of collection actions cuould have a material adverse effect on our business and could force us to seek relief through insolvency or other proceedings.
Although none of the holders of such promissory notes have elected to pursue remedies against us, we cannot assure you that they will not do so in the future. The institution of collection actions could have a material adverse effect on our business and could force us to seek relief through insolvency or other proceedings.
If this were to occur, we and our stockholders could face significant material adverse consequences, including: ● a limited availability of market quotations for our securities; ● reduced liquidity for our securities; ● a determination that the Common Stock is a “penny stock,” which will require brokers trading the Common Stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for shares of Common Stock; ● a limited amount of news and analyst coverage; and 41 Table of Contents ● a decreased ability for us to issue additional securities or obtain additional financing in the future.
If this were to occur, we and our stockholders could face significant material adverse consequences, including: ● a limited availability of market quotations for our securities; ● reduced liquidity for our securities; 34 Table of Contents ● a determination that the Common Stock is a “penny stock,” which will require brokers trading the Common Stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for shares of Common Stock; ● a limited amount of news and analyst coverage; and ● a decreased ability for us to issue additional securities or obtain additional financing in the future.
If we use AI as part of the AtlasClear Platform in a manner that is controversial because of the purported or real impact on our business members or vendors, this may lead to adverse results for our financial condition and operations or the financial condition and operations of our business members, which may further lead to us experiencing competitive harm, legal liability and brand or reputational harm. 31 Table of Contents We could face employee claims.
If we use AI as part of the AtlasClear Platform in a manner that is controversial because of the purported or real impact on our business members or vendors, this may lead to adverse results for our financial condition and operations or the financial condition and operations of our business members, which may further lead to us experiencing competitive harm, legal liability and brand or reputational harm. 25 Table of Contents We could face employee claims.
Our financial results in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including: ● the development and introduction of new services by us or our competitors; ● increases in marketing, sales, and other operating expenses that we may incur to grow and expand our operations and to remain competitive, and increased expenses we have incurred and will continue to incur as a public company; ● legislation and regulation; ● our ability to achieve operating margins; ● system failures or breaches of security or privacy; ● competition in the markets in which we operate, and our ability to successfully compete; and ● negative publicity we may encounter as we seek to grow our business.
Our financial results in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including: ● the development and introduction of new services by us or our competitors; ● increases in marketing, sales, and other operating expenses that we may incur to grow and expand our operations and to remain competitive, and increased expenses we have incurred and will continue to incur as a public company; 13 Table of Contents ● legislation and regulation; ● our ability to achieve operating margins; ● system failures or breaches of security or privacy; ● competition in the markets in which we operate, and our ability to successfully compete; and ● negative publicity we may encounter as we seek to grow our business.
The failure of any of our IT systems may cause disruptions in our operations, which could adversely affect our revenues and profitability, and lead to claims related to the disruption of our services from members of the AtlasClear Platform and advertisers. 30 Table of Contents Hackers and data thieves are increasingly sophisticated and operate large-scale and complex automated attacks, which may remain undetected until after they occur.
The failure of any of our IT systems may cause disruptions in our operations, which could adversely affect our revenues and profitability, and lead to claims related to the disruption of our services from members of the AtlasClear Platform and advertisers. 24 Table of Contents Hackers and data thieves are increasingly sophisticated and operate large-scale and complex automated attacks, which may remain undetected until after they occur.
All shares currently held by Public Stockholders and all of the shares issued in the Business Combination to former AtlasClear’s stockholders are freely tradable without registration under the Securities Act, and without restriction by persons other than our “affiliates” (as defined under Rule 144 under the Securities Act, (“Rule 144”)), including our directors, executive officers and other affiliates.
All shares currently held by public stockholders and all of the shares issued in the Business Combination to former AtlasClear’s stockholders are freely tradable without registration under the Securities Act, and without restriction by persons other than our “affiliates” (as defined under Rule 144), including our directors, executive officers and other affiliates.
As a public company trading on the NYSE, we have significant requirements for enhanced financial reporting and internal controls.
As a public company trading on the NYSE American, we have significant requirements for enhanced financial reporting and internal controls.
These events also could cause or act to prolong an economic recession in the United States or abroad. 19 Table of Contents Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our reported operating results.
These events also could cause or act to prolong an economic recession in the United States or abroad. 15 Table of Contents Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our reported operating results.
Because of perceived risks associated with the above factors, Wilson-Davis believes it faces heightened regulatory scrutiny from the SEC and the Financial Industry Regulatory Authority (the “FINRA”) and other self-regulatory organizations that require particular attention to compliance measures and supervision. The over-the-counter markets for the microcap securities Wilson-Davis liquidates frequently have limited trading volume and volatile trading prices.
Because of perceived risks associated with the above factors, Wilson-Davis believes it faces heightened regulatory scrutiny from the SEC and the Financial Industry Regulatory Authority (the “FINRA”) and other self-regulatory organizations that require particular attention to compliance measures and supervision. 18 Table of Contents The over-the-counter markets for the microcap securities Wilson-Davis liquidates frequently have limited trading volume and volatile trading prices.
Risks Relating to the Proposed Acquisition of Commercial Bancorp The proposed acquisition of Commercial Bancorp (the “CB Merger”) may not be completed on the terms or timeline currently contemplated, or at all, as the parties may be unable to satisfy the conditions or obtain the approvals required to complete the CB Merger.
Risks Relating to the Proposed Acquisition of Commercial Bancorp The proposed CB Merger may not be completed on the terms or timeline currently contemplated, or at all, as the parties may be unable to satisfy the conditions or obtain the approvals required to complete the CB Merger.
We may fail to attract and retain qualified technical, sales, marketing and managerial personnel required to continue to operate our business successfully. Personnel with the expertise necessary for our business are scarce and competition for personnel with proper skills is intense. 22 Table of Contents In addition, new hires frequently require extensive training before they achieve desired levels of productivity.
We may fail to attract and retain qualified technical, sales, marketing and managerial personnel required to continue to operate our business successfully. Personnel with the expertise necessary for our business are scarce and competition for personnel with proper skills is intense. In addition, new hires frequently require extensive training before they achieve desired levels of productivity.
If we are unable to successfully integrate the operations of Wilson-Davis and Commercial Bancorp with our business, we may incur unanticipated liabilities and be unable to realize the revenue growth, operating efficiencies, synergies and other anticipated benefits resulting from such transactions and the Business Combination, and the Company’s business, results of operations and financial condition could be materially and adversely affected.
If we are unable to successfully integrate the operations of Wilson-Davis and Commercial Bancorp with our business, we may incur unanticipated liabilities and be unable to realize the revenue growth, operating efficiencies, synergies and other anticipated benefits resulting from 16 Table of Contents such transactions and the Business Combination, and the Company’s business, results of operations and financial condition could be materially and adversely affected.
Wilson-Davis and its principals agreed to settle the matter, without admitting or denying the allegations respecting supervision, anti-money laundering, and documentation in July 2021 by consenting to an order under which the firm was censured and paid a $500,000 monetary penalty, one principal was suspended in all capacities for 90 days, that principal and two others were suspended as principals for two years, and the firm was required to undertake certain compliance and remediation efforts.
Wilson-Davis and its former principals agreed to settle the matter, without admitting or denying the allegations respecting supervision, anti-money laundering, and documentation in July 2021 by consenting to an order under which the firm was censured and paid a $500,000 monetary penalty, one former principal was suspended in all capacities for 90 days, that principal and two other former principals were suspended for two years, and the firm was required to undertake certain compliance and remediation efforts.
Additionally, if we are unable to properly protect the privacy and security of personal information, including sensitive personal information (e.g., financial information), we could be found to have breached our contracts with certain third parties. 29 Table of Contents There are numerous U.S. and Canadian federal, state, and provincial laws and regulations related to the privacy and security of personal information.
Additionally, if we are unable to properly protect the privacy and security of personal information, including sensitive personal information (e.g., financial information), we could be found to have breached our contracts with certain third parties. There are numerous U.S. and Canadian federal, state, and provincial laws and regulations related to the privacy and security of personal information.
These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could harm our business, results of operations, and financial condition. 35 Table of Contents We are an Emerging Growth Company, making comparisons to non-Emerging Growth companies difficult or impossible.
These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could harm our business, results of operations, and financial condition. We are an Emerging Growth Company, making comparisons to non-Emerging Growth companies difficult or impossible.
The AML regulatory regime covers a wide range of activities, including trading activities, securities liquidations and other transactions, funds and securities transfers, the opening of customer accounts, customer interactions, and other activities. In July 2019, FINRA censured Wilson-Davis and assessed a $500,000 fine for violations, among others, of applicable AML rules.
The AML regulatory regime covers a wide range of activities, including trading activities, securities liquidations and other transactions, funds and securities transfers, the opening of customer accounts, customer interactions, and other activities. 20 Table of Contents In July 2019, FINRA censured Wilson-Davis and assessed a $500,000 fine for violations, among others, of applicable AML rules.
AtlasClear and Commercial Bancorp may also terminate the Bank Acquisition Agreement in the event of breach of the agreement as specified in the Bank Acquisition Agreement. 33 Table of Contents Failure to complete the CB Merger may hinder the Company from achieving its anticipated business goals, and negatively impact the Company’s share price and its business, prospects, financial condition and results of operations.
AtlasClear and Commercial Bancorp may also terminate the Bank Acquisition Agreement in the event of breach of the agreement as specified in the Bank Acquisition Agreement. Failure to complete the CB Merger may hinder the Company from achieving its anticipated business goals, and negatively impact the Company’s share price and its business, prospects, financial condition and results of operations.
There is no guarantee that our acquisitions will increase our profitability or cash flow, and our efforts could cause unforeseen complexities and additional cash outflows, including financial losses. As a result, the realization of anticipated synergies or benefits from acquisitions may be delayed or substantially reduced.
There is no guarantee that our acquisitions will increase our 17 Table of Contents profitability or cash flow, and our efforts could cause unforeseen complexities and additional cash outflows, including financial losses. As a result, the realization of anticipated synergies or benefits from acquisitions may be delayed or substantially reduced.
Any disruption to those websites or services could result in a significant reduction of orders received from the firm’s customers and even a cessation of the firm’s business activities. 28 Table of Contents Wilson-Davis relies on representations of third parties to ensure compliance with applicable laws and rules.
Any disruption to those websites or services could result in a significant reduction of orders received from the firm’s customers and even a cessation of the firm’s business activities. Wilson-Davis relies on representations of third parties to ensure compliance with applicable laws and rules.
Even if we have not violated these laws and regulations, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
Even if we have not violated these laws and regulations, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could have a material adverse effect on our 23 Table of Contents business, financial condition, results of operations and prospects.
Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. 39 Table of Contents Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and consented to the forum provisions in our Charter.
Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and consented to the forum provisions in our Charter.
Wilson-Davis and Commercial Bancorp may have liabilities that are not known to AtlasClear and the indemnities negotiated in the Broker-Dealer Acquisition Agreement and the Bank Acquisition Agreement may not offer adequate protection.
Commercial Bancorp may have liabilities that are not known to AtlasClear and the indemnities negotiated in the Broker-Dealer Acquisition Agreement and the Bank Acquisition Agreement may not offer adequate protection.
In particular, the following considerations, among others, may offset our competitive strengths or have a negative effect on our business strategy, which could cause a decline in the price of shares of our Common Stock or warrants and result in a loss of all or a portion of your investment: ● We are a new company with no prior operating history, which makes it difficult to evaluate our business and prospects. ● We may require substantial funding to finance our operations, but adequate financing may not be available when we need it, on acceptable terms or at all. ● Uncertain global macro-economic and political conditions could materially and adversely affect our results of operations and financial condition. ● The loss of Robert McBey, Our Chief Executive Officer and Chairman of the Board, or other key personnel, or failure to attract and retain other highly qualified personnel, could harm our business. ● The requirement that we repay the Funicular Note, the Seller Notes and the Chardan Note could adversely affect our business plan, liquidity, financial condition, and results of operations. ● Restrictive covenants under the Convertible Notes could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests. ● If the proposed CB Merger is completed, we may experience difficulties in integrating the operations of Wilson-Davis and Commercial Bancorp and in realizing the expected benefits of these transactions. ● Wilson-Davis and Commercial Bancorp may have liabilities that are not known to AtlasClear and the indemnities negotiated in the Broker-Dealer Acquisition Agreement and the Bank Acquisition Agreement may not offer adequate protection. ● We may in the future make acquisitions, and such acquisitions could disrupt our operations, and may have an adverse effect on our operating results. ● Any acquisitions, partnerships or joint ventures that we enter into could disrupt our operations and have a material adverse effect on our business, financial condition and results of operations. ● We may be unable to successfully grow our business if we fail to compete effectively with others to attract and retain our executive officers and other key management and technical personnel. ● Wilson-Davis’ liquidation of microcap securities and related activities in the over-the-counter market segment expose it to significant risk. ● The over-the-counter markets for the microcap securities Wilson-Davis liquidates frequently have limited trading volume and volatile trading prices. ● The penny stock rules limit Wilson-Davis’ trading practices. ● Wilson-Davis needs to continue to maintain its excess net capital above the NSCC requirement of $10 million to continue to provide correspondent clearing services for introducing brokers. ● Wilson-Davis is substantially dependent on one principal customer. ● Wilson-Davis customers liquidate securities of smaller reporting companies that have relaxed disclosure obligations. 16 Table of Contents ● Wilson-Davis customers also liquidate securities in companies that do not file SEC reports, so there is very little, if any, reliable data publicly available about them. ● Wilson-Davis is, and may in the future be, subject to significant regulatory enforcement proceedings. ● Wilson-Davis and certain of its personnel are subject to various regulatory disciplinary orders that could be the basis of future regulatory action. ● Wilson-Davis’ procedures, policies, and practices to comply with the comprehensive anti-money laundering regulatory regime may not be sufficient to assure compliance. ● General, long-term financial and economic conditions and unforeseen events may adversely affect Wilson-Davis’ financial condition and results of operations. ● Wilson-Davis may be unable to attract and retain registered representatives and other professional employees. ● FINRA has adopted rules that impose significant compliance requirements on making investment recommendations to retail customers. ● Wilson-Davis is exposed to credit risk and other risks from customers, market makers, and other counterparties.
In particular, the following 11 Table of Contents risks, among others, may offset our competitive strengths or have a negative effect on our business strategy, which could cause a decline in the price of our Common Stock or warrants and result in a loss of all or a portion of your investment: ● We are a new company with a short operating history, which makes it difficult to evaluate our business and prospects. ● We may require substantial funding to finance our operations, but adequate financing may not be available when we need it, on acceptable terms or at all. ● Uncertain global macro-economic and political conditions could materially and adversely affect our results of operations and financial condition. ● The loss of key personnel, or failure to attract and retain other highly qualified personnel, could harm our business. ● The requirement that we repay the Funicular Note. ● Restrictive covenants under the Convertible Notes could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests. ● If the proposed CB Merger (as defined below) is completed, we may experience difficulties in integrating the operations of Wilson-Davis and Commercial Bancorp and in realizing the expected benefits of these transactions. ● Commercial Bancorp, if acquired, may have liabilities that are not known to AtlasClear and the indemnities negotiated in the Bank Acquisition Agreement may not offer adequate protection. ● We may in the future make acquisitions, and such acquisitions could disrupt our operations, and may have an adverse effect on our operating results. ● Any acquisitions, partnerships or joint ventures that we enter into could disrupt our operations and have a material adverse effect on our business, financial condition and results of operations. ● We may be unable to successfully grow our business if we fail to compete effectively with others to attract and retain our executive officers and other key management and technical personnel. ● Wilson-Davis’ liquidation of microcap securities and related activities in the over-the-counter market segment expose it to significant risk. ● The over-the-counter markets for the microcap securities Wilson-Davis liquidates frequently have limited trading volume and volatile trading prices. ● The penny stock rules limit Wilson-Davis’ trading practices. ● Wilson-Davis needs to continue to maintain its excess net capital above the NSCC requirement of $10 million to continue to provide correspondent clearing services for introducing brokers. ● Wilson-Davis is substantially dependent on one principal customer. ● Wilson-Davis customers liquidate securities of smaller reporting companies that have relaxed disclosure obligations. ● Wilson-Davis customers also liquidate securities in companies that do not file SEC reports, so there is very little, if any, reliable data publicly available about them. ● Wilson-Davis is, and may in the future be, subject to significant regulatory enforcement proceedings. ● Wilson-Davis and certain of its personnel are subject to various regulatory disciplinary orders that could be the basis of future regulatory action. ● Wilson-Davis’ procedures, policies, and practices to comply with the comprehensive anti-money laundering regulatory regime may not be sufficient to assure compliance. ● General, long-term financial and economic conditions and unforeseen events may adversely affect Wilson-Davis’ financial condition and results of operations. ● Wilson-Davis may be unable to attract and retain registered representatives and other professional employees. ● FINRA has adopted rules that impose significant compliance requirements on making investment recommendations to retail customers. ● Wilson-Davis is exposed to credit risk and other risks from customers, market makers, and other counterparties.
If we need additional capital and cannot raise it on acceptable terms, we may not be able to, among other things: ● to expand our sales and marketing; ● acquire complementary technologies or businesses; ● expand operations in the United States or internationally; 18 Table of Contents ● hire, train, and retain employees; or ● respond to competitive pressures or unanticipated working capital requirements.
If we need additional capital and cannot raise it on acceptable terms, we may not be able to, among other things: ● to expand our sales and marketing; ● acquire complementary technologies or businesses; ● expand operations in the United States or internationally; ● hire, train, and retain employees; or ● respond to competitive pressures or unanticipated working capital requirements.
For example, to the extent that the price of our Common Stock exceeds $11.50 per share, it is more likely that holders of our Warrants will exercise their warrants. If the price of our Common Stock is less than $11.50 per share, we believe it is much less likely that such holders will exercise their warrants.
For example, to the extent that the price of our Common Stock exceeds $690 per share, it is more likely that holders of our Warrants will exercise their warrants. If the price of our Common Stock is less than $690 per share, we believe it is much less likely that such holders will exercise their warrants.
Our failure to have sufficient capital to do any of these things could harm our business, financial condition, and results of operations. Uncertain global macro-economic and political conditions could materially and adversely affect our results of operations and financial condition.
Our failure to have sufficient capital to do any of these things could harm our business, financial condition, and results of operations. 14 Table of Contents Uncertain global macro-economic and political conditions could materially and adversely affect our results of operations and financial condition.
In such case, Quantum may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in Quantum’s financial reporting and Quantum’s stock price may decline as a result.
In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result.
The Conversion Price is subject to adjustment monthly to a price equal to the trailing five-day VWAP, subject to a floor of $2.00 per share (provided that if the Company sells stock at an effective price below $2.00 per share, such floor would be reduced to such effective price).
The Conversion Price is subject to adjustment monthly to a price equal to the trailing five-day VWAP, subject to a floor of $2.00 per share (provided that if the Company sells stock at an effective price below $2.00 per share, such floor would be reduced to such effective price now determined to be $0.15 per share).
Wilson-Davis continues to compete with larger firms that have greater financial resources, vast customer networks, diverse business lines, household name recognition, large-scale marketing campaigns, and established relationships with regulatory and legislative institutions.
Wilson-Davis continues to compete with larger firms that have greater financial resources, vast customer networks, diverse 21 Table of Contents business lines, household name recognition, large-scale marketing campaigns, and established relationships with regulatory and legislative institutions.
Quantum cannot assure you that the measures Quantum has taken to date, or any measures Quantum may take in the future, will be sufficient to avoid potential future material weaknesses. ​ 37 Table of Contents As a public company, we have incurred and expect to continue to incur increased expenses associated with the costs of being a public company.
We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses. As a public company, we have incurred and expect to continue to incur increased expenses associated with the costs of being a public company.
Effective internal controls are necessary for Quantum to provide reliable financial reports and prevent fraud. Quantum continues to evaluate steps to remediate the material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.
Effective internal controls are necessary for the Company to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.
Breaches of Wilson-Davis’ policy could expose Wilson-Davis to regulatory enforcement and to liability from its customers. 26 Table of Contents Wilson-Davis faces significant competition from other brokers and clearing firms.
Breaches of Wilson-Davis’ policy could expose Wilson-Davis to regulatory enforcement and to liability from its customers. Wilson-Davis faces significant competition from other brokers and clearing firms.
Transactions in the securities of these companies may expose Wilson-Davis to liability. 24 Table of Contents Wilson-Davis is, and may in the future be, subject to significant regulatory enforcement proceedings.
Transactions in the securities of these companies may expose Wilson-Davis to liability. Wilson-Davis is, and may in the future be, subject to significant regulatory enforcement proceedings.
Furthermore, AtlasClear has expended, and the Company’s management will have expended, valuable time and resources to matters relating to the CB Merger that could otherwise have been devoted to other beneficial activities for the Company.
Furthermore, AtlasClear has expended, and the Company’s management will 27 Table of Contents have expended, valuable time and resources to matters relating to the CB Merger that could otherwise have been devoted to other beneficial activities for the Company.
The risks and uncertainties described below are not the only risks and uncertainties we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. If any of the following risks actually occur, our business, results of operations and financial condition could suffer.
Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. If any of the following risks actually occur, our business, results of operations and financial condition could suffer.
The loss of Robert McBey, Our Chief Executive Officer and Chairman of the Board, or other key personnel, or failure to attract and retain other highly qualified personnel, could harm our business. Our future success depends in large part on the continued services of senior management and other key personnel.
The loss of our Chief Executive Officer, Chief Financial Officer, or other key personnel, or failure to attract and retain other highly qualified personnel, could harm our business. Our future success depends in large part on the continued services of senior management and other key personnel.
As part of the Broker-Dealer Acquisition Agreement AtlasClear assumed certain liabilities of Wilson-Davis and as part of the Bank Acquisition Agreement, AtlasClear will assume certain liabilities of Commercial Bancorp. There may be liabilities that AtlasClear failed or was unable to discover in the course of performing due diligence investigations into these companies.
As part of the Broker-Dealer Acquisition Agreement, AtlasClear assumed certain liabilities of Wilson-Davis and as part of the Bank Acquisition Agreement, AtlasClear expects to assume certain liabilities of Commercial Bancorp if the transaction is consummated. There may be liabilities that AtlasClear failed or was unable to discover in the course of performing due diligence investigations into these companies.
Prior to such time, AtlasClear had no operations or assets. Upon Closing, AtlasClear received certain intellectual property from Atlas FinTech and Atlas Financial Technologies Corp., acquired the Pacsquare Assets and completed the acquisition of Wilson-Davis. AtlasClear expects to complete CB Merger or a similar acquisition, however, we cannot assure you that the CB Merger will be completed as anticipated.
Upon Closing, AtlasClear received certain intellectual property from Atlas FinTech and Atlas Financial Technologies Corp., acquired the Pacsquare Assets and completed the acquisitions of Wilson-Davis. AtlasClear expects to complete CB Merger or a similar acquisition, however, we cannot assure you that the CB Merger will be completed as anticipated.
Also in connection with the Closing, AtlasClear Holdings agreed to settle certain accrued expenses and other obligations to certain parties through the issuance of an aggregate of 2,201,010 shares of Common Stock and intends to, in the future, issue additional shares of Common Stock, to settle other accrued expenses and obligations.
Also in connection with the Closing, AtlasClear Holdings agreed to settle certain accrued expenses and other obligations to certain parties through the issuance shares of Common Stock and intends to, in the future, issue additional shares of Common Stock, to settle other accrued expenses and obligations.
Our leverage and debt service obligations could adversely impact our business, including by: ● impairing our ability to generate cash sufficient to pay interest or principal, including periodic principal payments; ● increasing our vulnerability to general adverse economic and industry conditions; ● requiring the dedication of a portion of our cash flow from operations to service our debt, thereby reducing the amount of our cash flow available for other purposes, including capital expenditures, dividends to stockholders or to pursue future business opportunities; ● requiring us to sell debt or equity securities or to sell some of our core assets, possibly on unfavorable terms, to meet payment obligations; ● limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we compete; and ● placing us at a possible competitive disadvantage with less leveraged competitors and competitors that may have better access to capital resources.
Our leverage and debt service obligations could adversely impact our business, including by: ● impairing our ability to generate cash sufficient to pay interest or principal, including periodic principal payments; ● increasing our vulnerability to general adverse economic and industry conditions; ● requiring the dedication of a portion of our cash flow from operations to service our debt, thereby reducing the amount of our cash flow available for other purposes, including capital expenditures, dividends to stockholders or to pursue future business opportunities; ● requiring us to sell debt or equity securities or to sell some of our core assets, possibly on unfavorable terms, to meet payment obligations; ● limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we compete; and ● placing us at a possible competitive disadvantage with less leveraged competitors and competitors that may have better access to capital resources. ​ Any of the foregoing factors could have negative consequences on our financial condition and results of operations. ​ Limited insurance coverage and availability may prevent us from obtaining insurance to cover all risks of loss.
This could materially adversely affect us and lead to a decline in the market price of our Common Stock. 36 Table of Contents Quantum has identified material weaknesses in its internal control over financial reporting.
This could materially adversely affect us and lead to a decline in the market price of our Common Stock. 29 Table of Contents We have identified material weaknesses in its internal control over financial reporting.
If Quantum identifies any new material weaknesses in the future, any such newly identified material weakness could limit Quantum’s ability to prevent or detect a misstatement of Quantum’s accounts or disclosures that could result in a material misstatement of Quantum’s annual or interim financial statements.
If we identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of accounts or disclosures that could result in a material misstatement of annual or interim financial statements.
If Quantum is unable to develop and maintain an effective system of internal control over financial reporting, Quantum may not be able to accurately report its financial results in a timely manner, which may adversely affect investor confidence in Quantum and materially and adversely affect Quantum’s business and operating results.
If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in our Company and materially and adversely affect our business and operating results.
Wilson-Davis’ compliance measures to detect and prevent employee misconduct may not be effective or deemed adequate by regulatory authorities. 32 Table of Contents If the Pacsquare Assets are not successfully implemented or integrated into the Company’s business, or do not perform adequately, this could adversely affect the Company’s business, financial condition and results of operations, and could damage its reputation.
Wilson-Davis’ compliance measures to detect and prevent employee misconduct may not be effective or deemed adequate by regulatory authorities. If the Pacsquare Assets do not successfully scale, as the Company’s business grows, or do not perform adequately, this could adversely affect the Company’s business, financial condition and results of operations, and could damage its reputation.
This may make comparison of our financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. 43 Table of Contents We will remain an emerging growth company until the earliest of: (i) the last day of the fiscal year following the fifth anniversary of the closing of Quantum’s initial public offering (“IPO”), (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion; (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our Common Stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year; or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. ​ Item 1B.
This may make comparison of our financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. 36 Table of Contents We will remain an emerging growth company until the earliest of: (i) June 30, 2026, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion; (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our Common Stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year; or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. ​ Our operating results may be negatively impacted by unfavorable economic and market conditions and the uncertain geopolitical environment.
Wilson-Davis may be unable to attract and retain registered representatives and other professional employees. There is intense competition for experienced registered representatives with a knowledge of over-the-counter markets and a large customer network. Further, many customers may be more loyal to individual representatives than to the firm itself.
There is intense competition for experienced registered representatives with a knowledge of over-the-counter markets and a large customer network. Further, many customers may be more loyal to individual representatives than to the firm itself.
The occurrence of various unforeseeable events such as natural disasters, pandemics, terrorism and acts of war, could result in fewer customer orders and, as a result, decreased commissions and revenue, resulting in a significant impact on Wilson-Davis’ ability to conduct business and adversely affecting its results of operations and financial condition.
The occurrence of various unforeseeable events such as natural disasters, pandemics, terrorism and acts of war, could result in fewer customer orders and, as a result, decreased commissions and revenue, resulting in a significant impact on Wilson-Davis’ ability to conduct business and adversely affecting its results of operations and financial condition. ​ Wilson-Davis may be unable to attract and retain registered representatives and other professional employees.
Wilson-Davis’ recent revenue and profitability have been adversely affected by the general downturn in the securities markets since early 2022, resulting from rising inflation, increasing interest rates, the lingering economic effects of the COVID pandemic, supply chain disruptions, the military conflict in Ukraine and Israel, Hamas’ attack on Israel and the ensuing war and other factors.
Wilson-Davis’ revenue and profitability had been adversely affected by general downturns in the securities markets since early 2022, resulting from rising inflation, increased interest rates, the lingering economic effects of the COVID-19 pandemic, the military conflict in Ukraine and Israel, Hamas’ attack on Israel and the ensuing war and other factors.
Item 1A. Risk Factors Investing in our Common Stock involves risk. You should carefully consider the risks described below as well as all the other information in this Annual Report on Form 10-K, including the consolidated financial statements and the related notes included in this report.
Item 1A. Risk Factors Investing in our Common Stock involves risk. You should carefully consider the risks described below as well as all the other information in this Annual Report, including the consolidated financial statements and the related notes included in this report. The risks and uncertainties described below are not the only risks and uncertainties we face.
If we are unable to attract and retain suitably qualified individuals who are capable of meeting our growing technical, operational, and managerial requirements, on a timely basis or at all, our business, operating results, and financial condition may be adversely affected. Changes in tax rates or the adoption of new tax legislation may adversely impact our financial results.
If we are unable to attract and retain suitably qualified individuals, including a new Chief Executive Officer, who are capable of meeting our growing technical, operational, and managerial requirements, on a timely basis or at all, our business, operating results, and financial condition may be adversely affected.
Wilson-Davis and certain of its personnel are subject to various regulatory disciplinary orders that could be the basis of future regulatory action. Wilson-Davis and certain of its personnel are subject to previous disciplinary orders by FINRA and the SEC which, by their terms, do not expire.
Wilson-Davis and certain of its personnel are subject to various regulatory disciplinary orders that could be the basis of future regulatory action. Wilson-Davis is subject to previous disciplinary orders by FINRA and the SEC which, by their terms, do not expire. FINRA and the SEC can impose special supervision and compliance measures and may increase future regulatory scrutiny.
Conversely, employees may voluntarily terminate their employment at any time, for any reason, and without notice, and the risk of forfeiting equity incentives and/or losing other employee benefits might not be sufficient incentive for them to remain employed with us.
Conversely, employees may voluntarily terminate their employment at any time, for any reason, and without notice, and the risk of forfeiting equity incentives and/or losing other employee benefits might not be sufficient incentive for them to remain employed with us. If we lose the services of our senior management, as was the case with Mr. McBey and Mr.
On April 12, 2024, the closing price of the Common Stock as reported by the NYSE American was $1.43 per share, which price was less than the $11.50 per share exercise price of the Private Warrants. We cannot assure you that our Warrants will be in the money after the date of this report and prior to their expiration.
On September 24, 2025, the closing price of the Common Stock as reported by the NYSE American was $0.67 per share, which price was less than the $690 per share exercise price of the Private Warrants. We cannot assure you that our Warrants will be in the money after the date of this report and prior to their expiration.
We may require substantial funding to finance our operations, but adequate financing may not be available when we need it, on acceptable terms or at all. We expect to raise capital through public or private financing or other arrangements.
We may require substantial funding to finance our operations, but adequate financing may not be available when we need it, on acceptable terms or at all.
The requirement that we repay the Funicular Note, the Seller Notes and the Chardan Note could adversely affect our business plan, liquidity, financial condition, and results of operations. As discussed below, the Company sold and issued the Funicular Note, the Seller Notes and the Chardan Note (collectively, the Convertible Notes”).
The requirement that we repay all outstanding notes, including the Funicular Note, could adversely affect our business plan, liquidity, financial condition, and results of operations. As discussed below, the Company sold and issued promissory notes including the Funicular Note and convertible notes under the Securities Purchase Agreement(collectively, the Convertible Notes”).
Schaible, provided an aggregate of $1,300,000 in subordinated demand notes which were funded on October 13, 2023, and FINRA approved the demand notes. The notes are expected to mature on October 13, 2024 and to have an interest rate of 5% per annum, payable quarterly.
Investors, including the owners of Wilson-Davis and Mr. Schaible, provided an aggregate of $1,300,000 in subordinated demand notes which were funded on October 13, 2023 and FINRA approved the demand notes. The notes were renewed to mature on October 13, 2025 and to have an interest rate of 5% per annum, payable quarterly.
If we lose the services of our senior management or other key personnel, or if we are unable to attract, train, assimilate, and retain the highly skilled personnel that we need, our business, operating results, and financial condition could be adversely affected. Our future success depends on our continuing ability to attract, train, assimilate, and retain highly skilled personnel.
Barber, or other key personnel, or if we are unable to attract, train, assimilate, and retain the highly skilled personnel that we need, our business, operating results, and financial condition could be adversely affected. Our future success depends on our continuing ability to attract, train, assimilate, and retain highly skilled personnel, including a new Chief Executive Officer.
Any perceived excess in the supply of our shares in the market could negatively impact our share price and any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you. An active market for our securities may not develop, which would adversely affect the liquidity and price of our securities.
Any perceived excess in the supply of our shares in the market could negatively impact our share price and any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you.
AtlasClear Holdings relies on the third-party services of Pacsquare which may expose it to additional risks and could have an adverse impact on its business. AtlasClear Holdings relies on the third-party services of Pacsquare to customize and integrate the AtlasClear Platform, source code and technology assets and to maintain the software it provides along with industry updates as needed.
AtlasClear Holdings relies on the third-party services of Pacsquare to customize and integrate the AtlasClear Platform, source code and technology assets and to maintain the software it provides along with industry updates as needed. If Pacsquare fails to perform these services properly, this could have an adverse impact on the Company’s business.
As a result of that reassessment, Quantum’s management determined that its disclosure controls and procedures were not effective as of December 31, 2021, March 31, 2022, June 30, 2022, September 30, 2022, December 31, 2022, March 31, 2023 and June 30, 2023 due to the material weaknesses with respect to compiling information to prepare Quantum’s financial statements in accordance with U.S.
As a result of that reassessment, management determined that our disclosure controls and procedures were not effective as of June 30, 2025, and June 30, 2024 due to the material weaknesses with respect to compiling information to prepare financial statements in accordance with U.S. GAAP.
Outside directors are becoming increasingly concerned with the availability of directors’ and officers’ liability insurance to pay on a timely basis the costs incurred in defending shareholder claims. Directors’ and officers’ liability insurance is expensive and difficult to obtain. The SEC and NYSE have also imposed higher independence standards and certain special requirements on directors of public companies.
Outside directors are becoming increasingly concerned with the availability of directors’ and officers’ liability insurance to pay on a timely basis the costs incurred in defending shareholder claims. Directors’ and officers’ liability insurance is expensive and difficult to obtain.
We have not timely satisfied certain payment obligations under the Funicular Note, the Sellers Notes and the Chardan Note.
We have not timely satisfied certain payment obligations under the Funicular Note and the convertible notes under the Securities Purchase Agreement.
Due to the recurring fair value measurement, we expect we will recognize non-cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material.
As a result of the recurring fair value measurement, our financial statements may fluctuate quarterly, based on factors that are outside of our control. Due to the recurring fair value measurement, we expect we will recognize non-cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material.
Issuances of shares of Common Stock pursuant to the Pacsquare Purchase Agreement, or to settle accrued expenses and obligations, and conversion of any amounts under the Seller Notes, Funicular Note and the Chardan Note, each as defined herein, would result in substantial dilution of our stockholders and may have a negative impact on the market price of our Common Stock.
Issuances of shares of Common Stock pursuant to the Pacsquare Purchase Agreement, or to settle accrued expenses and obligations, and conversion of any amounts under the Funicular Note, the Winston & Strawn Agreement, the Company’s securities purchase agreements or pursuant to the ELOC Agreement or the Second ELOC Agreement, have resulted and would continue to result in substantial dilution of our stockholders and have had and may continue to have a negative impact on the market price of our Common Stock.
In accordance with ASC 815, Derivatives and Hedging (“ASC 815”), the Company’s warrants are classified as derivative liabilities and measured at fair value on its balance sheet, with any changes in fair value to be reported each period in earnings on our statement of operations. 42 Table of Contents As a result of the recurring fair value measurement, our financial statements may fluctuate quarterly, based on factors that are outside of our control.
In accordance with ASC 815, Derivatives and Hedging (“ASC 815”), the Company’s warrants are classified as derivative liabilities and measured at fair value on its balance sheet, with any changes in fair value to be reported each period in earnings on our statement of operations.
Wilson-Davis is subject to amendments of rules adopted by NSCC that require Wilson-Davis to have excess net capital of at least $10.0 million as of October 26, 2023 if Wilson-Davis clears for an introducing broker. As of December 31, 2023, Wilson-Davis had net capital of approximately $10.8 million. Investors, including the owners of Wilson-Davis and Mr.
Wilson-Davis is subject to amendments of rules adopted by NSCC that require Wilson-Davis to have excess net capital of at least $10.0 million as of October 26, 2023 if Wilson-Davis clears for an introducing broker. As of June 30, 2025 and 2024, Wilson-Davis had net capital of approximately $11.2 million and $10.4 million, respectively.
We are a new company with no prior operating history, which makes it difficult to evaluate our business and prospects. We are a new company with no prior operating history, which makes it difficult to evaluate our business and prospects or forecast our future results. In addition, our subsidiary, AtlasClear is a new company that was formed in March 2022.
We have a short operating history, which makes it difficult to evaluate our business and prospects or forecast our future results. In addition, our subsidiary, AtlasClear was formed in March 2022. Prior to such time, AtlasClear had no operations or assets.
Further, although Wilson-Davis may ultimately conclude that no fraud or money laundering exists, regulatory authorities may disagree that the red flags pointed towards such a conclusion and may impose various penalties without needing to point to any evidence of fraud or money laundering. Any such penalties could significantly harm the financial condition and results of operations of Wilson-Davis.
Any misbehavior of or violation by Wilson-Davis’ customers may also lead to regulatory investigations into the firm. Further, although Wilson-Davis may ultimately conclude that no fraud or money laundering exists, regulatory authorities may disagree that the red flags pointed towards such a conclusion and may impose various penalties without needing to point to any evidence of fraud or money laundering.
If we are not able to complete the CB Merger, or if the combined company does not achieve the anticipated operational and financial results, the value of your investment would be materially and adversely affected. In addition, we are subject to the same risks and uncertainties frequently encountered by new companies in rapidly evolving markets.
If we are not able to complete the CB Merger, or if the combined company does not achieve the anticipated operational and financial results, the value of your investment would be materially and adversely affected.
As of the date of this report we have a total of 11,781,759 shares of Common Stock outstanding (i) without giving effect to any awards that may be issued under the Incentive Plan or any Earnout Shares that may be issued in the future, and (iii) assuming no exercise of the outstanding Warrants.
As of September 25, 2025, we had a total of 126,819,145 shares of Common Stock outstanding (i) without giving effect to any awards that may be issued under the Incentive Plan or any earnout shares that may be issued in the future, and (ii) assuming no exercise of the outstanding Warrants.
Although Wilson-Davis generally has agreements, policies, and procedures relating to cybersecurity and data privacy in place with third-party service providers, security breaches may still occur.
Further, Wilson-Davis is reliant on numerous service providers that may themselves have insufficient security measures that Wilson-Davis cannot effectively monitor. Although Wilson-Davis generally has agreements, policies, and procedures relating to cybersecurity and data privacy in place with third-party service providers, security breaches may still occur.
The price of our securities may vary significantly due to factors specific to us as well as to general market or economic conditions. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.
Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.
We cannot predict the effect, if any, that market sales of shares of our Common Stock or the availability of shares of our Common Stock for sale will have on the market price of our Common Stock prevailing from time to time.
As such, short sales of our Common Stock could have a tendency to depress the price of our Common Stock, which could further increase the potential for short sales. 32 Table of Contents We cannot predict the effect, if any, that market sales of shares of our Common Stock or the availability of shares of our Common Stock for sale will have on the market price of our Common Stock prevailing from time to time.
Our continued eligibility to maintain the listing of our Common Stock on the NYSE American depends on a number of factors, including the price of our Common Stock and the number of persons that hold our Common Stock.
Our continued eligibility to maintain the listing of our Common Stock on the NYSE American depends on a number of factors, including the price of our Common Stock and the number of persons that hold our Common Stock. Our Common Stock has traded below the $1.00 minimum share price requirement since March 25, 2025.
Our existing indebtedness, and any indebtedness we incur in the future, could adversely affect our financial condition, our ability to raise additional capital to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry and our ability to pay our debts and could divert our cash flow from operations for debt payments.
Advocacy efforts by shareholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs. 30 Table of Contents Our existing indebtedness, and any indebtedness we incur in the future, could adversely affect our financial condition, our ability to raise additional capital to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry and our ability to pay our debts and could divert our cash flow from operations for debt payments.
The financial covenants could limit our ability to make needed expenditures or otherwise conduct necessary or desirable business activities. 20 Table of Contents Risks Related to Our Business Strategy and Industry If the proposed CB Merger is completed, we may experience difficulties in integrating the operations of Wilson-Davis and Commercial Bancorp and in realizing the expected benefits of these transactions.
Risks Related to Our Business Strategy and Industry If the proposed CB Merger is completed, we may experience difficulties in integrating the operations of Wilson-Davis and Commercial Bancorp and in realizing the expected benefits of these transactions.
Our warrants are accounted for as a warrant liability and were recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of our Common Stock.
Holders of public warrants may generally only exercise such warrants for cash, subject to very limited exceptions in certain circumstances as provided for in the Warrant Agreement relating to the warrants. 35 Table of Contents Our warrants are accounted for as a warrant liability and were recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of our Common Stock.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Item 1C. Cybersecurity Prior to the consummation of our Business Combination on February 9, 2024, we had no business operations and Quantum was a special purpose acquisition company with no business operations. Since Quantum’s IPO, its sole business activity has been identifying and evaluating acquisition transaction candidates.
Added
Item 1C. Cybersecurity Board of Directors Oversight Our board of directors, as a whole and through its committees, holds oversight responsibility for our risk management processes, including risks from cybersecurity threats. Our board of directors exercises its oversight function through the audit committee, which oversees the management of risk exposure across various areas, including cybersecurity risk.
Removed
We have not adopted any cybersecurity risk management program or formal processes for assessing cybersecurity risk. Our management oversees the assessment and management of cybersecurity threats. In the event of any reportable cybersecurity incident, our management shall promptly notify our board of directors, including determining the necessary actions such as disclosure, mitigation, or other appropriate responses.
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The audit committee is comprised of board members with diverse expertise including risk management and technology, which we believe enables the board to oversee cybersecurity risks. Management’s Role Our management is responsible for day-to-day administration and management of our cybersecurity program and for informing the audit committee of cybersecurity risks.
Removed
Quantum has not encountered any cybersecurity incidents since its IPO.
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We may also work with external security service providers to support our security monitoring and threat detection capabilities. Primary responsibility for assessing, monitoring and managing our cybersecurity risks rests with our information technology team overseen by the Executive Chairman.
Added
With over twenty-five years of technology development experience in the financial services industry, our Executive Chairman is familiar with our technology infrastructure and risk profile. Our information technology team tests our infrastructure for known cybersecurity risks and leads our employee training program on matters related to cybersecurity.
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The Executive Chairman and information technology team seek to implement and oversee processes for monitoring our information systems. This includes the deployment of advanced security measures and system audits to identify potential vulnerabilities. If a potential breach is identified, it is raised to the attention of senior management to help mitigate any further vulnerabilities.
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Cybersecurity Risk Management and Strategy The goal of our cybersecurity program is to establish processes for identification, assessment, and management of cybersecurity risks. We conduct periodic risk assessments, including with support from external vendors, if needed, to assess our cyber program, identify potential areas of enhancement, and develop strategies for the mitigation of cyber risks.
Added
We also conduct security testing and have established a vulnerability detection process, supported by security testing, that is designed to address the treatment of identified security risks based on severity.
Added
Our risk assessments include, but are not limited to: Interfaces Storage security Applications Hardware security Data Remote access security 37 Table of Contents IT architecture Information flow ​ Risks from Cybersecurity Threats Some potential cybersecurity threats include, but are not limited to: ● Human errors or sabotage : Company employees or a third-party having access to the system could cause errors or allow for sabotage that may cause company losses.
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Our procedures seek to identify the risks that can be caused by human error or intent and includes processes to mitigate with a particular focus on training employees to avoid human errors. ● Data leaks : Data leaks could result in a breach of our privacy policies for customers sensitive data, resulting in potential regulatory violations or commercial litigation.
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Our processes aim to restrict access and monitor for leaks of internal and/or external data. ● Unauthorized access : Unauthorized access could be due to password theft, malware attacks, employee involvement, or hackers. Preventing unauthorized access is a top priority within our cybersecurity protocols. ● Natural or man-made disasters : Data can be threatened by natural or human disasters.
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Lightning strikes, fire, floods, hurricanes, bombings, etc. Without proper data backup, all company data could be compromised in one incident.
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Backups, co-location of servers and data is regularly monitored and adjusted as needed with a goal of insulating the Company from this type of risk. ● Failed system : Our cybersecurity policies contemplate enterprise system failures due to cyber-attacks, network connections, hardware challenges, bottleneck problems and other issues. We seek to mitigate these potential vulnerabilities through monitoring and redundancy.
Added
We have not identified any cybersecurity incidents or threats that have materially affected us or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition; however, like other companies in our industry, we and our third-party vendors may, from time to time, experience threats and security incidents relating to our and our third-party vendors’ information systems.
Added
For more information about the cybersecurity risks we face, see “ Increased cybersecurity requirements, vulnerabilities, threats, and more sophisticated and targeted computer crime could pose a risk to our systems, networks, products, services, and data ” in “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties The Company maintains its principal executive offices at 4030 Henderson Blvd., Suite 712, Tampa, FL 33629. Our facilities, which are leased, are adequate to meet our current needs though we intend to procure additional space in the future, if and as necessary, as we continue to add employees and expand our business.
Biggest changeItem 2. Properties The Company maintains its principal executive offices at 2203 Lois Avenue, Suite 814 Tampa, FL, 33607. Our facilities, which are leased, are adequate to meet our current needs though we intend to procure additional space in the future, if and as necessary, as we continue to add employees and expand our business.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not presently a party to any legal proceedings that are expected to have a material adverse impact on our financial position, results of operations or cash flows, nor have we been to date since inception.
Biggest changeItem 3. Legal Proceedings From time to time, we are subject to legal proceedings and claims in the ordinary course of business.Other than asdisclosed in Note 9, we are not presently a party to any legal proceedings that are expected to have a material adverse impact on our financial position, results of operations or cash flows.
Mine Safety Disclosures Not applicable. ​ 44 Table of Contents PART II
See Note 9 for details regarding certain legal proceedings. Item 4. Mine Safety Disclosures Not applicable. ​ 38 Table of Contents PART II
Removed
Wilson-Davis is not a party to any material legal proceedings, and no material legal proceedings have been threatened by Wilson-Davis or, to the best of its knowledge, against it, except that in December 2016, FINRA filed a complaint (FINRA Enforcement Matter No. 20120327318) asserting potential violations of several securities laws and regulations.
Removed
Wilson-Davis denied the allegations and the hearing was held in November 2017. The FINRA panel issued its decision against Wilson-Davis in February 2018. Wilson-Davis was fined $1,170,000 and ordered to disgorge $51,624 for purported improper short sales. Wilson-Davis was fined an additional $300,000 for its purported failure to supervise and implement adequate AML procedures. Wilson-Davis filed a timely appeal.
Removed
All sanctions were stayed while the appeal was pending before the FINRA National Adjudicatory Council (“NAC”). The appeal hearing before the NAC occurred in October 2018. On December 27, 2019, NAC issued a ruling that affirmed Wilson-Davis’ liability but reduced the sanctions imposed. Wilson-Davis was fined $350,000 and ordered to disgorge $51,624 for purported improper short sales.
Removed
Wilson-Davis was fined an additional $750,000 for its purported failure to supervise and implement adequate AML procedures. Wilson-Davis timely appealed the ruling to the SEC. All sanctions are stayed while the appeal is pending before the SEC. The SEC has not made a ruling in this matter. ​ Item 4.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIt is the present intention of our Board to retain all earnings, if any, for use in our business operations and, accordingly, our Board does not anticipate declaring any dividends in the foreseeable future.
Biggest changeIt is the present intention of our Board to retain all earnings, if any, for use in our business operations and, accordingly, our Board does not anticipate declaring any dividends in the foreseeable future. Unregistered Sales of Equity Securities On July 17, 2025, the Company issued 800,000 shares of Common Stock to Sandip I.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Common Stock is currently listed on NYSE American under the symbol “ATCH.” Our Public Warrants trade on the over-the-counter (“OTC”) market under the symbol “ATCHW.” Holders As of April 15, 2024, there were 67 holders of record of our Common Stock, and 1 holders of record of our Public Warrants.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Common Stock is currently listed on NYSE American under the symbol “ATCH.” Our Public Warrants trade on the over-the-counter (“OTC”) market under the symbol “ATCHW.” Holders As of September 25, 2025, there were 300 holders of record of our Common Stock, and 46 holders of record of our warrants.
Removed
Unregistered Sales of Equity Securities In 2023, we did not sell any shares of stock that were not registered under the Securities Act. ​ Item 6. [Reserved] ​
Added
Patel, P.A., a law firm that is wholly owned by Sandip I. Patel, our director, as consideration for legal and consulting services provided to the Company. The shares were valued based on the closing price of the date of issuance of $0.21 for total retainer value amount of $169,920.
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On August 11, 2025, the Company issued 200,000 shares of Common Stock as consideration for $40,000 in open invoices to Dynamic Global Strategies, our transfer agent.
Added
The information set forth in the section titled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” above with respect to the issuances under the headings, “ Financing Arrangements –August 2024 Securities Purchase Agreement ;” “ Expense Settlements – Locbox Technologies, Inc.; ” “Expense Settlements – Longside Ventures LLC ” and “ Expense Settlements – Stock Promotion Agreement ” is incorporated by reference herein.
Added
The shares of Common Stock have been or will be issued pursuant to each of the respective agreements in reliance upon the exemption from registration provided under Section 4(a)(2) and/or Rule 506 of Regulation D of the Securities Act in transactions not requiring registration under the Securities Act.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIn connection with Quantum’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Codification Subtopic 205-40, “Presentation of Financial Statements – Going Concern,” the liquidity of Quantum raises substantial doubt about its ability to continue as a going concern through the twelve months following the issuance of the financial statements.
Biggest changeSubject to the provisions of the Securities Purchase Agreements, if, during the 12-month period commencing on the date of the Closing, the Company carries out one or more Future Offerings (as defined in the Securities Purchase Agreements), each Investor will have the right to participate in an amount up to 100% of such Investor’s investment amount under the Securities Purchase Agreement in any such securities offered by the Company, subject to certain exceptions. 50 Table of Contents Going Concern In connection with AtlasClear Holdings’ assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Codification Subtopic 205-40, “Presentation of Financial Statements – Going Concern,” the liquidity of the Company raises substantial doubt about the Company’s ability to continue as a going concern through the twelve months following the issuance of the financial statements.
Critical Accounting Policies The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported.
Critical Accounting Estimates The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported.
Expense Settlements In connection with the Closing, AtlasClear Holdings and Chardan agreed that the fee, in the amount of $7,043,750, payable by Quantum to Chardan upon the Closing pursuant to the terms of the business combination marketing agreement entered into in connection with Quantum’s IPO, would be waived in exchange for the issuance by AtlasClear Holdings to Chardan of a convertible promissory note in the aggregate principal amount of $4,150,000.
Chardan Settlement In connection with the Closing, AtlasClear Holdings and Chardan agreed that the fee, in the amount of $7,043,750, payable by Quantum to Chardan upon the Closing pursuant to the terms of the business combination marketing agreement entered into in connection with Quantum’s IPO, would be waived in exchange for the issuance by AtlasClear Holdings to Chardan of a convertible promissory note in the aggregate principal amount of $4,150,000.
If Quantum is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations and reducing overhead expenses. Quantum cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.
If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.
The Short-Term Notes accrue interest at a rate of 9% per annum, payable quarterly in arrears, in shares of Common Stock at a rate equal to 90% of the trailing seven-trading day VWAP prior to payment (or, at the Company’s option, cash), and are convertible at the option of the holder at any time during the continuance of an event of default, at a rate equal to 90% of the trailing seven-trading day VWAP prior to conversion.
The Short-Term Notes accrued interest at a rate of 9% per annum, payable quarterly in arrears, in shares of Common Stock at a rate equal to 90% of the trailing seven-trading day VWAP prior to payment (or, at the Company’s option, cash), and were convertible at the option of the holder at any time during the continuance of an event of default, at a rate equal to 90% of the trailing seven-trading day VWAP prior to conversion.
You should read the following discussion together with the sections entitled “Risk Factors”,” “Business” and the audited financial statements, including the related notes, appearing elsewhere in this Annual Report. All references to years, unless otherwise noted, refer to our fiscal years, which end on December 31.
You should read the following discussion together with the sections entitled “Risk Factors”,” “Business” and the audited financial statements, including the related notes, appearing elsewhere in this annual report. All references to years, unless otherwise noted, refer to our fiscal years, which end on June 30.
The Company has the right to redeem the Funicular Note upon 30 days’ notice after the earlier of August 7, 2024 and the effectiveness of the Registration Statement (as defined in the Funicular Note), and Funicular would have the right to require the Company to redeem the Note in connection with a Change of Control (as defined in the Note), in each case for a price equal to 101% of the outstanding principal amount of the Note plus accrued and unpaid interest.
The Company had the right to redeem the Funicular Note upon 30 days’ notice after the earlier of August 7, 2024 and the effectiveness of 42 Table of Contents the Registration Statement (as defined in the Funicular Note), and Funicular would have the right to require the Company to redeem the Note in connection with a Change of Control (as defined in the Note), in each case for a price equal to 101% of the outstanding principal amount of the Note plus accrued and unpaid interest.
Actual results could materially differ from those estimates. Derivative Liabilities We account for derivative instruments as either equity-classified or liability-classified instruments based on an assessment of the derivative instruments’ specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”).
Derivative Liabilities We account for derivative instruments as either equity-classified or liability-classified instruments based on an assessment of the derivative instruments’ specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”).
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations References in this section of the Annual Report to “we,” “us” or the “Company” refer to Quantum FinTech Acquisition Corporation, a Delaware corporation. References to our “management” or our “management team” refer to our officers and directors.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations References in this section of the annual report to “we,” “us” or the “Company” refer to AtlasClear Holdings, Inc., a Delaware corporation. References to our “management” or our “management team” refer to our officers and directors.
For issued or modified derivatives that do not meet all the criteria for equity classification, the derivatives are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter.
For issued or modified derivatives that do not meet all the criteria for equity classification, the derivatives are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the derivatives are recognized as a non-cash gain or loss on the statements of operations.
For more information about the Amendments to Broker-Dealer Acquisition Agreement, see Note 11 ( Subsequent Events ). 46 Table of Contents Convertible Note Financing On February 9, 2024, AtlasClear Holdings and Quantum entered into a securities purchase agreement (the “Funicular Purchase Agreement”) with Funicular, pursuant to which AtlasClear Holdings sold and issued to Funicular, on that date, a secured convertible promissory note in the principal amount of $6,000,000 for a purchase price of $6,000,000, in a private placement (the “Note Financing”).
Funicular Purchase Agreement On February 9, 2024, AtlasClear Holdings and Quantum entered into a securities purchase agreement (the “Funicular Purchase Agreement”) with Funicular, pursuant to which AtlasClear Holdings sold and issued to Funicular, on that date, a secured convertible promissory note (the “Funicular Note”) in the principal amount of $6,000,000 for a purchase price of $6,000,000, in a private placement (the “Note Financing”).
The Long-Term Notes accrue interest at a rate of 13% per annum, payable quarterly in arrears, in shares of Common Stock at a rate equal to 90% of the trailing seven-trading day VWAP prior to payment (or, at the Company’s option, in cash), and are convertible at the option of the holder at any time commencing six months after the Closing Date, at a rate equal to 90% of the trailing seven-trading day VWAP prior to conversion (or 85% if an event of default occurs and is continuing).
The Long-Term Notes accrued interest at a rate of 13% per annum, payable quarterly in arrears, in shares of Common Stock at a rate equal to 90% of the trailing seven-trading day VWAP prior to payment (or, at the Company’s option, in cash), and were convertible at the option of the holder at any time commencing six months after the Closing Date, at a rate equal to 90% of the trailing seven-trading day VWAP prior to conversion (or 85% if an event of default occurs and is continuing). 41 Table of Contents During the year ended June 30, 2025, the Company received conversion notice for a total $5,000,000 of principal related to the Short-Term Notes and $366,979 of interest related to the Short-Term Notes, and $6,995,624 of principal related to the Long-Term Notes and $1,036,256 of interest related to the Long-Term Notes.
Amendments to Broker-Dealer Acquisition Agreement Prior to the Closing, AtlasClear and AltasClear Holdings entered into two amendments to the Broker-Dealer Acquisition Agreement with Wilson-Davis and the then-owners of Wilson-Davis (the “Wilson-Davis Sellers”), Amendment No. 8 dated January 9, 2024 (“Amendment No. 8”) and Amendment No. 9 dated February 7, 2024 (“Amendment No. 9” and, together with Amendment No. 8, the “Amendments”).
Agreements Related to Business Combination Amendments to Broker-Dealer Acquisition Agreement Prior to the Closing, AtlasClear and AltasClear Holdings entered into two amendments to the Broker-Dealer Acquisition Agreement (as defined in the with Wilson-Davis and the then-owners of Wilson-Davis (the “Wilson-Davis Sellers”), (the “Amendments”).
For more information about the Note Financing, see Note 11 ( Subsequent Events ).
For more information about the Note Financing, see Notes 9 and 17.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our consolidated financial statements. ​ Item 7A. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, we are not required to provide the information required by this Item. ​
Item 7A. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, we are not required to provide the information required by this Item.
Removed
Overview As of December 31, 2023, Quantum was a blank check company formed under the laws of the State of Delaware on October 1, 2020, for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities.
Added
Overview Our goal is to build a cutting-edge technology enabled financial services firm that would create a more efficient platform for trading, clearing, settlement and banking, with evolving and innovative financial products such as crypto that focus on financial services firms. We are a fintech driven business-to-business platform that expects to power innovation in fintech, investing, underwriting and trading.
Removed
Recent Developments Business Combination On February 9, 2024, we consummated the previously announced transactions contemplated by the Business Combination Agreement, by and among Calculator New Pubco, Inc. (“Calculator”), Quantum, Merger Sub 1, Merger Sub 2, Inc., AtlasClear, Atlas FinTech and Robert McBey.
Added
We believe we are positioned to provide a modern, mission-critical suite of solutions to our clients, enabling them to reduce their transactions costs and compete more effectively in their businesses.
Removed
In connection with the consummation of the Business Combination, Calculator changed its name from “Calculator New Pubco, Inc.” to “AtlasClear Holdings, Inc.” As of December 31, 2023, AtlasClear Holdings was a wholly owned subsidiary of Quantum and had minimal activity since its inception. The discussion below is presenting the consolidated entity of Quantum.
Added
Our target client base for our prime banking and prime brokerage services includes financial services firms, generally with annual revenues up to $1 billion, including brokerage firms, hedge funds, pension plans, and family offices that are not adequately served by today’s larger correspondent clearing firms and banks.
Removed
Prior to the Closing, (i) AtlasClear received certain assets from Atlas FinTech and Atlas Financial Technologies Corp., and (ii) AtlasClear completed the acquisition of broker-dealer, Wilson-Davis. At Closing, the Bank Acquisition Agreement, pursuant to 45 Table of Contents which AtlasClear has agreed to acquire Commercial Bancorp, continued to be in full force and effect.
Added
Through the acquisition of Wilson-Davis, a correspondent clearing company, and the anticipated CB Merger, we expect to acquire the capabilities to provide specialized clearing and banking services to financial services firms, with an emphasis on global markets currently underserviced by larger vendors.
Removed
At Closing, AtlasClear stockholders received merger consideration in the form of 4,440,000 shares of Common Stock. In addition, the AtlasClear stockholders will receive up to 5,944,444 shares of Common Stock (the “Earn Out Shares”).
Added
Once properly integrated, anticipated synergies between Commercial Bancorp, if acquired, and Wilson-Davis are expected to allow for lower cost of capital, higher net interest margins, expanded product development and greater credit extension. In addition, we believe the AtlasClear Platform, is cutting-edge, flexible and scalable. On August 9, 2024, the Company changed its fiscal year-end from December 31 to June 30.
Removed
The Earn Out Shares will be issued to AtlasClear stockholders upon certain milestones (based on the achievement of certain price targets of Common Stock following the Closing). In the event such milestones are not met within the first 18 months following the Closing, the Earn Out Shares will be cancelled.
Added
As a result, the prior year reflects a transition period of six months, from January 1, 2024 to June 30, 2024, as previously reported in our Form 10-KT filed with the SEC on October 16, 2024. The current fiscal year covers the twelve-month period from July 1, 2024 to June 30, 2025.
Removed
Atlas FinTech will also receive up to $20 million of New Pubco Common Stock (“Software Products Earn Out Shares”), which will be issued to Atlas FinTech upon certain milestones based on the achievement of certain revenue targets of software products contributed to AtlasClear by Atlas FinTech and Atlas Financial Technologies Corp. following the Closing.
Added
As such, the periods presented in this Form 10-K are not directly comparable due to the difference in reporting periods. Where appropriate, we have included supplemental unaudited pro forma information and comparative commentary to aid in understanding period-over-period performance trends. See note 19 for further details.
Removed
The revenue targets will be measured yearly for the five years following Closing, with no catch-up between the years.
Added
Wilson-Davis Wilson-Davis is a self-clearing correspondent securities broker-dealer registered with the SEC, licensed in 50 states, District of Columbia, and Puerto Rico, and is a member in good standing of FINRA.
Removed
In connection with the stockholder vote to approve the Business Combination Agreement and the Business Combination, holders of an aggregate of 4,940,885 shares of Common Stock of Quantum properly exercised their right to have their shares redeemed for a full pro rata portion of the Trust Account, which was approximately $10.92 per share, or approximately $53.9 million in the aggregate.
Added
Wilson-Davis derives revenue principally from commissions charged on the liquidation of restricted and control microcap securities, vetting, and clearing service fees charged to introducing brokers for which Wilson-Davis clears transactions on a fully disclosed basis, and other financial service fees. Commissions are earned by executing transactions for customers.
Removed
The remaining balance of the Trust Account immediately prior to the Closing of approximately $1.2 million was used to partially fund the Business Combination. As a result of such redemptions, a total of 109,499 public shares of Common Stock Quantum remained outstanding at the Closing.
Added
Vetting fee revenues are earned when Wilson-Davis vests stock the customers want to bring into their accounts.
Removed
After giving effect to the Business Combination, the redemption of the public shares, the separation of the former units of Quantum, the issuance of shares of Common Stock as merger consideration and the issuance of shares of Common Stock pursuant to Expense Settlements (described below), as of the Closing date, there were 11,781,759 shares of Common Stock issued and outstanding.
Added
Clearing fees are earned by clearing transactions for Glendale Securities, as introducing broker on a fully disclosed basis, pursuant to a clearing agreement with Glendale Securities. 40 Table of Contents Key Factors Impacting Wilson-Davis’ Business Wilson-Davis’ business and results of operations have been, and will continue to be, affected by numerous factors and trends, which Wilson-Davis believes include those discussed in the section titled “Risk Factors” of the Annual Report. ● Liquidity .
Removed
Non-Redemption Agreement On August 1, 2023, Quantum and Quantum Ventures entered into a non-redemption agreement (the “Non-Redemption Agreement”) with Funicular Funds, LP (the “Holder”) in exchange for the Holder agreeing either not to request redemption in connection with the Extension (as defined below) or to reverse any previously submitted redemption demand in connection with the Extension with respect to an aggregate of 2,351,800 shares of Common Stock at the special meeting of stockholders called by the Company to, among other things, approve an amendment to the Company’s amended and restated certificate of incorporation to extend the date by which the Company must consummate an initial business combination to up to February 9, 2024 or such earlier date as is determined by the board of directors of the Company to be in the best interests of the Company (the “Extension”).
Added
As a clearing broker-dealer in the U.S., Wilson-Davis is subject to cash deposit requirements with clearing organizations, brokers, and banks that may be large in relation to its total liquid assets. ● Growth of Customer Base . Wilson-Davis’ growth requires continued use of its services by new customers. ● Expanding Wilson-Davis’ Relationship with Existing Customers .
Removed
In consideration of the foregoing agreement, immediately prior to, and substantially concurrently with, the closing of an initial business combination, (i) Quantum Ventures agreed to surrender and forfeit to the Company for no consideration an aggregate of 235,180 shares of Common Stock held by Quantum Ventures (the “Forfeited Shares”) and an aggregate of 235,180 warrants held by Quantum Ventures to purchase 235,180 shares of Common Stock (the “Forfeited Warrants”) and (ii) the Company agreed to issue to the Holder a number shares of Common Stock equal to the number of Forfeited Shares and a number of warrants to purchase shares of Common Stock equal to the number of Forfeited Warrants.
Added
Wilson-Davis’ ability to expand its relationship with its existing customers will be an important contributor to its long-term growth. ● Market Trends . As financial markets grow and contract, Wilson-Davis’ customers’ behaviors are affected.
Removed
As of February 9, 2024, there are no further obligations under the Non-Redemption Agreement and the agreement is terminated.
Added
Wilson-Davis’ revenue and profitability can be affected by general downturns in the securities markets, resulting from factors such as increased inflation, increased interest rates and other factors. Reverse Stock Split and Authorized Share Increase On December 31, 2024, the Company effected a 1-for-60 reverse stock split of its common stock.
Removed
The first quarterly interest payments on the Seller Notes were paid on April 15, 2024 in the form of an aggregate of 145,210 shares of Common Stock.
Added
As a result of the reverse stock split, every 60 shares of the Company’s issued and outstanding common stock were automatically combined into one share of common stock, with any fractional shares rounded up to the nearest whole share.
Removed
The Chardan Note was issued by AtlasClear Holdings at the Closing. The Chardan Note has a stated maturity date of February 9, 2028. Interest accrues at a rate per annum equal to 13%, and is payable quarterly on the first day of each calendar quarter.
Added
The reverse stock split did not change the par value of the common stock however the Company increased the number of authorized shares to 525,000,000 shares, consisting of 500,000,000 shares of Common Stock and 25,000,000 shares of Preferred Stock. The reverse stock split has been applied retroactively in the accompanying consolidated financial statements and related disclosures for all periods presented.
Removed
On each interest payment date, the accrued and unpaid interest shall, at the election of AtlasClear Holdings, be either paid in cash or, subject to the satisfaction of certain conditions, in shares of Common Stock, at a rate equal to 85% of the VWAP for the trading day immediately prior to the applicable interest payment date.
Added
All share and per-share amounts, including earnings per share (“EPS”), have been adjusted accordingly to reflect the reverse stock split as if it had occurred at the beginning of the earliest period presented.
Removed
The Chardan Note is convertible, in whole or in part, into shares of Common Stock at the election of the holder at any time at a conversion price equal to 90% of the VWAP of the Common Stock for the trading day immediately preceding the applicable conversion date.
Added
The impact of the reverse stock split is summarized as follows: ● The total number of issued and outstanding shares of common stock decreased from 12,455,157 to 207,585 as of June 30, 2024. ● Earnings per share and other per-share data were adjusted proportionally to reflect the reverse stock split. ● The reverse stock split had no impact on the Company’s total stockholders’ equity, net income, or overall financial condition.
Removed
In addition, on each conversion date AtlasClear Holdings is required to pay to Chardan in cash (or, at AtlasClear Holdings’s option and subject to certain conditions, a combination of cash and Common Stock) all accrued interest on the Chardan Note and all interest that would otherwise accrue on the amount of the Note being converted if such converted amount would be held to three years after the applicable conversion date.
Added
Management believes that the reverse stock split was necessary to regain compliance with stock exchange listing requirements and improve marketability of the stock.
Removed
The first quarterly interest payment due on the Chardan Note has not been paid as of the date of this filing. Also in connection with the Closing, AtlasClear Holdings agreed to settle certain accrued expenses and other obligations to certain parties through the issuance of shares of Common Stock.
Added
In addition, the Company received conversion notices for a total of $1,439,586 in Merger Financing as discussed below and $256,091 of Merger Financing interest receiving a total of approximately 34,931,855 shares of Common Stock. As of September 19, 2025, all of the Seller Notes have been paid in full.
Removed
Pursuant to such arrangements, on February 9, 2024, AtlasClear Holdings issued an aggregate of 2,201,010 shares of Common Stock in settlement of obligations in the aggregate amount of $5,448,933, including the issuance of 2,000,000 shares of Common Stock to Qvent, LLC, an affiliate of Quantum Ventures, in settlement of an aggregate of $4,633,833 advanced to Quantum through the Closing Date.
Added
For more information about the Amendments to Broker-Dealer Acquisition Agreement, see Note 9 and Note 10. Contingent Guarantee In connection with the acquisition of Wilson-Davis, Quantum Ventures and AtlasFinTech transferred 14,750 common stock shares to cover a cash deficit of $4,000,000.
Removed
Additionally, on the Closing Date, AtlasClear Holdings issued notes to settle other expenses of Quantum in the aggregate principal amount of approximately $3.3 million, some of which are convertible into shares of Common Stock. For more information about the Chardan Note and additional expense settlements, see Note 11 ( Subsequent Events ).
Added
The share has a make-whole provision where the Company had to issue shares to allow the seller to recover the cash deficit, as such it was required to be accounted for under ASC 480. The Company valued the obligation as of June 30, 2024 of $3,256,863 based on the cash value that would need to be renumerated by the Company.
Removed
Results of Operations We had neither engaged in any operations nor generated any revenues through December 31, 2023. Our only activities through December 31, 2023, were organizational activities, the IPO, which is described below, and subsequent to the IPO, identifying a target company for, and completing, a business combination.
Added
The value of the cash that would be paid was deemed to be the fair value of the contingent guarantee. The Company analyzed the public sales of the shares transferred to determine the amount of cash recovered less the $4,000,000 contingent guarantee resulting in a liability due of $3,256,863.
Removed
We do not expect to generate any operating revenues until after the completion of our business combination. We generate non-operating income in the form of income on marketable securities held in the trust account and change in fair value of derivative liabilities.
Added
As of February 9, 2024 the 885,010 shares transferred were valued at $8,850,100 which was greater than the $4,000,000 guaranteed value. As such the value of the guarantee was deemed to be zero on February 9, 2024.
Removed
We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. 47 Table of Contents For the year ended December 31, 2023, we had net income of $794,950, which consists of income earned on marketable securities held in trust account of $3,090,086, net gain on settlement of $829,853, change in fair value of non-redemption agreement liability of $439,787 and interest income from bank of $22,195, partially offset by change in fair value of warrant liability of $123,062, operating costs of $2,737,871 and provision for income taxes of $726,038.
Added
As a result of the decrease in stock prices through June 30, 2024 the Sellers have recovered $743,137 in cash through sales of the shares transferred resulting in the value of the liability as of June 30, 2024 of $3,256,863.
Removed
For the year ended December 31, 2022, we had a net income of $11,045,567, which consists of income earned on marketable securities held in trust account of $3,087,315, change in fair value of PIPE derivative liability of $4,566,000 and change in fair value of warrant liability of $6,953,336, partially offset by operating costs of $3,024,231 and provision for income taxes of $536,853.
Added
During the year ended June 30, 2025, the Atlas FinTech agreed to transfer 20,583 in registered shares to the sellers under the contingent guarantee, resulting in a reduction in the contingent guarantee of $1,210,290 based on the fair value of the shares transferred on the transfer date.
Removed
Liquidity and Capital Resources On February 9, 2021, we consummated our IPO of 17,500,000 units, each unit consisting of one share of Common Stock, par value $0.0001 per share, and one warrant to purchase one-half of one share of Common Stock at an exercise price of $11.50, at $10.00 per unit, generating gross proceeds of $175,000,000.
Added
On August 9, 2024, the Company entered into an agreement to modify the terms of the contingent guarantee where the Company agreed to enter into a convertible note on the amount that has not yet been recovered through share issuances of $2,886,347 plus a 5% convenience fee applied resulting in the Company issuing a convertible note of $3,030,665 due February 9, 2026.
Removed
Simultaneously with the closing of our IPO, we consummated the sale of 5,562,500 Private Warrants at a price of $1.00 per Private Warrant in a private placement to Quantum Ventures and Chardan Quantum LLC (the “Co-Sponsors”), generating gross proceeds of $5,562,500.
Added
This Convertible Promissory Note (this “Merger Financing”) was issued pursuant to that certain Post-Closing Agreement dated effective August 9, 2024 (the “Agreement”), by and between the Company and the former stockholders of Wilson-Davis, to address the remaining Gross Proceeds Shortfall that cannot be remedied by the transfer of Additional Shares.
Removed
On February 12, 2021, in connection with the underwriters’ exercise of their over-allotment option in full, we consummated the sale of an additional 2,625,000 units at a price of $10.00 per unit, generating total gross proceeds of $26,250,000. In addition, we consummated the sale of an additional 590,625 Private Warrants at $1.00 per Private Warrant, generating gross proceeds of $590,625.
Added
Capitalized terms used but not defined herein shall have the meanings given to them in the Stock Purchase Agreement, as defined in the Agreement. The note was analyzed under ASC 480 and ASC 815, as a result of the Company not having sufficient shares authorized to settle the convertible note, the Merger Financing note falls under ASC 815.
Removed
Following the IPO, the full exercise of the over-allotment option, and the sale of the Private Warrants, a total of $201,250,000 was placed in the trust account. We incurred $5,017,526 in IPO related costs, including $4,528,125 of underwriting fees and $489,401 of other costs. For the year ended December 31, 2023, net cash used in operating activities was $1,819,835.
Added
During the year ended June 30, 2025, the Company received notice to convert $1,439,586 and $256,091 in interest, see Sellers Note above for total shares issued to convert principal and interest on all conversion notices received from the Sellers.
Removed
Net income of $794,950 was affected by income earned on marketable securities held in the trust account of $3,090,086, change in fair value of warrant liability of $123,062, and change in fair value of non-redemption agreement liability of $439,787.
Added
Subsequent to June 30, 2025, and through of September 25, 2025 the Company received notices to convert $1,590,358 in principal and $69,501 in interest. As of September 25, 2025, the Merger Financing was settled in full. For more information about the Contingent Guarantee and Merger Financing, see Note 9 and Note 17.
Removed
Changes in operating assets and liabilities provided $791,193 of cash for operating activities, primarily due to an increase in accounts payable and accrued expenses. For the year ended December 31, 2022, net cash used in operating activities was $1,084,259.
Added
Pacsquare Software Development and License Agreement On June 10, 2025, the Company and Pacsquare entered into a Software Development and License Agreement, where the parties agreed to supersede and replace the Pacsquare Purchase Agreement and to fully release one another from any and all obligations or claims arising from or pursuant to the prior agreement.
Removed
Net income of $11,045,567 was affected by income earned on marketable securities held in the trust account of $3,087,315, change in fair value of PIPE derivative liability of $4,566,000 and the change in fair value of warrant liability of $6,953,336.

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