AtlasClear Holdings, Inc.

AtlasClear Holdings, Inc. operates as a fintech driven business-to-business platform focused on building a technology enabled financial services firm for trading, clearing, settlement, and banking, with evolving products such as crypto. The company targets financial services firms generally with annual revenues up to $1 billion, including brokerage firms, hedge funds, pension plans, and family offices that are underserved by larger correspondent clearing firms and banks. The industry is characterized by high barriers to entry, including expansive overhead and technology costs, complicated capital and collateral management requirements, and a complex regulatory and legal environment. The company believes legacy providers cannot offer its combination of flexibility, speed, execution, and broad asset-class capabilities, and it expects to benefit as new fintech firms launch and existing firms scale.

AtlasClear Holdings faces intense competition in all aspects of its business, competing directly with many national and regional full service financial services firms, other independent brokerage firms, and other companies offering financial services in the United States, globally, and through the Internet. AtlasClearing's principal direct competitors consist of other firms that liquidate investment and control securities in microcap stocks, including firms that clear their own securities transactions and firms that clear transactions through another firm on a fully disclosed basis. The company believes that a limited number of securities firms liquidate restricted or control microcap stocks, and that the number of broker-dealers that clear transactions in microcap stocks is declining. AtlasClear Holdings believes no single competitor has a comparable modern platform or ability to offer a truly frictionless investing, clearing, custody, and banking experience, and its leadership team has over 30 years of combined experience spanning technology, investing, custody, banking, and clearing lifecycles.

AtlasClear Holdings generates revenue through transactional and recurring sources. Transactional revenue is reliant upon customer-driven activity that results in fees, such as clearing, execution, banking, and confirms. Recurring revenue streams are expected from acting as custodian of customer assets and cash through the anticipated acquisition of Commercial Bancorp, and from investment banking, underwriting, and brokerage revenue through the anticipated acquisition of Ark Financial Services, Inc. Examples of recurring revenue include platform minimums, asset-based fees, credit and debit balances, securities lending, statements, and account maintenance. The company believes the best proxy for future revenue is the number of customer accounts on its platform.

AtlasClearing, a correspondent securities broker-dealer registered with the SEC and a member of FINRA, is engaged principally in the over-the-counter markets in microcap securities, which are issued by companies with total market capitalization values of less than $250 million, including low-priced securities trading for less than $5.00 per share with market capitalizations of less than $50 million. AtlasClearing derives revenue from the liquidation of restricted and control microcap securities, clearing transactions on behalf of introducing broker-dealers on a fully disclosed basis, and trading in equity securities for its own account. During the year ended June 30, 2026, revenues from commissions and related vetting fees accounted for approximately 46% and 7% of total revenue, respectively, while stock locate fees accounted for approximately 34% of revenue, a new line of business implemented and rapidly expanded during the year. AtlasClearing had approximately 4,826 active customer accounts as of June 30, 2026.

AtlasClearing's securities liquidation process involves selling into trading markets securities acquired by customers through registration or exemptions, requiring detailed information and supporting documentation reviewed by personnel and outside legal counsel. Clearing services are provided as a member of DTCC and NSCC, including fully disclosed clearing for Glendale Securities, with AtlasClearing maintaining a margin deposit at NSCC of $5.0 million as of June 30, 2026, well over the requirement of $1.0 million. Fully paid stock lending, introduced in 2021, allows eligible customers to lend securities to AtlasClearing, which lends them to other broker-dealers, deriving revenue from the interest spread. Margin accounts are offered on a limited basis, with credit extended for up to 50% of the cost of new securities purchases under Regulation T, and maintenance requirements generally ranging from 25% to 60%. AtlasClearing also engages in market making, underwriting limited to Best Effort offerings, and on a limited basis sells mutual funds and real estate investment trusts.

During the fiscal year, AtlasClear Holdings entered into a share purchase agreement on February 5, 2026, to acquire Commercial Bancorp of Wyoming, the owner of Farmers State Bank, for consideration consisting of cash and Common Stock, with an earnest money deposit of $100,000. The company also anticipates the acquisition of Ark Financial Services, Inc., the holding company of Dawson James, and an institutional digital asset business. Effective August 25, 2026, Wilson-Davis was rebranded as AtlasClearing Inc. The company entered into various financing arrangements, including convertible promissory notes and a securities purchase agreement on October 8, 2025, and a settlement agreement with Winston & Strawn LLP on January 26, 2026.

AtlasClear Holdings reported a net loss for the fiscal year ended June 30, 2026, with total revenues of $23.486 million, compared to $13.986 million in the prior year. The company's net loss was $17.8 million, compared to a net loss of $13.2 million in the prior year. AtlasClearing's net capital was $14.4 million as of June 30, 2026, with excess net capital of $14.2 million, compared to net capital of $11.2 million and excess net capital of $10.9 million as of June 30, 2025.

A primary growth vector is the anticipated acquisition of Commercial Bancorp of Wyoming, which would provide banking capabilities, allowing the company to act as custodian of customer assets and cash, and is expected to enable lower cost of capital, higher net interest margins, expanded product development, and greater credit extension. The Purchase Agreement provides for consideration based on three times the adjusted book value of the operational portion of equity capital, plus the value of the Premises and the NOL Tax Benefit, payable in various combinations of cash and stock. The company also anticipates the acquisition of Ark Financial Services, Inc., the holding company of Dawson James, to generate investment banking, underwriting, and brokerage revenue, and an institutional digital asset business.

Another growth vector is the expansion of AtlasClearing's stock locate services, which was an entirely new line of business implemented and rapidly expanded during the year ended June 30, 2026, with stock locate fees accounting for approximately 34% of revenue. The company also plans to grow its client base organically and through channel partners, expecting to benefit from the demand for cost efficiencies and the speed of bringing client offerings to market. International expansion is a potential opportunity, with operations initially U.S.-focused but with plans to expand into international markets experiencing secular tailwinds similar to the U.S., such as growth of mobile and digital solutions.

AtlasClear Holdings expects to selectively pursue acquisitions that enhance product capabilities, broaden client reach, drive further scale, increase presence in new geographies, and generate attractive financial returns. The company plans to evaluate acquisition opportunities against alternatives such as building capabilities in-house or partnering with third parties. The company's growth strategy includes growing clients' revenue by providing tools to streamline complex aspects of custody clearing and banking, and by enhancing product offerings with more products, capabilities, and functionality.

AtlasClearing's strategy includes expanding principal securities liquidation activities through retail customer marketing, identifying opportunities to provide clearing services to additional broker-dealers, particularly those dealing in micro-cap securities, fully marketing its recently introduced fully paid stock lending and margin capabilities, participating as agent in selected at-the-market equity offerings and private placements, and broadening its range of services to reactivate historical offerings.

AtlasClear Holdings expects to raise capital through public or private financing or other arrangements, and may sell equity or debt securities in one or more transactions. The company's ability to service its significant indebtedness and to raise additional financing is a key factor in its outlook. The company has not declared a dividend and does not have a share repurchase program disclosed in the filing.

The company faces headwinds from uncertain global macro-economic and political conditions, including inflation, deflation, interest rates, availability of capital, war, terrorism, pandemics, energy and commodity prices, trade laws, election cycles, and governmental initiatives. The Federal Reserve has raised, and may again raise, interest rates in response to inflation concerns, which could impact the company's ability to access capital markets. The company may require substantial funding to finance operations, and adequate financing may not be available on acceptable terms or at all.

AtlasClearing faces risks from the over-the-counter markets for microcap securities, which frequently have limited trading volume and volatile trading prices. The company is substantially dependent on one principal customer, Canaccord Genuity, and faces risks from regulatory enforcement proceedings, anti-money laundering compliance, and the need to maintain excess net capital above the NSCC requirement of $10 million to continue providing correspondent clearing services.

The company faces significant risks related to its substantial indebtedness, including the requirement to repay the Restated Note and restrictive covenants under the Convertible Notes that could limit growth and the ability to finance operations. If the company is not able to raise sufficient capital to satisfy payment obligations under the Convertible Notes, or otherwise restructure them, and payment is demanded, the company will be in default and may not be able to continue as a going concern. AtlasClearing is substantially dependent on one principal customer, Canaccord Genuity, with 7% of commissions attributable to securities liquidations referred by Canaccord during the year ended June 30, 2026. The company faces risks from the over-the-counter markets for microcap securities, which frequently have limited trading volume and volatile trading prices, and the penny stock rules limit trading practices. AtlasClearing must maintain excess net capital above the NSCC requirement of $10 million to continue providing correspondent clearing services, and as of June 30, 2026, it had excess net capital of $14.2 million. The company is subject to extensive regulation and may face significant regulatory enforcement proceedings, and its procedures to comply with anti-money laundering regulations may not be sufficient to assure compliance.

Management's message emphasizes the goal of building a cutting-edge technology enabled financial services firm that creates a more efficient platform for trading, clearing, settlement, and banking, with evolving and innovative financial products such as crypto. The company believes it is positioned to provide a modern, mission-critical suite of solutions to clients, enabling them to reduce transaction costs and compete more effectively. Key strategic priorities include completing the acquisitions of Commercial Bancorp and Ark Financial Services, integrating these acquisitions to realize synergies, and growing the client base organically and through channel partners. Management highlights the experience of the leadership team, with over 30 years of combined experience spanning technology, investing, custody, banking, and clearing lifecycles, and the belief that the AtlasClear Platform is cutting-edge, flexible, and scalable.