XML 19 R8.htm IDEA: XBRL DOCUMENT v3.25.3
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
12 Months Ended
Jun. 30, 2025
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS  
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

AtlasClear Holdings, Inc. (formerly known as Calculator New Pubco, Inc.) (the “Company” or “AtlasClear Holdings”) is a Delaware corporation and prior to the Business Combination (defined below), was a direct, wholly-owned subsidiary of Quantum FinTech Acquisition Corporation (“Quantum”). Quantum was incorporated in Delaware on October 1, 2020. Quantum was a blank check company formed 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.

On February 9, 2024 (the “Closing Date”), the Company consummated the previously announced transactions 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 registrant (“Merger Sub 1”), Calculator Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of the registrant (“Merger Sub 2”), AtlasClear, Inc., a Wyoming corporation (“AtlasClear”), Atlas FinTech Holdings Corp., a Delaware corporation (“Atlas FinTech”) and Robert McBey. The transactions consummated as a result of 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.” As a result, the operation history of Quantum survived the merger. Pursuant to the Business Combination Agreement, AtlasClear received certain assets from Atlas FinTech and Atlas Financial Technologies Corp., a Delaware corporation, and the Broker-Dealer Acquisition Agreement (as defined in the Business Combination Agreement), AtlasClear completed the acquisition of broker-dealer, Wilson-Davis & Co., Inc. (“Wilson-Davis”).

On February 16, 2024, AtlasClear and Pacsquare Technologies, LLC (“Pacsquare”) entered into a Source Code Purchase and Master Services Agreement (the “Pacsquare Purchase Agreement”). On June 10, 2025, AtlasClear entered into an amended Software Development and License Agreement with Pacsquare, pursuant to which AtlasClear purchased a proprietary data management platform that was developed by Pacsquare, including certain software and source code (the “AtlasClear Platform”).

AtlasClear Holdings’ 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. AtlasClear Holdings is a fintech driven business-to-business platform that expects to power innovation in fintech, investing, and trading.

AtlasClear does not meet the definition of a business and therefore was treated as an asset acquisition by AtlasClear Holdings. As such the assets contributed from Atlas FinTech and the net assets of AtlasClear were recognized at historical cost. ASC 350 prohibits the recognition of goodwill in an asset purchase with related parties.

Quantum was deemed the accounting acquirer based on the following factors: i) Quantum issued cash and shares of its common stock; ii) Quantum controlled the voting rights under the no redemption and the maximum contractual redemption scenarios; iii) Quantum had the largest minority voting interest; iv) Quantum has control over the board of directors of the post-combination company and most of senior management of the post-combination company are former officers of Quantum.

Wilson-Davis is a securities broker and dealer, dealing in over-the-counter and listed securities. Wilson-Davis is registered with the Securities and Exchange Commission (the “SEC”) and is a member of the Financial Industry Regulatory Authority.

Revenue is derived principally from Wilson-Davis’ operations in three areas: commission revenue, fee revenue and interest revenue.

Wilson-Davis has operations in Utah, Arizona, California, Colorado, Florida, New York, Oklahoma and Texas. Transactions for customers are principally in the states where the Company operates, however, some customers are located in other states in which the Company is registered. Principal trading activities are conducted with other broker dealers throughout the United States.

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. 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. 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, $0.0001 par value per share (“Common Stock”), and 25,000,000 shares of Preferred Stock, $0.0001 par value per share (“Preferred Stock”).

The reverse stock split has been applied retroactively in the accompanying consolidated financial statements and related disclosures for all periods presented. 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.

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.

Management believes that the reverse stock split was necessary to regain compliance with stock exchange listing requirements and improve marketability of the stock.

Going Concern

As of June 30, 2025, the Company had $29,609,219 in its bank accounts and a working capital deficit of $6,069,462.

The Company has raised and intends to raise additional capital through loans or additional investments from its stockholders, officers, directors, or third parties. The Company’s officers and directors may, but are not obligated to loan the Company funds, from time to time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs.

In connection with the Company’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 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. 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. No adjustments have been made to the carrying amounts of assets or liabilities as a result of this uncertainty.

Inflation Reduction Act of 2022

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.

Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. As such the Company has accrued for the estimated excise tax as a result of the redemptions that occurred after December 31, 2022. As of June 30, 2025, and June 30, 2024, the excise tax payable is $2,611,618 and $2,067,572, respectively. The June 30, 2025 balance includes $544,046 in penalties due to late filing and non payment of taxes as of June 30, 2025. As of the date of filing the Company has not paid the excise tax and as such the Company may be subject to interest and penalties which have been estimated and accrued.

Transition Period Comparative Data

On August 9, 2024, the board of directors of AtlasClear Holdings, Inc. (the “Company”) determined to change the Company’s fiscal year end from December 31 to June 30. Below is a summary of financial statements for the six-month transition period from January 1, 2024 to June 30, 2024 compared to the six month period ended June 30, 2023.

1.Consolidated Balance Sheets

    

June 30, 

    

June 30, 

2024

2023

ASSETS

 

 

(Unaudited)

Current assets

Cash and cash equivalents

$

6,558,176

$

1,132,900

Cash segregated - customers

 

20,548,972

 

Cash segregated - PAB

 

200,738

 

Receivables - broker-dealers and clearing organizations

 

1,333,306

 

Receivables - customers, net

 

823,784

 

Other receivables

 

64,842

 

Prepaid expenses

 

67,967

 

29,458

Trading securities, market value, net

 

55

 

Due from Atlas Clear

 

 

49,806

Total Current Assets

 

29,597,840

 

1,212,164

Operating lease right to use lease asset

 

326,336

 

Property and equipment, net

 

16,080

 

Customer list, net

 

14,150,856

 

Goodwill

 

7,706,725

 

Pacsquare asset purchase

 

1,726,500

 

Bank acquisition deposit

 

91,200

 

Cash deposits - broker-dealers and clearing organizations

 

3,515,000

 

Other assets

 

336,017

 

Marketable securities held in Trust Account

 

 

57,409,747

TOTAL ASSETS

$

57,466,554

$

58,621,911

LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ DEFICIT

 

  

 

  

Current liabilities

 

  

 

  

Payables to customers

$

20,162,973

$

Accounts and payables to officers/directors

 

686,579

 

Accounts payable and accrued expenses

 

5,393,912

 

5,181,488

Payables - broker-dealers and clearing organizations

 

4,915

 

Commissions, payroll and payroll taxes

 

273,386

 

Current portion of lease liability

 

149,499

 

Stock payable

 

259,893

 

Convertible notes, net

 

3,783,437

 

Secured convertible note, net

 

6,857,101

 

Promissory notes

 

852,968

 

Short-term merger financing, net

 

5,092,083

 

Contingent gurantee

3,256,863

Subscription agreement

 

2,425,647

 

Excise tax payable

 

2,067,572

 

Excise taxes payable

 

 

1,485,236

Stock payable - related party

55,087

Advance from related parties

 

 

1,968,116

Promissory note – related party

 

 

480,000

Total Current Liabilities

 

51,321,915

 

9,114,840

Accrued contingent liability

 

100,000

 

Long-term merger financing, net

 

7,606,561

 

Derivative liability - convertible notes

 

16,462,690

 

Derivative liability - warrants

 

307,656

 

307,656

Earnout - liability

 

12,298,000

 

Deferred income tax liability

5,245,886

Subordinated borrowings

 

1,950,000

 

Trading account deposit

 

100,000

 

Long-term lease liability

 

182,729

 

Total Liabilities

 

95,575,437

 

9,422,496

Commitments and Contingencies

Common stock subject to possible redemption

 

 

57,113,761

Stockholders’ Deficit

Preferred stock, $0.0001 par value;

 

 

Common stock, $0.0001 par value;

 

1,246

 

503

Additional paid-in capital

 

110,164,676

 

Accumulated deficit

 

(148,274,805)

 

(7,914,849)

Total Stockholders’ Deficit

 

(38,108,883)

 

(7,914,346)

TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ DEFICIT

$

57,466,554

$

58,621,911

2.Statements of consolidated Net Income (loss)

     

Three Months Ended

    

Six Months Ended

June 30, 

June 30,

2024

     

2023

2024

    

2023

REVENUES

Commissions

$

1,750,159

$

$

2,679,673

$

Vetting fees

 

340,050

 

499,125

Clearing fees

 

624,550

 

756,393

Net gain/(loss) on firm trading accounts

 

6,390

 

10,046

Other revenue

 

9,650

 

56,246

TOTAL REVENUES

 

2,730,799

 

 

4,001,483

 

EXPENSES

 

  

 

  

 

  

 

  

Compensation, payroll taxes and benefits

 

1,355,058

 

2,386,837

Data processing and clearing costs

 

843,824

 

1,299,527

Regulatory, professional fees and related expenses

 

112,216

 

11,649,470

Stock compensation - founder share transfer

 

 

1,462,650

Communications

 

172,018

 

254,608

Occupancy and equipment

 

54,765

 

76,324

Transfer fees

 

54,807

 

75,425

Bank charges

 

52,077

 

88,253

Intangible assets amortization

 

337,911

 

791,375

Other

 

147,042

 

185,840

Operating and formation costs

 

577,313

 

1,485,122

TOTAL EXPENSES

 

3,129,718

 

577,313

 

18,270,309

 

1,485,122

LOSS FROM OPERATIONS

 

(398,919)

(577,313)

(14,268,826)

(1,485,122)

OTHER INCOME/(EXPENSE)

Interest income

 

587,637

8,458

 

938,802

8,458

Interest earned on marketable securities held in Trust Account

 

727,468

 

256,279

2,028,921

Gain on sale of assets

 

146,706

 

146,706

Net gain on settlement

 

829,853

 

829,853

Loss on AtlasClear asset acquisition

 

(17,845,813)

 

(86,392,769)

Change in fair value of warrant liability derivative

 

307,656

(184,594)

 

(123,062)

Change in fair value, convertible note derivative

 

(992,152)

 

(3,585,902)

Change in fair value, long-term and short-term note derivative

 

(3,101,057)

 

(11,208,055)

Change in fair value of non-redemption agreement

 

 

 

(164,626)

Change in fair value of Contingent guarantee

(3,256,863)

(3,256,863)

Change in fair value of earnout liability

 

(1,115,000)

 

(1,335,000)

Change in fair value of subscription agreement

 

(4,413,946)

 

(38,796)

Extinguishment of stock payable

 

985,072

 

985,072

Extinguishment of accrued expenses

 

114,199

 

879,473

Interest expense

 

(3,210,786)

 

(3,732,178)

TOTAL OTHER INCOME/(EXPENSE)

 

(31,794,347)

 

1,381,185

 

(106,507,857)

 

2,744,170

Income before provision for income taxes

 

(32,193,266)

 

803,872

 

(120,776,683)

1,259,048

Provision for income taxes

 

563,736

 

(318,313)

 

569,736

(581,118)

Net income

$

(31,629,530)

$

485,559

$

(120,206,947)

$

677,930

3.Statements of consolidated cash flow

      

Six Months Ended June 30,

2024

      

2023

Cash Flows from Operating Activities:

Net income (loss)

$

(120,206,947)

$

677,930

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Change in fair value of warrant liability derivative

123,062

Change in fair value of non-redemption agreement

164,626

Loss on AtlsClear asset acquisition

86,392,769

Change in fair value, convertible note derivative

3,585,904

Change in fair value, long-term and short-term note derivative

11,208,055

Interest expense on convertible notes

1,896,714

Transaction costs paid with stock

1,401,937

Stock based compensation

1,462,650

Change in fair value, earnout liability

1,335,000

Fee on Secured convertible note

1,500,000

Change in operating lease expense

68,727

Change in fair value, contingent guarantee

3,256,863

Interest earned on marketable securities held in Trust Account

(251,569)

(2,028,921)

Change in fair value, subscription agreement

38,796

Depreciation expense

7,565

Amortization of intangibles

791,375

Bad debt expense

2,474

Changes in operating assets and liabilities:

Due from Atlas Clear

(49,806)

Income taxes payable

44,118

Marketable securities

6,820

Receivables from brokers & dealers

2,203,271

Receivables from customers

(303,486)

Receivables from others

(59,043)

Advances and Prepaid expenses

133,158

4,194

Cash deposits with clearing organization & other B/Ds

21,664

Change in operating lease right-of-use assets

(11,713)

Other assets

49,041

Payables to customers

(5,124,740)

Payables to officers & directors

98,048

Payable to brokers & dealers

(12,903)

Deferred tax liability

(43,484)

Accounts payable and accrued expenses

(1,066,430)

443,812

Commissions and payroll taxes payable

39,638

Stock Loan

259,893

Change in operatin lease right-of-use asset

(56,900)

Receivables from brokers & dealers

Receivables from customers

Net cash provided by (used in) operating activities

(11,212,227)

(785,611)

Cash Flows from Investing Activities:

Cash withdrawn from Trust Account to pay franchise and income taxes

68,418

Investment of cash into Trust Account

(160,000)

(875,000)

Cash withdrawn from Trust Account in connection with redemption

53,947,064

1,015,001

Cash paid for purchase of Pacsquare

(500,000)

Cash received from acquisition of Wilson-Davis

33,333,876

Cash withdrawn from Trust Account for working capital purposes

1,195,565

148,523,642

Cash paid to Wilson Davis shareholders

(8,092,568)

Net cash provided by (used in) investing activities

79,792,355

148,663,643

Cash Flows from Financing Activities:

Proceeds from secured convertible note

6,000,000

Transaction costs financed

5,002,968

Repayment of advances from related party

(300,000)

Advances from related party

1,052,300

1,948,950

Redemption of common stock

(53,947,064)

(148,523,642)

Net cash provided by (used in) financing activities

(41,891,796)

(146,874,692)

Net Change in Cash

26,688,332

1,003,340

Cash – Beginning

619,554

129,560

Cash – Ending

$

27,307,886

$

1,132,900

Supplementary cash flow information:

Cash paid for income taxes

$

$

537,000

Supplemental disclosure of non-cash investing and financing activities:

Shares issued to settled advances from related party and notes payable related party

 

$

4,577,569

$

Transaction cost settled with subscription payable

 

$

2,386,851

$

Fair value of equity treated earnout in AtlasClear, Inc asset acquisition

 

$

31,347,000

$

Fair value of shares issued in AtlasClear, Inc asset acquisition

 

$

44,400,000

$

Fair value of liability treated earnout in AtlasClear, Inc asset acquisition

 

$

10,963,000

$

Fair value of shares transferred to Wilson Davis shareholders

 

$

6,000,000

$

Short term notes issued to Wilson Davis shareholders

 

$

5,000,000

$

Long term notes issued to Wilson Davis shareholders

 

$

7,971,197

$

Common stock issued to settled vendor obligations

 

$

64,376

$

Fair value of shares transferred to Secured convertible note holders

 

$

1,250,698

$

Redeemable shares transferred to permanent equity

 

$

1,195,566

$

Non-redemption agreement re-classed to permanent equity

 

$

1,606,279

$

Shares issued to purchase Pacsquare

 

$

1,226,500

$

Shares issued as deposit for Commercial bank acquisition

 

$

91,200

$

Initial Classification of derivative liability – convertible notes

 

$

1,668,731

$

Interes settled with shares

$

210,550

$

Interest settled with shares transferred by related party

$

48,750

$

Cancellation of admin fees

 

$

$

120,000

Excise tax related to redemptions

 

$

539,471

$

1,485,236

Accretion of common stock subject to possible redemption

 

$

592,577

$

2,217,201