ATCHW

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.
In particular, the following 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.
Any 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. ● 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.
We have a short operating history, which makes it difficult to evaluate our business and prospects.
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.
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.
We expect to raise capital through public or private financing or other arrangements, including through the sale of common stock pursuant to the Second ELOC Agreement (as defined herein), pursuant to which we have the right from time to time to direct Tau to purchase up to an aggregate of $12.25 million of shares of our common stock over a 24-month period, upon the terms thereof and subject to the satisfaction of certain conditions, at a discount to the VWAP of the common stock during the applicable pricing period.
In particular, our ability to sell shares to Tau and obtain funds under the Second ELOC Agreement is limited by the terms and conditions in the Second ELOC Agreement, including restrictions on the amounts we may sell to Tau at any one time.
The extent we rely on the Second ELOC Agreement as a source of funding will depend on a number of factors including the prevailing market price of our common stock and the extent to which we are able to secure working capital from other sources.
If obtaining sufficient funding from Tau were to prove unavailable or prohibitively dilutive, we will need to secure another source of funding in order to satisfy our working capital needs.
Even if we sell all $12,250,000 in shares of our Common Stock under the Second ELOC Agreement to Tau, we may still need additional capital to finance our future plans and working capital needs, and we may have to raise funds through the issuance of equity or debt securities, which we may not be able to obtain on favorable terms, if at all.
We have in the past and expect to continue to raise capital through public or private financing or other arrangements.
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.
In particular, we are dependent on the services of our Chief Executive Officer, who is critical to the future vision and strategic direction of our business.
In December 2024, we removed Robert McBey from his role as Chief Executive Officer of AtlasClear Holdings and Wilson-Davis.
Barber resigned from his role as Chief Financial Officer of AtlasClear Holdings, and in January 2025, Mr.
McBey resigned from his role as Director.
Although we have since hired a Chief Executive Officer for Wilson-Davis, and we have hired a new Chief Financial Officer for AtlasClear Holdings,we have not yet hired a new Chief Executive Officer.
If we lose the services of our senior management, as was the case with Mr.
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.
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.
Changes in the various tax laws can and do occur.
For example, in July 2025, the U.S. government enacted the One Big Beautiful Bill Act (the 2025 U.S.
Tax Act extended or made permanent many of the corporate tax changes arising under the Tax Cuts and Jobs Act passed in 2017 (the 2017 U.S.
Tax Act to have a material impact to our financial condition, results of operations, cash flows or effective tax rate.
Additional changes to tax laws (which changes may have retroactive application) could adversely affect us.
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”).
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.
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.
As of June 30, 2025 and 2024, Wilson-Davis had net capital of approximately $11.2 million and $10.4 million, respectively.
The notes were renewed to mature on October 13, 2025 and to have an interest rate of 5% per annum, payable quarterly.
During the year ended June 30, 2025, Glendale, the sole introducing broker at Wilson-Davis, provided $840,000 or approximately 6.5% of Wilson-Davis revenues.
During the six months transition period ended June 30, 2024, Glendale, the sole introducing broker at Wilson-Davis, provided $164,000 or approximately 3% of Wilson-Davis’ revenues.
During the year ended June 30, 2025 and six months transition period ended June 30, 2024, Wilson-Davis received 6% and 10% of its revenue, respectively, from securities liquidations of Canadian traded securities for customers of Canaccord Genuity.
The termination or material reduction in the securities liquidation for customers of Canaccord Genuity would have a material adverse effect on the revenues and results of operations of Wilson-Davis.
On July 10, 2025 the National Adjudicatory Council reduced the fines to an aggregate of $490,000.
The Company made a timely appeal to the SEC to hear the case.

and 83 more.

Gone since FY2023

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.
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. ● 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.
Any 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.
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.
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.
In addition, we are subject to the same risks and uncertainties frequently encountered by new companies in rapidly evolving markets.
We expect to raise capital through public or private financing or other arrangements.
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.
In particular, we are dependent on the services of Robert McBey, our Chief Executive Officer and Chairman of the Board, who is critical to the future vision and strategic direction of our business.
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.
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 to tax laws (which changes may have retroactive application) could adversely affect us.
In recent years, many such changes have been made and changes are likely to continue to occur in the future.
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”).
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.
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.
As of December 31, 2023, Wilson-Davis had net capital of approximately $10.8 million.
The notes are expected to mature on October 13, 2024 and to have an interest rate of 5% per annum, payable quarterly.
During the fiscal year ended December 31, 2023, Glendale, the sole introducing broker at Wilson, provided $244,192 or approximately 7% of Wilson-Davis’ revenues.
During the six months ended December 31, 2023 and 2022, Wilson-Davis received 10.3% and 15.8% of its revenue, respectively, from securities liquidations of Canadian traded securities for customers of Canaccord Genuity.
The termination or material reduction in the securities liquidation for customers of Canaccord Genuity would have a material adverse effect on the revenues and results of operation of Wilson-Davis.
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.
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”).
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.
However, specific employees remained subject to sanctions and restrictions on activities, particularly Wilson-Davis stockholders Lyle Davis, Byron Barkley, and James Snow, who agreed to a suspension from being associated with the firm in a principal capacity for two years, which expired in August 2023.
Wilson-Davis cannot predict the duration or severity of current economic conditions that have adversely affected its results of operations.
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.
These effects are reflected in Wilson-Davis’ financial results for the fiscal years ended December 31, 2023 and 2022.
Wilson-Davis cannot predict the duration or severity of the downturn of the current securities markets or the economic and other factors that are contributing to these market conditions.
In addition to the current securities markets and economic challenges, previous long-term market downturns, economic depressions and unforeseen events, such as the COVID-19 pandemic, have had an adverse impact on Wilson-Davis’ business.
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.
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.
Although AtlasClear expects that the AtlasClear Platform, source code and other technology assets it acquired, or will acquire, from Pacsquare would be properly implemented and integrated into the Company’s systems, we cannot assure you that a successful implementation or integration would occur, or that the AtlasClear Platform, source code, software and other technology assets would perform adequately due to among other things, errors, viruses and defects.
Prior to its implementation, AtlasClear expects that all software will be fully tested and representatives from FINRA would be provided demonstrations before they are put into production.
Nevertheless, the inability to easily integrate with the Company’s system, or any defects in or nonperformance of Pacsquare’s software could result in increased costs, customer loss and customer dissatisfaction, and could negatively impact the Company’s ability to accomplish its business goals, which could adversely affect its business, financial condition and results of operations, and could damage the Company’s reputation.

and 44 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2023 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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