AtlasClear Holdings, Inc. (“AtlasClear Holdings” or “AtlasClear”) (NYSE American: ATCH) announced that their financial results for the first quarter ended March 31, 2024, have been released.

“I am pleased to report that our subsidiary, Wilson-Davis, delivered solid first quarter results highlighted, on a proforma basis (reflecting Wilson-Davis’ results on a stand-alone basis), by a 27.9% increase in commissions and clearing revenue. Our results today reflect our unique brokerage model that brings a one-stop technology and financing solution to fill the gap in the capital markets where smaller institutions, broker-dealers and asset managers have been at a disadvantage,” said Craig Ridenhour, President of AtlasClear. “We expect to continue to grow both organically and through further acquisitions, as well as by expanding the balance sheet for the clearing firm.”

On February 9, 2024, we closed our previously announced business combination. In connection with the transaction, AtlasClear, Inc. received certain assets from Atlas FinTech Holdings Corp., (“Atlas FinTech”) and Atlas Financial Technologies Corp. and completed the acquisition of broker-dealer, Wilson-Davis & Co., Inc.

First Quarter 2024 Highlights:

The consolidated earnings reflect net loss of $88.58 million. Below is a summary of the primary components:

• $68.5 million was a non-cash loss on the acquisition of the AtlasClear asset purchase. Under SAB topic 5G transfers of nonmonetary assets for stock prior to an initial offering should be recorded at predecessor cost in accordance with GAAP. The value of the Developed Technology was based on the carrying value of Atlas FinTech of $18.16 million. As such, in accordance with ASC 350 the company cannot recognize goodwill in an asset purchase. This is a non-recurring transaction which occurred in the first quarter. See footnote 9 to the financial statements included in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, for additional information.
• Regulatory, professional fees and related expenses of $11.54 million recognized as of March 31, 2024, was substantially due to transaction cost incurred with the business combination and asset purchase transaction with AtlasClear, Inc. Of the $11.54 million, $10.31 million were directly related to the closing of the business combination. These are non-recurring transaction expenses.
• $6.71 million are non-cash changes in fair value associated with the financing instruments issued in connection with the transaction, which included derivative elements requiring recognition of the obligations at fair value and changes in fair value recognized in earning. These consist of the conversion feature included in the short- and long-term notes to sellers, the convertible note issued to Chardan, the earnout liability, the subscription agreement and the non-redemption agreement.

The transaction in connection with Wilson-Davis was accounted for as a forward purchase transaction. As such the operation results consolidated during the three months period ended March 31, 2024, only include the operation of Wilson-Davis from February 9, 2024, through March 31, 2024. The following highlights are on a proforma basis and discuss Wilson-Davis on a stand-alone basis comparing its first quarter of 2023 to the first quarter of 2024.

• Commissions and related execution fees increased from $1,396,954 in the first quarter of 2023 to $1,786,403 in the first quarter of 2024, a 27.9% increase.
• Interest income increased 9% in 2024, driven by increases in our money market balances.
• As a stand-alone company, Wilson-Davis was profitable and we anticipate improving on that going forward.
• We expanded the scale of our income generating activities, with increased margin lending, increased stock loan business and we have begun a new line of investment banking business.

Earnings Teleconference Information

AtlasClear will discuss its first quarter financial results during a teleconference today, at 8:30 a.m. (ET). The conference call can be accessed by dialing 1-877-407-0752 (domestic) or 201-389-0912 (international). A replay of the conference call will be available at 1-844-512-2921 (domestic) or 412-317-6671 (international). The call will also be broadcast simultaneously via webcast at https://investors.atlasclear.com/. Following the completion of the call, a recorded replay of the webcast will be available on AtlasClear’s website.

About AtlasClear Holdings, Inc.

AtlasClear Holdings plans to build a cutting-edge technology enabled financial services firm that would create a more efficient platform for trading, clearing, settlement and banking of evolving and innovative financial products with a focus on the small and middle market financial services firms. The goal of AtlasClear Holdings is to have a fully vertically integrated suite of cloud-based products including account opening, trade execution, risk management, regulatory reporting and settlement. The team that leads AtlasClear Holdings consists of respected financial services industry veterans that have founded and led other companies in the industry including Penson Clearing, Southwest Securities, NexTrade and Anderen Bank.

About the Financial Technology

We are supported by robust financial technologies that we believe will enable the flow of business and success of the enterprise. Our goal is to have a full exchange platform for a spectrum of financial products. In addition, we expect to have a full prime brokerage and, following the completion of the proposed acquisition of Commercial Bancorp of Wyoming (“Commercial Bancorp”), a prime banking platform with complete front-end delivery. The enterprise is anticipated to offer a fixed income risk management platform which can be expanded to a diverse application on financial products.

About Wilson-Davis & Co., Inc.

Wilson-Davis is a full-service correspondent securities broker-dealer. The company is registered with the Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority and the Securities Investor Protection Organization. In addition, Wilson-Davis is a member of DTCC as well as the National Securities Clearing Corporation. Headquartered in Salt Lake City, Utah and Dallas, Texas. Wilson-Davis has been servicing the investment community since 1968, with satellite offices in California, Arizona, Colorado, New York, New Jersey and Florida.

Cautionary Statements Regarding Forward-Looking Statements

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that reflect AtlasClear Holdings’ current views with respect to, among other things, the future operations and financial performance of AtlasClear Holdings. Forward-looking statements in this communication may be identified by the use of words such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “foreseeable,” “future,” “intend,” “may,” “outlook,” “plan,” “potential,” “proposed,” “predict,” “project,” “seek,” “should,” “target,” “trends,” “will,” “would” and similar terms and phrases. Forward-looking statements contained in this communication include, but are not limited to, statements as to (i) AtlasClear’s expectations as to various operational results, (ii) AtlasClear’s anticipated growth strategy, including expected organic growth and acquisitions, and (iii) the financial technology of AtlasClear Holdings.

The forward-looking statements contained in this communication are based on the current expectations of AtlasClear Holdings and its management and are subject to risks and uncertainties. No assurance can be given that future developments affecting AtlasClear Holdings will be those that are anticipated. Actual results may differ materially from current expectations due to changes in global, regional or local economic, business, competitive, market, regulatory and other factors, many of which are beyond the control of AtlasClear Holdings. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Factors that could cause actual results to differ may emerge from time to time, and it is not possible to predict all of them.

Such factors include, but are not limited to: AtlasClear’s inability to successfully integrate, and/or realize the anticipated benefits of, the acquisition of Wilson-Davis & Co., Inc. and the technology acquired from Pacsquare Technologies LLC (the “Transaction”); failure to recognize the anticipated benefits of the Transaction, which may be affected by, among other things, competition, the ability of AtlasClear Holdings to maintain relationships with customers and suppliers and strategic alliance third parties, and to retain its management and key employees; AtlasClear Holdings’ inability to integrate, and to realize the benefits of, the Transaction and other potential acquisitions; changes in general economic or political conditions; changes in the markets that AtlasClear Holdings targets; slowdowns in securities or cryptocurrency trading or shifting demand for trading, clearing and settling financial products; any change in laws applicable to AtlasClear Holdings or any regulatory or judicial interpretation thereof; and other factors, risks and uncertainties, including those that were included under the heading “Risk Factors” in AtlasClear Holdings’ Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 16, 2024 and its subsequent filings with the SEC. AtlasClear Holdings cautions that the foregoing list of factors is not exhaustive. Any forward-looking statement made in this communication speaks only as of the date hereof. Plans, intentions or expectations disclosed in forward-looking statements may not be achieved and no one should place undue reliance on such forward-looking statements. AtlasClear Holdings does not undertake any obligation to update, revise or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

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