AtlasClear Holdings, Inc. (“AtlasClear Holdings” or the “Company”) (NYSEAMEX: ATCH) is building a cutting-edge, technology-enabled financial services firm designed to revolutionize trading, clearing, settlement, and banking processes. The focus is on providing efficient platforms for innovative financial products, particularly for small and middle-market financial services firms.
Dear Valued Stockholders,
As Executive Chairman of AtlasClear Holdings, I am delighted to update you on the significant progress and transformative steps the Company has taken. We are on a mission to establish AtlasClear Holdings as a technologically advanced custodial and clearing enterprise, delivering comprehensive solutions to our target customer base. Our efforts are focused on attracting top-tier managerial talent, implementing cost-effective technology, and securing investments to restructure unfavorable debt, enabling future growth.
Management Enhancements
On December 12, 2024, we announced Jeff Sime as the new CEO of our subsidiary, Wilson-Davis & Co., Inc. (“Wilson-Davis”). Mr. Sime brings over 25 years of executive experience in clearing organizations, with expertise in onboarding introducing broker-dealers—a key area of focus for us. As a CPA, his skills in budgeting, forecasting, and margin efficiency will be invaluable in achieving our vision sustainably and profitably. I am eager to collaborate with Jeff to realize our ambitious goals.
Capital Investment Milestone
On December 31, 2024, we secured a pivotal investment deal with Hanire LLC (“Hanire”), totaling up to $45 million. This investment, comprising equity and convertible debt, represents a transformative step for AtlasClear Holdings. The deal includes:
- Up to $5 million equity investment at $15 per share through the sale of 333,333 common stock shares.
- A convertible loan for the balance, including an initial $5 million advance and additional advances tied to specified milestones.
The loan’s conversion terms—based on a 40% discount to the volume-weighted average price of our common stock—are significantly more favorable than current notes. Stockholder approval is required for the conversion of the loan into shares.
Strategic Benefits of the Investment
The Hanire investment enables AtlasClear Holdings to:
- Restructure existing debt with more favorable terms and reduced dilution for stockholders.
- Increase the capital base of Wilson-Davis, facilitating the expansion of its correspondent clearing business and new ventures.
- Proceed with Federal Reserve filings for the proposed acquisition of Commercial Bancorp of Wyoming, including additional capital support for the bank.
- Pursue strategic and accretive acquisitions.
While past operations were hindered by limited capital and high debt, this investment positions us to shift from a defensive strategy to pursuing our ambitious vision with vigor. For example, the recent 1-for-60 reverse stock split, undertaken to maintain our NYSE Amex listing, reflects our commitment to building a robust foundation for future growth.
Vision for 2025
As we enter 2025, AtlasClear Holdings will prioritize four primary objectives:
- Expanding Customer Base and Profitability: Our foremost goal is increasing profits and cash flow by onboarding new introducing broker-dealer customers. This strategy will scale our assets under custody and enhance lending capacity.
- Focusing on Digital Assets: We aim to establish a crypto custodial, trading, clearing, and lending platform. Regulatory clarity from the new U.S. administration could unlock the immense potential of digital assets, and we plan to play a significant role in this space.
- Acquiring Commercial Bancorp of Wyoming: Finalizing this acquisition will enable us to offer a synergistic platform to our customers. Direct borrowing capabilities from the Federal Reserve represent a substantial strategic advantage.
- Pursuing Strategic Acquisitions: We intend to acquire accretive introducing broker-dealers and synergistic digital asset companies, strengthening our portfolio and capabilities.
Digital Asset Industry Trends
Reflecting on the digital asset industry’s evolution, we foresee 2025 as a transformative year, marked by the following trends:
Institutional Adoption of Tokenized Assets
Institutional interest in tokenized money market funds (MMFs) and high-quality liquid assets (HQLA) is expected to rise. With the Commodity Futures Trading Commission (CFTC) approving these assets as collateral, operational efficiencies could significantly improve through real-time settlement and reduced counterparty risks. We anticipate tokenized assets will drive a modernization of financial market infrastructure (FMI), enhancing liquidity management and operational efficiency.
Integration of Digital and Traditional Financial Systems
The integration of blockchain with traditional financial systems remains a critical challenge. Legacy systems—governing risk management, compliance, and settlement—must adapt to the speed, transparency, and efficiency of digital assets. AtlasClear Holdings is developing solutions to bridge this gap, enabling seamless interoperability and ensuring continuity and compliance. We envision blockchain technology becoming the foundational system for financial operations, transforming workflows and decision-making processes.
Bitcoin as a Marquee Asset
We believe Bitcoin will see increased adoption among institutional investors in 2025, driven by the approval of BTC ETFs and refined risk models. This growing demand will bolster Bitcoin’s status as a key asset class, reflecting the maturing credibility of digital assets.
Regulatory Progress
Recent U.S. regulatory developments indicate a shift toward a more supportive framework for digital assets. Pro-Bitcoin leadership in key regulatory positions could foster innovation while ensuring compliance. Clearer regulations will likely facilitate the scaling of stablecoins, tokenized assets, and decentralized finance (DeFi), paving the way for a resilient and inclusive financial system.
Commitment to Innovation and Growth
AtlasClear Holdings is committed to harmonizing traditional and digital financial systems. By integrating blockchain technology into existing operations, we aim to reduce technological inefficiencies and enable institutions to adopt digital assets seamlessly. Our efforts will focus on creating interoperable frameworks, making digital assets accessible to institutions of all sizes.
The Path Forward
As we advance into 2025, we remain steadfast in our commitment to revolutionizing financial services. By expanding our customer base, integrating digital assets, acquiring strategic businesses, and embracing innovation, we are positioning AtlasClear Holdings for sustained growth and industry leadership. With regulatory clarity and technological advancements on the horizon, we believe the future of finance holds immense opportunities for our Company and stakeholders alike.
Thank you for your continued support and trust in AtlasClear Holdings. We look forward to building a brighter, more efficient future together.
Sincerely,
[Executive Chairman’s Name] Executive Chairman
AtlasClear Holdings, Inc.
