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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: 001-41956

AtlasClear Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware		92-2303797
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2203 Lois Avenue, Suite 814 Tampa, FL		33607
(Address of principal executive offices)		(Zip Code)

(727) 446-6660

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.0001 par value per share		ATCH		NYSE American LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 7, 2026, there were 150,337,774 shares of Common Stock, $0.0001 par value, issued and outstanding.

ATLASCLEAR HOLDINGS, INC.

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2026

TABLE OF CONTENTS

	Page
Part I. Financial Information	3
Item 1. Interim Consolidated Financial Statements	3
Condensed Consolidated Balance sheet as of March 31, 2026 (unaudited) and June 30, 2025	3
Condensed Consolidated Statements of Operations for the three and nine-months ended March 31, 2026 and 2025 (Unaudited)	4
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three and nine-months ended March 31, 2026 and 2025 (Unaudited)	5
Condensed Consolidated Statements of Cash Flows for the nine-months ended March 31, 2026 and 2025 (Unaudited)	7
Notes to Condensed consolidated financial Statements (Unaudited)	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
Item 3. Quantitative and Qualitative Disclosures About Market Risk	46
Item 4. Controls and Procedures	46
Part II. Other Information	47
Item 1. Legal Proceedings	47
Item 1A. Risk Factors	47
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	47
Item 3. Defaults Upon Senior Securities	47
Item 4. Mine Safety Disclosures	47
Item 5. Other Information	47
Item 6. Exhibits	48
Signatures	49

PART I - FINANCIAL INFORMATION

Item 1. Interim Consolidated Financial Statements.

ATLASCLEAR HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2026			June 30, 2025
	(Unaudited)
ASSETS
Cash and cash equivalents	$	16,706,099		$	7,533,690
Cash segregated - customers		23,789,820			21,874,954
Cash segregated - PAB		676,084			200,575
Receivables - broker-dealers and clearing organizations		4,253,025			4,179,625
Receivables - customers, net, net of allowance for credit losses of $401,128 and $401,128 as of March 31, 2026 and June 30, 2025, respectively		783,769			320,815
Other receivables		37,161			251,099
Prepaids		674,588			573,175
Trading securities, market value, net		39			5
Total Current Assets		46,920,585			34,933,938

Operating lease right to use lease asset		627,057			179,267
Customer list, net		12,017,209			12,932,106
Goodwill		6,142,525			6,142,525
Pacsquare asset purchase		1,640,351			1,785,104
Cash deposits - broker-dealers and clearing organizations		5,512,500			4,265,000
Bank acquisition deposit		128,645			63,645
Other assets		926,934			591,248
TOTAL ASSETS	$	73,915,806		$	60,892,833

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
LIABILITIES
Payables to customers	$	22,889,139		$	23,935,348
Accounts and payables to officers/directors		58,278			199,088
Accounts payable and accrued expenses		2,623,346			6,194,311
Payables - broker-dealers and clearing organizations		3,193,373			497,660
Commissions, payroll and payroll taxes		367,845			395,214
Current portion of lease liability		309,958			111,983
Promissory notes		564,650			1,207,797
Current portion of long-term merger financing, net		—			980,106
Merger financing payable		—			1,618,575
Merger financing payable - derivative		—			63,696
Tau agreement liability		—			539,787
Debenture		412,644			—
Debenture – derivative		346,585			—
Convertible Notes - derivative		—			103,185
Winston & Strawn agreement		—			2,489,945
Stock payable – related party		55,087			55,087
Excise tax payable		—			2,611,618
Total Current Liabilities		30,820,905			41,003,400

Accrued contingent liability		100,000			100,000
Secured convertible note, net		11,706,148			8,909,070
Long-term convertible note Chardan, net		—			718,866
2025 Warrants		2,754,751			—
Derivative liability - Warrants		108,910			123,062
Earnout - liability		689,000			11,369,000
Deferred income tax liability		3,119,827			3,366,137
Subordinated borrowings		1,930,000			1,930,000
Trading account deposit		100,000			100,000
Long-term lease liability		327,686			70,746
TOTAL LIABILITIES		51,657,227			67,690,281

Commitments and Contingencies (Note 8)		-			-

STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, $0.0001 par value; 25,000,000 shares authorized; none issued or outstanding		—			—
Common stock, $0.0001 par value; 500,000,000 shares authorized; 149,794,297 and 40,165,603 shares issued and outstanding at March 31, 2026 and June 30, 2025, respectively		14,979			4,016
Additional paid-in-capital		157,783,898			135,763,445
Stock subscription receivable		(41,089	)		(41,089	)
Accumulated Deficit		(135,499,209	)		(142,523,820	)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		22,258,579			(6,797,448	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	73,915,806		$	60,892,833

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

ATLASCLEAR HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	2026			2025			2026			2025
	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2026			2025			2026			2025
REVENUES
Commissions	$	1,412,339		$	1,506,077		$	6,844,429		$	4,488,058
Vetting fees		430,525			370,700			1,154,075			1,093,684
Clearing fees		661,950			658,926			1,958,447			2,491,865
Net gain/(loss) on firm trading accounts		336,860			1,527			542,318			5,483
Stock locate fees		1,360,178			5,873			3,010,267			14,594
TOTAL REVENUES		4,201,852			2,543,103			13,509,536			8,093,684

EXPENSES
Compensation, payroll taxes and benefits		2,329,261			1,549,228			8,243,452			4,408,714
Data processing and clearing costs		999,545			435,307			2,551,573			1,676,686
Stock locate expense		256,119			—			718,056			—
Regulatory, professional fees and related expenses		1,540,079			844,374			3,299,426			3,041,609
Stock compensation expense		1,154,829			—			2,483,600			—
Communications		156,889			209,632			566,011			488,475
Occupancy and equipment		59,822			51,215			142,523			159,647
Transfer fees		41,417			51,264			129,916			142,771
Bank charges		57,916			56,933			175,120			166,259
Bad debt		14,561			976			12,754			7,322
Intangible assets amortization		348,060			348,060			1,059,650			1,010,519
Other		176,213			68,288			392,874			154,107
TOTAL EXPENSES		7,134,711			3,615,277			19,774,955			11,256,109

LOSS FROM OPERATIONS		(2,932,859	)		(1,072,174	)		(6,265,419	)		(3,162,425	)

OTHER INCOME/(EXPENSE)
Interest income		432,618			515,849			1,412,334			1,582,922
Change in fair value of warrant liability derivative		250,662			61,531			2,038,793			246,125
Change in fair value of convertible note derivative		—			—			382,154			3,990,385
Change in fair value of long-term and short-term note derivative		—			137,687			103,185			11,585,286
Change in fair value of contingent guarantee		—			—			—			(839,775	)
Change in fair value of secured convertible note		717,577			—			(1,078,855	)		—
Change in fair value of merger financing		—			48,116			63,696			10,670
Change in fair value of earnout liability		172,000			(186,000	)		10,680,000			1,068,000
Change in fair value of Winston & Strawn agreement		—			(11,404	)		1,799,545			(59,286	)
Change in fair value of debenture derivative		236,484			—			5,482			—
Change in fair value of stock payable		—			11,383			—			232,793
Change in fair value of Tau agreement		—			53,152			334,549			(707,547	)
Loss on settlement on Winston & Strawn agreement		(570,300	)		—			(570,300	)		—
Interest expense		(432,620	)		(2,765,180	)		(4,644,746	)		(6,889,461	)
TOTAL OTHER INCOME/(EXPENSE)		806,421			(2,134,866	)		10,525,837			10,220,112

NET INCOME/(LOSS) BEFORE INCOME TAXES		(2,126,438	)		(3,207,040	)		4,260,418			7,057,687

Income tax (expense) benefit		195,554			304,212			152,575			367,828

NET INCOME/(LOSS)	$	(1,930,884	)	$	(2,902,828	)	$	4,412,993		$	7,425,515

Basic weighted average shares outstanding, Common Stock		148,000,149			2,322,772			116,647,478			975,727
Basic net income (loss) per share, Common Stock	$	(0.01	)	$	(1.25	)	$	0.04		$	7.61

Diluted weighted average shares outstanding, Common Stock		148,000,149			2,322,772			136,346,439			975,727
Diluted net income (loss) per share, Common Stock	$	(0.01	)	$	(1.25	)	$	0.05		$	(0.52	)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

ATLASCLEAR HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2026

	Shares		Amount		Capital		Receivable			Deficit			Deficit
	Common Stock				Additional Paid-in		Subscription			Accumulated			Total Stockholders’ Equity
	Shares		Amount		Capital		Receivable			Deficit			(Deficit)
Balance — June 30, 2025		40,165,603	$	4,016	$	135,763,445	$	(41,089	)	$	(142,523,820	)	$	(6,797,448	)

Shares issued as conversion of $2,680,437 principal and interest on long-term and merger financing notes		15,922,008		1,592		2,678,845		—			—			2,680,437

Shares issued as conversion of $9,591,650 in principal and interest on secured convertible notes		63,944,332		6,394		9,585,256		—			—			9,591,650

Shares issued as conversion of $959,764 in principal on convertible notes Chardan		4,845,072		485		959,279		—			—			959,764

Shares issued under Software as a Service License Agreement		356,901		36		57,785		—			—			57,821

Shares issued as conversion of $438,922 in principal and interest on promissory note		585,229		58		438,864		—			—			438,922

Shares issued for consulting services provided by director.		800,000		80		169,840		—			—			169,920

Shares issued to settled vendor invoice		200,000		20		39,980		—			—			40,000

Vested portion of stock based compensation		—		—		155,411		—			—			155,411

Net loss		—		—		—		—			(440,294	)		(440,294	)

Balance — September 30, 2025 (unaudited)		126,819,145	$	12,681	$	149,848,705	$	(41,089	)	$	(142,964,114	)	$	6,856,183

Shares issued to settle vendor invoice		517,744		52		166,321		—			—			166,373

Shares issued as conversion of $324,462 in principal and interest on promissory note		576,616		58		324,404		—			—			324,462

Shares issued under Equity SPA, net of offering cost of $696,902 attributed to Equity		16,666,665		1,667		3,761,431		—			—			3,763,098

Vested portion of stock based compensation		—		—		1,173,360		—			—			1,173,360

Reversal of excise tax related to prior shareholder redemptions		—		—		—		—			2,611,618			2,611,618

Net income		—		—		—		—			6,784,171			6,784,171

Balance — December 31, 2025 (unaudited)		144,580,170	$	14,458	$	155,274,221	$	(41,089	)	$	(133,568,325	)	$	21,679,265
Balance		144,580,170	$	14,458	$	155,274,221	$	(41,089	)	$	(133,568,325	)	$	21,679,265

Shares issued in non-cash exercise of 2025 Warrants		4,214,127		421		1,094,248		—			—			1,094,669

Shares issued to Winston & Strawn as partial payment in settlement agreement		1,000,000		100		260,600		—			—			260,700

Vested portion of stock based compensation		—		—		1,154,829		—			—			1,154,829

Net loss		—		—		—		—			(1,930,884	)		(1,930,884	)
Net income (loss)		—		—		—		—			(1,930,884	)		(1,930,884	)

Balance — March 31, 2026 (unaudited)		149,794,297	$	14,979	$	157,783,898	$	(41,089	)	$	(135,499,209	)	$	22,258,579
Balance		149,794,297	$	14,979	$	157,783,898	$	(41,089	)	$	(135,499,209	)	$	22,258,579

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2025

	Shares		Amount		Capital			Receivable			Deficit			Deficit
	Common Stock				Additional Paid-in			Subscription			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Receivable			Deficit			Deficit
Balance — June 30, 2024		207,585	$	21	$	110,165,209		$	—		$	(148,274,113	)	$	(38,108,883	)

Common stock issued to for consulting services		200		—		2,578			—			—			2,578

Shares issued as purchase consideration for the assets of Pacsquare		8,333		1		122,299			—			—			122,300

Shares issued as conversion of $325,000 in principal on convertible notes		29,485		3		324,997			—			—			325,000

Shares transferred by related parties as settlement for Company obligations under various financial instruments see Note 9		—		—		2,412,930			—			—			2,412,930

Shares issued as conversion of $359,896 in principal and $7,530 of interest on short-term merger financing notes		31,035		3		367,423			—			—			367,426
Shares issued as conversion in principle on convertible notes		31,035		3		367,423			—			—			367,426

Shares issued to related party as settlement for $803,860 in related party payable.		46,471		5		803,855			—			—			803,860

Shares issued to as additional consideration for delayed payment on merger financing notes		1,267		—		16,340			—			—			16,340

Shares issued under Tau agreement settled through September 30, 2024		24,092		2		302,998			(154,619	)		—			148,381

Shares issued for shares transferred by related party as repayment of shares transferred to cover Company obligations as noted above net of contributed capital for debt assumed (see Note 9)		22,292		2		(2	)		—			—			—

Net income		—		—		—			—			10,748,033			10,748,033

Balance — September 30, 2024 (unaudited)		370,760	$	37	$	114,518,627		$	(154,619	)	$	(137,526,080	)	$	(23,162,035	)

Shares issued under Tau agreement settled through December 31, 2024		17,157		2		243,096			141,902			—			385,000

Rounding up for fractional shares in 1:60 reverse stock split		86		—		—			—			—			—

Net loss		—		—		—			—			(419,690	)		(419,690	)

Balance — December 31, 2024 (unaudited)		388,003	$	39	$	114,761,723		$	(12,717	)	$	(137,945,770	)	$	(23,196,725	)
Balance		388,003	$	39	$	114,761,723		$	(12,717	)	$	(137,945,770	)	$	(23,196,725	)

Shares issued as conversion of $4.2 million in principal on convertible notes		2,532,568		253		4,199,747			—			—			4,200,000

Shares issued as conversion of $0.5 million in principal and interest on secured convertible notes		258,678		26		509,523			—			—			509,549

Shares issued as conversion of $6.34 million in principal and interest on sellers short term, long term and merger financing		2,662,032		266		6,337,527			—			—			6,337,793
Shares issued as conversion in principle on convertible notes		2,662,032		266		6,337,527			—			—			6,337,793

Shares issued to settled vendor obligations		11,085		1		66,503			—			—			66,504

Shares issued under Tau agreement settled through March 31, 2025		264,678		26		879,377			24,597			—			904,000

Shares transferred by related parties as settlement for Company obligations under various financial instruments see Note 9		27,282		3		(3	)		—			—			—

Shares issued as deposit for purchase of the Commercial Bank acquisition		36,070		4		43,641			—			—			43,645

Commitment fee shares settled under the Tau agreement		7,698		1		81,191			—			—			81,192

Net loss		—		—		—			—			(2,902,828	)		(2,902,828	)
Net income (loss)		—		—		—			—			(2,902,828	)		(2,902,828	)

Balance — March 31, 2025 (unaudited)		6,188,094	$	619	$	126,879,229		$	11,880		$	(140,848,598	)	$	(13,956,870	)
Balance		6,188,094	$	619	$	126,879,229		$	11,880		$	(140,848,598	)	$	(13,956,870	)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

ATLASCLEAR HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	2026			2025
	Nine Months Ended March 31,
	2026			2025
Cash Flows from Operating Activities:
Net income	$	4,412,993		$	7,425,515
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Change in fair value of warrant liability derivative		(2,038,793	)		(246,125	)
Change in fair value of convertible note derivative		(382,154	)		(3,990,385	)
Change in fair value of long-term and short-term note derivative		(103,185	)		(11,585,286	)
Change in fair value of contingent guarantee		—			839,775
Change in fair value of debenture derivative		(5,482	)		—
Change in fair value of secured convertible note		1,078,855			—
Change in fair value of merger financing		(63,696	)		(10,670	)
Change in fair value of earnout liability		(10,680,000	)		(1,068,000	)
Change in fair value of Winston & Strawn agreement		(1,799,545	)		59,286
Change in fair value of stock payable		—			(232,793	)
Change in fair value of Tau agreement		(334,549	)		707,547
Loss on settlement on Winston & Strawn agreement		570,300			—
Late fee paid in shares to sellers		—			16,340
Non-cash interest in expense on financial instruments		3,646,719			6,178,848
Transaction cost attributed to 2025 warrants		865,659			—
Realized gain on Tau agreement		—			(19,064	)
Commission on Tau agreement		—			81,191
Excise tax penalties and interest		—			483,027
Consulting expense paid with stock		434,114			—
Stock based compensation		2,483,600			41,982
Bank acquisition deposit write off		—			91,200
Depreciation expense		—			13,707
Amortization of intangibles		1,059,650			1,010,519
Allowance for bad debt		12,754			7,322
Net lease payments		7,125			(1,313	)
Changes in operating assets and liabilities:
Cash deposits with clearing organization & other B/Ds		(1,247,500	)		—
Receivables from brokers & dealers		(73,400	)		634,244
Receivables from customers		(475,708	)		420,242
Receivables from others		8,700			11,741
Advances & prepaid expenses		307,273			(291,373	)
Other assets		(335,686	)		2,500
Payables to customers		(1,046,209	)		(2,080,762	)
Payables to officers & directors		(140,810	)		270,657
Payable to brokers & dealers		2,695,713			7,515
Accounts payable and accrued expenses		(3,582,020	)		598,621
Commissions and payroll taxes payable		(27,369	)		(59,753	)
Deferred taxes		(246,310	)		(370,205	)
Trading deposits		(34	)		—
Net cash used for operating activities		(4,998,995	)		(1,053,950	)

ATLASCLEAR HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS CONTINUED

(UNAUDITED)

	Nine Months Ended March 31,
	2026			2025
Cash Flows from Investing Activities
Cash paid for purchase of Pacsquare		—			(125,000	)
Cash paid for bank acquisition deposit		(65,000	)		—
Net cash used for investing activities		(65,000	)		(125,000	)

Cash Flows from Financing Activities
Proceeds from Equity SPA		5,850,000			—
Transaction cost paid with Equity SPA		(1,228,500	)		—
Proceeds from Secured Convertible Notes		10,000,000			—
Transaction cost paid with Security Convertible Notes		(25,000	)		—
Proceeds from Tau agreement		—			1,437,381
Proceeds from Convertible Notes, net of transaction cost		4,700,000			—
Payment on Convertible Notes		(1,850,000	)		—
Proceeds from debenture, net of transaction cost		490,000			—
Proceeds from third party advances		200,000			—
Subordinated debt payments		—			(20,000	)
Payment on Winston & Strawn settlement agreement		(1,000,000	)		—
Repayment of promissory notes		(509,721	)		(56,519	)
Net cash provided by financing activities		16,626,779			1,360,862

Net Change in Cash		11,562,784			181,912

Cash at beginning of period		29,609,219			27,307,886

Cash at end of period	$	41,172,003		$	27,489,798

Supplementary cash flow information:

Cash paid for interest	$	56,625		$	24,375
Cash paid for income taxes	$	85,784		$	—

Supplemental cash flow information non-cash investing and financing activities:

Decrease in goodwill due to change in deferred tax liability	$	—		$	1,564,200
Initial shares issued under Tau agreement	$	—		$	205,238
Value of shares transferred by related parties to settle obligations	$	—		$	2,412,930
Shares issued to purchase Pacsquare and amounts included in accounts payable	$	—		$	77,300
Shares issued to related party for settlement of accounts payable	$	—		$	803,860
Receivable from shares advanced under Tau agreement	$	205,238		$	—
Shares issued for Commercial Bancorp acquisition extension	$	—		$	43,645
Shares issued for conversion on convertible notes Chardan	$	959,764		$	4,525,000
Shares issued for conversion of principal and interest on short-term note	$	—		$	5,366,979
Shares issued for conversion of principal and interest on long-term note	$	1,014,055		$	1,229,428
Shares issued for conversion of principal and interest on merger financing	$	1,666,382		$	108,813
Shares issued for conversion of secured convertible note	$	9,591,650		$	509,549
Shares issued for stock payable	$	—		$	27,100
Initial value of derivative included in merger financing	$	—		$	113,044
Promissory note issued under insurance premium	$	408,686		$	489,381
Shares issued for conversion of principal and interest on promissory note	$	763,384		$	—
Reversal of excise tax	$	2,611,618		$	—
Convertible Notes transferred to Equity SPA	$	4,150,000		$	—
Initial value of warrants allocated for Equity SPA	$	5,540,000		$	—
Initial value of warrant issued as transaction cost under Equity SPA	$	334,062		$	—
Initial value of derivative included convertible note derivative	$	352,067		$	—
Initial value of derivative included debenture derivative	$	382,154		$	—
Shares issued for Winston & Strawn settlement agreement	$	260,700		$	—
Shares issued for non-cash exercise of 2025 Warrants	$	1,094,669		$	—
Right-of-use assets obtained in exchange for new operating lease liabilities	$	537,863		$	—

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

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 transactions pursuant to that certain Business Combination Agreement dated November 16, 2022 (as amended, the “Business Combination Agreement”), among the Company, Quantum, Atlas FinTech Holdings Corp. (“Atlas FinTech”) and certain other parties. 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 operating history of Quantum survived the Business Combination. Pursuant to the Business Combination Agreement, AtlasClear received certain assets from Atlas FinTech and Atlas Financial Technologies Corp., a Delaware corporation, and completed the acquisition of broker-dealer Wilson-Davis & Co., Inc. (“Wilson-Davis”).

AtlasClear Holdings is building 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 that focus on financial services firms. AtlasClear Holdings is a fintech driven business-to-business platform that seeks to power innovation in fintech, investing, and trading.

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, Inc. (“FINRA”).

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.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

Liquidity and Going Concern Considerations

The Company has incurred recurring operating losses and negative cash flows from operations since inception. These conditions, when considered in the aggregate, previously raised substantial doubt about the Company’s ability to continue as a going concern.

The Company completed a financing transaction that alleviated this substantial doubt. On October 8, 2025, the Company entered into an amended and restated securities purchase agreement (the “Restated SPA”) with Funicular Funds, LP (“Funicular”), pursuant to which the Company issued and sold, for a purchase price of $10.0 million, an amended and restated secured convertible promissory note (the “Restated Note”) in the principal amount of $10,097,782. The Restated Note amends and restates the Company’s original $6.0 million secured convertible note issued to Funicular in February 2024 (the “Secured Convertible Note”). The Restated Note bears interest at 11% per annum, payable semi-annually in cash or in-kind at the Company’s option, matures on October 8, 2030, and is secured by a perfected security interest in substantially all of the Company’s assets and the assets of its subsidiaries.

In addition, on October 8, 2025, the Company entered into a securities purchase agreement (the “Equity SPA”) with certain institutional investors, including Funicular, pursuant to which the Company issued and sold units (“Units”), each consisting of one share of the Company’s common stock (“Common Stock”) and one warrant to purchase one share of Common Stock at an exercise price of $0.75 per share (subject to exercise on a cashless exercise basis pursuant to a Black Scholes-based formula set forth in the warrant). The Units were sold at $0.60 per Unit for an aggregate sales price of $10 million, including $4.15 million converted from the Convertible Notes (as defined in Note 2 below). The closings of the issuances of the Restated Note and the Units occurred between October 9 and October 14, 2025.

The aggregate gross proceeds from these financings totaled approximately $15.85 million, after giving effect to the conversion of $4.15 million of Convertible Notes, and before deduction of placement agent fees and offering expenses. Management expects that these proceeds, together with projected cash flows from operations, will provide sufficient liquidity to fund the Company’s operations and satisfy its obligations as they become due for at least twelve months following the issuance of these condensed consolidated financial statements.

Accordingly, management has concluded that the conditions that previously raised substantial doubt about the Company’s ability to continue as a going concern have been alleviated as a result of the successful completion of these financing transactions.

Inflation Reduction Act of 2022

Any redemption or other repurchase of the Company’s Common Stock that occurs after December 31, 2022, including in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax payable under the Inflation Reduction Act of 1922. The Company has accrued for the estimated excise tax as a result of the redemptions that occurred after December 31, 2022. On November 24, 2025, the Treasury Department and Internal Revenue Service issued final regulations (the Final Regulations) regarding the application of the excise tax on repurchases of corporate stock. The Final Regulations, which generally apply to stock repurchases occurring after December 31, 2022, generally provide an exception for repurchases of certain types of stock issued prior to August 16, 2022. Quantum completed its initial public offering prior to August 16, 2022 and, as such, the Company has determined that certain of its stock repurchases qualify for this exception and has reversed the accrual of $2,611,618 incurred during 2023 and 2024 and reversed the penalties and interest that has been accrued during the three and nine-months period ended March 31, 2026.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K/A, as filed with the SEC on September 30, 2025. The accompanying condensed balance sheet as of June 30, 2025 has been derived from the audited financial statements included in the Form 10-K/A. The interim results for the three and nine-months ended March 31, 2026 are not necessarily indicative of the results to be expected for the year ending June 30, 2026 or for any future periods.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Impairment of Long-lived and Intangible Assets

The Company had no impairment charges during the three and nine-month periods ended March 31, 2026 and 2025.

Net (Loss) Income per Common Stock

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net (loss) income per share of Common Stock is computed by dividing net (loss) income by the weighted average number of shares of Common Stock outstanding for the period.

The calculation of diluted net (loss) income per share does not consider the effect of the warrants issued and outstanding. For the three and nine-months ended March 31, 2026 and 2025, the calculation excludes the dilutive impact of warrants because none would be issued under the treasury method.

For the three-months ended March 31, 2026 and 2025, the dilutive shares were excluded as including them would be antidilutive.

For the nine-months ended March 31, 2026 and 2025, the convertible financial instrument and other share obligations were included in the dilutive calculation under the as converted method, as such the number of shares were included as if the shares were issued on July 1, 2025 and 2024, respectively and the interest expense and the change in fair value associated with the financial instruments was adjusted from net income to determine the numerator and denominator.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

The following table reflects the calculation of basic net income (loss) per share of Common Stock (in dollars, except share amounts):

	Three Months Ended			Three Months Ended
	March 31, 2026			March 31, 2025
Basic and diluted net loss per Common Stock
Numerator:
Net loss	$	(1,930,884	)	$	(2,902,828	)
Denominator:
Basic and diluted weighted average Common Stock outstanding		148,000,149			2,322,772
Basic and diluted net loss per Common Stock	$	(0.01	)	$	(1.25	)

	Nine Months Ended		Nine Months Ended
	March 31, 2026		March 31, 2025
Basic net income per Common Stock
Numerator:
Net income	$	4,412,993	$	7,425,515
Denominator:
Basic weighted average Common Stock outstanding		116,647,478		975,727
Basic net income per Common Stock	$	0.04	$	7.61

The following table reflects the calculation of diluted net income (loss) per share of Common Stock (in dollars, except share amounts):

	Nine Months Ended-		Nine Months Ended-
	March 31, 2026		March 31, 2025
Diluted net income per Common Stock
Numerator:
Net income	$	4,412,993	$	7,425,515
Change in fair value of financial instruments		1,073,373		(13,979,733	)
Interest on dilutive instruments		1,587,348		6,050,871
Allocation of net income, as adjusted	$	7,073,714	$	(503,347	)
Denominator:
Dilutive weighted average Common Stock outstanding		116,647,478		975,727
If converted shares		19,698,961		—
		136,346,439		975,727
Diluted net income per Common Stock	$	0.05	$	(0.52	)

For the nine months ended March 31, 2025, the numerator is adjusted for the interest expenses and other components to include the effect of the convertible securities under the as converted method at the beginning of the period. The adjustment to the numerator resulted in a net loss position. As such, including the effect of convertible securities in a loss situation would make the loss per share smaller, which is misleading and considered antidilutive under U.S. GAAP.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

Below is a summary of the potentially dilutive instruments as of March 31, 2026 and 2025:

SCHEDULE OF DILUTIVE INSTRUMENTS

Description	March 31, 2026		March 31, 2025
Sellers Notes		—		13,214,028
Convertible notes - Chardan		—		1,594,763
Secured convertible note		14,169,724		11,333,505
Winston & Strawn agreement		—		1,034,381
Tau agreement		—		888,973
Debenture		3,555,553		—
Unissued Stock Based compensation shares		1,973,684		—
Promissory note		—		6,040
Total Shares issuable under Convertible Note obligations – if converted total dilutive		19,698,961		28,071,690

Public Warrants		10,062,500		10,062,500
Private Warrants		5,553,125		5,553,125
2025 Warrants		16,258,332		—
Secured convertible note warrants		600,000		600,000
Total excluded under treasury method – out of the money		32,473,957		16,215,625

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution which, at times may exceed the Federal Deposit Insurance Coverage of $250,000. The Company has not experienced losses on these accounts. The Company’s cash is deposited at five financial institutions. At March 31, 2026, the Company had $39,061,867 in excess of the FDIC limit.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature, except for warrant liabilities, convertible notes derivative liability and the earnout liability (see Note 13).

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the issuance date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Leases

The Company leases office space under operating lease arrangements. At lease commencement, the Company recognizes right of use assets and lease liabilities based on the present value of lease payments over the lease term. Because the Company’s leases do not provide an implicit interest rate, management uses the Company’s incremental borrowing rate at lease commencement. Lease expense is recognized on a straight line basis over the lease term.

Recent Accounting Standards

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

NOTE 3. CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS

Wilson-Davis is required by Rule 15c3-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to maintain a cash reserve with respect to customers’ transactions and credit balances, on a settlement date basis. Such a reserve is computed weekly using a formula provided by the rule, and the reserve account must be separate from all other bank accounts of Wilson-Davis. The required reserve as of March 31, 2026 and June 30, 2025 was calculated to be $21,878,696 and $20,890,603, respectively. As of March 31, 2026, Wilson-Davis had $23,129,837 in cash which was $1,251,141 more than the amount required. As of June 30, 2025 Wilson-Davis had $21,175,129 cash on deposit which was $284,526 more than the required amount.

Wilson-Davis is also required by Rule 15c3-3 of the Exchange Act to maintain a cash reserve with respect to broker-dealer transactions and credit balances. Such a reserve is computed weekly using a formula provided by the rule, and the reserve account must be separate from all other bank accounts of Wilson-Davis. The required reserve as of March 31, 2026 and June 30, 2025 was calculated to be $337,764 and $100,000, respectively. As of March 31, 2026 and June 30, 2025, Wilson-Davis had $676,084 and $200,575, respectively, cash on deposit in the reserve account, which was $338,320 and $100,575, respectively, more than the amount required.

NOTE 4. NET CAPITAL REQUIREMENTS

As a broker-dealer, Wilson-Davis is subject to the uniform net capital rule adopted and administered by the SEC. The rule requires maintenance of minimum net capital and prohibits a broker-dealer from engaging in securities transactions at a time when its net capital falls below minimum requirements, as those terms are defined by the rule. Under the alternative method permitted by this rule, net capital shall not be less than the greater of $250,000 or 2% of aggregate debit items arising from customer transactions, as defined. Also, Wilson-Davis has a minimum requirement based upon the number of securities markets that it maintains. On March 31, 2026 and June 30, 2025, Wilson-Davis’s net capital was $15,161,789 and $11,190,362, respectively, which was $14,911,789 and $10,940,362, respectively, in excess of the minimum required.

NOTE 5 – CASH AND RESTRICTED CASH

Reconciliation of cash and restricted cash as shown in the condensed statements of cash flows is presented in the table below:

	March 31, 2026		June 30, 2025
Cash and cash equivalents	$	16,706,099	$	7,533,690
Cash segregated - customers		23,789,820		21,874,954
Cash segregated - PAB		676,084		200,575
Total cash and restricted cash shown in the statement of cash flows.	$	41,172,003	$	29,609,219

NOTE 6. LEASE

During the three months ended March 31, 2026, the Company entered into a new operating lease agreement. This transaction resulted in the recognition of the Right-of-Use (“ROU”) asset of $537,863 and corresponding lease liability of $537,863 at the commencement date.

As of the end of the current interim period, the components of our lease portfolio are as follows:

	March 31, 2026			June 30, 2025

Operating lease ROU Asset -	$	179,267		$	179,267
Increase		537,863			—
Decrease		(90,073	)		—
Operating lease ROU Asset - Ending Balance	$	627,057		$	179,267

Operating lease liability - Short Term	$	309,958		$	111,983
Operating lease liability - Long Term		327,686			70,746
Operating lease liability - Total	$	637,644		$	182,729

NOTE 7. RELATED PARTY TRANSACTIONS

Related Party Share Issuance/Transfers

During the three-month period ended March 31, 2025, AtlasFinTech transferred some of its shares to Tau Investment Partners LLC (“Tau”) to provide the Company with funding as the Company no longer had registered shares available. The value of the shares resulted in $177,334 of value contributed to the Company. As a result, the board approved the issuance of 27,282 shares to remunerate AtlasFinTech, resulting in a net zero impact to the Company.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

Advances from Related Parties

On May 9, 2024, Quantum Ventures, a related party, transferred 935 shares of Common Stock to pay for $47,750 of interest in connection with the Short-Term Notes (as defined in Note 9 below). The Company agreed to reimburse Quantum Ventures for the value of the shares plus 13% interest; as such a payable of $55,087 is due and payable to Quantum Ventures.

As of March 31, 2026, amounts due to the Executive Chairman is $20,000.

As of March 31, 2026, amounts due to the President is $27,300.

As of March 31, 2026, $10,978 is due in payable to employees of Wilson-Davis.

On July 17, 2025, the Company issued 800,000 shares of Common Stock to Sandip I. Patel, P.A., a law firm that is wholly owned by Sandip I. Patel, the Company’s General Counsel, Chief Financial Officer and a member of the Company’s board of directors, as consideration for legal and consulting services provided to the Company prior to his employment. The shares were valued based on the closing price of the date of issuance of $0.21 for a total value of $169,920.

Note Financing

In September 2025, the Company entered into the September-Securities Purchase Agreements, as defined and described in Note 9 below. $1,050,000 and $1,000,000, respectively, of the aggregate principal amount of the Convertible Notes sold pursuant to the September-Securities Purchase Agreements were sold to Sixth Borough Capital Fund, LP, an entity controlled by Robert D. Keyser, Jr., who is a member of the Company’s board of directors, and to Sandip Patel, the Company’s General Counsel, Chief Financial Officer and a member of the Company’s board of directors.

On October 8, 2025 the Company repaid to Sandip Patel $1,200,000 in cash and to Sixth Borough Capital Fund, LP, $640,000 in cash and $500,000 through the issuance of Units sold pursuant to the Equity SPA. As such, as of March 31, 2026, no amounts are due under the Convertible Notes sold pursuant to the September Securities Purchase agreement held by Sandip Patel and Sixth Borough Capital Fund, LP.

NOTE 8. COMMITMENTS AND CONTINGENCIES

Earnout Liability

In connection with the Closing, and pursuant to the terms of the Business Combination Agreement, stockholders of AtlasClear (the “AtlasClear Stockholders”) received merger consideration (the “Merger Consideration Shares”) consisting of 74,000 shares of Common Stock. In addition, the AtlasClear Stockholders were entitled to receive up to 5,944,444 shares of Common Stock (the “Earn Out Shares”) upon certain milestones (based on the achievement of certain price targets of Common Stock following the Closing). The milestones were not met during the first 18 months following the Closing, and as such the price target Earn Out Shares will not be issued. Atlas FinTech will also receive up to $20 million of shares of Common Stock (“Software Products Earn Out Shares”), which will be issued to Atlas FinTech upon certain milestones based on the achievement of certain revenue targets of software products contributed to AtlasClear by Atlas FinTech and Atlas Financial Technologies Corp. following the Closing. The revenue targets will be measured yearly for five years following the Closing, with no catch-up between the years. The Earn Out provision was analyzed under ASC 480 and ASC 815. The Software Products Earn Out Shares Payments in this transaction are within the scope of ASC 480 and therefore have been accounted for as a liability.

As of March 31, 2026 and June 30, 2025 the fair value of the earnout liability was $689,000 and $11,369,000, respectively. As a result of the delay in the Company’s planned acquisition of Commercial Bancorp of Wyoming (“Commercial Bancorp”), the Company has not yet been able to implement the targets of software product revenue under the earnout. As such, management has revisited its revenue targets through the earnout period, resulting in a significant reduction in the estimated value attributed to the Software Product Earn Out Shares. See Note 13 Fair Value Measurements for additional information.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

Employment Agreements

On September 19, 2025, the Company entered into employment agreements and amendments to employment agreements with each of John Schaible, the Company’s Executive Chairman, and Craig Ridenhour, the Company’s President, and on September 24, 2025, the Company entered into second amendments to such agreements with each such officer.

The employment agreements with Mr. Schaible and Mr. Ridenhour, as amended by such amendments (as so amended, the “Schaible Employment Agreement” and the “Ridenhour Employment Agreement,” respectively) provide for the employment of Mr. Schaible and Mr. Ridenhour as Executive Chairman and President, respectively, reporting to the Board, for an initial term of three years, subject to automatic successive one1-year renewals unless either party provides written notice of non-renewal at least 60 days’ prior to the end of the then-current term. Each executive is entitled to receive an initial annual base salary of $400,000, subject to review at least annually and increase to $450,000 and $500,000 in the second and third years of the term, respectively. In addition, each executive is entitled to receive (i) a one-time cash signing bonus of $300,000, of which one-third was payable immediately and the balance is payable upon the earlier of (a) a minimum qualified cumulative financing of $5 million or (b) one-third at the end of the fourth quarter of 2025 and one-third at the end of the first quarter of 2026; and (ii) one-time stock grants of 700,000 shares and 286,842 shares on signing and July 1, 2026, respectively, in each case to vest on June 30 of the year following the grant and subject to stockholder approval of an increase in the number of shares issuable under the equity incentive plan. Each executive is also entitled to receive an annual bonus, provided that the Company is profitable and determined at the discretion of the board, annual equity awards under the Company’s equity incentive plan, and up to five5 stock awards, each in an amount equal to 1% of the total number of the Company’s outstanding shares, vesting over three years, in the event the Company’s stock trading price reaches the following 10-day volume weighted average prices: $0.75, $1.00, $1.24, $1.49 and $1.74.

On September 24, 2025, the Company entered into an employment agreement with Sandip Patel (the “Patel Employment Agreement”), a member of the Board, pursuant to which Mr. Patel is employed as the Company’s General Counsel and Chief Financial Officer, reporting to the Board, for an initial term of three years, subject to automatic successive one-year renewals unless either party provides written notice of non-renewal at least 60 days’ prior to the end of the then-current term. Mr. Patel is entitled to receive an initial annual base salary of $350,000, subject to review at least annually and increase to $400,000 and $450,000 in the second and third years of the term, respectively. In addition, Mr. Patel is entitled to receive a one-time cash signing bonus of $250,000, of which one-third was payable immediately and the balance is payable upon the earlier of (a) a minimum qualified cumulative financing of $5 million or (b) one-third at the end of the fourth quarter of 2025 and one-third at the end of the first quarter of 2026. Mr. Patel is also entitled to receive an annual bonus, provided that the Company is profitable and determined at the discretion of the board, annual equity awards under the Company’s equity incentive plan, and up to five5 stock awards, each in an amount equal to 0.5% of the total number of the Company’s outstanding shares, vesting over three years, in the event the Company’s stock trading price reaches the following 10-day volume weighted average prices: $0.75, $1.00, $1.24, $1.49 and $1.74.

Refer to Note 13 for discussion regarding stock based compensation. As of March 31, 2026 the Company paid the one time signing bonuses for a total of $850,000 under the employment agreements discussed above.

Commercial Bancorp Share Purchase Agreement

On February 5, 2026, the Company entered into a share purchase agreement (the “Purchase Agreement”) with Commercial Bancorp, and each of the shareholders of Commercial Bancorp (collectively, the “Sellers”). The Purchase Agreement provides for the Company to acquire (the “Acquisition”) from the Sellers all of the outstanding shares (the “Shares”) of common stock of Commercial Bancorp, which is the owner of all of the outstanding stock of Farmers State Bank, a Wyoming state-chartered member bank (the “Bank”), subject to the terms and conditions set forth in the Purchase Agreement. As previously disclosed, the Company had previously entered into an agreement and plan of merger, as amended, to acquire Commercial Bancorp, which agreement has expired in accordance with its terms.

Pursuant to the terms of the Purchase Agreement, the Company has agreed to purchase the Shares from the Sellers for consideration consisting of a combination of cash and shares Common Stock, with the total amount of consideration to be determined based on (i) each Seller’s election to receive cash, shares of Common Stock, or a combination thereof, (ii) the adjusted book value of the operational portion of the equity capital of Commercial Bancorp as of the closing of the Acquisition (the “CB Closing”), determined in accordance with the provisions of the Purchase Agreement (the “ABV”), (iii) the value of the existing building and land comprising the physical location of the Bank (the “Premises”), and (iv) Commercial Bancorp’s net operating loss as reflected on its most recent tax return prior to the CB Closing, multiplied by the maximum corporate federal income tax rate in effect as of the date of the CB Closing (the “NOL Tax Benefit”). Each Seller may elect (the “Election”) to receive an amount equal to any of the following three options: (i) three times such Seller’s pro rata portion of the ABV, plus such Seller’s pro rata portion of the value of the Premises and the NOL Tax Benefit, payable one-third in cash and two-thirds in shares of Common Stock; (ii) two times such Seller’s pro rata portion of the ABV, plus such Seller’s pro rata portion of the value of the Premises and the NOL Tax Benefit, payable entirely in cash; or (iii) three times such Seller’s pro rata portion of the ABV, plus such Seller’s pro rata portion of the value of the Premises and the NOL Tax Benefit, payable entirely in shares of Common Stock. The Company has made an earnest money deposit payment in the amount of $100,000 to Commercial Bancorp, which deposit will be applied to the cash portion of the consideration payable at the CB Closing or, if the CB Closing does not occur under certain circumstances, retained by Commercial Bancorp.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

The shares of Common Stock to be issued pursuant to the Purchase Agreement will be valued based on either the closing price of the Common Stock on the date of execution of the Purchase Agreement ($0.23), or on the business day immediately preceding the date of the CB Closing, at each Seller’s option. The Company has agreed to file with the SEC, by the later of 90 days following the date of the Purchase Agreement and ten business days following the deadline for each Seller to make an Election, a resale registration statement with respect to the shares of Common Stock issuable pursuant to the Purchase Agreement (the “Resale Registration Statement”).

The obligations of each of the Sellers and the Company under the Purchase Agreement are subject to specified conditions, including, among other matters: (i) the receipt of all required regulatory approvals, (ii) the Resale Registration Statement having been declared effective by the SEC, such that all shares of Common Stock to be issued pursuant to the Purchase Agreement shall be registered for resale and freely tradeable, (iii) the receipt of certain specified third-party consents, and (iv) the absence of any injunctions being entered into or law being adopted that would make the Acquisition illegal.

The Purchase Agreement contains customary representations and warranties of Commercial Bancorp and the Bank, the Sellers and the Company. It also contains customary covenants, including (i) covenants providing for each of the parties to use reasonable best efforts to cause the Acquisition to be consummated and to receive all required regulatory approvals, including from the Federal Reserve Board and the Wyoming Division of Banking, (ii) covenants providing for Commercial Bancorp and the Bank to carry on their respective businesses in the ordinary course of business, and to refrain from taking certain actions, during the period between the execution of the Purchase Agreement and the CB Closing, and (ii) granting the Company observation rights with respect to meetings of the boards of directors of Commercial Bancorp and the Bank during the between the execution of the Purchase Agreement and the CB Closing. Commercial Bancorp, the Bank and the Sellers have also agreed not to initiate, solicit, encourage or otherwise facilitate the making of any proposal or offer relating to alternate transactions or, engage in any discussions or negotiations with respect to alternate transactions.

The Purchase Agreement contains termination rights for each of the Sellers and the Company, including, without limitation, in the event that (i) any governmental entity issues a non-appealable final order denying approval of the Acquisition; (ii) the Acquisition is not consummated within two years of the execution of the Purchase, subject to extension under certain circumstances; or (iii) the other party breaches its representations, warranties or covenants under the Purchase Agreement which would give rise to the failure of a closing condition and such breach is not cured with 30-days of receipt of written notice of such breach.

Indemnification Agreements

On the Closing Date, in connection with the Closing, the Company entered into indemnification agreements with each of its directors and executive officers, which provide for indemnification and advancements by the Company of certain expenses and costs under certain circumstances. The indemnification agreements provide that AtlasClear Holdings will indemnify each of its directors and executive officers against any and all expenses incurred by that director or executive officer because of his or her status as a director or officer of AtlasClear Holdings, to the fullest extent permitted by Delaware law, the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws.

Wilson-Davis

On February 27, 2018, an extended hearing panel of the Department of Enforcement of FINRA, Office of Hearing Officers, issued its decision ordering Wilson-Davis to pay fines aggregating $1.47 million for violations of the applicable short sales and anti-money laundering rules. Wilson-Davis appealed the decision to the National Adjudicatory Council (“NAC”). On December 19, 2019, NAC issued its decision ordering that the fines be reduced by $205,000 to an aggregate of $1.265 million. Wilson-Davis made a timely appeal to the SEC to hear the case. On December 28, 2023, the SEC issued a ruling affirming the findings of violations and remanding the matter back to FINRA to reconsider the appropriate sanctions in light of the SEC decision. On July 10, 2025, the NAC reduced the fines to an aggregate of $490,000. The Company made a timely appeal of the decision to the SEC. Pursuant to FINRA Rules, the Company’s timely appeal of the decision to the SEC deferred the effectiveness of the findings and sanctions. Due to the disparity in the range of fines of similar cases, the Company believes that the final amount is not reasonably estimable. The Company has booked a contingent liability totaling $100,000 which represents the estimated low end of the possible range of fines.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

NOTE 9. NOTES PAYABLE

The following table represents the notes payable and related financing as of March 31, 2026 and June 30, 2025:

	March 31, 2026		June 30, 2025

Promissory notes	$	564,650	$	1,207,797
Current portion of long-term merger financing, net		—		980,106
Merger financing payable		—		1,618,575
Merger financing -derivative		—		63,696
Tau Agreement		—		539,787
Debenture		412,644		—
Derivative liability - debenture		346,585		—
Convertible note - derivative		—		103,185
Current portion	$	1,323,879	$	4,513,146

Long-term convertible note Chardan, net	$	—	$	718,866
Secured Convertible Note, net		11,706,148		8,909,070
Subordinated borrowings		1,930,000		1,930,000
Long term portion	$	13,636,148	$	11,557,936

Chardan Convertible Note

During the nine-months ended March 31, 2026, the Company issued a total of 4,845,072 shares of Common Stock to Chardan Capital Markets LLC (“Chardan”) under a promissory note issued to Chardan on October 23, 2024 (the “Chardan Note”), for a total of $959,764 in principal. The conversion rate of 90% of the trailing seven-trading day VWAP prior to payment was between $0.16 and $0.18 per share. As a result, the Company recognized $240,897 in amortized debt discount included in interest expense and has fully settled the Chardan Note balance. As of March 31, 2026 and June 30, 2025, the balance under the Chardan Note was $0 and $718,866, respectively.

See Note 13 for additional information on the fair value and change in fair value related to the derivative.

Secured Convertible Note Financing

During the nine-months ended March 31, 2026, the Company issued a total of 63,944,332 shares of Common Stock to Funicular under the Secured Convertible Note for total of $9,324,489 in principal and $267,161 of interest. The conversion rate was $0.15 per share, which is the floor established under the agreement.

As of March 31, 2025, the Company recognized $899,165 in interest expense on the principal and $180,085 of interest related to the amortization of the debt discount. As of March 31, 2025, the carrying value of the Secured Convertible Note was $8,745,699, net of discount of $611,496. During the three-month period ended March 31, 2025, Quantum Ventures transferred 6,133 shares to pay for accrued interest of $217,373.

As of June 30, 2025, the carrying value of the Secured Convertible Note was $8,909,070, net of discount of $513,201.

As of October 8, 2025, the company recognized $269,925 in interest expense on the principal and $513,201 of interest related to the amortization of the debt discount. As of October 8, 2025, the carrying value of the Secured Convertible Note was $100,546.

On October 8, 2025, the Company entered into the Restated SPA with Funicular, which amended and restated in its entirety the securities purchase agreement, dated February 9, 2024, pursuant to which the Company had issued and sold to Funicular, in a private placement, the Secured Convertible Note, in the original principal amount of $6,000,000. Pursuant to the Restated SPA, the Company issued and sold to Funicular, for a purchase price of $10,000,000, the Restated Note, which amends and restates the Secured Convertible Note in its entirety. The principal amount of the Restated Note is $10,097,782, consisting of the $10,000,000 purchase price plus $97,782 in remaining outstanding principal under the Secured Convertible Note.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

The Restated Note has a stated maturity date of October 8, 2030. Interest accrues at a rate per annum equal to 11%, and is payable semi-annually on each June 30 and December 31. On each interest payment date, the accrued and unpaid interest shall, at the election of the Company in its sole discretion, be either paid in cash or paid in-kind by increasing the principal amount of the Restated Note. In the event of an Event of Default (as defined in the Restated Note), in addition to Funicular’s other rights and remedies, the interest rate would increase to 14% per annum. The Restated Note is convertible, in whole or in part, into shares of the Company’s Common Stock at the election of the holder at any time at an initial conversion price of $0.75 per share (the “Conversion Price”). The Conversion Price is subject to adjustment if the Company issues or is deemed to issue shares of Common Stock at a price below the then-current conversion price (subject to certain exceptions), and is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like. The Restated Note contains covenants which, among other things, limit the ability of the Company and its subsidiaries to incur additional indebtedness, incur additional liens and sell its assets or properties.

The Restated Note is secured by a perfected security interest in substantially all of the existing and future assets of the Company and each Grantor (as defined in the Security Agreement, as defined below), including a pledge of all of the capital stock of each of the Grantors, subject to certain exceptions, as evidenced by (i) the security agreement, dated as of February 9, 2024 (the “Security Agreement”), among the Company, each of the Company’s subsidiaries and Funicular, and (ii) the guaranty, dated as of February 9, 2024 (the “Guaranty”), executed by each of the Company’s subsidiaries pursuant to which each of them has agreed to guaranty the obligations of the Company under the Restated Note and the other Loan Documents (as defined in the Restated Note), each of which was entered into in connection with the Funicular Note.

Pursuant to the Restated SPA, the Company agreed, among other things, that if the Restated Note becomes convertible into a number of shares of Common Stock in excess of 19.9% of the Company’s total number of shares of Common Stock outstanding, to seek the approval of its stockholders for the issuance of all shares of Common Stock issuable upon conversion of the Restated Note in excess of that amount, in accordance with the rules of the NYSE American.

The Restated Note issued by the Company to Funicular on October 8, 2025 represents a freestanding financial liability within the scope of ASC 470-10 Debt – Overall, with certain fair value election provisions applied under ASC 825-10 Financial Instruments – Overall. The Restated Note replaces the prior Secured Convertible Note originally issued on February 9, 2024, described above, increasing the principal balance from approximately $97,782 to $10,097,782, thereby constituting a significant new investment and creating an extinguishment of the prior note under ASC 470-50 Debt – Modifications and Extinguishments.

The Company elected to apply the Fair Value Option (FVO) under ASC 825-10 to the Restated Note. Under ASC 825-10-15-4 and 825-10-25-4, the Restated Note qualifies as an eligible financial liability because it is recognized upon initial issuance and not within any of the prohibited categories. The election was made at initial recognition and applies to the entire instrument, with upfront fees and costs expensed as incurred. As a result, the Restated Note is measured at fair value with changes recognized in earnings each reporting period, and the Company separately presents in other comprehensive income the portion of fair value changes attributable to instrument-specific credit risk, consistent with ASC 825-10-45-5.

As part of the transaction, fees and expenses incurred in connection with the amendment—principally legal and negotiation costs up to $25,000 --were deducted from the proceeds of the note and treated as fees paid to the creditor under ASC 470-50-40-17. Because the Restated Note is accounted for under the fair value option, third-party costs are expensed as incurred in accordance with ASC 825-10-25-3.

As a result, the Company recognized $22,235 as transaction cost consisting of $25,000 legal cost incurred and a gain of $2,764 in accumulated interest payable that was waived as a result of the Restated Note.

For the three and nine-months ended March 31, 2026, the Company recognized $273,885 and $529,511, respectively in accumulated interest under the Restated Note and recognized a change in the fair value of $717,577 for the three months ended March 31, 2026 and a loss in change in fair value of $1,078,855 for the nine-month ended March 31, 2026. See Note 13 for additional information on the fair value and change in fair value related to the Secured Convertible Note.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

Sellers Note

As of September 19, 2025, all of the Seller Notes have been fully settled via the conversion to shares of Common Stock. The Company during the nine-months ended March 31, 2026, issued a total of 15,922,008 shares of Common Stock to the Wilson-Davis sellers under both the Long-Term Notes and the Merger Financing Note, as defined below, for total of $2,565,216 in principal and $113,791 of interest. The conversion rate of 90% of the trailing 7 seven-trading day VWAP prior to payment was between $0.16 and $0.18 per share.

During the nine-month ended March 31, 2025, the Company received conversion notices for a total $5,000,000 in short term loan principal and $366,979 of short-term loan interest, and long-term loan principal of $523,573 and $705,856 of long-term interest, issuing a total of approximately 2,557,683 post reverse split shares of Common Stock. During the three and nine months ended March 31, 2025, the company recognized $57,842 and $366,978, respectively, in interest expense on the short-term principal, $259,063 and $777,192 in interest expense on the long-term principal and $99,890 and $299,670, respectively, of interest related to the amortization of the debt discount on long-term loan created with the derivative liability. During the nine-month period Quantum Ventures transferred 368,004 pre reverse split or 6,133 post reverse split registered shares to pay for accrued interest of $92,083 on short-term loan and $259,058 on long-term loan.

Contingent Guarantee/ Merger Financing

The carrying balance of the Merger Financing Note as of June 30, 2025, net of principal converted to shares of $1,439,586, was $1,618,575, net of $24,215 in unamortized debt discount. The conversion rate of 90% of the trailing seven - trading day VWAP prior to payment was between $0.16 and $0.18 per share. As of September 19, 2025 the Merger Financing Note was paid in full and the Company recognized $24,215 in amortized debt discount and $23,599 in interest expense.

Tau Agreement – ELOC and Second ELOC Agreement

As of March 31, 2025 the Company requested advance notices for a total of $1,611,675 which resulted in approximately 346,833 post reverse split to be sold by Tau. Tau sold and settled 305,928 post reverse split shares under the at-the-market agreement entered into between the Company and Tau on July 31, 2024 (the “ELOC”) resulting in in $1,425,503 of cash proceeds under the ELOC. Tau purchased the shares from the Company at $1,406,439, resulting in a realized gain of $19,064. Tau over funded the Company by $11,880, as such this is reflected as a stock payable in equity. As of March 31, 2025, 888,973 shares were issued to Tau towards future advance requests. The shares are deemed issued but not outstanding.

As of March 31, 2026, there are no shares available under the ELOC and accordingly no further advances are anticipated. Therefore the fair value of the ELOC was deemed to be $0 as of March 31, 2026. See Note 13 for additional information regarding the fair value method and related disclosures.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

Promissory Notes

Interest Solutions, LLC. Shares of Common Stock were issuable to Interest Solutions, LLC (“Interest Solutions”) pursuant to a convertible promissory note, dated as of February 9, 2024, in the aggregate principal amount of $275,000 (the “Interest Solutions Note”) at a price per share of $120, subject to adjustment. Accrued interest on the Interest Solutions Note was payable monthly, beginning on June 30, 2024, at a rate of 13% per annum and the Interest Solution Note was to mature on February 9, 2026. Until all payments have been made to the Wilson-Davis sellers, interest on the Interest Solutions Note may be paid in cash or shares of Common Stock valued at the then-current conversion price. Thereafter, all accrued interest must be paid in cash. During the three-months ended March 31, 2026 and 2025, the Company recognized $0 and $8,815 in interest expense, respectively. During the nine-months ended March 31, 2026 and 2025 the Company recognized $8,913 and $17,826 in interest expenses, respectively. On October 1, 2025, the Company issued 576,616 shares of Common Stock at a conversion price of $0.5627 in full settlement of $275,000 in principal and $49,462 of accrued interest. As of March 31, 2026 and June 30, 2025, there was $0 and $315,549 included in Promissory note payable.

JonesTrading Institutional Services LLC. Up to 3,283 shares of Common Stock were issuable to JonesTrading Institutional Services LLC (“JonesTrading”), pursuant to a convertible promissory note, dated as of February 9, 2024, in the aggregate principal amount of $375,000 (the “JonesTrading Note”) at a price per share of $120, subject to adjustment. Accrued interest on the JonesTrading Note was payable monthly, beginning on June 30, 2024, at a rate of 13% per annum. Until all payments have been made to the Wilson-Davis sellers, interest on the Jones Trading Note may be paid in cash or shares of Common Stock valued at the then-current conversion price. Thereafter, all accrued interest must be paid in cash. During the three and nine-month period ended March 31, 2026, the Company recognized $0 and $8,627, respectively and for the three and nine-months ended March 31, 2025, the Company recognized $12,288 and $24,309, respectively, in interest expenses. On September 16, 2025, the Company and JonesTrading entered into an amendment to the promissory note agreement, whereby the conversion price floor of $2.00 was amended to $0.75. As a result, on September 16, 2025, the Company issued 585,229 shares of Common Stock at a conversion price of $0.75 in full settlement of $375,000 in principal and $63,922 of accrued interest. During the three and nine-months ended March 31, 2025, Quantum Ventures transferred 101 shares of Common Stock to pay for $12,288 in accrued interest. As of March 31, 2026 and June 30, 2025, there was $0 and $430,295 included in Promissory note payable.

Toppan Merrill LLC. The Company issued to Toppan Merrill LLC (“Toppan”) a promissory note, dated as of February 9, 2024, in the aggregate principal amount of $160,025 (the “Toppan Note”). The maturity date of the Toppan Note was February 8, 2026 and the note accrued interest at a rate of 13% per annum. The principal and interest payments due under the note was not payable in shares of Common Stock. The Company paid $180,000 in cash on November 4, 2025 as full repayment of the promissory note. As of March 31, 2026 and June 30, 2025, there was $0 and $175,286, respectively, included in Promissory note payable.

Hanire Purchase Agreement: During the nine-months ended March 31, 2026, the Company received $200,000 as a good faith deposit towards the securities purchase agreement entered into on December 31, 2024 between the Company and Hanire, LLC (the “ Hanire Purchase Agreement”). An amendment to the Hanire Purchase Agreement is currently being negotiated. As such, the proceeds received are treated as due on demand non interest bearing advances. If terms or repayment and additional funding is not negotiated, the Company expects to refund the good faith deposit.

D&O financing: During the three months ended March 31, 2026, the Company renewed its Directors and Officers insurance policy and entered into a premium financing agreement to fund the annual premium which is included in Promissory note balance of $364,650 as of March 31, 2026. The agreement requires nine equal monthly payments of $47,128 and provides for an interest rate of 8.75%. The unamortized portion of the insurance premium is recorded within “Prepaid expenses and other current assets” and is being amortized to “General and administrative expense” on a straight-line basis over the one-year policy term.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

Winston & Strawn Agreement

Up to $2,500,000 in shares of Common Stock were issuable 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”). Pursuant to the Winston & Strawn Agreement, the Company was to issue $2,500,000 worth of shares of Common Stock as payment for legal services, in three equal installments of $833,333 beginning on August 9, 2024. As of June 30, 2025, the amount is included in Winston & Strawn Agreement as a liability of $690,400. Due to the nature of the settlement terms, the Winston & Strawn Agreement was deemed to be a derivative liability to the Company as of June 30, 2025 under ASC 480. Change in fair value of the subscription agreement are measured at each reporting period with change reported in earnings. See valuation approach and further disclosure on Note 13.

On January 26, 2026, the Company and Winston & Strawn entered into a settlement agreement. The Company agreed to provide Winston & Strawn with cash and shares of the Company’s Common Stock. The Company paid $1,000,000 in cash, and issued a total of 1,000,000 shares of the Company Common Stock with a deemed value of $750,000 and a fair value of $260,700 based on the closing stock price on January 26, 2026 resulting in a loss of $570,300 loss on settlement. As of March 31, 2026 the Company has complied with the terms and has fully settled the obligations with Winston & Strawn.

Debenture

On August 4, 2025, the Company entered into a securities purchase agreement (“August-Securities Purchase Agreement”) with an institutional investor under which the Company agreed to issue and sell, in a private placement, a Series A convertible debentures (the “Debenture”) for an aggregate principal amount of $500,000, for a gross purchase price of $490,000, net of legal fees. The Debenture bears 10% interest and matures on August 3, 2026. The holder is entitled to convert the unpaid principal amount of the Debenture, plus accrued interest and penalties, at any time $0.15 per share. If, at any time after Closing, the Company receives financing from third party (excluding the Holder), the Company is required to pay to the Holder, in the form of cash, equity, or a combination of the two, solely at the discretion of the Holder, one hundred percent (100%) of the proceeds raised from the third party in excess of an aggregate amount of $10,000,000 (the “Threshold Amount”) until such time as the Face Amount of the Debenture has been paid in full. The Company agreed that, within 60 days after the sale of the Debenture, the Company would file with the SEC a registration statement, or an amendment to a previously-filed registration statement, registering the resale of the shares of Common Stock underlying the Debenture.

The Debenture is within the scope of ASC 470-10 and is not an ASC 480 liability. The Company did not elect the fair value option under ASC 825-10. The instrument contains two embedded derivatives—the conversion option and the event-of-default feature—each of which requires bifurcation and separate measurement at fair value through earnings. Other redemption and prepayment features are clearly and closely related and remain within the debt host. The Debenture is therefore recognized net of a debt discount, with the derivative liabilities recorded separately and subsequently remeasured to fair value through earnings. Interest expense will be recognized using the effective-interest method.

The Company recognized the discount of $362,067 at issuance consisting of the fair value of the derivative at issuance of $352,067, and $10,000 of transaction cost paid at closing. As a result, the Company recognized $90,517 in amortized debt discount and $12,500 in interest expense for the three-months ended March 31, 2026 and $241,378 in amortized debt discount and $33,333 in interest expense for the nine-months ended March 31, 2026. The balance as of March 31, 2026 is $412,644, net of $120,689 of unamortized debt discount. See note 13 for additional disclosure regarding fair value of the derivative.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

Convertible Notes

On September 16, 2025, September 19, 2025 and September 23, 2025, the Company entered into separate securities purchase agreements (each, a “September-Securities Purchase Agreement”) with certain institutional investors under which the Company agreed to issue and sell, in a private placement, convertible promissory notes (each, a “Convertible Note” and collectively, the “Convertible Notes”) for an aggregate principal amount of $6,000,000, for a gross purchase price of $5,000,000, reflecting a 20% original issue discount, before fees and other expenses. The Notes did not bear interest, and were to mature on the earlier of six-months from issuance or the date that the Company completes a Qualified Financing (meaning an issuance and sale of capital stock raising gross proceeds of at least $10 million, as defined in the Convertible Notes). The Convertible Notes were convertible into equity, at each holder’s option, at the closing of a Qualified Financing, at the same per share price as the securities sold in the Qualified Financing. The Notes were subject to customary events of default and related remedies.

The Convertible Notes are within the scope of ASC 470-10 and not an ASC 480 liability. The Company did not elect the ASC 825-10 fair value option. The instrument includes two embedded derivative features—the Conversion upon Qualified Financing and Event of Default acceleration—each meeting the definition of a derivative under ASC 815-15 and therefore requiring bifurcation and separate recognition at fair value. The Convertible Notes were issued at a 16.67% discount, and the aggregate discount (original issue plus bifurcation-related) will be amortized under ASC 835-30 using the effective interest method. The Convertible Notes did not bear any stated interest, and imputed interest was recognized accordingly. The Convertible Notes are presented as debt, with derivative liabilities separately disclosed and measured at fair value.

The Company recognized the discount of $1,682,154 at issuance consisting of the fair value of the derivative at issuance of $382,154, $1,000,000 originally issued discount and $300,000 of transaction cost paid at closing. On October 8, 2025 in connection with the Equity SPA discussed below, the Company repaid $1,850,000 in cash and converted $4,150,000 of the Convertible Note into the Units sold pursuant to the Equity SPA. As a result, the Company recognized $1,541,975 and $1,682,154 in amortized debt discount for the three and nine-months ended March 31, 2026, respectively. The balance as of March 31, 2026 fully settled and no amounts remain due under the Convertible Note. The derivative was derecognized as a result of the full settlement of the Convertible Note. See note 13 for additional disclosure regarding fair value of the derivative.

Equity Financing

On October 8, 2025, the Company entered into the Equity SPA with certain institutional investors (each, an “Investor”), including Funicular, pursuant to which the Company agreed to issue and sell, in a private placement, 16,666,666 Units for a purchase price of $0.60 per Unit. Each Unit consists of one share of the Common Stock and one warrant (each, a “2025 Warrant”) to purchase Common Stock. Of the total investment amount of $10,000,000, $5,850,000 of proceeds were received and $4,150,000 were converted from the Convertible Notes discussed above.

The 2025 Warrants are immediately exercisable on a cash basis or exchangeable on a cashless basis and will expire five years from the date of issuance. Each 2025 Warrant will be initially exercisable for one share of Common Stock at an initial exercise price of $0.75 per share, subject to adjustment for stock splits, distributions and the like (the “Initial Exercise Price”). The Initial Exercise Price is also subject to potential increase if the Company completes certain subsequent offerings at a price greater than the Initial Exercise Price while the 2025 Warrants remain outstanding. At any time after the issuance of the 2025 Warrants, the holder of the 2025 Warrants may exchange the 2025 Warrants on a cashless basis for a number of shares of Common Stock determined by multiplying the total number of shares with respect to which the 2025 Warrant is then being exercised by the Black Scholes Value (as defined in the 2025 Warrant) divided by the lower of the two closing bid prices of the Common Stock in the two days prior the time of such exercise.

In the event of a Fundamental Transaction (as defined in the 2025 Warrants), the holders of the 2025 Warrants will be entitled to receive upon exercise of the 2025 Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the 2025 Warrants immediately prior to such Fundamental Transaction. Additionally, as more fully described in the 2025 Warrants, the holders of the 2025 Warrants will be entitled to receive consideration in an amount equal to the Black Scholes value of the 2025 Warrant in connection with a Fundamental Transaction. If the Company fails to timely deliver the shares of Common Stock issuable upon exercise of the 2025 Warrants, the Company will be subject to liquidated damages.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

Subject to the provisions of the Equity SPA, if, during the 12-month period commencing on the date of the closing, the Company carries out one or more Subsequent Financings (as defined in the Equity SPA), each Investor that purchases $50,000 or more of Units will have the right to participate in an amount up to 100% of such Investor’s investment amount under the Equity SPA in any such securities offered by the Company, subject to certain exceptions.

The Company engaged Dawson James Securities, Inc. as the placement agent (the “Placement Agent”) with respect to the offering of the Restated Note and the Units. The Company agreed to pay the Placement Agent’s fees totaling (i) 4.5% of the aggregate gross from the sale of the Restated Note, (ii) 6% of the aggregate gross proceeds from the sale of the Units to current or previous investors not introduced to the Company by the Placement Agent and (iii) 7% of the aggregate gross proceeds from the sale of the Units to investors introduced to the Company by the Placement Agent, and to reimburse the Placement Agent’s expenses (subject to a cap). Resulting in total transaction cost paid of $1,228,500. The Company also agreed to issue warrants to purchase up to an aggregate of 1,005,000 shares of Common Stock with a fair value of $334,062 to the Placement Agent and its designees, resulting in total transaction cost of $1,562,562. The fair value of the warrants issued to the Placement Agent was included in the transaction cost and allocated between the 2025 Warrant in the amount of $865,659 and the Common Stock in the amount of $696,903 on a pro rated basis.

$500,000 of the Units sold pursuant to the Equity SPA were purchased by Sixth Borough Capital Fund, LP, an entity controlled by Robert D. Keyser, Jr., who is a member of the Company’s board of directors and the Chief Executive Officer of the Placement Agent.

The closings of the issuance and sale of the Restated Note and the Units occurred on October 9 through October 14, 2025, and the Company issued an aggregate of 16,666,666 shares of Common Stock and 16,666,665 2025 Warrants.

At the closings, the Company entered into a registration rights agreement with the Investors (the “Registration Rights Agreement”), pursuant to which the Company agreed, among other things, to file one or more registration statements covering the resale of the shares of Common Stock included as part of the Units, as well as the shares issuable upon conversion of the Restated Note or exercise of the 2025 Warrants. The Company will be subject to liquidated damages if it fails to meet certain conditions set forth in the Registration Rights Agreement.

The Company evaluated the classification of the 2025 Warrants, Common Stock, and the Registration Rights Agreement issued or entered into pursuant to the Equity SPA. The assessment was performed under the relevant guidance in ASC 480-10, ASC 815-10, ASC 815-40, and ASC 825-20, to determine whether these instruments should be accounted for as freestanding or embedded financial instruments, and whether they meet the criteria for equity or liability classification. The 2025 Warrants are classified as freestanding derivative financial liabilities within the scope of ASC 815-10 and ASC 815-40, measured initially and subsequently at fair value through earnings. The issued shares of Common Stock are freestanding equity instruments. The Registration Rights Agreement is a freestanding contingent obligation within the scope of ASC 825-20, with potential liability recognition contingent on probability and estimability under ASC 450-20. See Note 13 for additional disclosure regarding fair value of the 2025 Warrants.

NOTE 10. INTANGIBLE ASSETS

Amortization expense was $348,060 and $348,060 for the three-month period ended March 31, 2026 and March 31, 2025. Amortization expense was $1,059,650 and $1,010,519 for the nine-month period ended March 31, 2026 and March 31, 2025, respectively.

Intangible Assets of the company at March 31, 2026 and June 30, 2025 are summarized as follows:

SCHEDULE OF INTANGIBLE ASSETS

		March 31, 2026
				Accumulated			Impairment
	Est useful life	Cost		Amortization			of Asset		Net
Goodwill	Indefinite	$	6,142,525	$	—		$	—	$	6,142,525
Pacsquare assets – Proprietary Software	10 years		1,928,800		(288,448	)		—		1,640,352
Customer Lists	12 years		14,625,000		(2,607,791	)		—		12,017,209
Intangible Assets		$	22,696,325	$	(2,896,239	)	$	—	$	19,800,086

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

		June 30, 2025
				Accumulated			Impairment
	Est useful life	Cost		Amortization			of Asset		Net
Goodwill	Indefinite	$	6,142,525	$	—		$	—	$	6,142,525
Developed technology	10 years		1,928,800		(143,696	)		—		1,785,104
Customer Lists	12 years		14,625,000		(1,692,894	)		—		12,932,106
Intangible Assets		$	22,696,325	$	(1,836,590	)	$	—	$	20,859,735

Below is a summary of the amortization of intangible assets for the next five years:

Fiscal Year	Amount
June 30, 2026	$	351,927
June 30, 2027		1,411,577
June 30, 2028		1,414,916
June 30, 2029		1,411,577
June 30, 2030		1,411,577
Thereafter		7,655,985

NOTE 11. STOCKHOLDERS’ DEFICIT

Preferred Stock — The Company is authorized to issue 25,000,000 shares of Preferred Stock with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At March 31, 2026 and June 30, 2025, there were no shares of Preferred Stock issued or outstanding.

Common stock — The Company is authorized to issue 500,000,000 shares of Common Stock. Holders of the Company’s Common Stock are entitled to one vote for each share. At March 31, 2026 and June 30, 2025, there were 149,794,297 and 40,165,603 shares of Common Stock outstanding, respectively.

The Common Stock commenced trading on the NYSE American LLC (“NYSE American”) under the symbol “ATCH” on February 12, 2024. AtlasClear Holdings’ public warrants (the “Public Warrants”) commenced trading on the over-the-counter market (the “OTC”) under the symbol “ATCH WS” on February 12, 2024.

On August 11, 2025, the Company issued 200,000 shares of Common Stock as consideration for $40,000 in open invoices to a service provider.

Pursuant to a Software As A Services License Agreement, as payment in shares for services rendered during the nine-months period ended March 31, 2026, the Company issued 356,901 shares of Common Stock valued at the closing price on the date of issuance of $0.162 per share, resulting in compensation expense of $57,821.

On October 1, 2025, the Company and Interest Solutions entered into an amendment to the Interest Solutions Note whereby the conversion price floor of $2.00 was amended to $0.5627. As a result, on October 1, 2025, the Company issued 576,616 shares of Common Stock at a conversion price of $0.5627 in full settlement of $275,000 in principal and $49,462 of accrued interest.

On October 13, 2025, the Company and a vendor entered into a settlement agreement and release, whereas the Company agreed to issue 192,744 shares of Common Stock in settlement of $34,000 of a vendor payable balance.

On October 13, 2025, the Company issued 325,000 shares of Common Stock to consultants for services rendered. The shares were valued based on the date the date shares were issued for total compensation expenses of $132,373.

In connection with the Equity SPA discussed in Note 9 above, the closings of the issuance and sale of the Units occurred on October 9 through October 14, 2025, and the Company issued an aggregate of 16,666,666 shares of Common Stock.

Refer to Notes 7 and 9 for details regarding shares issued during the three and nine-months ended March 31, 2026 and 2025.

Warrants—In connection with the Equity SPA, on October 8, 2025, the Company issued the 2025 Warrants as discussed in Note 9 above. The warrants were issued to investors as an equity-linked incentive and to the placement agent as part of transaction compensation. The warrants entitle holders to purchase fully paid and non-assessable shares of common stock, subject to the terms summarized below.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

Instruments Issued and Outstanding

	●	Investor Warrants: 16,666,667 warrants issued on October 8, 2025

	●	Placement Agent Warrants: 1,005,000 warrants issued on October 8, 2025

	●	Public Warrants: 10,062,500 warrants issued on February 9, 2024

	●	Private Warrants: 5,553,125 warrants issued on February 9, 2024

	●	Secured Convertible Note Warrants: 600,000 issued February 9, 2024

	●	As of March 31, 2026 there are total 32,473,957 warrants outstanding. During the three months ended March 31, 2026, the Company received three cash less warrant exercise notices from the Investor Warrant holders, resulting in 1,413,333 warrants exercised and the issuance of 4,214,127 shares of Common Stock valued at $1,094,669.

The warrants are freestanding financial instruments within the scope of ASC 815-10 and ASC 815-40. Although indexed to the Company’s own stock, the warrants do not qualify for equity classification because they contain provisions that could require net cash settlement (e.g., cash payout upon certain fundamental transactions and cash penalties for delayed share delivery). Accordingly, the warrants are classified as derivative financial liabilities and recorded at fair value on the balance sheet, with subsequent changes in fair value recognized in earnings. Refer to Note 13 for discussion regarding the fair value disclosures.

NOTE 12. STOCK BASED COMPENSATION

Executive Employment Agreements and Equity Awards

In September 2025, the Company entered into the Schaible Employment Agreement, the Ridenhour Employment Agreement and the Patel Employment Agreement, each as discussed in Note 9.

Under the terms of these agreements, the executives are entitled to annual base salaries ranging from $350,000 to $500,000 over the three-year5 term, annual discretionary cash bonuses contingent upon Company profitability and board approval, and various stock-based awards under the Company’s equity incentive plan.

Time-Based Stock Awards

Each of Messrs. Schaible and Ridenhour received a one-time grant of 700,000 shares of Common Stock upon execution of their respective agreements and are entitled to receive an additional 286,842 shares on July 1, 2026, in each case subject to stockholder approval of an amendment to the Company’s equity incentive plan to increase the number of shares authorized for issuance thereunder. Each such grant vests on June 30 of the year following the grant date, subject to continued employment.

The grant-date fair value of the time-based awards was measured based on the closing price of the Company’s Common Stock determined to be $641,900 each for total of $1,283,800, on the respective grant dates and is recognized as compensation expense on a straight-line basis over the vesting period.

Schedule of Nonvested Stock Awards

(Shares in units; weighted-average grant-date fair value in $)

SCHEDULE OF NONVESTED STOCK AWARDS

Activity	Shares		Weighted-Average Grant-Date Fair Value
Nonvested at July 1, 2025		—		—
Granted		1,400,000	$	0.92
Vested		—		—
Forfeited/Expired		—		—
Nonvested at March 31, 2026		1,400,000	$	0.92

Performance-Based (Market Condition) Stock Awards

Each of Messrs. Schaible and Ridenhour is eligible to receive up to five performance-based stock awards, each equal to 1% of the Company’s total outstanding shares at the time of grant, and Mr. Patel is eligible to receive up to five performance-based stock awards, each equal to 0.5% of the Company’s total outstanding shares, upon achievement of specified stock price milestones, in each case subject to stockholder approval of an amendment to the Company’s equity incentive plan to increase the number of shares authorized for issuance thereunder.

These milestones are based on the Company’s Common Stock achieving a 10-day volume-weighted average price (“VWAP”) of $0.75, $1.00, $1.24, $1.49, and $1.74, respectively. Each award vests over three years following achievement of the applicable stock price target, subject to continued employment.

Schedule of Performance-Based (Market Condition) Awards by Tranche (Units; grant-date shares)

Tranche	VWAP Milestone		Grant-Date FV/Share		Nonvested at July 1, 2025		Granted		Vested		Forfeited/Expired		Nonvested at March 31, 2026
1	$	0.75		0.66		—		3,170,479		—		—		3,170,479
2	$	1.00		0.65		—		3,170,479		—		—		3,170,479
3	$	1.24		0.64		—		3,170,479		—		—		3,170,479
4	$	1.49		0.63		—		3,170,479		—		—		3,170,479
5	$	1.74		0.62		—		3,170,479		—		—		3,170,479
Total						—		15,852,395		—		—		15,852,395

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

Because these awards include market conditions, the Company estimated their grant-date fair value using a Monte Carlo simulation model. The following table summarizes the key assumptions used in the valuation of these awards:

Assumption	September 2025 Grants
Expected volatility		140.6	%
Risk-free interest rate		3.5	%
Expected term		3.0 years
Expected dividend yield		0	%
Fair value per share (Tranche 1)	$	0.66
Fair value per share (Tranche 2)	$	0.65
Fair value per share (Tranche 3)	$	0.64
Fair value per share (Tranche 4)	$	0.63
Fair value per share (Tranche 5)	$	0.62

Compensation cost for these awards will be recognized over the derived service period, regardless of whether the market condition is ultimately achieved, provided the requisite service is rendered. Expense is not reversed solely because the market condition is not satisfied.

Forfeiture Policy

The Company accounts for forfeitures of share-based awards as they occur. Previously recognized compensation cost is reversed in the period an unvested award is forfeited.

Stock-Based Compensation Expense

As of March 31, 2026, none of the stock price milestones had been achieved and no shares had vested under the performance-based awards.

Stock-based compensation expense recognized in the unaudited condensed consolidated statements of operations was as follows:

	Three Months Ended		Three Months Ended
	March 31, 2026		March 31, 2025
Time-based stock awards	$	320,950	$	—
Market-based stock awards	$	833,879	$	—
Total stock-based compensation expense	$	1,154,829	$	—

	Nine Months Ended		Nine Months Ended
	March 31, 2026		March 31, 2025
Time-based stock awards	$	695,392	$	—
Market-based stock awards	$	1,788,208	$	—
Total stock-based compensation expense	$	2,483,600	$	—

As of March 31, 2026, total unrecognized compensation cost related to unvested time- and market-based stock awards was approximately $8,945,732, which is expected to be recognized over a weighted-average period of 2.25 years.

NOTE 13. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

	●	Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
	●	Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
	●	Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2026 and June 30, 2025, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description	Level	March 31, 2026		June 30, 2025
Assets:
Trading securities	1	$	5	$	5

Liabilities:
Winston & Strawn agreement	3	$	—	$	2,489,945
Warrant liability – Private Warrants	3	$	108,910	$	123,062
Earnout liability	3	$	689,000	$	11,369,000
Convertible notes Chardan derivative	3	$	—	$	103,185
Merger financing derivative	3	$	—	$	63,696
Tau agreement	3	$	—	$	539,787
Debentures – derivative	3	$	346,585	$	—
Convertible Notes – derivative	3	$	—	$	—
Secured Convertible Note	3	$	11,706,148	$	—
Warrant liability – Equity SPA	3	$	2,754,751	$	—

Winston & Strawn Agreement

On February 9, 2024, the Company entered into the Winston & Strawn Agreement, as described in Note 9.

The Winston & Strawn Agreement is considered a variable-share obligation under ASC Topic 480 (“Distinguishing Liabilities from Equity”). The Winston & Strawn Agreement meets the requirements for classification under ASC 480 and as a result is required to be accounted for as a liability under ASC 480 and is presented as such on the Condensed Consolidated Balance Sheets. The Company will record a change in fair value on each reporting period until settlement in its Condensed Consolidated Statement of Operations. See Note 9 for further discussion.

As of March 31, 2026 the Company entered into a settlement agreement Winston & Strawn Agreement and, as such, the Company derecognized the carrying value of the agreement and recognized a loss on settlement of $570,300.

The key inputs into the Monte Carlo model for the Winston & Strawn Agreement were as follows:

Input	June 30, 2025
Market price of public shares	$	0.19
Equity volatility		167.7	%
Risk-free rate		4.21	%
Subscription agreement measurement input		4.21	%

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

Warrant Liability

The private placement warrants originally issued by Quantum and assumed by the Company in connection with the Business Combination (the “Private Warrants”) were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liability in the consolidated statements of operations.

The Private Warrants were, initially and as of the end of each subsequent reporting period, valued using a lattice model, specifically a Black-Scholes model, which is considered to be a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the Private Warrants is the expected volatility of the Company’s Common Stock. The expected volatility of the Company’s Common Stock was determined based on the implied volatility of the publicly traded Public Warrants.

The key inputs into the Black-Scholes model for the Private Warrants were as follows:

Input	March 31, 2026			June 30, 2025
Market price of public shares	$	0.20		$	0.19
Risk-free rate		3.81	%		3.67	%
Dividend yield		0.00	%		0.00	%
Volatility		181.45	%		167.7	%
Exercise price	$	689.86		$	689.86
Warrants and rights expiration date description	$	689.86		$	689.86

Effective expiration date		February 2029			February 2029

Earnout Liability

The liability associated with the Earnout Shares was, initially as of February 9, 2024, valued using a Monte Carlo simulation to determine if and when the revenue hurdles would be achieved. The revenue volatility and revenue to equity correlation was based upon the same guideline public companies. As of March 31, 2026, the Company revised when revenue hurdles would be achieved, as a result of the delay in financing and implementation of the Commercial Bancorp acquisition. Revenue targets were deemed less likely to be reached and as such, this resulted in a significant decrease in the value of the Earnout liability. The Monte Carlo simulation was performed simultaneously on both the share price and revenue to account for the correlation between revenue and equity.

The key inputs into the Monte Carlo model for the Earnout liability were as follows:

Input	March 31, 2026			June 30, 2025
Market price of public shares	$	0.20		$	0.19
Revenue volatility		50.00	%		12.00	%
Discount factor for revenue		21.19	%		9.31	%
Earnout liability measurement input		21.19	%		9.31	%

Convertible Note Derivatives

The conversion derivatives associated with Short-Term Notes, Long-Term Notes and the Chardan Note were accounted for as a liability in accordance with ASC 815-40. The conversion derivative liabilities were measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of conversion derivative liability in the consolidated statements of operations. The convertible note derivatives are made up of the fair value of the embedded conversion option included in the Long-Term Notes and the Chardan Note, which each had fair value as of March 31, 2026 of $0. The fair value of the embedded conversion option included in the Long-Term Notes and the Chardan Note had a fair value as of June 30, 2025 of $103,185 and $0, respectively, totaling $103,185.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

Long-Term Notes

As of June 30, 2025 the conversion feature was valued using Monte Carlo model resulting in the fair value of the conversion option included in the Long-Term Notes at $103,185. During the nine-months ended March 31, 2026 the Long-Term Notes were settled in full and, as such, the derivative was settled in full with a zero value as of March 31, 2026.

The key inputs into the Monte-Carlo model for the conversion derivative as of June 30, 2025 were as follows:

Input	June 30, 2025
Market price of public shares	$	0.19
Risk-free rate		4.13	%
Discount rate		15.63	%
Probability of default		14.3	%
Recovery rate		28.9	%
Volatility		167.7	%
Effective expiration date		February 2026

Secured Convertible Note

On October 8, 2025, the Company entered into the Restated SPA with Funicular. The Restated Note issued pursuant to the Restated SPA is convertible, in whole or in part, into shares of the Company’s Common Stock at the election of the holder at any time at an initial Conversion price of $0.75 per share. The Conversion Price is subject to adjustment if the Company issues or is deemed to issue shares of Common Stock at a price below the then-current Conversion Price (subject to certain exceptions), and is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like. The Company elected to apply the Fair Value Option (FVO) under ASC 825-10 to the Restated Note. Under ASC 825-10-15-4 and 825-10-25-4, the Restated Note qualifies as an eligible financial liability because it is recognized upon initial issuance and not within any of the prohibited categories. The election was made at initial recognition and applies to the entire instrument, with upfront fees and costs expensed as incurred. As a result, the Restated Note is measured at fair value with changes recognized in earnings each reporting period, and the Company separately presents in other comprehensive income the portion of fair value changes attributable to instrument-specific credit risk, consistent with ASC 825-10-45-5.

As of March 31, 2026 and October 8, 2025, the Restated Note was valued using Black-Scholes model combined with the discounted cash flow model, resulting in the fair value of the Restated Note of $11,706,148 and $14,585,961, respectively.

The key inputs into the Black-Scholes model for the conversion derivative as of March 31, 2026 and October 8, 2025 were as follows:

Input	March 31, 2026			October 8, 2025
Market price of public shares	$	0.20		$	0.36
Conversion Price	$	0.75		$	0.75
Principal and interest balance at valuation date	$	10,627,293		$	10,097,782
Risk-free rate		3.89	%		3.73	%
Discount rate		15.75	%		11.30	%
Volatility		181.45	%		165.13	%
Effective expiration date		October 2030			October 2030
Term		4.53 years			5 years

Merger Financing Note

As of June 30, 2025 the conversion feature was valued using Monte Carlo model resulting in the fair value of the conversion option included in the Merger Financing Note of $63,696. During the nine-months ended March 31, 2026, the Merger Financing Note was settled in full and, as such, the derivative was settled in full with a zero value as of March 31, 2026.

Input	June 30, 2025
Market price of public shares	$	0.19
Risk-free rate		4.13	%
Discount rate		15.63	%
Probability of default		14.3	%
Recovery rate		28.9	%
Volatility		167.7	%
Derivative liability measurement input		167.7	%
Effective expiration date		February 2026

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

Tau Agreement

As discussed in Note 9, the Tau Agreement no longer has shares available to utilize and management does not intend to utilize the ELOC. As such as of March 31, 2026 the fair value of the Tau Agreement was deemed to be zero. As of June 30, 2025 the Tau Agreement and the related Commitment Fee was valued using Monte Carlo model resulting in the fair value of $539,448 and $337, respectively.

The key inputs into the Monte-Carlo model for the Commitment Amount as of issuance date of June 30, 2025 was as follows:

Input	June 30, 2025
Anticipated Monthly Advance Amounts	$	40,000
Risk-free rate		3.75	%
Volatility		167.7	%
Commitment amount measurement input		167.7	%

Effective expiration date		July 2026

Debenture Derivative

On August 4, 2025 the Company issued the Debenture as discussed in Note 9. The Company determined that the conversion feature was required to be bifurcated under ASC 815 and, as such, the Company fair valued the embedded derivative. As of March 31, 2026 the Debenture was valued using a Black-Scholes model and as of August 4, 2025, the issuance date, the Debenture was valued using Scenario Based Methodology model resulting in the fair value of the conversion option included in the Debenture embedded derivative at $346,585 and $352,067, respectively. See Note 9 for additional information.

The key inputs into the Black-Scholes for the conversion derivative as of March 31, 2026 and Scenario Based Methodology model August 4, 2025 were as follows:

Input	March 31, 2026			August 4, 2025
Market price of public shares	$	0.20		$	0.22
Risk-free rate		3.71	%		3.75	%
Discount rate		17.52	%		15.41	%
Volatility		181.45	%		165.9	%
Effective expiration date		August 2026			August 2026

Convertible Note Derivative

On September 16, 2025 the Company issued Convertible Notes as discussed in Note 9. The Company determined that the conversion feature was required to be bifurcated under ASC 815 and, as such, the Company fair valued the embedded derivative. As of September 16, 2025, the issuance date, the Convertible Notes derivative was valued using a Scenario Based methodology model resulting in the fair value of the embedded derivatives included in the Convertible Notes of $5,382,154, of which at $382,154 was allocated to the embedded derivative. On October 8, 2025 in connection with the Equity SPA, the Company repaid the Convertible Note in full; as such as of March 31, 2026 the derivative was derecognized. See Note 9 for additional information.

The key inputs into Scenario Based Method for the conversion derivative as of September 16, 2025 were as follows:

Input	September 16, 2025
Discount rate		11.21	%
Probability of default		8.98	%
Recovery rate		42.90	%
Effective expiration date		March 2026

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

2025 Warrant Liability- Equity SPA

On October 8, 2025, the Company entered into the Equity SPA pursuant to which the Company agreed to issue and sell, in a private placement, 16,666,666 Units for a purchase price of $0.60 per Unit. Each Unit consists of one share of the Company’s Common Stock and one 2025 Warrant. In addition, 1,005,000 of 2025 Warrants were issued to the placement agent as transaction cost. The 2025 Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liability in the consolidated statements of operations. The fair value of all 2025 Warrants issued at issuance was $5,874,061 ($5,539,999 for the warrants included in the units and $334,062 for the warrants issued to placement agents).

The 2025 Warrants were, initially and as of the end of each subsequent reporting period, valued using a lattice model, specifically a Black-Scholes model, which is considered to be a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the 2025 Warrants is the expected volatility of the Company’s Common Stock.

The key inputs into the Black-Scholes model for the 2025 Warrants were as follows:

Input	March 31, 2026			October 8, 2025
Market price of public shares	$	0.20		$	0.36
Risk-free rate		3.89	%		3.73	%
Dividend yield		0.00	%		0.00	%
Volatility		181.45	%		165.13	%
Exercise price	$	0.75		$	0.75
Term		4.52 years			5 years
Derivative liability measurement input		0.75			0.75

Effective expiration date		October 2030			October 2030

The following table presents the changes in the fair value of the following:

SCHEDULE OF CHANGES IN THE FAIR VALUE

	Private Placement			Tau Agreement
	Warrants			Liability
Fair value as of June 30, 2025	$	123,062		$	539,787
Write of receivable		—			(205,238	)
Change in valuation inputs or other assumptions		61,531			(334,549	)
Fair value as of September 30, 2025	$	184,593		$	—
Change in valuation inputs or other assumptions		91,066			—
Fair value as of December 31, 2025	$	275,659		$	—
Change in valuation inputs or other assumptions		(166,749	)		—
Fair value as of March 31, 2026	$	108,910		$	—

	Private Placement			Tau Agreement
	Warrants			Liability
Fair value as of June 30, 2024	$	307,656		$	—
Initial measurement		—			1,090,949
Transferred to equity		—			(303,000	)
Change in valuation inputs or other assumptions		(246,125	)		184,559
Fair value as of September 30, 2024	$	61,531		$	972,508
Transfer to equity		—			115,277
Change in valuation inputs or other assumptions		61,531			73,284
Fair value as of December 31, 2024	$	123,062		$	783,947
Fair value of advance requests		—			1,042,329
Transfer to equity		—			(879,403	)
Change in valuation inputs or other assumptions		(61,531	)		(53,152	)
Fair value as of March 31, 2025	$	61,531		$	893,721

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

	Conversion			Earnout
	Derivative			Liability
Fair value as of June 30, 2025	$	103,185		$	11,369,000
Change in valuation inputs or other assumptions		(103,185	)		116,000
Fair value as of September 30, 2025	$	—		$	11,485,000
Change in valuation inputs or other assumptions		—			(10,624,000
Fair value as of December 31, 2025	$	—		$	861,000
Change in valuation inputs or other assumptions		—			(172,000	)
Fair value as of March 31, 2026	$	—		$	689,000

	Conversion			Earnout
	Derivative			Liability
Fair value as of June 30, 2024	$	16,462,690		$	12,298,000
Change in valuation inputs or other assumptions		(14,320,179	)		340,000
Fair value as of September 30, 2024	$	2,142,511		$	12,638,000
Change in valuation inputs or other assumptions		(1,117,805	)		(1,594,000	)
Fair value as of December 31, 2024	$	1,024,706		$	11,044,000
Change in valuation inputs or other assumptions		(137,687	)		186,000
Fair value as of March 31, 2025	$	887,019		$	11,230,000

	Winston & Strawn			Merger Financing
	Agreement			Derivative
Fair value as of June 30, 2025	$	2,489,945		$	63,696
Change in valuation inputs or other assumptions		(1,798,624	)		(63,696	)
Fair value liability as of September 30, 2025	$	691,321		$	—
Change in valuation inputs or other assumptions		(921	)		—
Fair value liability as of December 31, 2025	$	690,400		$	—
Derecognized on settlement		(690,400	)		—
Fair value liability as of March 31, 2026	$	—		$	—

	Winston & Strawn		Merger Financing
	Agreement		Derivative
Fair value as of June 30, 2024	$	2,425,647	$	—
Initial measurement		—		113,044
Change in valuation inputs or other assumptions		34,841		63,195
Fair value liability as of September 30, 2024	$	2,460,488	$	176,239
Change in valuation inputs or other assumptions		13,041		(25,749	)
Fair value liability as of December 31, 2024	$	2,473,529	$	150,490
Change in valuation inputs or other assumptions		11,404		(48,115	)
Fair value liability as of March 31, 2025	$	2,484,933	$	102,375

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

				Secured
	Contingent			Convertible
	Guarantee			Derivative
Fair value as of June 30, 2024	$	3,256,863		$	—
Shares issued as partial payment		(1,210,290	)		—
Change in valuation inputs or other assumptions		839,774			89,535
Exchange to Merger financing note		(2,886,347	)		—
Fair value as of September 30, 2024	$	—		$	89,535
Change in valuation inputs or other assumptions		—			(89,535	)
Fair value liability as of March 31, 2025	$	—		$	—

	Debenture			Convertible Notes
	Derivative			Derivative
Fair value as of June 30, 2025	$	—		$	—
Initial measurement		352,067			382,154
Change in valuation inputs or other assumptions		837,888			52,873
Fair value as of September 30, 2025	$	1,189,955		$	435,027
Change in valuation inputs or other assumptions		(606,886	)		(435,027	)
Fair value as of December 31, 2025	$	583,069		$	—
Change in valuation inputs or other assumptions		(236,484	)		—
Fair value as of March 31, 2026	$	346,585		$	—

	Secured			2025
	Convertible Note			Warrant Liability
Fair value as of June 30, 2025	$	—		$	—
Principal amount		10,097,782			—
Day 1 fair value charge to earnings		4,488,179			—
Initial measurement October 8, 2025		14,585,961			5,874,061
Accrued interest through December 31, 2025		255,626			—
Change in valuation inputs or other assumptions		(2,691,747	)		(1,940,728	)
Fair value as of December 31, 2025	$	12,149,840		$	3,933,333
Fair value of warrants exercised		—			(1,094,669	)
Accrued interest through March 31, 2026		273,885			—
Change in valuation inputs or other assumptions		(717,577	)		(83,913	)
Fair value as of March 31, 2026	$	11,706,148		$	2,754,751

There were no transfers between levels during the three and nine-months ended March 31, 2026 and 2025.

NOTE 14. SEGMENT REPORTING

The Company operates as one reportable segment in accordance with ASC 280, Segment Reporting. The single reportable segment reflects the Company’s core business operations of securities broker and dealer, dealing in over-the-counter and listed securities.

The Chief Operating Decision Maker (CODM), identified as the Chief Financial Officer, who reviews financial performance and allocates resources on a consolidated basis. The Company’s internal reporting is prepared and reviewed as a single operating unit, without disaggregated information by product line, region, or customer type. Accordingly, the Company has determined that it operates in a single reportable segment.

ATLASCLEAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

The following table presents revenue and operating income (loss) for the periods presented:

	Three Months Ended			Three Months Ended
	March 31, 2026			March 31, 2025
Commissions	$	1,412,339		$	1,506,077
Vetting fees		430,525			370,700
Clearing fees		661,950			658,926
Net gain/(loss) on firm trading accounts		336,860			1,527
Stock locate fees		1,360,178			5,873
Total revenue	$	4,201,852		$	2,543,103
Loss from operations	$	(2,932,859	)	$	(1,072,174	)

	Nine Months Ended			Nine Months Ended
	March 31, 2026			March 31, 2025
Commissions	$	6,844,429		$	4,488,058
Vetting fees		1,154,075			1,093,684
Clearing fees		1,958,447			2,491,865
Net gain/(loss) on firm trading accounts		542,318			5,483
Stock locate fees		3,010,267			14,594
Total revenue	$	13,509,536		$	8,093,684
Loss from operations	$	(6,265,419	)	$	(3,162,425	)
Total assets	$	73,915,806		$	60,892,833

Corporate general and administrative expenses are not allocated to any specific operating component and are included within total operating income.

Segment Assets

The Company does not report separate asset information by segment to the CODM. However, in accordance with ASC 280-10-50-30, the Company has elected to disclose total segment assets, which are equal to consolidated total assets. The table above summarizes total assets.

NOTE 15. SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed consolidated financial statements were issued. Based upon this review the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements, other than as described below.

On April 20, 2026, the Company issued 543,477 shares of Common Stock that were issued to Lockbox Holdings (“LCBX”), pursuant to a Software as a Services License Agreement, as payment in shares for services rendered through March 31, 2026. As per the terms of agreement the monthly fee is $20,000 and if paid in stock the company shall use 90% of the five-day VWAP of the last trading of the preceding month. The share issued represents $140,000 of accrued expenses of which $120,000 was included in the balance sheet as of March 31, 2026.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References in this quarterly report on Form 10-Q (the “Quarterly Report”) to “we,” “us,” “AtlasClear Holdings,” or the “Company” refer to AtlasClear Holdings, Inc. References to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with, and certain capitalized terms and not otherwise used in this section are defined in, the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Certain defined terms used herein have the meaning ascribed to them in the notes to the financial statements.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy, plans and objectives of management for future operations, including planned acquisition of Commercial Bancorp, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements.

Forward-looking statements are not guarantees of performance, and the absence of these words does not mean that a statement is not forward looking. You should understand that the following important factors could affect our future results, and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements herein:

	●	our ability to realize the benefits expected from the Business Combination (as defined herein);
	●	our ability complete the acquisition of Commercial Bancorp of Wyoming (“Commercial Bancorp”); or Ark Financial Services, Inc. (“Ark”);
	●	our ability to successfully integrate our recent and proposed acquisitions, including the acquisition of Commercial Bancorp, and to realize the synergies and benefits of such acquisitions;
	●	our ability to successfully implement the AtlasClear Platform (as defined herein);
	●	our significant indebtedness and our ability to service such indebtedness;
	●	the volatility of the price of our Common Stock, par value $0.0001 per share (the “Common Stock”) and the possibility that stockholders could incur substantial losses;
	●	potential dilution of our stockholder interests resulting from our issuance of equity securities;
	●	the ability to maintain the listing of our Common Stock on the NYSE American LLC (“NYSE American”), and the potential liquidity and trading of such securities;
	●	our ability to grow and manage growth profitably;
	●	our ability to raise financing in the future, if and when needed;
	●	our success in retaining or recruiting, or adapting to changes in, our officers, key employees, or directors following the Business Combination;
	●	our ability to attract and retain our senior management and other highly qualified personnel;
	●	our ability to achieve or maintain profitability;
	●	the period over which we anticipate our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements;
	●	our ability to successfully protect against cybersecurity attacks or breaches, ransomware attacks, and other disruptions to our information technology structure;
	●	our ability to successfully compete against other companies;
	●	our estimates regarding expenses, future revenue, and needs for additional financing; and
	●	the effect of economic downturns and political and market conditions beyond our control.

For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Annual Report on Form 10-K/A for the fiscal year ended June 30, 2025 (the “Annual Report”) filed with the U.S. Securities and Exchange Commission (the “SEC”) on September 30, 2025. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

We are building 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 that focus on financial services firms. We are a fintech driven business-to-business platform that seeks to power innovation in fintech, investing, underwriting and trading. We believe we are positioned to provide a modern, mission-critical suite of solutions to our clients, enabling them to reduce their transactions costs and compete more effectively in their businesses.

Our target client base for our prime banking and prime brokerage services includes financial services firms, generally with annual revenues up to $1 billion, including brokerage firms, hedge funds, pension plans, and family offices that are not adequately served by today’s larger correspondent clearing firms and banks.

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”), among the Company, Quantum, Atlas FinTech Holdings Corp. (“Atlas FinTech”) and certain other parties. 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 completed the acquisition of broker-dealer Wilson-Davis & Co., Inc. (“Wilson-Davis”).

Through the acquisition of Wilson-Davis, a correspondent clearing company, and the anticipated acquisition of Commercial Bancorp, we expect to acquire the capabilities to provide specialized clearing and banking services to financial services firms, with an emphasis on global markets currently underserviced by larger vendors. Once properly integrated, anticipated synergies between Commercial Bancorp, if acquired, and Wilson-Davis are expected to allow for lower cost of capital, higher net interest margins, expanded product development and greater credit extension.

On February 16, 2024, AtlasClear and Pacsquare Technologies, LLC (“Pacsquare”) entered into a Source Code Purchase and Master Services Agreement (the “Pacsquare Purchase Agreement”), pursuant to which AtlasClear purchased a proprietary trading platform with clearing and settlement capabilities that will be developed by Pacsquare, including certain software and source code (the “AtlasClear Platform”). On June 10, 2025, the Company and Pacsquare entered into a Software Development and License Agreement which supersedes and amends the terms under the Purchase Agreement. Under the Software Development and License Agreement, Pacquare agreed to develop and provide services for a period of 36 months, commencing on the date of execution of the Software Development and License Agreement.

We believe that our proprietary trading platform with clearing and settlement capabilities along with the software products and intellectual property assets, are cutting-edge, flexible and scalable.

Wilson-Davis

Wilson-Davis is a self-clearing correspondent securities broker-dealer registered with the SEC, licensed in 50 states, District of Columbia, and Puerto Rico, and is a member in good standing of FINRA. Wilson-Davis is engaged principally in the over-the-counter, or “OTC,” markets in microcap securities. Microcap securities generally are issued by companies with low or “micro” capitalizations, meaning the total market capitalization value of the company’s stock is less than $250 million, which includes low-priced securities, or penny stocks, that trade for less than $5.00 per share and have a market capitalization of less than $50 million. Wilson-Davis also executes transactions in exchange-traded securities. It derives its revenue from the liquidation of restricted and control microcap securities; clearing transactions on behalf of an introducing broker-dealer on a fully disclosed basis; and trading in equity securities for its own account. It receives limited revenues from fully paid stock lending, stock locates and margin accounts. During its history, Wilson-Davis has underwritten at-the-market offerings for publicly traded companies, placed private offerings, sold mutual funds, introduced margin accounts cleared by other firms on a fully disclosed basis, and provided ancillary financial services. Wilson-Davis derives revenue principally from commissions charged on the liquidation of restricted and control microcap securities, vetting, and clearing service fees charged to introducing brokers for which Wilson-Davis clears transactions on a fully disclosed basis, and other financial service fees. Commissions are earned by executing transactions for customers. Vetting fee revenues are earned when Wilson-Davis vests stock the customers want to bring into their accounts. Clearing fees are earned by clearing transactions for Glendale Securities, as introducing broker on a fully disclosed basis, pursuant to a clearing agreement with Glendale Securities.

Key Factors Impacting Wilson-Davis’ Business

Wilson-Davis’ business and results of operations have been, and will continue to be, affected by numerous factors and trends, which Wilson-Davis believes include those discussed in the section titled “Risk Factors” of the Transition Report. Some key factors impacting Wilson-Davis’ business include:

	●	Liquidity. As a clearing broker-dealer in the U.S., Wilson-Davis is subject to cash deposit requirements with clearing organizations, brokers, and banks that may be large in relation to its total liquid assets.
	●	Growth of Customer Base. Wilson-Davis’ growth requires continued use of its services by new customers.
	●	Expanding Wilson-Davis’ Relationship with Existing Customers. Wilson-Davis’ ability to expand its relationship with its existing customers will be an important contributor to its long-term growth.
	●	Market Trends. As financial markets grow and contract, Wilson-Davis’ customers’ behaviors are affected. Wilson-Davis’ revenue and profitability can be affected by general downturns in the securities markets, resulting from factors such as increased inflation, increased interest rates and other factors.

Debenture

On August 4, 2025, the Company entered into a securities purchase agreement (“August-Securities Purchase Agreement”) with an institutional investor under which the Company agreed to issue and sell, in a private placement, a Series A convertible debentures (the “Debenture”) for an aggregate principal amount of $500,000, for a gross purchase price of $490,000, net of legal fees. The Debenture bears 10% interest and matures on August 3, 2026. The holder is entitled to convert the unpaid principal amount of the Debenture, plus accrued interest and penalties, any time, at $0.15 per share. If, at any time after Closing, the Company receives financing from third party (excluding the Holder), the Company is required to pay to the Holder, in the form of cash, equity, or a combination of the two, solely at the discretion of the Holder, one hundred percent (100%) of the proceeds raised from the third party in excess of an aggregate amount of $10,000,000 (the “Threshold Amount”) until such time as the Face Amount of the Debenture has been paid in full. The Company agreed that, within 60 days after the sale of the Debenture, the Company would file with the SEC a registration statement, or an amendment to a previously-filed registration statement registering the resale of the shares of Common Stock underlying the Debenture.

Convertible Notes

On September 16, 2025, September 19, 2025 and September 23, 2025, the Company entered into separate securities purchase agreements (each, a “September-Securities Purchase Agreement”) with certain institutional investors under which the Company agreed to issue and sell, in a private placement, convertible promissory notes (each, a “Convertible Note” and collectively, the “Convertible Notes”) for an aggregate principal amount of $6,000,000, for a gross purchase price of $5,000,000, reflecting a 20% original issue discount, before fees and other expenses. The Notes did not bear interest, and were to mature on the earlier of six-months from issuance or the date that the Company completes a Qualified Financing (meaning an issuance and sale of capital stock raising gross proceeds of at least $10 million, as defined in the Notes). The Convertible Notes were convertible into equity, at each holder’s option, at the closing of a Qualified Financing, at the same per share price as the securities sold in the Qualified Financing. The Notes were subject to customary events of default and related remedies. In October 2025, upon the consummation of the transactions contemplated by the Equity SPA (as defined below), $4.15 million payable by the Company under the Convertible Notes was converted into Units (as defined below), and the remaining balance of the Convertible Notes was paid in full.

Convertible Note Financing

On October 8, 2025, the Company entered into an amended and restated securities purchase agreement (the “Restated SPA”) with Funicular Funds, LP (“Funicular”), which amended and restated in its entirety the securities purchase agreement, dated February 9, 2024, pursuant to which the Company had issued and sold to Funicular, in a private placement, a million secured convertible note in the original principal amount of $6,000,000 (the “Funicular Note”). Pursuant to the Restated SPA, the Company issued and sold to Funicular, for a purchase price of $10,000,000, an amended and restated convertible promissory note, dated October 8, 2025 (the “Restated Note”), which amends and restates the Funicular Note in its entirety. The principal amount of the Restated Note is $10,097,782, consisting of the $10,000,000 purchase price plus $97,782 in remaining outstanding principal under the Funicular Note.

The Restated Note has a stated maturity date of October 8, 2030. Interest accrues at a rate per annum equal to 11%, and is payable semi-annually on each June 30 and March 31. On each interest payment date, the accrued and unpaid interest shall, at the election of the Company in its sole discretion, be either paid in cash or paid in-kind by increasing the principal amount of the Restated Note. In the event of an Event of Default (as defined in the Restated Note), in addition to Funicular’s other rights and remedies, the interest rate would increase to 14% per annum. The Restated Note is convertible, in whole or in part, into shares of the Company’s Common Stock at the election of the holder at any time at an initial conversion price of $0.75 per share (the “Conversion Price”). The Conversion Price is subject to adjustment if the Company issues or is deemed to issue shares of Common Stock at a price below the then-current conversion price (subject to certain exceptions), and is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like. The Restated Note contains covenants which, among other things, limit the ability of the Company and its subsidiaries to incur additional indebtedness, incur additional liens and sell its assets or properties.

Equity Financing

On October 8, 2025, the Company entered into a securities purchase agreement (the “Equity SPA”) with certain institutional investors (each, an “Investor”), including Funicular, pursuant to which the Company agreed to issue and sell, in a private placement, an aggregate of 16,666,666 units of securities (each, a “Unit”), for a purchase price of $0.60 per Unit. Each Unit consists of one share of Common Stock and one warrant (each, a “2025 Warrant”) to purchase Common Stock. Of the total investment amount of $10,000,000, $5,850,000 of proceeds were received and $4,150,000 were converted from the Convertible Notes discussed above.

The Company engaged Dawson James Securities, Inc. as the placement agent (the “Placement Agent”) with respect to the offering of the Restated Note and the Units. The Company agreed to pay the Placement Agent’s fees totaling (i) 4.5% of the aggregate gross from the sale of the Restated Note, (ii) 6% of the aggregate gross proceeds from the sale of the Units to current or previous investors not introduced to the Company by the Placement Agent and (iii) 7% of the aggregate gross proceeds from the sale of the Units to investors introduced to the Company by the Placement Agent, and to reimburse the Placement Agent’s expenses (subject to a cap), resulting in total transaction cost paid of $1,228,500. The Company also agreed to issue warrants to purchase up to an aggregate of 1,005,000 shares of Common Stock with a fair value of $334,062 to the Placement Agent and its designees, resulting in total transaction cost of $1,562,562. The fair value of the warrants issued to the Placement Agent was included in the transaction cost and allocated between the 2025 Warrant in the amount of $865,659 and the Common Stock in the amount of $696,903 on a pro rated basis.

The closings of the issuance and sale of the Restated Note and the Units occurred on October 9 through October 14, 2025.

At the closings, the Company entered into a registration rights agreement with the Investors (the “Registration Rights Agreement”), pursuant to which the Company agreed, among other things, to file one or more registration statements covering the resale of the shares of Common Stock included as part of the Units, as well as the shares issuable upon conversion of the Restated Note or exercise of the Warrants. The Company will be subject to liquidated damages if it fails to meet certain conditions set forth in the Registration Rights Agreement.

Commercial Bancorp Share Purchase Agreement

Pursuant to the terms of the Purchase Agreement, the Company has agreed to purchase the Shares from the Sellers for consideration consisting of a combination of cash and shares of Common Stock, with the total amount of consideration to be determined based on (i) each Seller’s election to receive cash, shares of Common Stock, or a combination thereof, (ii) the adjusted book value of the operational portion of the equity capital of Commercial Bancorp as of the closing of the Acquisition (the “CB Closing”), determined in accordance with the provisions of the Purchase Agreement (the “ABV”), (iii) the value of the existing building and land comprising the physical location of the Bank (the “Premises”), and (iv) Commercial Bancorp’s net operating loss as reflected on its most recent tax return prior to the CB Closing, multiplied by the maximum corporate federal income tax rate in effect as of the date of the CB Closing (the “NOL Tax Benefit”). Each Seller may elect (the “Election”) to receive an amount equal to any of the following three options: (i) three times such Seller’s pro rata portion of the ABV, plus such Seller’s pro rata portion of the value of the Premises and the NOL Tax Benefit, payable one-third in cash and two-thirds in shares of Common Stock; (ii) two times such Seller’s pro rata portion of the ABV, plus such Seller’s pro rata portion of the value of the Premises and the NOL Tax Benefit, payable entirely in cash; or (iii) three times such Seller’s pro rata portion of the ABV, plus such Seller’s pro rata portion of the value of the Premises and the NOL Tax Benefit, payable entirely in shares of Common Stock. The Company has made an earnest money deposit payment in the amount of $100,000 to Commercial Bancorp, which deposit will be applied to the cash portion of the consideration payable at the CB Closing or, if the CB Closing does not occur under certain circumstances, retained by Commercial Bancorp.

The shares of Common Stock to be issued pursuant to the Purchase Agreement will be valued based on either the closing price of the Common Stock on the date of execution of the Purchase Agreement ($0.23), or on the business day immediately preceding the date of the CB Closing, at each Seller’s option. The Company has agreed to file with the Securities Exchange Commission (the “SEC”), by the later of 90 days following the date of the Purchase Agreement and ten business days following the deadline for each Seller to make an Election, a resale registration statement with respect to the shares of Common Stock issuable pursuant to the Purchase Agreement (the “Resale Registration Statement”).

The Purchase Agreement contains termination rights for each of the Sellers and the Company, including, without limitation, in the event that (i) any governmental entity issues a non-appealable final order denying approval of the Acquisition; (ii) the Transaction is not consummated within two years of the execution of the Purchase, subject to extension under certain circumstances; or (iii) the other party breaches its representations, warranties or covenants under the Purchase Agreement which would give rise to the failure of a closing condition and such breach is not cured with 30-days of receipt of written notice of such breach.

Results of Operations

Comparison of the Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

Three Months Ended

Three Months

March 31,

Ended

2026

2025

Changes

REVENUES

AtlasClear Holdings, Inc. 10-Q