AtlasClear Holdings, Inc. 2025 Stockholder Letter Clarification

Rhea-AI Summary

AtlasClear Holdings (NYSEAMEX: ATCH) has issued a clarification regarding its 2025 Stockholder Letter, specifically about the investment structure from Hanire The investment comprises an initial $5 million commitment structured in two parts: a common equity investment at $15 per share up to 19.99% ownership, and the remainder as a convertible note.

Additional funding beyond the initial $5 million, up to a total of $45 million, will be available at the Company's request through convertible notes with a 40% discount. Notably, Hanire requires shareholder approval for further note conversions beyond the initial investment.

AtlasClear aims to develop a technology-enabled financial services platform focusing on trading, clearing, settlement, and banking services for small and middle market financial firms.

Positive

• Secured $5 million initial investment commitment from Hanire
• Additional $40 million funding available upon company request
• Strategic investment structured at $15 per share for initial equity portion

Negative

• 40% discount on convertible notes for additional funding could lead to significant dilution
• Requirement for shareholder approval may delay further investment conversions
• 19.99% ownership cap on initial equity investment indicates substantial dilution risk

Insights

Financial Analyst

The clarification reveals critical details about AtlasClear Holdings' financing structure with Hanire The $5 million investment is structured in two parts: an initial equity investment at $15 per share up to 19.99% ownership, followed by a convertible note for the remainder. The additional $40 million commitment features a significant 40% discount on conversion, which could lead to substantial dilution for existing shareholders.

The $15 per share pricing represents a premium to current market levels, suggesting Hanire's confidence in AtlasClear's potential. However, the 40% discount on future conversions is notably steep and could pressure share prices when exercised. The requirement for shareholder approval on additional conversions provides some protection but also indicates potential governance concerns.

This financing structure, while providing necessary capital for AtlasClear's ambitious technology platform development, comes with significant strings attached. The deep discount on future conversions could create selling pressure and volatility in the stock price once conversions begin.

Tech Expert

AtlasClear's vision to build a technology-enabled financial services platform targeting small and middle-market firms addresses a important gap in the market. Modern clearing and settlement systems often favor larger institutions, leaving smaller players with less efficient solutions. The planned platform could potentially streamline operations and reduce costs for these underserved segments.

The $45 million total commitment, if fully utilized, would provide substantial resources for technology development and infrastructure building. However, the execution risk remains high given the complexity of developing robust trading, clearing and settlement systems that must meet stringent regulatory requirements and security standards.

The focus on 'evolving and innovative financial products' suggests potential integration of newer asset classes or trading mechanisms, which could position AtlasClear at the forefront of financial technology innovation. However, this ambitious scope also increases development complexity and time-to-market considerations.

TAMPA, Fla.--(BUSINESS WIRE)-- AtlasClear Holdings, Inc. (“AtlasClear Holdings” or the “Company”) (NYSEAMEX: ATCH), plans to build a cutting-edge technology enabled financial services firm that would create a more efficient platform for trading, clearing, settlement and banking of evolving and innovative financial products with a focus on the small and middle market financial services firms.

Dear Valued Stockholders,

We have received a number of inquiries for clarification related to our 2025 Stockholder Letter we released on Friday, January 10. To clarify elements of the investment detailed within the letter, Hanire LLC (“Hanire”) is investing the initial monies of the $5 million at $15 per share common equity up to 19.99%. The remainder of the $5 million is a convertible note. Hanire is prohibited from further conversions until a shareholder vote enabling such conversions. Any amount greater than the initial $5 million of the $45 million commitment will be at the Company’s request and in the form of a convertible note that converts at a 40% discount.

John Schaible
Executive Chairman
AtlasClear Holdings, Inc.

Cautionary Note Regarding Forward Looking Statements

This Shareholder Letter contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are characterized by future or conditional verbs such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” and similar words. Forward-looking statements contained in this communication include, but are not limited to, statements as to (i) the closing of all or any portion of the investment from Hanire, (ii) AtlasClear Holdings’ expectations regarding the benefits of the investment from Hanire, including its ability to allow AtlasClear Holdings to accomplish a number of its strategic goals, achieve profitability, deliver the capital needed for its proposed bank acquisition upon approval, solidify its capital foundation, reduce potential dilution, and position the Company to maximize long-term stockholder value, (iii) AtlasClear Holdings’ expectations as to future operational results, ; and (iv) the financial technology of AtlasClear Holdings. These forward-looking statements are based on the current beliefs and expectations of our management team and involve risks, potential changes in circumstances, assumptions, and uncertainties, including risks related to any failure by Hanire to deliver the tranches of capital on the anticipated schedule, or at all; any failure by the Company to meet the milestones required to receive the tranches of capital on a timely basis, or at all; failure of the Company to realize the anticipated benefits of the investment of capital, such as achieving profitability, delivering the capital needed for its proposed bank acquisition upon approval, solidifying its capital foundation, reducing potential dilution, and positioning the Company to maximize long-term stockholder value; failure by AtlasClear Holdings to satisfy the closing conditions to any of the tranches of capital; inability of regulatory changes, if any are enacted, to favorably impact the Company; poor performance or lack of growth in crypto and digital assets generally; the Company’s inability to accurately predict regulatory developments and developments in the crypto and digital asset markets; the Company’s ability to successfully introduce its new products, gain market acceptance for these products, and achieve profitability by marketing and selling these products. You are cautioned not to place undue reliance on these forward-looking statements, which are made only as of the date of this Stockholder Letter.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250113348432/en/

Media

AtlasClearPR@atlasclear.com

Investors

AtlasClearIR@atlasclear.com

Source: AtlasClear

FAQ

What is the total investment commitment received by AtlasClear Holdings (ATCH)?

AtlasClear Holdings has received a total investment commitment of $45 million from Hanire , with an initial $5 million portion and the remaining $40 million available upon company request.

What is the share price for Hanire's initial investment in ATCH?

Hanire's initial equity investment in AtlasClear Holdings is priced at $15 per share for up to 19.99% ownership.

What is the conversion discount for ATCH's additional funding beyond $5 million?

Any additional funding beyond the initial $5 million will be through convertible notes with a 40% discount to the conversion price.

What approvals are needed for Hanire's investment conversion in ATCH?

Hanire requires shareholder approval for converting notes beyond the initial investment portion.