AtlasClear Holdings, Inc. 10-K Summary
Business Context and Reporting Period
AtlasClear Holdings, Inc. filed its Annual Report on Form 10-K for the fiscal year ended June 30, 2026. The company operates as a single reportable segment through AtlasClearing, a FINRA-member correspondent broker-dealer focused on OTC and microcap securities liquidation, clearing, commissions, vetting, stock-locate services and related financial products. Management is pursuing a broader technology-enabled clearing, brokerage, banking and fintech platform.
The common stock trades on NYSE American under ATCH. The company had 150.3 million shares outstanding at June 30, 2026 and 151.8 million shares outstanding as of September 22, 2026.
Key Financial Metrics
| Metric | FY2026 | FY2025 | Change |
|---|---|---|---|
| Revenue | $20.1 million | $10.9 million | +85% |
| Operating expenses | $29.8 million | $15.8 million | +89% |
| Operating loss | $(9.8) million | $(4.9) million | Loss increased 99% |
| Other income | $11.5 million | $10.4 million | +10% |
| Net income | $2.0 million | $5.8 million | Down $3.8 million |
| Basic and diluted EPS | $0.02 | $0.96 | Declined substantially |
| Cash used in operating activities | $(6.2) million | $0.8 million provided | Deteriorated |
| Cash and restricted cash | $39.8 million | $29.6 million | +35% |
| Total assets | $71.2 million | $60.9 million | +17% |
| Total liabilities | $50.1 million | $67.7 million | Down $17.6 million |
| Stockholders’ equity | $21.1 million | $(6.8) million | Improved to positive |
Revenue growth was driven primarily by commissions of $9.3 million and stock-locate fees of $6.8 million, compared with $5.9 million and $0.3 million, respectively, in the prior year. Stock-locate fees represented a newly implemented and rapidly expanded business line. Clearing fees declined to $2.1 million from $3.2 million, while vetting fees declined modestly to $1.4 million.
The operating loss margin was approximately 48.7% of revenue, compared with 45.3% in FY2025. Net income was approximately 9.8% of revenue, compared with 53.0% in FY2025, but was substantially affected by non-cash fair-value gains, including an $11.1 million reduction in the earnout liability.
Cash and cash equivalents were $15.4 million, while $24.0 million was segregated for customers and $0.4 million was segregated for broker-dealer purposes. Approximately $37.8 million of cash was above FDIC insurance limits. AtlasClearing maintained net capital of $14.4 million, or $14.2 million above its $250,000 regulatory minimum and above the $10 million NSCC excess-net-capital requirement for correspondent clearing.
Debt, Liquidity and Capital Resources
- The company had $11.2 million of long-term secured convertible note obligations at fair value, arising from the October 2025 Restated Note. The note has a stated principal amount of approximately $10.1 million, bears interest at 11%, matures in October 2030, is secured by substantially all company and subsidiary assets, and is convertible initially at $0.75 per share.
- Subordinated borrowings totaled $1.9 million and generally mature in October 2026, subject to renewal and FINRA approval.
- A $10 million BMO revolving line of credit was undrawn at June 30, 2026. It is available for NSCC clearing-margin liquidity, bears interest at the bank’s overnight rate plus 1.5% when drawn, and is payable on demand.
- Current debt and financing obligations included approximately $1.2 million of promissory notes and debenture-related balances. The $500,000 related-party debenture was amended after year-end to extend maturity to February 3, 2027.
- Management stated that October 2025 debt and equity financings alleviated substantial doubt regarding going-concern status and expects sufficient liquidity for at least twelve months after issuance of the financial statements. However, operating cash flow remained negative in FY2026.
Material Changes Versus FY2025
- Revenue increased 85%, but expenses increased 89%, resulting in a larger operating loss despite strong top-line growth.
- Compensation expense increased 91% to $11.7 million, data processing and clearing costs increased 169% to $5.7 million, and stock-based compensation of $3.6 million was recorded for the first time in the presented periods.
- Cash flow from operations changed from $0.8 million provided to $6.2 million used, primarily reflecting working-capital changes and the company’s operating loss.
- Common shares outstanding increased from 40.2 million to 150.3 million, reflecting extensive debt conversions, equity financing and other share issuances. Further dilution remains possible from convertible instruments, warrants, employee awards and the proposed Commercial Bancorp acquisition.
- The company completed or settled several obligations through equity issuance, including approximately 63.9 million shares issued to Funicular under the prior secured note and 15.9 million shares issued to AtlasClearing sellers under seller and merger-financing notes.
- The company settled its Winston & Strawn obligation through $1.0 million of cash and 1.0 million shares, recording a $0.6 million settlement loss.
- The earnout liability declined from $11.4 million to $0.3 million because management revised revenue-target assumptions following delays in implementing the Commercial Bancorp strategy.
- Management reported remediation of the previously disclosed material weakness involving technical accounting and disclosures for complex financial instruments, merger agreements and going-concern assessments. Management concluded that internal control over financial reporting and disclosure controls were effective as of June 30, 2026. The auditor was not required to provide an ICFR attestation because the company is a non-accelerated filer.
Guidance, Outlook, Risks and Unusual Items
The filing provides no quantified revenue, earnings or cash-flow guidance. Management’s strategy centers on expanding AtlasClearing, developing a technology-enabled brokerage and clearing platform, adding banking capabilities, increasing customer accounts and selectively pursuing acquisitions.
On February 5, 2026, the company entered into an agreement to acquire Commercial Bancorp, owner of Farmers State Bank. The transaction remains subject to regulatory approvals, shareholder and other closing conditions and has not been consummated as of the filing. Consideration may include cash and a substantial number of common shares. The company also announced non-binding letters of intent involving Ark Financial Services and an institutional digital-asset business; neither transaction is assured.
- AtlasClearing’s revenue is concentrated in volatile OTC and microcap markets and is substantially dependent on a principal customer, Glendale, which represented approximately 6.6% of AtlasClearing revenue in FY2026.
- The company faces regulatory, AML, market-making, customer-credit, clearing-margin, cybersecurity, data-privacy and third-party technology risks.
- AtlasClearing is contesting a FINRA-related matter involving short-sale and AML allegations. The latest stated aggregate fine was $490,000, but the appeal remains pending and the company has recorded only a $100,000 contingency reserve.
- The company’s significant debt, restrictive covenants, secured collateral package, upcoming subordinated-loan maturities and reliance on additional financing create liquidity and default risks.
- Fair-value accounting for warrants, convertible instruments, the secured note and earnout liabilities produced material non-cash gains and losses and relies on Level 3 valuation assumptions. The independent auditor identified valuation of complex financial instruments and the earnout liability as a critical audit matter.
- At September 21, 2026, the common stock closed at $0.1958, below the $1.00 NYSE American minimum share-price requirement cited in the filing. Delisting remains a stated risk.
- The company does not expect to pay cash dividends in the foreseeable future.
Important Facts for Investors to Verify
- Confirm the status and regulatory approvals of the Commercial Bancorp acquisition and determine the potential cash consideration and share dilution at closing.
- Reconcile the company’s actual unrestricted cash, customer-segregated cash and regulatory liquidity with its operating cash burn and debt maturities.
- Review the terms, covenants, collateral and conversion mechanics of the $10.1 million Restated Note and the $500,000 related-party debenture.
- Assess the potential dilution from 32.5 million outstanding warrants, convertible debt, performance awards, stock options and proposed acquisition consideration.
- Evaluate the sustainability and concentration of the new stock-locate revenue stream and the decline in clearing-fee revenue.
- Monitor AtlasClearing’s FINRA/SEC litigation, AML compliance, $10 million NSCC excess-capital requirement and any additional margin calls.
- Review the Level 3 valuation assumptions supporting the secured note, warrant liabilities and earnout liability, including the effect of future stock-price and revenue changes.
- Verify continued compliance with NYSE American listing standards and the effectiveness of the company’s newly remediated internal controls.