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,

As Executive Chairman of AtlasClear Holdings, I am pleased to provide you with an update on the significant changes and developments our Company has experienced. We have been working diligently to refine our vision of being the most efficient, technologically forward custodial and clearing enterprise that intends to deliver a full spectrum of solutions to our target customer base. To accomplish our goals, we have focused on new managerial talent, securing cost effective technology solutions and have secured an investment deal to recapitalize our unfavorable debt structure that has been a limiting factor to our ability to grow.

Management

On December 12, 2024, we announced the new CEO of our subsidiary, Wilson-Davis & Co. Inc. (“Wilson-Davis”), Jeff Sime. Mr. Sime has been at the C Level in clearing organizations for over 25 years. Mr. Sime brings to our firm deep experience in onboarding new introducing broker dealers, which we currently intend to be our primary focus moving forward. A trained CPA, Mr. Sime brings exceptional skills in budgeting, forecasting and creating margin efficiency to Wilson-Davis. I look forward to working closely with Jeff to build out our vision in a sustainable and profitable manner.

Capital

We were thrilled to announce on December 31, 2024, the investment deal we signed with Hanire LLC (“Hanire”). The agreements signed with Hanire provide for an up-to-$45 million investment, subject to satisfaction of closing conditions, in the form of a combination of equity and convertible debt, comprised of an up-to-$5 million equity investment (at a fixed price of $15 per share) through the sale of 333,333 shares of common stock and a convertible loan for the balance of the investment, including an initial advance of $5 million and additional advances subject to the achievement of specified milestones. The loan will be convertible at a conversion price calculated based on a 40% discount to the volume-weighted average price of the Company’s common stock at the time of conversion which is considerably more favorable for the Company than the current notes. The conversion of any portion of the convertible loan is subject to the Company’s receipt of stockholder approval of the issuance of the shares.

The Company believes the investment will allow AtlasClear Holdings to achieve a number of strategic goals, including:

  • Allow for the restructuring of the current debt structure of the Company with better terms and less dilution to existing stockholders
  • Increase the capital base at its wholly-owned subsidiary, Wilson-Davis & Co., Inc. (“Wilson-Davis”), thereby allowing Wilson-Davis to expand its correspondent clearing business and accelerate additional business lines.
  • Allow the Company to move forward with the formal filings with the Federal Reserve for the proposed acquisition of Commercial Bancorp of Wyoming while providing additional capital for the bank upon a potential approval.
  • Provide capital for targeted, accretive acquisitions.

Since our business combination, the Company has been hamstrung due to limited capital and burdensome debt. Consequently, we have been operating the Company from an almost entirely defensive mode. For example, the recently effective 1-for-60 reverse stock split was effectuated prior to our securing the Hanire investment deal and done purely to maintain our listing on NYSE Amex. We think our vision and our ability to access more forward capital require maintaining our listing. Going forward, we are excited for our future as we believe this deal, when consummated in full, will potentially allow the Company to go full throttle after its vision for the future.

The Future

For 2025, the Company intends to mainly focus on four primary efforts.

First, the Company intends to focus on increasing profits and cash flow through the addition of new introducing broker dealer customers. As rudimentary as it may sound, building our customer base, increasing our scale of assets custodied, and increasing our capacity to lend are foremost goals for the coming year.

Second, the Company intends to focus on digital assets. Management and the Board believe the Company is uniquely positioned to build a crypto custodial, trading, clearing and lending platform. We hope that the new Administration will finally provide the clarity the US markets have been lacking to properly capitalize on the Digital Asset opportunity, and we intend for the Company to be actively engaged in the space.

Third, the Company intends to devote the necessary resources to finalize our contracted acquisition of Federal Reserve Member Commercial Bancorp of Wyoming. We believe this acquisition will position the Company to offer an efficient and synergistic platform to our target customers. We believe the ability to borrow directly from the Federal Reserve is a substantial asset.

Fourth, the Company intends to pursue strategic acquisitions of accretive introducing broker-dealers and synergistic Digital Asset companies.

As we have closed out 2024 and look toward the future, we’ve taken some time to reflect on the incredible journey of the digital asset industry and the path forward in 2025. While we are not in the business of making predictions—particularly price predictions, which demand extensive research, modeling, and conviction—we see several transformative trends on the horizon. These trends signal the potential growing maturity and mainstream acceptance of digital assets.

Institutional Adoption: Bitcoin and Beyond

We hope 2025 will be a year of increased institutional interest—not just in ETF wrappers, but also in tokenized money market funds (MMFs) and high-quality liquid assets (HQLA). With the CFTC approving these assets as collateral, we believe we are poised to witness enhanced transaction efficiencies that directly impact critical elements like intraday liquidity. We believe this is where technology will have the opportunity to truly shine, driving operational efficiencies that will potentially exceed the benefits of simply tokenizing an asset or security. By enabling real-time settlement and reducing counterparty risk, we believe tokenized assets offer a transformative solution for liquidity management in the institutional landscape.

This shift will require significant advancements in regulatory frameworks, rulemaking, and settlement technology, but it could also represent an unprecedented opportunity to modernize the financial market infrastructure (FMI)—the core mechanisms for transmitting assets globally. Stablecoins may play an integral role in this evolution, acting as programmable and reliable mediums for on-chain transactions. By integrating blockchain and leveraging smart contracts, institutions can streamline workflows, enhance resilience, and create a more inclusive and efficient financial ecosystem. We believe the convergence of regulatory clarity, tokenized assets, and technological innovation may redefine how value is transferred and preserved, paving the way for a future-ready global market infrastructure.

Bridging Digital and Traditional Systems

As the adoption of digital assets accelerates, one of the most pressing challenges is the seamless integration of blockchain-based systems with traditional back-office infrastructure. These legacy systems, which support critical functions like risk management, compliance, and settlement, were not designed to handle the unique requirements of digital assets. We believe this creates a significant gap: while digital assets offer speed, transparency, and efficiency, their full potential cannot be realized without interoperating effectively with the systems that govern traditional financial operations; and a significant opportunity for AtlasClear to lead institutional clients to the future state of finance through the implementation and operation of Bitcoin and Stablecoin based technologies.

In the near term, coexistence is key. Digital assets must be integrated into existing systems in a way that ensures continuity, compliance, and operational resilience. For instance, adjacent risk management tools depend heavily on the data generated by core systems. Ensuring that digital asset data feeds seamlessly into these workflows is crucial to maintaining stability and building trust. However, looking further ahead, we envision a future where digital assets are no longer just an add-on but become the foundation of financial operations. On-chain records have the potential to evolve into the system of record for transactions, providing immutable, real-time data that powers not only financial reporting but also decision-making and engagement. This dual role—as a system of record and a system of engagement—positions blockchain as a transformative force for how financial ecosystems operate.

AtlasClear Holdings is committed to solving this integration challenge. We are building solutions to help bridge the gap between blockchain technology and traditional financial systems. Our goal is to harmonize operations, reduce technology debt, and ensure that enterprises can adopt digital assets without disrupting their existing workflows. By creating a framework for interoperability, AtlasClear Holdings aims to bring digital assets into the mainstream, making them accessible and manageable for institutions of all sizes.

The Uptake of BTC as a Marquee Asset

We believe Bitcoin—the marquee digital asset—will see significant uptake among institutional investors. Since the approval of the BTC ETF, institutions have been refining their risk models, and 2025 will likely see this groundwork translate into increased adoption. The growing interest will likely create demand-side pressure on Bitcoin, cementing its status as a marquee asset class. This wave of institutional activity underscores the maturation of digital assets as a credible component of global financial portfolios.

Regulatory Winds Possibly Shifting Favorably

Regulation has always been a critical driver for the growth and mainstream adoption of digital assets, and recent developments in the U.S. signal a much-needed positive shift. With pro Bitcoin leadership now in key regulatory roles, the industry is set to benefit from a clearer and more supportive framework. This shift could reverse the restrictive stance of past administrations, fostering an environment that prioritizes innovation while ensuring compliance.

We believe a possibly more favorable regulatory climate will not only provide much-needed clarity for enterprises and institutional players but also potentially enable the scaling of technologies like stablecoins, tokenized assets, and decentralized finance (DeFi). If regulators embrace the transformative potential of blockchain, we believe the future holds the promise of harmonizing innovation with oversight, laying the groundwork for a more resilient and inclusive global financial system.

New Perspectives:

A New Dawn for Digital Assets

We believe the future may be bright for crypto and digital assets. As we look ahead to 2025, we are filled with optimism and excitement for a year of innovation, collaboration, and hopefully unparalleled growth for digital assets.

Following the closing of the business combination, 2024 was a profoundly challenging year for the Company because we had less capital and much more convertible debt than hoped and our stock paid a dire price. In spite of these challenges, our operating company, Wilson-Davis, was profitable on a stand-alone basis.

With a solution in hand for our capital constraints, we trust 2025 will be a better year for the Company and we think our stock price will respond accordingly.

Happy New Year!

Sincerely,

John M. 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, (v) AtlasClear Holdings’ anticipated growth strategy, including expected acquisitions and its intended primary focus on introducing broker dealers, (vi) AtlasClear’s beliefs regarding future regulations and their impact on the Company, (vii) AtlasClear’s beliefs regarding the future of the crypto and digital assets markets; and (viii) 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.

Media AtlasClearPR@atlasclear.com Investors AtlasClearIR@atlasclear.com

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