AtlasClear Holdings, Inc. Q1 2024 Financial Report: Condensed Consolidated Balance Sheet, Statements of Operations, and Cash Flows

Press release · 05/28 10:21

AtlasClear Holdings, Inc. has reported a net loss of $1.2 million for the quarter ended March 31, 2024, compared to a net loss of $0.8 million for the same period in 2023. The company’s total assets increased to $12.5 million, while total liabilities remained stable at $0.7 million. The company’s cash and cash equivalents increased to $1.5 million, and the number of shares outstanding increased to 12.5 million. The company’s financial condition and results of operations are discussed in detail in the management’s discussion and analysis section of the report.

Overview

AtlasClear Holdings is a financial technology company aiming to provide services like trading, clearing, settlement, and banking to financial services firms. They want to create a more efficient platform for these services, with new and innovative financial products.

AtlasClear was formed through several recent acquisitions and mergers. This includes the acquisition of Wilson-Davis, a broker-dealer company, and the planned acquisition of Commercial Bancorp, a bank. AtlasClear also acquired technology and software assets from other companies.

Key Developments

In February 2024, AtlasClear officially merged with Quantum FinTech Acquisition Corporation. This business combination provided AtlasClear with an influx of cash and public stock shares.

AtlasClear amended its agreement to acquire Wilson-Davis in January and February 2024. The amendments reduced the total purchase price by $5 million. Most of the remaining payment to Wilson-Davis was in the form of convertible promissory notes.

In February 2024, AtlasClear raised $6 million through a convertible note financing agreement with Funicular Funds. The funds helped pay the Wilson-Davis purchase price.

In February 2024, AtlasClear acquired source code and technology assets from Pacsquare Technologies for $4.8 million. This included the AtlasClear Platform that Pacsquare will now develop and implement.

Financial Results

For the period from the Wilson-Davis acquisition (February 9, 2024) through March 31, 2024:

Revenues were $1.3 million, a 100% increase over $0 in the prior year period
Expenses were $15.1 million, a 1568% increase over $0.9 million in the prior year period
Loss from operations was $13.9 million compared to $0.9 million in the prior year period
Net loss was $88.6 million compared to net income of $0.2 million in the prior year period

Revenue/Expense	3/31/2024	3/31/2023	Change
Total Revenues	$1,270,684	$0	+100%
Total Expenses	$15,140,591	$907,809	+1568%
Loss from Operations	$13,869,907	$907,809	+1429%
Net Loss	$88,577,417	$192,371	+45992%

The large increases in expenses and losses were due to significant one-time costs related to the AtlasClear mergers and acquisitions. This includes a $68.5 million loss booked based on the AtlasClear purchase price accounting.

Liquidity and Capital Resources

Cash used in operating activities was $13.3 million for the 3 months ended March 31, 2024, compared to $0.8 million in the prior year period
Cash provided by investing activities was $81 million, primarily due to the business combination transaction
Cash used in financing activities was $40.7 million, largely due to transaction costs related to the business combination

AtlasClear has a $10 million revolving credit facility, which provides liquidity to meet clearing margin requirements. The credit facility was not utilized as of March 31, 2024.

Outlook

The large net loss in the first quarter of 2024 was driven by one-time merger and acquisition costs. Over time, AtlasClear aims to realize synergies, growth opportunities, and cost savings from combining the various acquired businesses. However, substantial doubt exists around AtlasClear’s ability to continue as a going concern over the next 12 months unless they can raise additional capital.