Document And Entity Information
Document And Entity Information | 3 Months Ended |
Mar. 31, 2024 | |
Cover [Abstract] | |
Document Type | S-1/A |
Entity Registrant Name | ATLASCLEAR HOLDINGS, INC. |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Central Index Key | 0001963088 |
Amendment Flag | true |
Amendment Description | AMENDMENT NO. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 619,554 | $ 129,560 |
Prepaid expenses | 33,652 | |
Due from Atlas Clear | 58,828 | |
Total Current Assets | 678,382 | 163,212 |
Marketable securities held in Trust Account | 54,799,478 | 204,044,469 |
TOTAL ASSETS | 55,477,860 | 204,207,681 |
Current liabilities | ||
Accounts payable and accrued expenses | 4,784,869 | 4,276,705 |
Non-redemption agreement liability | 1,441,653 | |
Income taxes payable | 725,891 | 536,853 |
Excise tax payable | 1,528,101 | |
Advances from related parties | 3,104,097 | 319,166 |
Promissory note - related party | 480,000 | 480,000 |
Total Current Liabilities | 12,064,611 | 5,612,724 |
Warrant liability | 307,656 | 184,594 |
TOTAL LIABILITIES | 12,372,267 | 5,797,318 |
Commitments and Contingencies (Note 6) | ||
Common stock subject to possible redemption | 54,618,469 | 203,420,202 |
STOCKHOLDERS' DEFICIT | ||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding | ||
Common stock, $0.0001 par value; 100,000,000 shares authorized; 12,277,759 and 5,031,250 shares issued and outstanding (excluding 0 and 5,050,384 shares subject to possible redemption) at March 31, 2024 and December 31, 2023, respectively | 503 | 503 |
Accumulated Deficit | (11,513,379) | (5,010,342) |
TOTAL STOCKHOLDERS' DEFICIT | (11,512,876) | (5,009,839) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 55,477,860 | $ 204,207,681 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
Subject to possible redemption shares | 0 | 5,050,384 | 20,125,000 |
Common stock subject to possible redemption value (in Dollars per share) | $ 10.81 | $ 10.11 | |
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Common Stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued | 12,277,759 | 5,031,250 | 5,031,250 |
Common stock, shares outstanding | 12,277,759 | 5,031,250 | 5,031,250 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating and formation costs | $ 2,737,871 | $ 3,024,231 |
LOSS FROM OPERATIONS | (2,737,871) | (3,024,231) |
OTHER INCOME/(EXPENSE) | ||
Change in fair value of warrant liability derivative | (123,062) | 6,953,336 |
Change in fair value of PIPE derivative liability | 4,566,000 | |
Interest earned on marketable securities held in Trust Account | 3,090,086 | 3,087,315 |
Change in fair value of non-redemption agreement liability | 439,787 | |
Net gain on settlement | 829,853 | |
Interest income - bank | 22,195 | |
TOTAL OTHER INCOME/(EXPENSE) | 4,258,859 | 14,606,651 |
NET INCOME/(LOSS) BEFORE INCOME TAXES | 1,520,988 | 11,582,420 |
Income tax (expense) benefit | (726,038) | (536,853) |
NET INCOME/(LOSS) | $ 794,950 | $ 11,045,567 |
Redeemable Common Stock | ||
OTHER INCOME/(EXPENSE) | ||
Basic weighted average shares outstanding (in Shares) | 6,898,644 | 20,125,000 |
Diluted weighted average shares outstanding (in Shares) | 6,898,644 | 20,125,000 |
Basic net income (loss) per share (in Dollars per share) | $ 0.07 | $ 0.44 |
Diluted net income (loss) per share (in Dollars per share) | $ 0.07 | $ 0.44 |
Non-redeemable Common Stock | ||
OTHER INCOME/(EXPENSE) | ||
Basic weighted average shares outstanding (in Shares) | 5,031,250 | 5,031,250 |
Diluted weighted average shares outstanding (in Shares) | 5,031,250 | 5,031,250 |
Basic net income (loss) per share (in Dollars per share) | $ 0.07 | $ 0.44 |
Diluted net income (loss) per share (in Dollars per share) | $ 0.07 | $ 0.44 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2021 | $ 503 | $ (13,885,707) | $ (13,885,204) | |
Balance (in Shares) at Dec. 31, 2021 | 5,031,250 | |||
Accretion of Common Stock subject to Possible Redemption | (2,170,202) | (2,170,202) | ||
Allocation of net income, as adjusted | 11,045,567 | 11,045,567 | ||
Balance at Dec. 31, 2022 | $ 503 | (5,010,342) | (5,009,839) | |
Balance (in Shares) at Dec. 31, 2022 | 5,031,250 | |||
Balance at Dec. 31, 2022 | $ 503 | (5,010,342) | (5,009,839) | |
Balance (in Shares) at Dec. 31, 2022 | 5,031,250 | |||
Balance at Dec. 31, 2022 | $ 503 | (5,010,342) | (5,009,839) | |
Balance (in Shares) at Dec. 31, 2022 | 5,031,250 | |||
Accretion of Common Stock subject to Possible Redemption | (1,260,719) | (1,260,719) | ||
Allocation of net income, as adjusted | 192,371 | 192,371 | ||
Balance at Mar. 31, 2023 | $ 503 | (7,563,926) | (7,563,423) | |
Balance at Dec. 31, 2022 | $ 503 | (5,010,342) | (5,009,839) | |
Balance (in Shares) at Dec. 31, 2022 | 5,031,250 | |||
Excise taxes related to redemptions | (1,528,101) | (1,528,101) | ||
Cancellation of admin fees | $ 120,000 | 120,000 | ||
Fair value of non-redemption agreement liability at issuance | (1,881,440) | (1,881,440) | ||
Accretion of Common Stock subject to Possible Redemption | (120,000) | (3,888,446) | (4,008,446) | |
Allocation of net income, as adjusted | 794,950 | 794,950 | ||
Balance at Dec. 31, 2023 | $ 503 | (11,513,379) | (11,512,876) | |
Balance (in Shares) at Dec. 31, 2023 | 5,031,250 | |||
Balance at Dec. 31, 2023 | $ 503 | (11,513,379) | (11,512,876) | |
Balance (in Shares) at Dec. 31, 2023 | 5,031,250 | |||
Balance at Dec. 31, 2023 | $ 503 | (11,513,379) | (11,512,876) | |
Balance (in Shares) at Dec. 31, 2023 | 5,031,250 | |||
Accretion of Common Stock subject to Possible Redemption | (592,577) | (592,577) | ||
Allocation of net income, as adjusted | (88,577,417) | (88,577,417) | ||
Balance at Mar. 31, 2024 | $ 1,229 | $ 97,162,370 | $ (101,222,844) | $ (4,059,245) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash Flows from Operating Activities: | ||
Allocation of net income, as adjusted | $ 794,950 | $ 11,045,567 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Change in fair value of warrant liability | 123,062 | (6,953,336) |
Change in fair value of PIPE derivative liability | (4,566,000) | |
Change in fair value of non-redemption agreement liability | (439,787) | |
Interest earned on marketable securities held in Trust Account | (3,090,086) | (3,087,315) |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 33,652 | 305,798 |
Due from Atlas Clear | (58,828) | |
Accounts payable and accrued expenses | 628,164 | 1,634,174 |
Income taxes payable | 189,038 | 536,853 |
CASH USED FOR OPERATING ACTIVITIES | (1,819,835) | (1,084,259) |
Cash Flows from Investing Activities: | ||
Cash withdrawn from Trust Account to pay franchise and income taxes | 1,374,898 | 351,474 |
Investment of cash into Trust Account | (1,850,000) | |
Cash withdrawn from Trust Account in connection with redemption | 152,810,179 | |
CASH PROVIDED BY INVESTING ACTIVITIES | 152,335,077 | 351,474 |
Cash Flows from Financing Activities: | ||
Proceeds from promissory note - related party | 480,000 | |
Repayment of advances from related party | (70,500) | |
Advances from related party | 2,855,431 | 319,166 |
Redemption of Common Stock | (152,810,179) | |
CASH USED FOR FINANCING ACTIVITIES | (150,025,248) | 799,166 |
NET INCREASE (DECREASE) IN CASH | 489,994 | 66,381 |
CASH AT BEGINNING OF YEAR | 129,560 | 63,179 |
CASH AT YEAR END | 619,554 | 129,560 |
Supplementary cash flow information: | ||
Cash paid for income taxes | 537,000 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Initial Classification of non-redemption agreement liability | 1,881,440 | |
Cancellation of admin fees | 120,000 | |
Excise tax related to redemptions | 1,528,101 | |
Accretion of Common Stock subject to possible redemption | $ 4,008,446 | $ 2,170,202 |
DESCRIPTION OF ORGANIZATION AND
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 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 a direct, wholly-owned subsidiary of Quantum FinTech Acquisition Corporation (“Quantum”) formed solely for the purpose of effectuating a business combination. 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 previously announced transactions pursuant to that certain Business Combination Agreement, dated November 16, 2022 (as amended, the “Business Combination Agreement”), by and among the Company, Quantum, Calculator Merger Sub 1, Inc., a Delaware corporation and a wholly-owned subsidiary of the registrant (“Merger Sub 1”), Calculator Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of the registrant (“Merger Sub 2”), AtlasClear, Inc., a Wyoming corporation (“AtlasClear”), Atlas FinTech Holdings Corp., a Delaware corporation (“Atlas FinTech”) and Robert McBey. The transactions contemplated by 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, among other things, (i) Merger Sub 1 merged with and into Quantum, with Quantum continuing as the surviving corporation and a wholly-owned subsidiary of AtlasClear Holdings and (ii) Merger Sub 2 merged with and into AtlasClear, with AtlasClear continuing as the surviving corporation and a wholly-owned subsidiary of AtlasClear Holdings. Prior to the Closing, pursuant to the (i) Contribution Agreement (as defined in the Business Combination Agreement), AtlasClear received certain assets from Atlas FinTech and Atlas Financial Technologies Corp., a Delaware corporation, and (ii) Broker-Dealer Acquisition Agreement (as defined in the Business Combination Agreement), AtlasClear completed the acquisition of broker-dealer, Wilson-Davis & Co., Inc. (“Wilson-Davis”). In addition, at Closing, the Bank Acquisition Agreement (as defined in the Business Combination Agreement), pursuant to which AtlasClear has agreed to acquire Commercial Bancorp, a Wyoming corporation and parent of Farmers State Bank (“Commercial Bancorp”), continued to be in full force and effect. Pursuant to the transactions contemplated by a letter of intent, 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”). The Business Combination has been accounted for in accordance with the acquisition method of accounting, with Quantum considered to be the accounting acquirer of Wilson-Davis. Under the acquisition method of accounting, the preliminary purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair market values, with the excess purchase price, if any, allocated to goodwill. Costs related to the transaction were expensed as incurred. (See Note 8 – Acquisition of Wilson-Davis). AtlasClear Holdings’ goal is to build 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 expects to power innovation in fintech, investing, and trading. AtlasClear does not meet the definition of a business and therefore was treated as an asset acquisition by AtlasClear Holdings. As such the assets contributed from Atlas Fintech and the net assets of AtlasClear were recognized at historical cost. ASC 350 prohibits the recognition of goodwill in an asset purchase. (See Note 9 – Acquisition of Assets of AtlasClear, Inc.) Quantum was deemed the accounting acquirer based on the following factors: i) Quantum issued cash and shares of its common stock; ii) Quantum controlled the voting rights under the no redemption and the maximum contractual redemption scenarios; iii) Quantum had the largest minority voting interest; iv) Quantum has control over the board of directors of the post-combination company and most of senior management of the post-combination company are former officers of Quantum. 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. Revenue is derived principally 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. Going Concern As of March 31, 2024, the Consolidated Company had $7,194,912 in its operating bank accounts and working capital deficit of $14,591,130. The Company has raised and intends to raise additional capital through loans or additional investments from its stockholders, officers, directors, or third parties. The Company’s officers and directors may, but are not obligated to loan the Company funds, from time to time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Codification Subtopic 205-40, “Presentation of Financial Statements – Going Concern,” the liquidity of the Company raises substantial doubt about the Company’s ability to continue as a going concern through the twelve months following the issuance of the financial statements. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. No adjustments have been made to the carrying amounts of assets or liabilities as a result of this uncertainty. Inflation Reduction Act of 2022 On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. As such the Company has accrued for the estimated excise tax as a result of the redemptions that occurred after December 31, 2022. | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Calculator New Pubco, Inc. (the “Registrant”) is a Delaware corporation and a direct, wholly-owned subsidiary of Quantum formed solely for the purpose of effectuating the Business Combination. On February 9, 2024 (the “Closing Date”), the registrant consummated the previously announced transactions pursuant to that certain Business Combination Agreement, dated November 16, 2022 (as amended, the “Business Combination Agreement”), by and among the registrant, Quantum FinTech Acquisition Corporation (“Quantum”), Calculator Merger Sub 1, Inc., a Delaware corporation and a wholly-owned subsidiary of the registrant (“Merger Sub 1”), Calculator Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of the registrant (“Merger Sub 2”), AtlasClear, Inc., a Wyoming corporation (“AtlasClear”), Atlas FinTech Holdings Corp., a Delaware corporation (“Atlas FinTech”) and Robert McBey. The transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Business Combination.” In connection with the consummation of the Business Combination (the “Closing”), the registrant changed its name from “Calculator New Pubco, Inc.” to “AtlasClear Holdings, Inc.” (hereinafter referred to as “AtlasClear Holdings”). As of December 31, 2023 the registrant, was a wholly owned subsidiary of Quantum and had minimal activity since its inception, as such the financial statements represent the consolidated financial statement of Quantum as of and for the year ended December 31, 2023. Quantum was incorporated in Delaware on October 1, 2020. Quantum is 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 (the “Business Combination”). Quantum has three wholly owned subsidiaries. Calculator New Pubco, Inc, a Delaware corporation, and Calculator Merger Sub I, Inc., a Delaware corporation, were formed on October 13, 2022. Calculator Merger Sub II, LLC (“Merger Sub II”), a Delaware corporation was formed on October 17, 2022. Quantum and its subsidiaries are collectively referred to as “the Company”. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. On November 4, 2021, the Company entered into a Merger Agreement by and among the Company, TradeStation, and Merger Sub. The Merger Agreement, as amended, and other parties thereto, were described in previous filings. On August 2, 2022, the Company received a notice from TradeStation that purported to terminate the Merger Agreement pursuant to Section 12.01(c) thereof (the “Purported Termination Notice”). Section 12.01(c) provides that the Merger Agreement may be terminated by either party if the merger of the Company with Merger Sub has not occurred on or before August 1, 2022 (the “Termination Date”); provided that such termination right is not available to any party whose breach of any provision of the Merger Agreement has been the primary cause of, or primarily resulted in, the failure of the closing of the Business Combination to occur on or before such date. On August 2, 2022, the Company sent a letter to TradeStation stating that TradeStation is not permitted to terminate the Merger Agreement pursuant to Section 12.01(c) because TradeStation’s breaches of, and failure to perform under, the Merger Agreement are the primary cause of the failure of the closing of the Business Combination to occur on or before the Termination Date. On November 15, 2022, the Company sent a notice to TradeStation terminating the Merger Agreement pursuant to Section 12.01(b) thereof. On November 16, 2022, the Company entered into a Business Combination Agreement by and among the Company, Calculator New Pubco, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“New Pubco”), Calculator Merger Sub 1, Inc., a Delaware corporation and a wholly-owned subsidiary of New Pubco (“Merger Sub 1”), Calculator Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of New Pubco (“Merger Sub 2”), AtlasClear, Inc., a Wyoming corporation (“AtlasClear”), Atlas FinTech Holdings Corp., a Delaware corporation (“Atlas FinTech”) and Robert McBey (see Note 6). As of December 31, 2023, the Company had not commenced any operations. All activity through December 31, 2023 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, and identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income and expenses in the form of investment income from the proceeds derived from the Initial Public Offering and change in fair value of derivative liabilities. The registration statements for the Company’s Initial Public Offering were declared effective on February 4, 2021. On February 9, 2021, the Company consummated the Initial Public Offering of 17,500,000 units (the “Units” and, with respect to the shares of Common Stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $175,000,000, which is described in Note 3. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 5,562,500 warrants (each, a “Private Warrant” and, collectively, the “Private Warrants”) at a price of $1.00 per Private Warrant in a private placement to Quantum Ventures LLC (“Quantum Ventures”), who purchased 4,450,000 Private Warrants and Chardan Quantum LLC (“Chardan Quantum” and together with Quantum Ventures, the “Co-Sponsors”) who purchased 1,112,500 Private Warrants, generating gross proceeds of $5,562,500, which is described in Note 4. Following the closing of the Initial Public Offering on February 9, 2021, an amount of $175,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Warrants was placed in a trust account (the “Trust Account”), invested in U.S. government treasury bills, notes or bonds having a maturity of 185 days or less and/or (ii) in money market funds meeting certain conditions under Rule 2a-7 of the Investment Company Act of 1940, as amended (the “Investment Company Act”), as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below. On February 12, 2021, the underwriters fully exercised their over-allotment option, resulting in an additional 2,625,000 Units issued for an aggregate amount of $26,250,000. In connection with the underwriters’ full exercise of their over-allotment option, the Company also consummated the sale of an additional 590,625 Private Warrants at $1.00 per Private Warrant, generating total proceeds of $590,625. A total of $26,250,000 was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $201,250,000. Transaction costs amounted to $5,017,526, consisting of $4,528,125 of underwriting fees, and $489,401 of other offering costs. Offering costs amounting to $5,008,178 were charged to stockholders’ equity upon the completion of the Initial Public Offering, and $9,348 of the offering costs were related to the warrant liability and charged to the operating and formation costs in the consolidated statement of operations for the year ended December 31, 2021. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Warrants, although substantially all of the net proceeds are intended to be applied generally toward completing a Business Combination. The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (as defined below) (excluding the taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an initial Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to complete a Business Combination successfully. On February 6, 2023, as approved by the Company’s stockholders at the special meeting in lieu of annual meeting of stockholders held (the “Special Meeting”), the Company entered into an amendment to the Investment Management Trust Agreement on February 6, 2023 (the “Trust Amendment”) and filed an amendment to our amended and restated certificate of incorporation with the Delaware Secretary of State on February 6, 2023 (the “Charter Amendment”). Pursuant to the Trust Amendment, the amendment extended the initial date on which the Company must commence liquidation of the Trust Account to up to August 9, 2023, or such earlier date as determined by the Company’s board of directors (the “Board”), unless the closing of the Company’s initial business combination shall have occurred, provided that Quantum Ventures (or its affiliates or permitted designees) will deposit into a trust account established for the benefit of the Company’s public stockholders (the “Trust Account”) an amount determined by multiplying $0.055 by the number of public shares then outstanding, up to a maximum of $175,000 for each such one-month extension unless the closing of the Company’s initial business combination shall have occurred, in exchange for a non-interest bearing, unsecured promissory note payable upon consummation of a business combination. In connection with the Special Meeting, the holders of 14,667,626 shares of Common Stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.13 per share, for an aggregate redemption amount of approximately $148.5 million. On August 2, 2023, the Company completed the transfer of the listing of the public shares from the New York Stock Exchange to the NYSE American LLC (“NYSE American”). Also effective August 2, 2023, the Company’s units were mandatorily separated into shares of Common Stock and warrants underlying the units, and the units no longer trade on the New York Stock Exchange. The Common Stock included in the units trades on the NYSE, and the warrants included in the units continued to trade on the over-the-counter market. This was a mandatory and automatic separation, and no action was required by the holders of the units. On August 4, 2023 at a special meeting, the stockholders approved a proposal to amend the Company’s amended and restated certificate of incorporation, to extend the date by which the Company has to consummate a business combination for an additional six months, from August 9, 2023 to up to February 9, 2024, by electing to extend the date to consummate an initial business combination on a monthly basis for up to six times by an additional one month each time, provided that Quantum Ventures (or its affiliates or permitted designees) will deposit into the Trust Account an amount determined by multiplying $0.04 by the number of public shares then outstanding, up to a maximum of $160,000 for each such one-month extension unless the closing of the Company’s initial business combination shall have occurred, in exchange for a non-interest bearing, unsecured promissory note payable upon consummation of a business combination. In connection with the special meeting on August 4, 2023, the holders of 406,990 shares of Common Stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.53 per share, for an aggregate redemption amount of approximately $4.3 million. On November 3, 2023, the Company held a special meeting of stockholders (the “November Meeting”), which was called to approve the proposals relating to the entry into and consummation of the Business Combination Agreement. An aggregate of 8,500,897 shares of Quantum’s Common Stock that were entitled to vote as of the record date of September 18, 2023, were represented in person or by proxy at the November Meeting. In connection with the November Meeting, stockholders holding 4,940,885 shares of Quantum’s Common Stock (the “Public Shares”) exercised (and did not subsequently reverse) their right to redeem their shares for a pro rata portion of the funds in Quantum’s trust account (the “Trust Account”). The trustee of the Trust Account is calculating the final amount of the funds to be removed from the Trust Account in connection with such redemptions, but the current preliminary calculations are that approximately $53.0 million (approximately $10.73 per Public Share) will be removed from the Trust Account to pay such holders. The Company had until up to February 9, 2024 to complete a Business Combination (the “Combination Period”). On February 9, 2024, the Company completed its business combination with AtlasClear Inc. (see Note 6 and 10.) The Business Combination will be accounted for in accordance with the acquisition method of accounting, with Quantum considered to be the accounting acquirer of Wilson-Davis. Under the acquisition method of accounting, the preliminary purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair market values, with the excess purchase price, if any, allocated to goodwill. Costs related to the transaction are expensed as incurred. AtlasClear does not meet the definition of a business and will therefore be treated as an asset acquisition by Quantum, which will include the assets contributed from Atlas Fintech. AtlasClear’s assets and liabilities will be measured and recognized at their relative fair values, as estimated in good faith by management, and allocated to the net assets acquired as of the transaction date, and combined with the assets, liabilities, and results of operations of Quantum on consummation of the Business Combination. The reported consolidated financial condition and results of operations of the combined company after completion of the Business Combination will reflect these fair values. Quantum was deemed the accounting acquirer based on the following factors: i) Quantum will be issuing cash and shares of its common stock; ii) Quantum will control the voting rights under the no redemption and the maximum contractual redemption scenarios; iii) Quantum will have the largest minority voting interest; iv) Quantum will have control over the Board; and most of senior management of the post-combination company will be former Quantum officers. Going Concern As of December 31, 2023, the Company had $619,554 in its operating bank accounts ($619,554 of which is required to be used to pay taxes, as described below), $54,799,478 in marketable securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem stock in connection therewith and a working capital deficit of $11,386,299. In October 2021, Quantum Ventures committed to provide the Company an aggregate of $2,000,000 in loans in connection with the Working Capital Loans as described in Note 5. The Company may raise additional capital through loans or additional investments from Quantum Ventures or its stockholders, officers, directors, or third parties. The Company’s officers and directors and Quantum Ventures may, but are not obligated to (except as described above), loan the Company funds, from time to time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. The Company has drawn $480,000 on the promissory note, evidencing the Working Capital Loans, as of December 31, 2023 (see Note 5). In February 2022, Quantum Ventures committed to provide the Company an additional $1,000,000 for a total of $3,000,000 in loans in connection with the Working Capital Loans as described in Note 5. Through the date of this filing, the Co-Sponsors have advanced an aggregate total of $3,116,097 to the Company. In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Codification Subtopic 205-40, “Presentation of Financial Statements – Going Concern,” the liquidity of the Company raises substantial doubt about the Company’s ability to continue as a going concern through the twelve months following the issuance of the financial statements. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. No adjustments have been made to the carrying amounts of assets or liabilities as a result of this uncertainty. Inflation Reduction Act of 2022 On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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 for the period ended December 31, 2023, as filed with the SEC on April 16, 2024. The accompanying condensed balance sheet as of December 31, 2023 has been derived from the audited financial statements included in this Form 10-K. The interim results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 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. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s condensed consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The more significant accounting estimates included in these condensed consolidated financial statements is the determination of the fair value of the private warrant liabilities, the fair value of the Subscription Agreement, the fair value of the conversion liabilities, fair value of the customer list, licenses acquired on February 9, 2024. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all operating accounts that hold money market funds held and short-term investments with an original maturity of three months or less when purchased to be cash equivalents. Trading Securities Securities held in the Company’s trading account and trading securities, consist primarily of over-the-counter securities and are valued based upon quoted market prices. The value of securities that are not readily marketable are estimated by management based upon quoted prices, the number of market makers, trading volume and number of shares held. Unrealized gains and losses are reflected in income in the financial statements. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation on property and equipment is provided using accelerated and straight-line methods over expected useful lives of three Leases In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right-of-use asset and a corresponding lease liability on the statement of financial condition for all leases with terms longer than 12 months. Pursuant to this standard, the Company has recorded an operating lease right-of use (“ROU”) asset and operating lease liability in the accompanying balance sheet as of March 31, 2024. The Company leases office space under the terms of several operating leases. The determination of whether an arrangement is a lease is made at the lease’s inception. Under ASC 842, a contract is (or contains) a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control is defined under the standard as having both the right to obtain substantially all of the economic benefits from use of the asset and the right to direct the use of the asset. Management only reassesses its determination if the terms and conditions of the contract are changed. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses the implicit rate when it is readily determinable. Since the Company’s leases do not provide implicit rates, to determine the present value of lease payments, management uses the Company’s estimated incremental borrowing rate based on the information available at lease commencement. Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants that do not meet all the criteria for equity classification are recognized as a non-cash gain or loss on the condensed consolidated statements of operations. The fair value of the private warrants was estimated using a Black-Scholes model approach (see Note 9). Income Taxes The Company utilizes the asset and liability method to account for income taxes. The objective of this method is to establish deferred tax assets and liabilities for the temporary differences between net income for financial reporting basis and the tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized. Income tax expense or benefit is provided based upon the financial statement earnings of the Company. The allowance for doubtful accounts is deductible for financial statement purposes, but not for tax purposes. Depreciation expense is recognized in different periods for tax and financial accounting purposes due to the use of accelerated depreciation methods for income tax purposes. The tax effects of such differences are reported as deferred income taxes in the financial statements. Revenue Recognition Wilson-Davis, a subsidiary of the Company, recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, using the modified retrospective method. This revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model to: (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when the entity satisfies a performance obligation. Wilson-Davis acts as an agent by selling securities to customers and collecting commissions. Wilson-Davis recognizes commissions on a trade date basis, which is the day the transaction is executed. Wilson-Davis believes that the performance obligation is satisfied on the trade date because that is when the security is selected, the price is determined, the trade is executed, and the risks and rewards of ownership have been transferred to/from the customer. Wilson-Davis also receives commissions on mutual funds purchased by customers. Wilson-Davis believes that the performance obligation is not satisfied until the mutual funds are purchased by customers and recognizes the commission at that time. Wilson-Davis performs vetting services to customers that wish to convert restricted stock to eligible trading stock. In addition, Wilson-Davis charges clearing fees to another broker-dealer for which it clears trades. Wilson-Davis recognizes revenue as the related performance obligations are satisfied. 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. (Loss) Income is allocated between redeemable and non-redeemable shares based on relative amounts of weighted average shares outstanding. Accretion associated with the redeemable shares of common stock is excluded from (loss) income per share as the redemption value approximates fair value. The calculation of diluted net (loss) income per share does not consider the effect of the convertible derivative liability nor the warrants issued and outstanding. The calculation excludes the dilutive impact of these instruments because the issuance of the securities underlying the exercise of the warrants are contingent upon the occurrence of future events and inclusion would be antidilutive. As a result, diluted net (loss) income per share of common stock is the same as basic net (loss) income per common stock for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per share of common stock (in dollars, except share amounts): Three Months Ended March 31, 2024 March 31, 2023 Non- Non- Redeemable redeemable Redeemable redeemable Basic and diluted net income per common stock Numerator: Allocation of net income, as adjusted $ (71,126,651) $ (17,450,766) $ 135,463 $ 56,908 Denominator: Basic and diluted weighted average common stock outstanding 9,048,173 2,219,949 11,976,319 5,031,250 Basic and diluted net income per common stock $ (7.86) $ (7.86) $ 0.01 $ 0.01 Below is a summary of the dilutive instruments as of March 31, 2024 and 2023, these were excluded as including them would be anti dilutive as of March 31, 2024 and were excluded in March 31, 2023 as the exercise was contingent: Description March 31, 2024 March 31, 2023 Short Term Notes 5,390,752 — Secured convertible note 18,000,000 — Subscription agreement 833,333 — Promissory note 704,404 — Total Shares issuable under Convertible Note obligations 24,928,489 — Public Warrants 10,062,500 10,062,500 Private Warrants 5,553,125 6,153,125 Secured convertible note warrants 600,000 — Total dilutive 41,144,114 16,153,125 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 and management believes the Company is not exposed to significant risks on such accounts. 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 condensed balance sheets, primarily due to their short-term nature, except for warrant liabilities, convertible derivatives and the earnout out liability (see Note 14). 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. 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. | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. 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. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The more significant accounting estimates included in these consolidated financial statements is the determination of the fair value of the Private Warrant liabilities, and fair value of the sale of the Founder Shares. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all operating accounts that hold money market funds held and short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had cash equivalents of $619,554 and $0, respectively, as of December 31, 2023 and 2022. Marketable Securities Held in Trust Account At December 31, 2023 and 2022, substantially all of the assets held in the Trust Account were held in mutual funds which are invested primarily in U.S. Treasury securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in income earned on marketable securities held in Trust Account in the accompanying consolidated statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information. Offering Costs Offering costs consisted of legal, and other expenses incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to Private Warrant liabilities were expensed as incurred in the statements of operations. Offering costs associated with the Common Stock issued were initially charged to temporary equity and then accreted to Common Stock subject to redemption upon the completion of the Initial Public Offering. Offering costs amounting to $5,008,178 were charged to stockholders’ equity upon the completion of the Initial Public Offering, and $9,348 of the offering costs were related to the warrant liability and charged to the operating and formation costs in the consolidated statement of operations for the year ended December 31, 2021. Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own Common Stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants that do not meet all the criteria for equity classification are recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the Private Warrants was estimated using a Binomial lattice model approach (see Note 9). Common Stock Subject to Possible Redemption The Company accounts for its Common Stock subject to possible redemption in accordance with the guidance in ASC 480. Common Stock subject to mandatory redemption are classified as a liability instrument and is measured at fair value. Conditionally redeemable Common Stock (including Common Stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, Common Stock is classified as stockholders’ equity. The Company’s Common Stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, all Common Stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable Common Stock to equal the redemption value at the end of each reporting period. The accretion of redeemable Common Stock during the year ended December 31, 2023 was an increase of $4,008,446, which represents cumulative earnings and withdrawals on the Trust Account through December 31, 2023, net of reimbursable income and franchise tax obligations as of December 31, 2023. The dissolution expense of $100,000 is not included in the redemption value of the Common Stock subject to redemption since it is only taken into account in the event of the Company’s liquidation. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Common Stock resulted in charges against additional paid-in capital, to the extent available, and accumulated deficit. At December 31, 2023 and 2022, the Common Stock reflected in the balance sheets is reconciled in the following table: Common Stock subject to possible redemption, December 31, 2021 $ 201,250,000 Plus: Accretion of carrying value to redemption value 2,170,202 Common Stock subject to possible redemption, December 31, 2022 203,420,202 Less: Redemption (152,810,179) Plus: Accretion of carrying value to redemption value 4,008,446 Common Stock subject to possible redemption, December 31, 2023 $ 54,618,469 Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the consolidated financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2023 and 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. Net Income per Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income per share of Common Stock is computed by dividing net income by the weighted average number of shares of Common Stock outstanding for the period. Income is allocated between redeemable and non-redeemable shares based on relative amounts of weighted average shares outstanding. Accretion associated with the redeemable shares of Common Stock is excluded from income per share as the redemption value approximates fair value. The calculation of diluted net income per share does not consider the effect of the PIPE derivative liability nor the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement. The calculation excludes the dilutive impact of these instruments because the issuance of the securities underlying the exercise of the warrants are contingent upon the occurrence of future events. The warrants are exercisable to purchase 16,215,625 shares of Common Stock in the aggregate. As of December 31, 2023 and 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into Common Stocks and then share in the earnings of the Company. As a result, diluted net income per share of Common Stock is the same as basic net income per Common Stock for the periods presented. The following table reflects the calculation of basic and diluted net income per share of Common Stock (in dollars, except share amounts): For the Year Ended December 31, 2023 2022 Non- Non- Redeemable redeemable Redeemable redeemable Basic and diluted net income per share of Common Stock Numerator: Allocation of net income $ 460,174 $ 335,609 $ 8,836,454 $ 2,209,113 Denominator: Basic and diluted weighted average shares outstanding 6,898,644 5,031,250 20,125,000 5,031,250 Basic and diluted net income per share of Common Stock $ 0.07 $ 0.07 $ 0.44 $ 0.44 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 and management believes the Company is not exposed to significant risks on such accounts. 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 (see Note 9). The non-redemption agreement liability was recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the non-redemption agreement liability were recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the non-redemption agreement liability is discussed in Note 9. 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. The PIPE derivative was terminated in congruence with the termination of the Merger Agreement with TradeStation. The PIPE derivative met the criteria for derivative liability classification. As such, the PIPE derivative liability was recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the derivative liability were recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the derivative liability is discussed in Note 9. Recent Accounting Standards In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have an impact on its financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. ASU 2023-09 will become effective for Annual periods beginning after December 15, 2024. The Company is still reviewing the impact of ASU 2023-09. 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 consolidated financial statements. |
PUBLIC OFFERING
PUBLIC OFFERING | 12 Months Ended |
Dec. 31, 2023 | |
PUBLIC OFFERING | |
PUBLIC OFFERING | NOTE 3. PUBLIC OFFERING Pursuant to the Initial Public Offering, the Company sold 20,125,000 Units, inclusive of 2,625,000 Units sold to the underwriters on February 12, 2021 upon the underwriters’ election to fully exercise their over-allotment option, at a purchase price of $10.00 per Unit. Each Unit consists of one share of Common Stock and one redeemable warrant (“Public Warrant”). Each Public Warrant entitles the holder to purchase one |
PRIVATE PLACEMENT
PRIVATE PLACEMENT | 12 Months Ended |
Dec. 31, 2023 | |
PRIVATE PLACEMENT | |
PRIVATE PLACEMENT | NOTE 4. PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, Quantum Ventures purchased 4,450,000 Private Warrants and Chardan Quantum purchased 1,112,500 Private Warrants, in each case, at a price of $1.00 per Private Warrant, for an aggregate purchase price of $5,562,500, in a private placement. On February 12, 2021, in connection with the underwriters’ election to fully exercise their over-allotment option, the Company sold an additional 590,625 Private Warrants to the Co-Sponsors, at a price of $1.00 per Private Warrant, generating gross proceeds of $590,625. Each Private Warrant entitles the holder to purchase one share of Common Stock at a price of $11.50 per share, subject to adjustment (see Note 8). |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
RELATED PARTY TRANSACTIONS | ||
RELATED PARTY TRANSACTIONS | NOTE 6. RELATED PARTY TRANSACTIONS Founder Shares On October 23, 2020, Quantum Ventures LLC (“Quantum Ventures”), an affiliate of the Company, purchased 4,312,500 shares (the “Founder Shares”) of the Company’s common stock for an aggregate price of $25,000. In January 2021, Quantum Ventures sold 813,500 Founder Shares to Chardan Quantum LLC (“Chardan Quantum” and together with Quantum Ventures, the “Co-Sponsors”) and 35,000 Founder Shares to each of the Company’s directors and director nominees, for a total of 245,000 Founder Shares, in each case at the original price per share, resulting in Quantum Ventures holding a balance of 3,254,000 Founder Shares. On February 4, 2021, the Company effected a stock dividend of 718,750 shares with respect to its common stock, resulting in the initial stockholders holding an aggregate of 5,031,250 Founder Shares. The Founder Shares included an aggregate of up to 656,250 shares that were subject to forfeiture. As a result of the underwriters’ election to fully exercise their over-allotment option on February 12, 2021, no Founder Shares are currently subject to forfeiture. As of December 31, 2023 there were 5,031,250 Founder Shares issued and outstanding At the time of the Initial Public Offering, the initial stockholders placed the Founder Shares into an escrow account maintained by Continental Stock Transfer & Trust Company until (1) with respect to 50% of the Founder Shares, the earlier of six months six months The sale of the Founders Shares to the Company’s directors and director nominees is in the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The fair value of the 245,000 shares granted to the Company’s directors and director nominees was $1,462,650 or $5.97 per share. The Founders Shares were granted subject to a performance condition (i.e., the occurrence of a Business Combination). Compensation expense related to the Founders Shares is recognized only when the performance condition is probable of occurrence under the applicable accounting literature in this circumstance. As of December 31, 2023, the Company determined that a Business Combination is not considered probable, and, therefore, no stock-based compensation expense had been recognized. Stock-based compensation would be recognized at the date a Business Combination is considered probable (i.e., upon consummation of a Business Combination) in an amount equal to the number of Founders Shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the Founders Shares. Since the transaction closed on February 9, 2024 the transaction was recognized as of February 9, 2024. Related Party Loans In order to finance transaction costs in connection with a Business Combination, Quantum Ventures or an affiliate of Quantum Ventures, or certain of the Company’s officers and directors may have, but were not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans were to be evidenced by promissory notes. The notes were to be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may have been converted upon completion of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Warrants. In October 2021, Quantum Ventures committed to provide the Company an aggregate of $2,000,000 in loans in connection with the Working Capital Loans. In February 2022, Quantum Ventures committed to provide the Company an additional $1,000,000 for a total of $3,000,000 in loans in connection with the Working Capital Loans. On March 14, 2022, the Company issued an unsecured promissory note, effective as of January 3, 2022, in the amount of up to $480,000 to Quantum Ventures to evidence the Working Capital Loans. The note bore no interest and was payable in full upon the earlier (i) February 9, 2023 and (ii) the effective date of the consummation of an initial business combination. The note was required to be repaid in cash at the Closing and was not convertible into Private Warrants. As of December 31, 2023, a principal balance of $480,000 had been advanced. The promissory note was past due as of December 31, 2023 and on February 9, 2024, upon the Closing of the Business Combination, the unsecured promissory note was settled with the issuance of 2,000,000 shares (see Note 7.) Advances from Related Parties As of March 31, 2024 and December 31, 2023, the Co-Sponsors had advanced $0 and $3,104,097, respectively, to the Company. Through February 9, 2024, the Co-Sponsors advanced an additional $1,052,300 for an aggregate of $4,156,397 advanced to the Company and offset the balance by $58,828 in receivable from Co-Sponsor. On February 9, 2024, upon the Closing of the Business Combination, the advances from related party, the related party loan of $480,000 as described above and the $58,828 receivable from related party was settled with the issuance of 2,000,000 shares settling a total of $4,636,397 in liabilities and $58,828 in receivables (see Note 7.) | NOTE 5. RELATED PARTY TRANSACTIONS Founder Shares On October 23, 2020, Quantum Ventures purchased 4,312,500 shares (the “Founder Shares”) of the Company’s Common Stock for an aggregate price of $25,000. In January 2021, Quantum Ventures sold 813,500 Founder Shares to Chardan Quantum and 35,000 Founder Shares to each of the Company’s directors and director nominees, in each case at the original price per share, resulting in Quantum Ventures holding a balance of 3,254,000 Founder Shares. On February 4, 2021, the Company effected a stock dividend of 718,750 shares with respect to its Common Stock, resulting in the initial stockholders holding an aggregate of 5,031,250 Founder Shares. The Founder Shares included an aggregate of up to 656,250 shares that were subject to forfeiture. As a result of the underwriters’ election to fully exercise their over-allotment option on February 12, 2021, no Founder Shares are currently subject to forfeiture. At the time of the Initial Public Offering, the initial stockholders placed the Founder Shares into an escrow account maintained by Continental Stock Transfer & Trust Company until (1) with respect to 50% of the Founder Shares, the earlier of six months six months The sale of the Founders Shares to the Company’s directors and director nominees is in the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The fair value of the 245,000 shares granted to the Company’s directors and director nominees was $1,462,650 or $5.97 per share. The Founders Shares were granted subject to a performance condition (i.e., the occurrence of a Business Combination). Compensation expense related to the Founders Shares is recognized only when the performance condition is probable of occurrence under the applicable accounting literature in this circumstance. As of December 31, 2023, the Company determined that a Business Combination is not considered probable, and, therefore, no stock-based compensation expense has been recognized. Stock-based compensation would be recognized at the date a Business Combination is considered probable (i.e., upon consummation of a Business Combination) in an amount equal to the number of Founders Shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the Founders Shares. Since the transaction closed on February 9, 2024 the transaction will be recognized in the first quarter. Administrative Services Agreement The Company agreed, commencing on February 4, 2021, to pay Quantum Ventures a total of $10,000 per month for office space, utilities and secretarial support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. For the year ended December 31, 2022, the Company incurred $120,000, in fees for these services. As of December 31, 2023 and 2022, included in accounts payable and accrued expenses in the accompanying balance sheets is $0 and $120,000, respectively, for these services. On May 9, 2023, Quantum Ventures notified the Company that the administrative support fee of $10,000 will no longer be charged and cancelled all outstanding fees due amounting to $120,000. The cancelled fee was accounted for as contributed capital in additional paid-in-capital. Promissory Note – Related Party On October 1, 2020, the Company issued an unsecured promissory note to Quantum Ventures (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $200,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) January 31, 2021 and (ii) the completion of the Initial Public Offering. At December 31, 2023 and 2022, there was no balance under this Promissory Note. The outstanding amount of $154,057 was repaid at the closing of the Initial Public Offering on February 9, 2021. Related Party Loans In order to finance transaction costs in connection with a Business Combination, Quantum Ventures or an affiliate of Quantum Ventures, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon completion of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Warrants. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. In October 2021, Quantum Ventures committed to provide the Company an aggregate of $2,000,000 in loans in connection with the Working Capital Loans. In February 2022, Quantum Ventures committed to provide the Company an additional $1,000,000 for a total of $3,000,000 in loans in connection with the Working Capital Loans. On March 14, 2022, the Company issued an unsecured promissory note, effective as of January 3, 2022, in the amount of up to $480,000 to Quantum Ventures to evidence the Working Capital Loans. The note bears no interest and is payable in full upon the earlier (i) February 9, 2023 and (ii) the effective date of the consummation of our initial business combination. The note is required to be repaid in cash at the Closing and is not convertible into Private Warrants. As of December 31, 2023, a principal balance of $480,000 has been advanced. The promissory note is past due as of December 31, 2023 and on February 9, 2024, during the Closing of the Business Combination, the unsecured promissory note was settled (see Note 10.) Advances from Related Parties As of December 31, 2023 and 2022, the Co-Sponsors have advanced $3,104,097 and $319,166, respectively, to the Company. Through the date of this filing, the Co-Sponsors have advanced an additional $795,000 for an aggregate of $3,116,097 advanced to the Company. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | ||
COMMITMENTS AND CONTINGENCIES | NOTE 7. COMMITMENTS AND CONTINGENCIES Registration Rights Pursuant to a registration rights agreement entered into on February 4, 2021, the holders of the Founder Shares, as well as the holders of the Private Warrants (and underlying securities) and any warrants issued in payment of Working Capital Loans made to the Company (and underlying securities) will have registration and stockholder rights pursuant to an agreement to be signed prior to or on the effective date of the Initial Public Offering. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Warrants (and underlying securities) can elect to exercise these registration rights at any time after the consummation of a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. The registration and stockholder rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. On May 14, 2024, the Company filed a registration statement on Form S-1 to register the resale of up to 37,885,852 shares of Common Stock by the selling stockholders named in the registration statement. The Company will not receive any of the proceeds from these sales. Business Combination Marketing Agreement The Company engaged the underwriters as advisors in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’s attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with the potential Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the underwriters the marketing fee for such services upon the consummation of our initial business combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of the Initial Public offering or $7,043,750. In connection with the Closing, the Company and Chardan Capital Markets LLC (“Chardan”) agreed that the fee, in the amount of $7,043,750, payable by the Company to Chardan upon the Closing pursuant to the terms of the business combination marketing agreement entered into in connection with Quantum’s initial public offering, would be waived in exchange for the issuance by the Company to Chardan of a convertible promissory note in the aggregate principal amount of $4,150,000. Such note (the “Chardan Note”) was issued by the Company at the Closing. The Chardan Note has a stated maturity date of February 9, 2028. Interest accrues at a rate per annum equal to 13%, and is payable quarterly on the first day of each calendar quarter. On each interest payment date, the accrued and unpaid interest shall, at the election of the Company, be either paid in cash or, subject to the satisfaction of certain conditions, in shares of Common Stock, at a rate equal to 85% of the VWAP for the trading day immediately prior to the applicable interest payment date. The Chardan Note is convertible, in whole or in part, into shares of Common Stock at the election of the holder at any time at a conversion price equal to 90% of the VWAP of the Common Stock for the trading day immediately preceding the applicable conversion date. In addition, on each conversion date the Company is required to pay to Chardan in cash (or, at the Company’s option and subject to certain conditions, a combination of cash and Common Stock) all accrued interest on the Chardan Note and all interest that would otherwise accrue on the amount of the Note being converted if such converted amount would be held to three years Also on February 9, 2024, the Company entered into a registration rights agreement with Chardan (the “Chardan Registration Rights Agreement”), pursuant to which the Company agreed, among other things, to file with the U.S. Securities and Exchange Commission within 45 days after the Closing Date a registration statement registering the resale of the shares of Common Stock issuable upon exercise of the Chardan Note and to use its reasonable best efforts to have such registration statement declared effective as soon as possible after filing. If the registration statement is not filed within 45 days after the Closing or is not effective within a specified period after the Closing (or if effectiveness is subsequently suspended or terminated for at least 15 days, subject to certain exceptions), then the interest rate of the Chardan Note will increase by 2% for each week that such event continues. The Chardan Registration Rights Agreement also provides that the Company is obligated to file additional registration statements under certain circumstances, and provides Chardan with customary “piggyback” registration rights. Non-Redemption Agreement On August 1, 2023, the Company and Quantum Ventures entered into a non-redemption agreement (the “Non-Redemption Agreement”) with Funicular Funds, LP (the “Holder”) in exchange for the Holder agreeing either not to request redemption in connection with the Extension (as defined below) or to reverse any previously submitted redemption demand in connection with the Extension with respect to an aggregate of 2,351,800 shares of common stock at the special meeting of stockholders called by the Company to, among other things, approve an amendment to the Company’s amended and restated certificate of incorporation to extend the date by which the Company must consummate an initial business combination to up to February 9, 2024 or such earlier date as is determined by the board of directors of the Company to be in the best interests of the Company (the “Extension”). In consideration of the foregoing agreement, immediately prior to, and substantially concurrently with, the closing of an initial business combination, (i) Quantum Ventures (or its designees or transferees) will surrender and forfeit to the Company for no consideration an aggregate of 235,180 shares of common stock held by Quantum Ventures (the “Forfeited Shares”) and an aggregate of 235,180 warrants held by Quantum Ventures to purchase 235,180 shares of common stock (the “Forfeited Warrants”) and (ii) the Company shall issue to the Holder a number shares of common stock equal to the number of Forfeited Shares and a number of warrants to purchase shares of common stock equal to the number of Forfeited Warrants. As a result of the closing of the Business Combination, there is no further obligation regarding the Non-Redemption Agreement, as such the liability was trued up as of February 9, 2024 and transferred to permanent equity as the shares have been transferred. Expense Settlements In connection with the Closing, AtlasClear Holdings agreed to settle certain accrued expenses and other obligations to certain parties through the issuance of shares of Common Stock. Pursuant to such arrangements, on February 9, 2024, AtlasClear Holdings issued an aggregate of 2,201,010 shares of Common Stock in settlement of obligations in the aggregate amount of $5,448,933, including the issuance of 2,000,000 shares of Common Stock to Qvent, LLC, an affiliate of Quantum Ventures, in settlement of an aggregate of $4,577,569 advanced to Quantum through the Closing Date. Additionally, on the Closing Date, AtlasClear Holdings issued notes to settle other expenses of Quantum in the aggregate principal amount of approximately $3.3 million, some of which are convertible into shares of Common Stock. Additional Settlements ● Grant Thornton LLP – 46,010 shares of Common Stock that were issued to Grant Thornton LLP (“Grant Thornton”), pursuant to a Satisfaction and Discharge Agreement, dated as of February 9, 2024, between Grant Thornton and the Company (the “Grant Thornton Agreement”), in lieu of payment for services in the amount of $460,100 , at a price per share of $10.00 . ● IB Capital LLC – 155,000 shares of Common Stock that were issued to IB Capital LLC (“IB”), pursuant to a Satisfaction and Discharge Agreement, dated as of February 9, 2024, between IB and the Company (the “IB Agreement”), in lieu of payment for services in the amount of $355,000, at a price per share of $2.29. ● Outside The Box Capital Inc. – 20,000 shares of Common Stock that were issued to Outside The Box Capital Inc. (“OTB”), pursuant to a Marketing Services Agreement, dated as of September 13, 2023, between OTB and Quantum (the “OTB Agreement”), as payment in shares for services rendered to Quantum valued at $10 per share for total consideration paid of $200,000. ● Carriage House Capital, Inc. – up to 350,000 shares of Common Stock that were issued, or may become issuable, to Carriage House Capital, Inc. (“Carriage”), pursuant to the Consulting Agreement, dated as of February 19, 2024, between Carriage and the Company (the “Carriage Agreement”), as partial consideration for consulting services rendered to the Company, at the price per share of $4.98 on the day of issuance. The total consideration due under the Consulting Agreement is 350,000 shares of Common Stock, 100,007 shares of which were due upon signing of the contract and 27,777 shares of which are due in months four through twelve from the date of signing. As of March 31, 2024, 100,000 shares were issued, and were valued at $4.98 per share as agreed upon consideration. The Stock payable for the remaining 250,000 shares was valued at $1,244,965 and recorded as a stock payable. ● Interest Solutions, LLC – up to 298,017 shares of Common Stock that may become 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 $1.00. Accrued interest on the Interest Solutions Note is 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 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. As of March 31, 2024, the amount is included in Promissory note payable. ● JonesTrading Institutional Services LLC – up to 375,000 shares of Common Stock that may become 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 $1.00. Accrued interest on the JonesTrading Note is 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 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. As of March 31, 2024, the amount is included in Promissory note payable. ● Winston & Strawn LLP – up to 833,333 shares of Common Stock that may become 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”) at a price per share of $1.00. Pursuant to the Winston Agreement, the Company may 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 March 31, 2024, the amount is included in Subscription agreement as an asset of $1,875,150. Due to the nature of the settlement terms, the subreption agreement was deemed to be a derivative asset to the Company as of March 31, 2024. 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 14. ● 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 is February 8, 2026 and the note accrues interest at a rate of 13% per annum. The principal and interest payments due under the note is not payable in shares of Common Stock. As of March 31, 2024, the amount is included in Promissory note payable. ● Lead Nectar – up to 12,000 shares of Common Stock that may become issuable to Lead Nectar in lieu of payment for internet marketing services in the amount of $20,000. Excise Taxes Payable On February 6, 2023, the Company’s stockholders redeemed 14,667,626 shares of common stock for a total of $148,523,642. On August 4, 2023, the Company’s stockholders redeemed 406,990 shares of common stock for a total of $4,286,537. On February 9, 2024, the Company’s stockholders redeemed 4,940,885 shares of common stock for a total of $53,947,064. The Company evaluated the classification and accounting of the excise tax related to these stock redemptions under ASC 450, “Contingencies”. ASC 450 states that when a loss contingency exists the likelihood that the future event(s) will confirm the loss or impairment of an asset, or the incurrence of a liability can range from probable to remote. A contingent liability must be reviewed at each reporting period to determine appropriate treatment. The Company evaluated the current status and probability of completing a Business Combination as of September 30, 2023 and determined that a contingent liability should be calculated and recorded. As of March 31, 2024 and December 31, 2023, the Company recorded $2,067,572 and $1,528,101, respectively, of excise tax liability calculated as 1% of shares redeemed. Convertible Note Financing On February 9, 2024, Wilson-Davis and Quantum entered into a securities purchase agreement (the “Purchase Agreement”) with Funicular Funds, LP, a Delaware limited partnership (“Funicular”), pursuant to which the Company sold and issued to Funicular, on that date, a secured convertible promissory note in the principal amount of $6,000,000 (the “Funicular Note”) for a purchase price of $6,000,000, in a private placement (the “Note Financing”). The proceeds raised in the Note Financing were used to pay a portion of the purchase price paid at Closing to the Wilson-Davis Sellers. The Funicular Note has a stated maturity date of November 9, 2025. Interest accrues at a rate per annum equal to 12.5%, 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 Funicular Note. In the event of an Event of Default (as defined in the Funicular Note), in addition to Funicular’s other rights and remedies, the interest rate would increase to 20% per annum. The Funicular Note is convertible, in whole or in part, into shares of Common Stock at the election of the holder at any time at an initial conversion price of $10.00 per share (the “Conversion Price”). The Conversion Price is subject to adjustment monthly to a price equal to the trailing five-day VWAP, subject to a floor of $2.00 per share (provided that if the Company sells stock at an effective price below $2.00 per share, such floor would be reduced to such effective price), and is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like. The Company has the right to redeem the Funicular Note upon 30 days’ notice after the earlier of August 7, 2024 and the effectiveness of the Registration Statement (as defined in the Funicular Note), and Funicular would have the right to require the Company to redeem the Note in connection with a Change of Control (as defined in the Note), in each case for a price equal to 101% of the outstanding principal amount of the Note plus accrued and unpaid interest. The Funicular 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 Funicular 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) a security agreement, dated as of February 9, 2024 (the “Security Agreement”), entered into among the Company, each of the Company’s subsidiaries and Funicular, and (ii) a 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 Funicular Note and the other Loan Documents (as defined in the Funicular Note). Pursuant to the Purchase Agreement, the Company agreed, among other things, that if the Funicular 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 Funicular Note in excess of that amount, in accordance with the rules of the NYSE American. Also pursuant to the Purchase Agreement, at the Closing the Sponsor transferred 600,000 Founder Shares and 600,000 private placement warrants to Funicular, which transfers terminated Quantum’s obligation to issue shares to Funicular pursuant to the terms of the non-redemption agreement, dated August 1, 2023, between Quantum and Funicular. The purchase price was allocated on a relative fair value basis resulting in the allocated value of the warrants transferred at $24,982 and the value of the shares transferred at $978,650 for a total value of $1,003,632 recorded as additional paid in capital. In connection with the Note Financing, on February 9, 2024, the Company entered into a registration rights agreement with Funicular (the “Funicular Registration Rights Agreement”), pursuant to which the Company agreed, among other things, to file with the U.S. Securities and Exchange Commission within 15 days after the Closing Date a registration statement registering the resale of the shares of Common Stock issuable upon exercise of the Funicular Note (the “Funicular Registration Statement”), and the Company agreed to use its best efforts to have the Funicular Registration Statement declared effective as promptly as reasonably possible after the filing thereof, but in any event within 60 days of the Closing Date. If the registration statement is not filed within 30 days after the Closing or is not declared effective by the applicable deadline set forth in the Registration Rights Agreement, or under certain other circumstances described in the Registration Rights Agreement, then the Company shall be obligated to pay to the Buyer an amount in cash equal to 5% of the original principal amount of the Note on a monthly basis until the applicable event giving rise to such payments is cured. The Funicular Registration Rights Agreement also provides that the Company is obligated to file additional registration statements under certain circumstances, and provides Funicular with customary “piggyback” registration rights. Subscription Agreement and Satisfaction and Discharge Agreement On February 9, 2024, the Registrant entered into a Subscription Agreement (the “Subscription Agreement”) and Satisfaction and Discharge Agreement (“Discharge Agreement”) with Winston & Strawn LLP (“Winston”), Calculator New Pubco, Inc. and Quantum. The Registrant accepted the offer of Winston to subscribe for an aggregate of $2.5 million worth of shares of its common stock in lieu of fees accrued prior to the Business Combination. In accordance with the Discharge Agreement, Winston, the service provider, has irrevocably waived their rights to receive the professional fees for the Prior Services in cash and has agreed to the Company tendering the full amount of the Fees in cash at Closing, Winston accept common stock of the Post-Closing Company as satisfaction of the Fees. As a result of the Discharge Agreement, Winston has legally released the Company from being the primary obligor under the liability. As a result, the Company has concluded that such liabilities are no longer an obligation of the Company and therefore qualify for extinguishment. The Subscription Agreement is considered a variable-share obligation under ASC Topic 480 (“Distinguishing Liabilities from Equity”). The Subscription 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 Consolidated Balance Sheets. The Company will record a change in fair value on each reporting period until settlement in its Consolidated Statement of Operations. See foot note 14 for additional disclosures. 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 the Financial Industry Regulatory Authority, Inc. (“FINRA”), Office of Hearing Officers, issued its decision ordering 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 $1.265 million. Wilson-Davis made a timely appeal to the SEC to hear the case. Pursuant to FINRA rules, Wilson-Davis’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, Wilson-Davis believes that the final amount is not reasonably estimable. Wilson-Davis has booked a contingent liability totaling $100,000, which represents the estimated low end of the possible range of fines. On December 28, 2023, the SEC issued an Opinion sustaining FINRA’s findings of violations against Wilson-Davis. The Opinion set aside the fines FINRA imposed on Wilson-Davis for the Reg SHO violations and the supervisory and AML violations. The SEC remanded the case to FINRA to reconsider the appropriate sanctions. On October 16, 2023, Wilson-Davis entered into a Fifth Addendum to Lease for the Salt Lake City office. The lease is for three years. On December 21, 2023, Wilson-Davis entered into a Second Amendment to Office Lease for the Denver office. The lease is for one year. | NOTE 6. COMMITMENTS AND CONTINGENCIES Registration Rights Pursuant to a registration rights agreement entered into on February 4, 2021, the holders of the Founder Shares, as well as the holders of the Private Warrants (and underlying securities) and any warrants issued in payment of Working Capital Loans made to the Company (and underlying securities) will have registration and stockholder rights pursuant to an agreement to be signed prior to or on the effective date of the Initial Public Offering. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of Common Stock are to be released from escrow. The holders of a majority of the Private Warrants (and underlying securities) can elect to exercise these registration rights at any time after the consummation of a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. The registration and stockholder rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement The Company granted the underwriters a 45-day option to purchase up to 2,625,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. On February 12, 2021, the underwriter’s elected to fully exercise the over-allotment option to purchase an additional 2,625,000 Public Units at a price of $10.00 per Public Unit. Business Combination Marketing Agreement The Company engaged the underwriters as advisors in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’s attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with the potential Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the underwriters the marketing fee for such services upon the consummation of our initial business combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of the Initial Public offering or $7,043,750. On February 9, 2024, upon the closing of the Business Combination, the $7,043,750 fee was waived in exchange for the issuance by the Company to the Underwriters a convertible promissory note in the aggregate principal amount of $4,150,000. Such note (the “Chardan Note”) was issued by the Company at the Closing. Business Combination Agreement Throughout the notes to the condensed consolidated financial statements, unless otherwise noted or otherwise suggested by context, the “Company” refers to Quantum FinTech Acquisition Corporation prior to the consummation of the Business Combination, and to AtlasClear Holdings, Inc. after the consummation of the Business Combination. On November 16, 2022, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) by and among the Company, Calculator New Pubco, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“New Pubco”), Calculator Merger Sub 1, Inc., a Delaware corporation and a wholly-owned subsidiary of New Pubco (“Merger Sub 1”), Calculator Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of New Pubco (“Merger Sub 2”), AtlasClear, Inc., a Wyoming corporation (“AtlasClear”), Atlas FinTech Holdings Corp., a Delaware corporation (“Atlas FinTech”) and Robert McBey. The Business Combination Agreement was unanimously approved by the Company’s Board based upon the unanimous recommendation of a special committee of independent directors. If the Business Combination Agreement is approved by the Company’s stockholders, and the transactions contemplated by the Business Combination Agreement are consummated, (i) Merger Sub 1 will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly-owned subsidiary of New Pubco and (ii) Merger Sub 2 will merge with and into AtlasClear, with AtlasClear continuing as the surviving corporation and a wholly-owned subsidiary of New Pubco (collectively, the “Business Combination”). Prior to the closing of the Business Combination (the “Closing”), AtlasClear will receive certain assets from Atlas FinTech and Atlas Financial Technologies Corp., will complete the acquisition of broker-dealer Wilson-Davis & Co., Inc. (“WDCO”) and will seek to consummate a transaction with Pacsquare Technologies, LLC (“Pacsquare”). In addition, at Closing, the definitive agreement pursuant to which AtlasClear has agreed to acquire Commercial Bancorp, a Wyoming corporation (“CB”) shall continue to be in full force and effect (the “CB Merger Agreement”). The Company expects the Closing to occur before the closing of the transactions contemplated by the CB Merger Agreement (the “CB Closing”). At the Closing, AtlasClear stockholders will receive merger consideration in shares of New Pubco Common Stock equal to the quotient of (i) $75.4 million, less the purchase prices for WDCO and CB, divided by (ii) $10. In addition, the AtlasClear stockholders will receive up to 5,944,444 shares of New Pubco Common Stock (the “Earn Out Shares”). The Earn Out Shares will be issued to AtlasClear stockholders upon certain milestones (based on the achievement of certain price targets of New Pubco Common Stock following the Closing). In the event such milestones are not met within the first 18 months following the Closing, the Earn Out Shares will be forfeited. Atlas FinTech will also receive up to $20 million of New Pubco 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 the five years following Closing, with no catch-up between the years. In connection with the Closing, each share of the Company’s Common Stock (“Company Common Stock”) (other than shares held by Atlas FinTech) that is outstanding and has not been redeemed will be converted into one share of New Pubco Common Stock. Each outstanding warrant to purchase Company Common Stock (“Company Warrant”) (other than Private Warrants, described below) will become a warrant to purchase one-half of a share of New Pubco Common Stock. Each outstanding warrant to purchase Company Common Stock initially issued in a private placement in connection with the Company’s initial public offering (“Private Warrant”) will become a warrant to purchase one share of New Pubco Common Stock. Atlas FinTech, which directly or indirectly holds shares of Company Common Stock and Private Warrants, has agreed to transfer, or cause to transfer, up to 1,279,427 of Company Common Stock and up to 1,657,579 of the Private Warrants held indirectly by it to potential sources of debt, equity or financing if the Company pursues financing between signing and the Closing. Any of such Company Common Stock or Private Warrants remaining following any transfers for potential financing will be forfeited for no consideration. On April 28, 2023, the Company and AtlasClear entered into Amendment No. 1 to the Business Combination Agreement (the “Amendment”). The Amendment amends the Business Combination Agreement to provide that the consummation of the transactions contemplated by the letter of intent pursuant to which AtlasClear expects to acquire certain technology assets of Pacsquare Technologies, LLC, will no longer be required to be completed prior to the closing of the Business Combination. On August 8, 2023, the Company and AtlasClear entered into Amendment No. 2 to the Business Combination Agreement (the “Second Amendment”). The Second Amendment amends the Business Combination Agreement to extend the Outside Date to November 6, 2023. On October 12, 2023, the Company announced the effectiveness of the registration statement on Form S-4 for the Business Combination Agreement. On October 19, 2023, the Company and AtlasClear entered into a Business Combination Agreement Waiver (the “Business Combination Agreement Waiver”) to waive the Minimum Cash Condition closing condition (as defined in the Business Combination Agreement) set forth in Section 8.1(j) of the Business Combination Agreement. On November 6, 2023, the Company and AtlasClear entered into Amendment No. 3 to the Business Combination Agreement (the “Amendment”). The Amendment amends the Business Combination Agreement to extend the date after which either Quantum or AtlasClear may terminate the Business Combination Agreement from November 6, 2023 to November 22, 2023. On February 9, 2024, the Company completed its business combination with AtlasClear (see Note 10.) Non-Redemption Agreement On August 1, 2023, the Company and Quantum Ventures entered into a non-redemption agreement (the “Non-Redemption Agreement”) with Funicular Funds, LP (the “Holder”) in exchange for the Holder agreeing either not to request redemption in connection with the Extension (as defined below) or to reverse any previously submitted redemption demand in connection with the Extension with respect to an aggregate of 2,351,800 shares of Common Stock at the special meeting of stockholders called by the Company to, among other things, approve an amendment to the Company’s amended and restated certificate of incorporation to extend the date by which the Company must consummate an initial business combination to up to February 9, 2024 or such earlier date as is determined by the board of directors of the Company to be in the best interests of the Company (the “Extension”). In consideration of the foregoing agreement, immediately prior to, and substantially concurrently with, the closing of an initial business combination, (i) Quantum Ventures (or its designees or transferees) will surrender and forfeit to the Company for no consideration an aggregate of 235,180 shares of Common Stock held by Quantum Ventures (the “Forfeited Shares”) and an aggregate of 235,180 warrants held by Quantum Ventures to purchase 235,180 shares of Common Stock (the “Forfeited Warrants”) and (ii) the Company shall issue to the Holder a number shares of Common Stock equal to the number of Forfeited Shares and a number of warrants to purchase shares of Common Stock equal to the number of Forfeited Warrants. The non-redemption agreement liability was recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the non-redemption agreement liability were recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the non-redemption agreement liability is discussed in Note 10. As of February 9, 2024, there are no further obligations under the Non-Redemption Agreement and the agreement is terminated. Excise Taxes Payable On February 6, 2023, the Company’s stockholders redeemed 14,667,626 shares of Common Stock for a total of $148,523,642. On August 4, 2023, the Company’s stockholders redeemed 406,990 shares of Common Stock for a total of $4,286,537. The Company evaluated the classification and accounting of the excise tax related to these stock redemptions under ASC 450, “Contingencies”. ASC 450 states that when a loss contingency exists the likelihood that the future event(s) will confirm the loss or impairment of an asset, or the incurrence of a liability can range from probable to remote. A contingent liability must be reviewed at each reporting period to determine appropriate treatment. The Company evaluated the current status and probability of completing a Business Combination as of December 31, 2023 and determined that a contingent liability should be calculated and recorded. As of December 31, 2023, the Company recorded $1,528,101 of excise tax liability calculated as 1% of shares redeemed. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
STOCKHOLDERS' DEFICIT | ||
STOCKHOLDERS' DEFICIT | NOTE 13. STOCKHOLDERS’ DEFICIT Preferred Stock — Common stock — March 31, 2024 December 31, 2023 In connection with the Closing, each share of Quantum’s common stock (“Quantum Common Stock” or “Public Shares”) that was outstanding and had not been redeemed was converted into one share of Common Stock. Each outstanding public warrant to purchase Quantum Common Stock became a warrant to purchase one In connection with the stockholder vote to approve the Business Combination Agreement and the Business Combination, holders of an aggregate of 4,940,885 shares of Quantum Common Stock properly exercised their right to have their shares redeemed for a full pro rata portion of the Trust Account holding the proceeds from the IPO, which was approximately $10.92 per share, or $53,947,064.28 in the aggregate. The remaining balance of the Trust Account immediately prior to the Closing of approximately $1.2 million was used to partially fund the Business Combination. As a result of such redemptions, a total of 109,499 Public Shares remained outstanding at the Closing. After giving effect to the Business Combination, the redemption of the Public Shares described above, the separation of the Quantum Units and the issuance of Merger Consideration Shares and the issuance of shares of Common Stock pursuant to Expense Settlements (described below), as of the Closing Date, there were 12,277,759 shares of Common Stock issued and outstanding In connection with the Closing, the Company instructed Continental Stock Transfer & Trust Company (“CST”), as escrow agent under the Stock Escrow Agreement, dated as of February 4, 2021 (the “Stock Escrow Agreement”), between the Company and CST, to release from escrow 4,000,000 of the Founder Shares that were held in escrow pursuant to the terms of the Stock Escrow Agreement (consisting of 949,084 shares owned by Chardan Quantum, LLC and 3,050,916 shares owned by the Sponsor; as contemplated by the previously-disclosed amendment to the Stock Escrow Agreement entered into on October 31, 2023.) The Common Stock commenced trading on the NYSE American LLC (“NYSE”) under the symbol “ATCH” on February 12, 2024. AtlasClear Holdings’ warrants commenced trading on the over-the-counter market (the “OTC”) under the symbol “ATCH WS” on February 12, 2024. | NOTE 7. STOCKHOLDERS’ DEFICIT Preferred Stock — Common Stock — issued outstanding |
WARRANTS
WARRANTS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
WARRANTS | ||
WARRANTS | NOTE 14. WARRANTS As of March 31, 2024 and December 31, 2023, there are 20,125,000 Public Warrants outstanding, each Public Warrant entitles the holder to purchase one the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within 120 days from the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. Once the warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per warrant; ● at any time after the warrants become exercisable; ● upon not less than 30 days ’ prior written notice of redemption; ● if, and only if, the reported last sale price of the shares of common stock equals or exceeds $16.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period ending on the third business day prior to the notice of redemption to warrant holders; and ● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants at the time of redemption and for the entire 30 - day trading period referred to above and continuing each day thereafter until the date of redemption. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. In addition, if (x) the Company issues additional common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the initial stockholders or their affiliates, without taking into account any Founder Shares or Private Warrants held by the initial stockholders or their affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and income thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.50 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and Newly Issued Price, and the $16.50 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 165% of the higher of the Market Value and the Newly Issued Price. As of March 31, 2024 and December 31, 2023, there are 6,153,125 Private Warrants to purchase an equal number of common shares that are outstanding that are classified and accounted for as derivative liabilities. Under this accounting treatment, the Company is required to measure the fair value of the Private Warrants at the end of each reporting period as well as re-evaluate the treatment of the Private Warrants and recognize changes in the fair value from the prior period in the Company’s operating results for the current period. The Private Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that (i) each private warrant is exercisable for one share of common stock at an exercise price of $11.50 per share, and (ii) the Private Warrants will be non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. On the Closing Date, the Company, AtlasClear Holdings and CST entered into that certain Assignment, Assumption and Amendment Agreement (the “New Warrant Agreement”). The New Warrant Agreement amends that certain Warrant Agreement, dated as of February 4, 2021, by and between the Company and CST (the “Existing Warrant Agreement”), to provide for the assignment by the Company of all its rights, title and interest in the warrants of the Company to AtlasClear Holdings. Pursuant to the New Warrant Agreement, all Company warrants under the Existing Warrant Agreement will no longer be exercisable for shares of Quantum Common Stock, but instead will be exercisable for shares of Common Stock. | NOTE 8. WARRANTS As of December 31, 2023 and 2022, there are 20,125,000 Public Warrants outstanding that are classified and accounted for as equity instruments. The Public Warrants will become exercisable on the later of (a) the completion of a Business Combination or (b) one year 120 days Once the warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per warrant; ● at any time after the warrants become exercisable; ● upon not less than 30 days ’ prior written notice of redemption; ● if, and only if, the reported last sale price of the shares of Common Stock equals or exceeds $16.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period ending on the third business day prior to the notice of redemption to warrant holders; and ● if, and only if, there is a current registration statement in effect with respect to the shares of Common Stock underlying the warrants at the time of redemption and for the entire 30 - day trading period referred to above and continuing each day thereafter until the date of redemption. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Common Stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuance of Common Stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. In addition, if (x) the Company issues additional Common Stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of Common Stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the initial stockholders or their affiliates, without taking into account any Founder Shares or Private Warrants held by the initial stockholders or their affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and income thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Common Stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.50 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and Newly Issued Price, and the $16.50 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 165% of the higher of the Market Value and the Newly Issued Price. As of December 31, 2023 and 2022, there are 6,153,125 Private Warrants to purchase an equal number of common shares that are outstanding that are classified and accounted for as derivative liabilities. Under this accounting treatment, the Company is required to measure the fair value of the Private Warrants at the end of each reporting period as well as re-evaluate the treatment of the Private Warrants and recognize changes in the fair value from the prior period in the Company’s operating results for the current period. The Private Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that (i) each Private Warrant is exercisable for one share of Common Stock at an exercise price of $11.50 per share, and (ii) the Private Warrants will be non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAX | |
INCOME TAX | NOTE 9. INCOME TAX The Company’s net deferred tax assets (liability) at December 31, 2023 and 2022 are as follows: December 31, December 31, 2023 2022 Deferred tax assets (liability) Net operating loss carryforward $ — $ — Unrealized gain on marketable securities — — Business combination expenses 437,530 427,319 Start up costs 974,835 745,713 Total deferred tax assets (liability) 1,412,365 1,173,032 Valuation Allowance (1,412,365) (1,173,032) Deferred tax assets (liability), net of allowance $ — $ — The income tax (benefit) provision for the year ended December 31, 2023 and 2022 consists of the following: December 31, December 31, 2023 2022 Federal Current $ 726,038 $ 536,853 Deferred (239,332) (575,221) State and Local Current — — Deferred — — Change in valuation allowance 239,332 575,221 Income tax provision $ 726,038 $ 536,853 As of December 31, 2023 and 2022, the Company has a total of $0 and $0, respectively, of U.S. federal net operating loss carryovers available to offset future taxable income. The federal net operating loss can be carried forward indefinitely. As of December 31, 2023 and 2022, the Company had did not have any state net operating loss carryovers available to offset future taxable income. In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended December 31, 2023, the change in the valuation allowance was $239,332. For the year ended December 31, 2022, the change in the valuation allowance was $575,221. A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2023 and 2022 is as follows, as restated: December 31, December 31, 2023 2022 Statutory federal income tax rate 21.0 % 21.0 % Business combination expenses 15.27 % (0.51) % Change in fair value of warrant liability 1.70 % (12.61) % Change in fair value of PIPE derivative liability (6.07) % (8.28) % Transaction costs - warrants 0.0 % 0.0 % Penalties & Interest 0.08 % 0.07 % Valuation allowance 15.73 % 4.97 % Income tax provision 47.71 % 4.64 % The Company files income tax returns in the U.S. federal jurisdiction and is subject to examination by the various taxing authorities. The Company’s tax returns for the year ended December 31, 2023 and 2022 remain open and subject to examination. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
FAIR VALUE MEASUREMENTS | ||
FAIR VALUE MEASUREMENTS | NOTE 15. 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. 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, 2024 and December 31, 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: March 31, December 31, Description Level 2024 2023 Assets: Marketable securities held in Trust Account 1 $ — $ 54,799,478 Liabilities: Warrant liability – Private Warrants 3 $ 615,312 $ 307,656 Non-redemption agreement liability 3 $ — $ 1,441,653 Convertible notes derivative 3 $ 12,369,480 $ — Earnout liability 3 $ 11,183,000 $ — The Private Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the condensed 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 condensed consolidated statements of operations. The Private Placement 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 Placement 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: March 31, December 31, Input 2024 2023 Market price of public shares $ 1.60 $ 6.20 Risk-free rate 4.14 % 3.77 % Dividend yield 0.00 % 0.00 % Volatility 51.1 % 12.0 % Probability of a business combination 100 % 100 % Exercise price $ 11.50 $ 11.50 Effective expiration date 2/09/29 02/09/28 The non-redemption agreement liability was measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of non-redemption agreement liability in the condensed consolidated statements of operations. The non-redemption agreement liability is comprised of 235,180 shares of non-redeemable common stock and 235,180 Private Placement Warrants. The non-redeemable common stock was valued using a Monte Carlo model, which is considered to be a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the non-redeemable common stock is equity volatility, probability of acquisition, the discount for marketability and discount for expected forfeiture. As of February 9, 2024, the shares and warrants were transferred and valued based on the trading prices of the stock and warrants and reclassified as permanent equity at total value of $1,606,279. The key inputs into the Monte Carlo model for the non-redeemable common stock were as follows: December 31, Input 2023 Market price of public shares $ 6.20 Probability of acquisition 100.0 % Equity volatility 12.0 % Discount for lack of marketability 8.0 % Discount for expected forfeiture 5.11 % The Earnout liability was, initially and 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. 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: February 9, March 31, 2024 Input 2024 (initial measurement) Market price of public shares $ 1.60 $ 10.26 Revenue volatility 15.00 % 15.00 % Discount factor for revenue 96.9 % 99.5 % The Conversion derivative, associated with Short-term notes, Long-Term notes, and the Chardan Note was accounted for as a liability in accordance with ASC 815-40. The Conversion derivative liability was 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 condensed consolidated statements of operations. On February 9, 2004, the Company issued short-term notes to the former officers and directors of Wilson-Davis. The terms of the short-term notes are as follows: (i) $5,000,000 in aggregate principal amount of notes due 90 days after the closing date; (ii) the short term notes accrue interest at 9% per annum, payable quarterly in arrears, in shares of Common Stock at a rate equal to 90% of the trailing seven-trading day VWAP prior to payment (or, at the Company’s option, cash) and are convertible at the option of the holder at any time during the continuance of an event of default, at a rate equal to 90% of the trailing seven-trading day VWAP prior to conversion; (iii) the short-term notes have a conversion feature that qualifies for derivative treatment in accordance with ASC 815-40. On February 9, 2024, the Company valued the derivatives using a Black-Scholes model which is considered to be a Level 3 fair value measurement. The key inputs into the Black-Scholes model for the Conversion derivative were as follows: February 9, 2024 March 31, (initial Input 2024 measurement) Market price of public shares $ 1.60 $ 10.26 Risk-free rate 5.49 % 4.48 % Dividend yield 0.00 % 0.00 % Volatility 10,274.0 % 4,120.0 % Exercise price $ 1.60 $ 10.26 Effective expiration date 5/9/2024 5/9/2024 (iv) The conversion feature is deemed to include an embedded derivative that requires bifurcation and separate account. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability with the offset being a discount to the note. The discount will be amortized as interest expense over the term of the short-term note(s). The derivative liability will be revalued at each reporting period with the change being charged to the income statement. The original derivative liability – convertible notes valued at $487,329. On March 31, 2024, a Black-Scholes calculation was performed (see above chart) and the value of the fair value of the derivative liability – convertible notes increased $3,125,000 to $3,582,929. The original $487,929 discount will be amortized over the 90-day maturity. Through March 31, 2024, $276,153 had been amortized bringing the carrying amount of the short-term notes to $4,788,824. On February 9, 2004, the Company issued long-term notes to the former officers and directors of Wilson-Davis. The terms of the long-term notes are as follows: (i) $7,971,197 in aggregate principal amount of notes due two years after the closing date; (ii) the long term notes accrue interest at 13% per annum, payable quarterly in arrears, in shares of Common Stock at a rate equal to 90% of the trailing seven-trading day VWAP prior to payment (or, at the Company’s option, cash) and are convertible at the option of the holder at any time commencing six months after the closing date, at a rate equal to 90% of the trailing seven-trading VWAP prior to conversion (or 85% if an event of default occurs and is continuing); (iii) the long-term notes have a conversion feature that qualifies for derivative treatment in accordance with ASC 815-40. On February 9, 2024, the Company valued the derivatives using a Black-Scholes model which is considered to be a Level 3 fair value measurement. The key inputs into the Black-Scholes model for the Conversion derivative were as follows: February 9, 2024 March 31, (initial Input 2024 measurement) Market price of public shares $ 1.60 $ 10.26 Risk-free rate 4.59 % 4.48 % Dividend yield 0.00 % 0.00 % Volatility 10,274 % 41,200 % Exercise price $ 1.60 $ 10.26 Effective expiration date 2/9/2026 2/9/2026 The conversion feature is deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability with the offset being a discount to the notes. The discount will be amortized as interest expense over the term of the note. The derivative liability will be revalued at each reporting period with the change being charged to Derivative liability – convertible notes. The derivative liability was valued at $404,483 on February 9, 2024. On March 31, 2024, the fair value of the derivative liability was updated with the value increasing $2,593,750 to $2,998,233. Through March 31, 2024, $12,640 had been amortized bringing the carrying amount of the note to $3,775,017. In connection with the Closing, AtlasClear Holdings and Chardan agreed that the fee, in the amount of $7,043,750, payable by Quantum to Chardan upon the Closing pursuant to the terms of the business combination marketing agreement entered into in connection with Quantum’s IPO, would be waived in exchange for the issuance by AtlasClear Holdings to Chardan of a convertible promissory note in the aggregate principal amount of $4,150,000. The Chardan Note was issued by AtlasClear Holdings at the Closing. The Chardan Note has a stated maturity date of February 9, 2028. Interest accrues at a rate per annum equal to 13%, and is payable quarterly on the first day of each calendar quarter. On each interest payment date, the accrued and unpaid interest shall, at the election of AtlasClear Holdings, be either paid in cash or, subject to the satisfaction of certain conditions, in shares of Common Stock, at a rate equal to 85% of the VWAP for the trading day immediately prior to the applicable interest payment date. The Chardan Note is convertible, in whole or in part, into shares of Common Stock at the election of the holder at any time at a conversion price equal to 90% of the VWAP of the Common Stock for the trading day immediately preceding the applicable conversion date. The Chardan Note qualifies for derivative treatment in accordance with ASC 814-40. On February 9, 2024, the Company valued the derivatives using a Black-Scholes model which is considered to be a Level 3 fair value measurement. The key inputs into the Black-Scholes model for the conversion derivative are as follows: February 9, 2024 March 31, (initial Input 2024 measurement) Market price of public shares $ 1.60 $ 10.26 Risk-free rate 4.31 % 4.48 % Dividend yield 0.00 % 0.00 % Volatility 166,681.0 % 4,120.0 % Exercise price $ 1.43 $ 10.26 Effective expiration date 2/9/2028 2/9/2028 In addition, on each conversion date AtlasClear Holdings is required to pay to Chardan in cash (or, at AtlasClear Holding’s option and subject to certain conditions, a combination of cash and Common Stock) all accrued interest on the Chardan Note and all interest that would otherwise accrue on the amount of the Note being converted if such converted amount would be held to three On February 9, 2004, the Company issued a long-term note to Interest Solutions in the amount of $275,000. The Company also issued a long-term note to JonesTrading Institutional Services for $375,000. Both of the notes accrue interest On February 9, 2004, the Company issued a long-term note to Funicular Funds in the amount of $6,000,000. The note accrues interest at 12.5% per annum. The outstanding principal, together with any then unpaid and accrued interest and other amounts payable, shall be due and payable at the earlier of (i) when requested by the note holder on or after February 9, 2025, or (ii) when, upon the occurrence and during the continuance of an event of default. The conversion feature in the note does not qualify for derivative treatment. On February 9, 2024, the Registrant entered into a Subscription Agreement and Discharge Agreement with Winston & Strawn LLP (“Winston”) Calculator New Pubco, Inc. and Quantum, as described in Note 1. The Company has concluded that such liabilities are no longer an obligation of the Company and therefore qualify for extinguishment. The Subscription Agreement is considered a variable-share obligation under ASC Topic 480 (“Distinguishing Liabilities from Equity”). The Subscription 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 Consolidated Balance Sheets. The Company will record a change in fair value in each reporting period until settlement in its Consolidated Statement of Operations. The following table presents the changes in the fair value of the Conversion derivative liability and the warrant liability: Private Non-Redemption Placement Agreement Warrants Liability Fair value as of December 31, 2023 $ 307,656 $ 1,441,653 Change in valuation inputs or other assumptions 307,656 164,626 Transferred to equity — (1,606,279) Fair value as of March 31, 2024 $ 615,312 $ — Conversion Earnout derivative Liability Fair value as of December 31, 2023 $ — $ — Initial measurement as of February 9, 2024 1,668,730 10,963,000 Change in valuation inputs or other assumptions 10,700,750 220,000 Fair value as of March 31, 2024 $ 12,369,480 $ 11,183,000 There were no transfers between levels during the three months ended March 31, 2024 and 2023. | NOTE 10. 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. 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. At December 31, 2023 and 2022, assets held in the Trust Account were comprised of $54,799,478 and $204,044,469, respectively, in money market funds which are primarily invested in U.S. Treasury securities. During the year ended December 31, 2023, the Company withdrew an amount of $1,374,898 in income from the Trust Account that will be used to pay franchise and income taxes. During the year ended December 31, 2022, the Company withdrew an amount of $351,474 in income from the Trust Account that will be used to pay franchise and income taxes. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2023 and 2022, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: December 31, December 31, Description Level 2023 2022 Assets: Marketable securities held in Trust Account 1 $ 54,799,478 $ 204,044,469 Liabilities: Warrant liability – Private Warrants 3 $ 307,656 $ 184,594 Non-redemption agreement liability 3 1,441,653 $ — 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 Placement 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 Placement 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: December 31, December 31, Input 2023 2022 Market price of public shares $ 6.20 $ 10.05 Risk-free rate 3.77 % 3.91 % Dividend yield 0.00 % 0.00 % Volatility 12.0 % 2.6 % Probability of a business combination 100.0 % 4.5 % Exercise price $ 11.50 $ 11.50 Effective expiration date 02/09/2029 02/09/2028 The non-redemption agreement liability was measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of non-redemption agreement liability in the consolidated statements of operations. The non-redemption agreement liability is comprised of 235,180 shares of non-redeemable Common Stock and 235,180 Private Placement Warrants. The non-redeemable Common Stock was valued using a Monte Carlo model, which is considered to be a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the non-redeemable Common Stock is equity volatility, probability of acquisition, the discount for marketability and discount for expected forfeiture. The key inputs into the Monte Carlo model for the non-redeemable Common Stock were as follows: December 31, August 1, 2023 Input 2023 (Initial Measurement) Market price of public shares $ 6.20 $ 10.57 Probability of acquisition 100.0 % 82.0 % Equity volatility 12.0 % 19.9 % Discount for lack of marketability 8.00 % 3.0 % Discount for expected forfeiture 5.11 % 5.1 % The PIPE derivative, associated with the terminated TradeStation merger agreement, was accounted for as a liability in accordance with ASC 815-40. The PIPE derivative liability was measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of PIPE derivative liability in the consolidated statements of operations. The PIPE derivative was, initially and as of March 31, 2022, valued using a Monte Carlo model, which is considered to be a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the PIPE derivative liability 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 PIPE derivative was terminated in congruence with the Company’s termination of the merger agreement with TradeStation, and as a result, the fair value was determined to be $0 as of December 31, 2022. The following table presents the changes in the fair value of the PIPE derivative liability and the warrant liability: Private Non-Redemption PIPE Placement Agreement Derivative Warrants Liability Liability Fair value as of December 31, 2022 $ 184,594 $ — $ — Initial measurement as of August 1, 2023 — 1,881,440 — Change in valuation inputs or other assumptions 123,062 (439,787) — Fair value as of December 31, 2023 $ 307,656 $ 1,441,653 $ — PIPE Private Derivative Placement Warrants Liability Fair value as of December 31, 2021 $ 7,137,930 4,566,000 Change in valuation inputs or other assumptions (6,953,336) (4,566,000) Fair value as of December 31, 2022 $ 184,594 — There were no transfers between levels during the year ended December 31, 2023 and 2022. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
SUBSEQUENT EVENTS | ||
SUBSEQUENT EVENTS | NOTE 16. 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, other than described below, 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 4, 2024, 32,188 shares of Common Stock were issued to Calabrese Consulting LLC (“Calabrese”), pursuant to a Satisfaction and Discharge Agreement between Calabrese and the Company (the “Calabrese Agreement”), in lieu of payment for accounting services in the amount of $64,236, at a price per share of $2.00. On April 8, 2024, the Company issued an aggregate of 145,210 shares of Common Stock to the Wilson-Davis Sellers to settle the first quarterly interest payments on the Seller Notes. On May 14, 2024, the Company filed a registration statement on Form S-1 to register the resale of up to 37,885,852 shares of Common Stock by the selling stockholders named in the registration statement. The Company will not receive any of the proceeds from these sales. | NOTE 11. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, other than described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements. On February 9, 2024 (the “Closing Date”), the registrant consummated the previously announced transactions pursuant to that certain Business Combination Agreement, dated November 16, 2022 (as amended, the “Business Combination Agreement”), by and among the registrant, the Company, Calculator Merger Sub 1, Inc., a Delaware corporation and a wholly-owned subsidiary of the registrant (“Merger Sub 1”), Calculator Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of the registrant (“Merger Sub 2”), AtlasClear, Inc., a Wyoming corporation (“AtlasClear”), Atlas FinTech Holdings Corp., a Delaware corporation (“Atlas FinTech”) and Robert McBey. The transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Business Combination.” In connection with the consummation of the Business Combination (the “Closing”), the registrant changed its name from “Calculator New Pubco, Inc.” to “AtlasClear Holdings, Inc.” (hereinafter referred to as “AtlasClear Holdings”). Pursuant to the Business Combination Agreement, among other things, (i) Merger Sub 1 merged with and into the Company, with the Company continuing as the surviving corporation and a wholly-owned subsidiary of AtlasClear Holdings and (ii) Merger Sub 2 merged with and into AtlasClear, with AtlasClear continuing as the surviving corporation and a wholly-owned subsidiary of AtlasClear Holdings. Prior to the Closing, pursuant to the (i) Contribution Agreement (as defined in the Business Combination Agreement), AtlasClear received certain assets from Atlas FinTech and Atlas Financial Technologies Corp., a Delaware corporation, and (ii) Broker-Dealer Acquisition Agreement (as defined in the Business Combination Agreement), completed the acquisition of broker-dealer, Wilson-Davis & Co., Inc. (“Wilson-Davis”). In addition, at Closing, the Bank Acquisition Agreement (as defined in the Business Combination Agreement), pursuant to which AtlasClear has agreed to acquire Commercial Bancorp, a Wyoming corporation and parent of Farmers State Bank (“Commercial Bancorp”), continued to be in full force and effect. Pursuant to the transactions contemplated by a letter of intent, AtlasClear expects to acquire certain technology assets of Pacsquare Technologies, LLC (“Pacsquare”) after the Closing. In connection with the Closing, and pursuant to the terms of the Business Combination Agreement, AtlasClear Stockholders received merger consideration (the “Merger Consideration Shares”) consisting of 4,440,000 shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”). In addition, the AtlasClear Holdings Stockholders will 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). In the event such milestones are not met within the first 18 months following the Closing, the 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 Closing, with no catch-up between the years. In connection with the Closing, each share of the Company’s Common Stock (“Quantum Common Stock” or “Public Shares”) that was outstanding and had not been redeemed was converted into one share of Common Stock. Each outstanding public warrant to purchase Quantum Common Stock became a warrant to purchase one In connection with the stockholder vote to approve the Business Combination Agreement and the Business Combination, holders of an aggregate of 4,940,885 shares of Quantum Common Stock properly exercised their right to have their shares redeemed for a full pro rata portion of the Trust Account holding the proceeds from the IPO, which was approximately $10.92 per share, or $53,947,064.28 in the aggregate. The remaining balance of the Trust Account immediately prior to the Closing of approximately $1.2 million was used to partially fund the Business Combination. As a result of such redemptions, a total of 109,499 Public Shares remained outstanding at the Closing. After giving effect to the Business Combination, the redemption of the Public Shares described above, the separation of the former Company Units and the issuance of Merger Consideration Shares and the issuance of shares of Common Stock pursuant to Expense Settlements (described below), as of the Closing Date, there were 11,781,759 shares of Common Stock issued and outstanding In connection with the Closing, the Company instructed Continental Stock Transfer & Trust Company (“CST”), as escrow agent under the Stock Escrow Agreement, dated as of February 4, 2021 (the “Stock Escrow Agreement”), between the Company and CST, to release from escrow 4,000,000 of the Founder Shares that were held in escrow pursuant to the terms of the Stock Escrow Agreement (consisting of 949,084 shares owned by Chardan Quantum, LLC and 3,050,916 shares owned by the Sponsor; as contemplated by the previously-disclosed amendment to the Stock Escrow Agreement entered into on October 31, 2023. The Common Stock commenced trading on the NYSE American LLC (“NYSE”) under the symbol “ATCH” on February 12, 2024. AtlasClear Holdings’ warrants commenced trading on the over-the-counter market (the “OTC”) under the symbol “ATCH WS” on February 12, 2024. Amendments to Broker-Dealer Acquisition Agreement Prior to the Closing, AtlasClear and the Company entered into two amendments to the Broker-Dealer Acquisition Agreement with Wilson-Davis and the then-owners of Wilson-Davis (the “Wilson-Davis Sellers”), Amendment No. 8 dated January 9, 2024 (“Amendment No. 8”) and Amendment No. 9 dated February 7, 2024 (“Amendment No. 9” and, together with Amendment No. 8, the “Amendments”). Among other things, the Amendments reduced the total purchase price payable under the Broker- Dealer Acquisition Agreement by $5 million and reduced the cash payable at the Wilson-Davis Closing as part of the purchase price to $8 million, with the balance of the purchase price paid in the form of convertible promissory notes issued by AtlasClear to the Wilson-Davis Sellers, as follows: (i) $5,000,000 in aggregate principal amount of notes due 90 days after the Closing Date (the “Short-Term Notes”) and (ii) $7,971,000 in aggregate principal amount of notes due 24 months after the Closing Date (the “Long-Term Notes” and, together with the Short-Term Notes, the “Seller Notes”). The Short-Term Notes accrue interest at a rate of 9% per annum, payable quarterly in arrears, in shares of Common Stock at a rate equal to 90% of the trailing seven-trading day VWAP prior to payment (or, at the Company’s option, cash), and are convertible at the option of the holder at any time during the continuance of an event of default, at a rate equal to 90% of the trailing seven-trading day VWAP prior to conversion. The Long-Term Notes accrue interest at a rate of 13% per annum, payable quarterly in arrears, in shares of Common Stock at a rate equal to 90% of the trailing seven-trading day VWAP prior to payment (or, at the Company’s option, in cash), and are convertible at the option of the holder at any time commencing six months after the Closing Date, at a rate equal to 90% of the trailing seven-trading day VWAP prior to conversion (or 85% if an event of default occurs and is continuing). Pursuant to the terms of the Amendments, at the closing of the transactions contemplated by the Broker-Dealer Acquisition Agreement (the “Wilson-Davis Closing”) the Company entered into a parent guaranty and registration rights agreement with the Wilson-Davis Sellers (the “Wilson-Davis Guaranty and RRA”), pursuant to which the Company guaranteed the obligations of AtlasClear under the Notes. The Company also agreed (i) to file, within 30 days of the Closing Date, a registration statement with the SEC, registering the resale of the shares of Common Stock issuable upon conversion of the Notes and (ii) if necessary to allow any of the Notes to be converted into shares of Common Stock in accordance with the rules of the NYSE, to seek stockholder approval for the issuance of such shares, including by filing a proxy statement by no later than April 30, 2024. The Sponsor also entered into Amendment No. 9, for the limited purpose of agreeing to transfer certain Founder Shares owned by the Sponsor to the Wilson-Davis Sellers. The Sponsor agreed to transfer to the Wilson-Davis Sellers, at the Wilson-Davis Closing, Founder Shares having an aggregate value of $6 million, based on the VWAP of Quantum Common Stock for the five Convertible Note Financing On February 9, 2024, the WDCO and Quantum entered into a securities purchase agreement (the “Purchase Agreement”) with Funicular Funds, LP, a Delaware limited partnership (“Funicular”), pursuant to which the Company sold and issued to Funicular, on that date, a secured convertible promissory note in the principal amount of $6,000,000 (the “Funicular Note”) for a purchase price of $6,000,000, in a private placement (the “Note Financing”). The proceeds raised in the Note Financing were used to pay a portion of the purchase price paid at Closing to the Wilson-Davis Sellers. The Funicular Note has a stated maturity date of November 9, 2025. Interest accrues at a rate per annum equal to 12.5%, 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 Funicular Note. In the event of an Event of Default (as defined in the Funicular Note), in addition to Funicular’s other rights and remedies, the interest rate would increase to 20% per annum. The Funicular Note is convertible, in whole or in part, into shares of Common Stock at the election of the holder at any time at an initial conversion price of $10.00 per share (the “Conversion Price”). The Conversion Price is subject to adjustment monthly to a price equal to the trailing five-day VWAP, subject to a floor of $2.00 per share (provided that if the Company sells stock at an effective price below $2.00 per share, such floor would be reduced to such effective price), and is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like. The Company has the right to redeem the Funicular Note upon 30 days’ notice after the earlier of August 7, 2024 and the effectiveness of the Registration Statement (as defined in the Funicular Note), and Funicular would have the right to require the Company to redeem the Note in connection with a Change of Control (as defined in the Note), in each case for a price equal to 101% of the outstanding principal amount of the Note plus accrued and unpaid interest. The Funicular 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 Funicular 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) a security agreement, dated as of February 9, 2024 (the “Security Agreement”), entered into among the Company, each of the Company’s subsidiaries and Funicular, and (ii) a 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 Funicular Note and the other Loan Documents (as defined in the Funicular Note). Pursuant to the Purchase Agreement, the Company agreed, among other things, that if the Funicular 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 Funicular Note in excess of that amount, in accordance with the rules of the NYSE American. Also pursuant to the Purchase Agreement, at the Closing the Sponsor transferred 600,000 Founder Shares and 600,000 private placement warrants to Funicular, which transfers terminated Quantum’s obligation to issue shares to Funicular pursuant to the terms of the non-redemption agreement, dated August 1, 2023, between Quantum and Funicular and previously disclosed in the Proxy Statement/Prospectus. In connection with the Note Financing, on February 9, 2024, the Company entered into a registration rights agreement with Funicular (the “Funicular Registration Rights Agreement”), pursuant to which the Company agreed, among other things, to file with the U.S. Securities and Exchange Commission within 15 days after the Closing Date a registration statement registering the resale of the shares of Common Stock issuable upon exercise of the Funicular Note (the “Funicular Registration Statement”), and the Company agreed to use its best efforts to have the Funicular Registration Statement declared effective as promptly as reasonably possible after the filing thereof, but in any event within 60 days of the Closing Date. If the registration statement is not filed within 30 days after the Closing or is not declared effective by the applicable deadline set forth in the Registration Rights Agreement, or under certain other circumstances described in the Registration Rights Agreement, then the Company shall be obligated to pay to the Buyer an amount in cash equal to 5% of the original principal amount of the Note on a monthly basis until the applicable event giving rise to such payments is cured. The Funicular Registration Rights Agreement also provides that the Company is obligated to file additional registration statements under certain circumstances, and provides Funicular with customary “piggyback” registration rights. Expense Settlements In connection with the Closing, the Company and Chardan Capital Markets LLC (“Chardan”) agreed that the fee, in the amount of $7,043,750, payable by the Company to Chardan upon the Closing pursuant to the terms of the business combination marketing agreement entered into in connection with Quantum’s initial public offering, would be waived in exchange for the issuance by the Company to Chardan of a convertible promissory note in the aggregate principal amount of $4,150,000. Such note (the “Chardan Note”) was issued by the Company at the Closing. The Chardan Note has a stated maturity date of February 9, 2028. Interest accrues at a rate per annum equal to 13%, and is payable quarterly on the first day of each calendar quarter. On each interest payment date, the accrued and unpaid interest shall, at the election of the Company, be either paid in cash or, subject to the satisfaction of certain conditions, in shares of Common Stock, at a rate equal to 85% of the VWAP for the trading day immediately prior to the applicable interest payment date. The Chardan Note is convertible, in whole or in part, into shares of Common Stock at the election of the holder at any time at a conversion price equal to 90% of the VWAP of the Common Stock for the trading day immediately preceding the applicable conversion date. In addition, on each conversion date the Company is required to pay to Chardan in cash (or, at the Company’s option and subject to certain conditions, a combination of cash and Common Stock) all accrued interest on the Chardan Note and all interest that would otherwise accrue on the amount of the Note being converted if such converted amount would be held to three years after the applicable conversion date. Conversion of the Chardan Note, including the issuance of shares to pay interest thereon, is limited to the extent that such conversion would result in Chardan (together with its affiliates and any other persons acting as a group together with Chardan or its affiliates) beneficially owning in excess of 9.99% of the outstanding shares of Common Stock outstanding immediately prior to such conversion. The conversion price applicable to the Chardan Note is subject to adjustment is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and is subject to price-based adjustment, on a “full ratchet” basis, in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for, Common Stock at a price below the then-applicable conversion price (subject to certain exceptions). The Chardan Note is subject to a demand for immediate repayment in cash upon the occurrence of certain events of default specified therein. Also on February 9, 2024, the Company entered into a registration rights agreement with Chardan (the “Chardan Registration Rights Agreement”), pursuant to which the Company agreed, among other things, to file with the U.S. Securities and Exchange Commission within 45 days after the Closing Date a registration statement registering the resale of the shares of Common Stock issuable upon exercise of the Chardan Note and to use its reasonable best efforts to have such registration statement declared effective as soon as possible after filing. If the registration statement is not filed within 45 days after the Closing or is not effective within a specified period after the Closing (or if effectiveness is subsequently suspended or terminated for at least 15 days, subject to certain exceptions), then the interest rate of the Chardan Note will increase by 2% for each week that such event continues. The Chardan Registration Rights Agreement also provides that the Company is obligated to file additional registration statements under certain circumstances, and provides Chardan with customary “piggyback” registration rights. Also in connection with the Closing, the Company agreed to settle certain accrued expenses and other obligations to certain parties through the issuance of shares of Common Stock. Pursuant to such arrangements, the Company issued an aggregate of 2,201,010 shares of Common Stock in settlement of obligations in the aggregate amount of $5,448,933, including the issuance of 2,000,000 shares of Common Stock to Qvent, LLC, an affiliate of the Sponsor, in settlement of an aggregate of $4,633,833 advanced to Quantum through the Closing Date. 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 Charter (as defined below) and the Amended and Restated Bylaws (as defined below). Assignment, Assumption and Amendment Agreement On the Closing Date, the Company, AtlasClear Holdings and CST entered into that certain Assignment, Assumption and Amendment Agreement (the “New Warrant Agreement”). The New Warrant Agreement amends that certain Warrant Agreement, dated as of February 4, 2021, by and between the Company and CST (the “Existing Warrant Agreement”), to provide for the assignment by the Company of all its rights, title and interest in the warrants of the Company to AtlasClear Holdings. Pursuant to the New Warrant Agreement, all Company warrants under the Existing Warrant Agreement will no longer be exercisable for shares of Quantum Common Stock, but instead will be exercisable for shares of Common Stock. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Basis of Presentation | 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 for the period ended December 31, 2023, as filed with the SEC on April 16, 2024. The accompanying condensed balance sheet as of December 31, 2023 has been derived from the audited financial statements included in this Form 10-K. The interim results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any future periods. | Basis of Presentation The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. |
Principles of Consolidation | 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. | 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. |
Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s condensed consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The more significant accounting estimates included in these condensed consolidated financial statements is the determination of the fair value of the private warrant liabilities, the fair value of the Subscription Agreement, the fair value of the conversion liabilities, fair value of the customer list, licenses acquired on February 9, 2024. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The more significant accounting estimates included in these consolidated financial statements is the determination of the fair value of the Private Warrant liabilities, and fair value of the sale of the Founder Shares. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all operating accounts that hold money market funds held and short-term investments with an original maturity of three months or less when purchased to be cash equivalents. | Cash and Cash Equivalents The Company considers all operating accounts that hold money market funds held and short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had cash equivalents of $619,554 and $0, respectively, as of December 31, 2023 and 2022. |
Marketable Securities Held in Trust Account | Trading Securities Securities held in the Company’s trading account and trading securities, consist primarily of over-the-counter securities and are valued based upon quoted market prices. The value of securities that are not readily marketable are estimated by management based upon quoted prices, the number of market makers, trading volume and number of shares held. Unrealized gains and losses are reflected in income in the financial statements. | Marketable Securities Held in Trust Account At December 31, 2023 and 2022, substantially all of the assets held in the Trust Account were held in mutual funds which are invested primarily in U.S. Treasury securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in income earned on marketable securities held in Trust Account in the accompanying consolidated statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information. |
Offering Costs | Offering Costs Offering costs consisted of legal, and other expenses incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to Private Warrant liabilities were expensed as incurred in the statements of operations. Offering costs associated with the Common Stock issued were initially charged to temporary equity and then accreted to Common Stock subject to redemption upon the completion of the Initial Public Offering. Offering costs amounting to $5,008,178 were charged to stockholders’ equity upon the completion of the Initial Public Offering, and $9,348 of the offering costs were related to the warrant liability and charged to the operating and formation costs in the consolidated statement of operations for the year ended December 31, 2021. | |
Warrant Liabilities | Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants that do not meet all the criteria for equity classification are recognized as a non-cash gain or loss on the condensed consolidated statements of operations. The fair value of the private warrants was estimated using a Black-Scholes model approach (see Note 9). | Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own Common Stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants that do not meet all the criteria for equity classification are recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the Private Warrants was estimated using a Binomial lattice model approach (see Note 9). |
Common Stock Subject to Possible Redemption | Common Stock Subject to Possible Redemption The Company accounts for its Common Stock subject to possible redemption in accordance with the guidance in ASC 480. Common Stock subject to mandatory redemption are classified as a liability instrument and is measured at fair value. Conditionally redeemable Common Stock (including Common Stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, Common Stock is classified as stockholders’ equity. The Company’s Common Stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, all Common Stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable Common Stock to equal the redemption value at the end of each reporting period. The accretion of redeemable Common Stock during the year ended December 31, 2023 was an increase of $4,008,446, which represents cumulative earnings and withdrawals on the Trust Account through December 31, 2023, net of reimbursable income and franchise tax obligations as of December 31, 2023. The dissolution expense of $100,000 is not included in the redemption value of the Common Stock subject to redemption since it is only taken into account in the event of the Company’s liquidation. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Common Stock resulted in charges against additional paid-in capital, to the extent available, and accumulated deficit. At December 31, 2023 and 2022, the Common Stock reflected in the balance sheets is reconciled in the following table: Common Stock subject to possible redemption, December 31, 2021 $ 201,250,000 Plus: Accretion of carrying value to redemption value 2,170,202 Common Stock subject to possible redemption, December 31, 2022 203,420,202 Less: Redemption (152,810,179) Plus: Accretion of carrying value to redemption value 4,008,446 Common Stock subject to possible redemption, December 31, 2023 $ 54,618,469 | |
Income Taxes | Income Taxes The Company utilizes the asset and liability method to account for income taxes. The objective of this method is to establish deferred tax assets and liabilities for the temporary differences between net income for financial reporting basis and the tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized. Income tax expense or benefit is provided based upon the financial statement earnings of the Company. The allowance for doubtful accounts is deductible for financial statement purposes, but not for tax purposes. Depreciation expense is recognized in different periods for tax and financial accounting purposes due to the use of accelerated depreciation methods for income tax purposes. The tax effects of such differences are reported as deferred income taxes in the financial statements. | Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the consolidated financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2023 and 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. |
Net Income per Common Stock | 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. (Loss) Income is allocated between redeemable and non-redeemable shares based on relative amounts of weighted average shares outstanding. Accretion associated with the redeemable shares of common stock is excluded from (loss) income per share as the redemption value approximates fair value. The calculation of diluted net (loss) income per share does not consider the effect of the convertible derivative liability nor the warrants issued and outstanding. The calculation excludes the dilutive impact of these instruments because the issuance of the securities underlying the exercise of the warrants are contingent upon the occurrence of future events and inclusion would be antidilutive. As a result, diluted net (loss) income per share of common stock is the same as basic net (loss) income per common stock for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per share of common stock (in dollars, except share amounts): Three Months Ended March 31, 2024 March 31, 2023 Non- Non- Redeemable redeemable Redeemable redeemable Basic and diluted net income per common stock Numerator: Allocation of net income, as adjusted $ (71,126,651) $ (17,450,766) $ 135,463 $ 56,908 Denominator: Basic and diluted weighted average common stock outstanding 9,048,173 2,219,949 11,976,319 5,031,250 Basic and diluted net income per common stock $ (7.86) $ (7.86) $ 0.01 $ 0.01 Below is a summary of the dilutive instruments as of March 31, 2024 and 2023, these were excluded as including them would be anti dilutive as of March 31, 2024 and were excluded in March 31, 2023 as the exercise was contingent: Description March 31, 2024 March 31, 2023 Short Term Notes 5,390,752 — Secured convertible note 18,000,000 — Subscription agreement 833,333 — Promissory note 704,404 — Total Shares issuable under Convertible Note obligations 24,928,489 — Public Warrants 10,062,500 10,062,500 Private Warrants 5,553,125 6,153,125 Secured convertible note warrants 600,000 — Total dilutive 41,144,114 16,153,125 | Net Income per Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income per share of Common Stock is computed by dividing net income by the weighted average number of shares of Common Stock outstanding for the period. Income is allocated between redeemable and non-redeemable shares based on relative amounts of weighted average shares outstanding. Accretion associated with the redeemable shares of Common Stock is excluded from income per share as the redemption value approximates fair value. The calculation of diluted net income per share does not consider the effect of the PIPE derivative liability nor the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement. The calculation excludes the dilutive impact of these instruments because the issuance of the securities underlying the exercise of the warrants are contingent upon the occurrence of future events. The warrants are exercisable to purchase 16,215,625 shares of Common Stock in the aggregate. As of December 31, 2023 and 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into Common Stocks and then share in the earnings of the Company. As a result, diluted net income per share of Common Stock is the same as basic net income per Common Stock for the periods presented. The following table reflects the calculation of basic and diluted net income per share of Common Stock (in dollars, except share amounts): For the Year Ended December 31, 2023 2022 Non- Non- Redeemable redeemable Redeemable redeemable Basic and diluted net income per share of Common Stock Numerator: Allocation of net income $ 460,174 $ 335,609 $ 8,836,454 $ 2,209,113 Denominator: Basic and diluted weighted average shares outstanding 6,898,644 5,031,250 20,125,000 5,031,250 Basic and diluted net income per share of Common Stock $ 0.07 $ 0.07 $ 0.44 $ 0.44 |
Concentration of Credit Risk | 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 and management believes the Company is not exposed to significant risks on such accounts. | 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 and management believes the Company is not exposed to significant risks on such accounts. |
Fair Value of Financial Instruments | 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 condensed balance sheets, primarily due to their short-term nature, except for warrant liabilities, convertible derivatives and the earnout out liability (see Note 14). | 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 (see Note 9). The non-redemption agreement liability was recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the non-redemption agreement liability were recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the non-redemption agreement liability is discussed in Note 9. |
Derivative Financial Instruments | 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. | 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. The PIPE derivative was terminated in congruence with the termination of the Merger Agreement with TradeStation. The PIPE derivative met the criteria for derivative liability classification. As such, the PIPE derivative liability was recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the derivative liability were recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the derivative liability is discussed in Note 9. |
Recent Accounting Standards | 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. | Recent Accounting Standards In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have an impact on its financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. ASU 2023-09 will become effective for Annual periods beginning after December 15, 2024. The Company is still reviewing the impact of ASU 2023-09. 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 consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Schedule of common stock reflected in the balance sheets | Common Stock subject to possible redemption, December 31, 2021 $ 201,250,000 Plus: Accretion of carrying value to redemption value 2,170,202 Common Stock subject to possible redemption, December 31, 2022 203,420,202 Less: Redemption (152,810,179) Plus: Accretion of carrying value to redemption value 4,008,446 Common Stock subject to possible redemption, December 31, 2023 $ 54,618,469 | |
Schedule of basic and diluted net income per share of Common Stock | The following table reflects the calculation of basic and diluted net income (loss) per share of common stock (in dollars, except share amounts): Three Months Ended March 31, 2024 March 31, 2023 Non- Non- Redeemable redeemable Redeemable redeemable Basic and diluted net income per common stock Numerator: Allocation of net income, as adjusted $ (71,126,651) $ (17,450,766) $ 135,463 $ 56,908 Denominator: Basic and diluted weighted average common stock outstanding 9,048,173 2,219,949 11,976,319 5,031,250 Basic and diluted net income per common stock $ (7.86) $ (7.86) $ 0.01 $ 0.01 | The following table reflects the calculation of basic and diluted net income per share of Common Stock (in dollars, except share amounts): For the Year Ended December 31, 2023 2022 Non- Non- Redeemable redeemable Redeemable redeemable Basic and diluted net income per share of Common Stock Numerator: Allocation of net income $ 460,174 $ 335,609 $ 8,836,454 $ 2,209,113 Denominator: Basic and diluted weighted average shares outstanding 6,898,644 5,031,250 20,125,000 5,031,250 Basic and diluted net income per share of Common Stock $ 0.07 $ 0.07 $ 0.44 $ 0.44 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAX | |
Schedule of net deferred tax assets (liability) | December 31, December 31, 2023 2022 Deferred tax assets (liability) Net operating loss carryforward $ — $ — Unrealized gain on marketable securities — — Business combination expenses 437,530 427,319 Start up costs 974,835 745,713 Total deferred tax assets (liability) 1,412,365 1,173,032 Valuation Allowance (1,412,365) (1,173,032) Deferred tax assets (liability), net of allowance $ — $ — |
Schedule of income tax (benefit) provision | December 31, December 31, 2023 2022 Federal Current $ 726,038 $ 536,853 Deferred (239,332) (575,221) State and Local Current — — Deferred — — Change in valuation allowance 239,332 575,221 Income tax provision $ 726,038 $ 536,853 |
Schedule of federal income tax rate to the company's effective tax rate | December 31, December 31, 2023 2022 Statutory federal income tax rate 21.0 % 21.0 % Business combination expenses 15.27 % (0.51) % Change in fair value of warrant liability 1.70 % (12.61) % Change in fair value of PIPE derivative liability (6.07) % (8.28) % Transaction costs - warrants 0.0 % 0.0 % Penalties & Interest 0.08 % 0.07 % Valuation allowance 15.73 % 4.97 % Income tax provision 47.71 % 4.64 % |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
FAIR VALUE MEASUREMENTS | ||
Schedule of Company's assets and liabilities that are measured at fair value on a recurring basis | March 31, December 31, Description Level 2024 2023 Assets: Marketable securities held in Trust Account 1 $ — $ 54,799,478 Liabilities: Warrant liability – Private Warrants 3 $ 615,312 $ 307,656 Non-redemption agreement liability 3 $ — $ 1,441,653 Convertible notes derivative 3 $ 12,369,480 $ — Earnout liability 3 $ 11,183,000 $ — | December 31, December 31, Description Level 2023 2022 Assets: Marketable securities held in Trust Account 1 $ 54,799,478 $ 204,044,469 Liabilities: Warrant liability – Private Warrants 3 $ 307,656 $ 184,594 Non-redemption agreement liability 3 1,441,653 $ — |
Schedule of Key Inputs into the models | March 31, December 31, Input 2024 2023 Market price of public shares $ 1.60 $ 6.20 Risk-free rate 4.14 % 3.77 % Dividend yield 0.00 % 0.00 % Volatility 51.1 % 12.0 % Probability of a business combination 100 % 100 % Exercise price $ 11.50 $ 11.50 Effective expiration date 2/09/29 02/09/28 December 31, Input 2023 Market price of public shares $ 6.20 Probability of acquisition 100.0 % Equity volatility 12.0 % Discount for lack of marketability 8.0 % Discount for expected forfeiture 5.11 % February 9, March 31, 2024 Input 2024 (initial measurement) Market price of public shares $ 1.60 $ 10.26 Revenue volatility 15.00 % 15.00 % Discount factor for revenue 96.9 % 99.5 % February 9, 2024 March 31, (initial Input 2024 measurement) Market price of public shares $ 1.60 $ 10.26 Risk-free rate 5.49 % 4.48 % Dividend yield 0.00 % 0.00 % Volatility 10,274.0 % 4,120.0 % Exercise price $ 1.60 $ 10.26 Effective expiration date 5/9/2024 5/9/2024 February 9, 2024 March 31, (initial Input 2024 measurement) Market price of public shares $ 1.60 $ 10.26 Risk-free rate 4.59 % 4.48 % Dividend yield 0.00 % 0.00 % Volatility 10,274 % 41,200 % Exercise price $ 1.60 $ 10.26 Effective expiration date 2/9/2026 2/9/2026 February 9, 2024 March 31, (initial Input 2024 measurement) Market price of public shares $ 1.60 $ 10.26 Risk-free rate 4.31 % 4.48 % Dividend yield 0.00 % 0.00 % Volatility 166,681.0 % 4,120.0 % Exercise price $ 1.43 $ 10.26 Effective expiration date 2/9/2028 2/9/2028 | December 31, December 31, Input 2023 2022 Market price of public shares $ 6.20 $ 10.05 Risk-free rate 3.77 % 3.91 % Dividend yield 0.00 % 0.00 % Volatility 12.0 % 2.6 % Probability of a business combination 100.0 % 4.5 % Exercise price $ 11.50 $ 11.50 Effective expiration date 02/09/2029 02/09/2028 December 31, August 1, 2023 Input 2023 (Initial Measurement) Market price of public shares $ 6.20 $ 10.57 Probability of acquisition 100.0 % 82.0 % Equity volatility 12.0 % 19.9 % Discount for lack of marketability 8.00 % 3.0 % Discount for expected forfeiture 5.11 % 5.1 % |
Schedule of changes in the fair value of the PIPE derivative liability and the warrant liability | Private Non-Redemption Placement Agreement Warrants Liability Fair value as of December 31, 2023 $ 307,656 $ 1,441,653 Change in valuation inputs or other assumptions 307,656 164,626 Transferred to equity — (1,606,279) Fair value as of March 31, 2024 $ 615,312 $ — Conversion Earnout derivative Liability Fair value as of December 31, 2023 $ — $ — Initial measurement as of February 9, 2024 1,668,730 10,963,000 Change in valuation inputs or other assumptions 10,700,750 220,000 Fair value as of March 31, 2024 $ 12,369,480 $ 11,183,000 | Private Non-Redemption PIPE Placement Agreement Derivative Warrants Liability Liability Fair value as of December 31, 2022 $ 184,594 $ — $ — Initial measurement as of August 1, 2023 — 1,881,440 — Change in valuation inputs or other assumptions 123,062 (439,787) — Fair value as of December 31, 2023 $ 307,656 $ 1,441,653 $ — PIPE Private Derivative Placement Warrants Liability Fair value as of December 31, 2021 $ 7,137,930 4,566,000 Change in valuation inputs or other assumptions (6,953,336) (4,566,000) Fair value as of December 31, 2022 $ 184,594 — |
DESCRIPTION OF ORGANIZATION A_2
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||
Feb. 09, 2024 | Nov. 03, 2023 | Sep. 18, 2023 | Aug. 04, 2023 | Feb. 06, 2023 | Feb. 06, 2023 | Feb. 12, 2021 | Feb. 09, 2021 | Feb. 28, 2022 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Jan. 03, 2023 | Mar. 14, 2022 | Dec. 31, 2021 | Oct. 31, 2021 | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||
Price per public share (in Dollars per share) | $ 10.73 | $ 10 | |||||||||||||||
Maturity (in days) | 185 days | ||||||||||||||||
Proceeds from warrants | $ 590,625 | ||||||||||||||||
Deposited into trust account | $ 26,250,000 | $ 54,799,478 | $ 204,044,469 | ||||||||||||||
Proceeds from trust account | $ 53,947,064 | $ 148,523,642 | 152,810,179 | ||||||||||||||
Transaction costs | 5,017,526 | ||||||||||||||||
Underwriting fees | 4,528,125 | ||||||||||||||||
Other offering costs | $ 489,401 | ||||||||||||||||
Offering costs | $ 5,008,178 | ||||||||||||||||
Condition for future business combination use of proceeds percentage | 80% | ||||||||||||||||
Extension amount | $ 175,000 | $ 91,200 | |||||||||||||||
Shares of common stock for redemptions (in Shares) | 0 | 5,050,384 | 20,125,000 | ||||||||||||||
Redemption price per share (in dollars per share) | $ 10.53 | ||||||||||||||||
Aggregate redemption amount | $ 4,008,446 | $ 2,170,202 | |||||||||||||||
Aggregate shares | 8,500,897 | ||||||||||||||||
Shares of common stock | 4,940,885 | ||||||||||||||||
Approximately redemptions amount (in Dollars) | $ 53,000,000 | ||||||||||||||||
Public price per shares (in Dollars per share) | $ 0.04 | ||||||||||||||||
Public share value | $ 160,000 | ||||||||||||||||
Dissolution expense | 100,000 | ||||||||||||||||
Cash in bank account | $ 7,194,912 | 619,554 | |||||||||||||||
tax payable | 619,554 | ||||||||||||||||
Marketable securities held in trust account | 54,799,478 | ||||||||||||||||
Working capital deficit | 14,591,130 | 11,386,299 | |||||||||||||||
Working capital loans | $ 480,000 | $ 480,000 | $ 2,000,000 | ||||||||||||||
Drawings from working capital loan | 480,000 | ||||||||||||||||
Additional working capital loans | $ 1,000,000 | ||||||||||||||||
Working capital net | $ 3,000,000 | ||||||||||||||||
Aggregate total | 3,116,097 | ||||||||||||||||
Common Stock | |||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||
Extension amount | $ 4 | ||||||||||||||||
Number of shares redeemed (in shares) | 4,940,885 | 406,990 | 14,667,626 | ||||||||||||||
Value of shares redeemed | $ 148,523,642 | ||||||||||||||||
Private Warrants | |||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||
Gross proceeds | $ 5,562,500 | ||||||||||||||||
Sale of warrants (in Shares) | 590,625 | 6,153,125 | 1,112,500 | ||||||||||||||
Price per share (in Dollars per share) | $ 10 | $ 1 | |||||||||||||||
Net proceeds | $ 175,000,000 | ||||||||||||||||
Proceeds from warrants | $ 590,625 | ||||||||||||||||
Proceeds from trust account | $ 201,250,000 | ||||||||||||||||
Initial Public Offering | |||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||
Units issued during period shares | 20,125,000 | 17,500,000 | |||||||||||||||
Price per public share (in Dollars per share) | $ 10 | ||||||||||||||||
Gross proceeds | $ 175,000,000 | ||||||||||||||||
Sale of warrants (in Shares) | 5,562,500 | ||||||||||||||||
Offering costs | $ 9,348 | ||||||||||||||||
Private Warrants | |||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||
Price per share (in Dollars per share) | $ 1 | $ 1 | |||||||||||||||
Number of additional units (in Shares) | 590,625 | ||||||||||||||||
Over-Allotment Option | |||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||
Units issued during period shares | 2,625,000 | ||||||||||||||||
Price per share (in Dollars per share) | $ 10 | ||||||||||||||||
Number of additional units (in Shares) | 2,625,000 | ||||||||||||||||
Units issued during period new issues value | $ 26,250,000 | ||||||||||||||||
Public Shares | |||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||
Price per public share (in Dollars per share) | $ 0.055 | $ 0.055 | |||||||||||||||
Common Stock | |||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||
Redemption price per share (in dollars per share) | $ 10.13 | $ 10.13 | |||||||||||||||
Common Stock | |||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||
Value of shares redeemed | $ 4,300,000 | $ 148,500,000 | |||||||||||||||
Business Combination | |||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||
Percentage of outstanding voting securities | 50% | ||||||||||||||||
Number of shares redeemed (in shares) | 406,990 | ||||||||||||||||
Business Combination | Common Stock | |||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||
Number of shares redeemed (in shares) | 14,667,626 | ||||||||||||||||
Chardan Quantum LLC | Private Warrants | |||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||
Sale of warrants (in Shares) | 4,450,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Cash equivalents | $ 619,554 | $ 0 | |
Offering costs | $ 9,348 | ||
Accretion of redeemable common stock increase | 4,008,446 | ||
Dissolution expense | 100,000 | ||
Unrecognized tax benefits | 0 | 0 | |
Amounts accrued for interest and penalties | $ 0 | $ 0 | |
Effective tax rate | 47.71% | 4.64% | |
Statutory tax rate | 21% | 21% | |
Warrants exercised to purchase of common stock | 16,215,625 | ||
FDIC insurance limit | $ 250,000 | ||
Initial Public Offering | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Offering costs | $ 5,008,178 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of common stock reflected in the balance sheets - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Common stock subject to possible redemption, beginning | $ 203,420,202 | $ 201,250,000 |
Less: | ||
Redemption | (152,810,179) | |
Plus: | ||
Accretion of carrying value to redemption value | 4,008,446 | 2,170,202 |
Common Stock subject to possible redemption, ending | $ 54,618,469 | $ 203,420,202 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of basic and diluted net income per share of common stock - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Numerator: | ||||
Net income (loss) | $ (88,577,417) | $ 192,371 | $ 794,950 | $ 11,045,567 |
Redeemable | ||||
Numerator: | ||||
Net income (loss) | $ (71,126,651) | $ 135,463 | $ 460,174 | $ 8,836,454 |
Denominator: | ||||
Basic weighted average shares outstanding (in shares) | 9,048,173 | 11,976,319 | 6,898,644 | 20,125,000 |
Diluted weighted average shares outstanding (in shares) | 9,048,173 | 11,976,319 | 6,898,644 | 20,125,000 |
Basic net income per share of Common Stock (in dollars per share) | $ (7.86) | $ 0.01 | $ 0.07 | $ 0.44 |
Diluted net income per share of Common Stock (in dollars per share) | $ (7.86) | $ 0.01 | $ 0.07 | $ 0.44 |
Non-redeemable | ||||
Numerator: | ||||
Net income (loss) | $ (17,450,766) | $ 56,908 | $ 335,609 | $ 2,209,113 |
Denominator: | ||||
Basic weighted average shares outstanding (in shares) | 2,219,949 | 5,031,250 | 5,031,250 | 5,031,250 |
Diluted weighted average shares outstanding (in shares) | 2,219,949 | 5,031,250 | 5,031,250 | 5,031,250 |
Basic net income per share of Common Stock (in dollars per share) | $ (7.86) | $ 0.01 | $ 0.07 | $ 0.44 |
Diluted net income per share of Common Stock (in dollars per share) | $ (7.86) | $ 0.01 | $ 0.07 | $ 0.44 |
PUBLIC OFFERING (Details)
PUBLIC OFFERING (Details) - $ / shares | Feb. 12, 2021 | Feb. 09, 2021 | Dec. 31, 2023 |
PUBLIC OFFERING | |||
Warrant exercise price (in Dollars per share) | $ 11.50 | ||
Number of shares called by each warrant | 0.5 | ||
Initial Public Offering | |||
PUBLIC OFFERING | |||
Units issued during period shares | 20,125,000 | 17,500,000 | |
Over-Allotment Option | |||
PUBLIC OFFERING | |||
Units issued during period shares | 2,625,000 | ||
Purchase price | $ 10 |
PRIVATE PLACEMENT (Details)
PRIVATE PLACEMENT (Details) - USD ($) | Feb. 12, 2021 | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Feb. 09, 2021 |
Private Placement (Details) [Line Items] | |||||
Derivative liability - Warrants | $ 615,312 | $ 307,656 | $ 6,153,125 | ||
Proceeds from warrants | $ 590,625 | ||||
Common stock per share | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Private Placement | |||||
Private Placement (Details) [Line Items] | |||||
Common stock per share | $ 11.50 | ||||
Private Warrants | |||||
Private Placement (Details) [Line Items] | |||||
Price per warrants | $ 1 | ||||
Private Warrants | |||||
Private Placement (Details) [Line Items] | |||||
Warrant purchased | 590,625 | 6,153,125 | 1,112,500 | ||
Sale of stock price | $ 1 | $ 10 | |||
Derivative liability - Warrants | $ 5,562,500 | ||||
Proceeds from warrants | $ 590,625 | ||||
Quantum Ventures | Private Warrants | |||||
Private Placement (Details) [Line Items] | |||||
Warrant purchased | 4,450,000 | ||||
Chardan Quantum, LLC | Private Warrants | |||||
Private Placement (Details) [Line Items] | |||||
Warrant purchased | 1,112,500 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||
May 09, 2023 USD ($) | Feb. 09, 2021 USD ($) | Feb. 04, 2021 USD ($) shares | Oct. 23, 2020 USD ($) shares | Feb. 28, 2022 USD ($) | Jan. 31, 2021 shares | Mar. 31, 2024 USD ($) D $ / shares shares | Dec. 31, 2023 USD ($) D $ / shares shares | Dec. 31, 2022 USD ($) | Nov. 03, 2023 $ / shares | Aug. 01, 2023 $ / shares | Jan. 03, 2023 USD ($) | Mar. 14, 2022 USD ($) | Oct. 31, 2021 USD ($) | Oct. 01, 2020 USD ($) | |
Related Party Transaction [Line Items] | |||||||||||||||
Common stock dividend (in Shares) | shares | 718,750 | ||||||||||||||
Market price of public shares (in Dollars per share) | $ / shares | $ 6.20 | $ 10.57 | |||||||||||||
Sale price per share (in Dollars per share) | $ / shares | $ 10 | $ 10.73 | |||||||||||||
Office space | $ 10,000 | ||||||||||||||
Incurred fees | $ 120,000 | ||||||||||||||
Accounts payable and accrued expenses | $ 0 | 120,000 | |||||||||||||
Administrative support fee | $ 10,000 | ||||||||||||||
Outstanding fees due amount | $ 120,000 | ||||||||||||||
Price per warrant (in Dollars per share) | $ / shares | $ 1 | $ 1 | |||||||||||||
Working capital loans | $ 480,000 | $ 480,000 | $ 2,000,000 | ||||||||||||
Additional working capital loans | $ 1,000,000 | ||||||||||||||
Working capital loan total net | $ 3,000,000 | ||||||||||||||
Principal balance amount | $ 480,000 | ||||||||||||||
Co-sponsors have advanced | 795,000 | ||||||||||||||
Co-sponsors have advanced an additional | 3,116,097 | ||||||||||||||
Promissory Notes | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Conversion amount | $ 1,500,000 | $ 1,500,000 | |||||||||||||
Over-Allotment Option | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Stock issued subject to forfeiture (in Shares) | shares | 656,250 | ||||||||||||||
Founder Shares | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Number of shares outstanding (in Shares) | shares | 3,254,000 | ||||||||||||||
Founder Shares | First 50% of founder shares | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Percentage of shares | 50% | 50% | |||||||||||||
Commencement period for placing shares in Escrow account | 6 months | 6 months | |||||||||||||
Market price of public shares (in Dollars per share) | $ / shares | $ 12.50 | $ 12.50 | |||||||||||||
Threshold trading days | D | 20 | 20 | |||||||||||||
Threshold consecutive trading days | D | 30 | 30 | |||||||||||||
Founder Shares | Second 50% of Founder Shares | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Percentage of shares | 50% | 50% | |||||||||||||
Commencement period for placing shares in Escrow account | 6 months | 6 months | |||||||||||||
Director | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Stock issued during period shares (in Shares) | shares | 245,000 | 245,000 | |||||||||||||
Stock issued during period value | $ 1,462,650 | $ 1,462,650 | |||||||||||||
Sponsor purchased shares (in Shares) | shares | 35,000 | ||||||||||||||
Sale price per share (in Dollars per share) | $ / shares | $ 5.97 | $ 5.97 | |||||||||||||
Initial Stockholders | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Stock issued during period shares (in Shares) | shares | 5,031,250 | ||||||||||||||
Related Party | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Co-sponsors have advanced | $ 3,104,097 | $ 319,166 | |||||||||||||
Sponsor | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Stock issued during period shares (in Shares) | shares | 4,312,500 | ||||||||||||||
Stock issued during period value | $ 25,000 | ||||||||||||||
Sponsor purchased shares (in Shares) | shares | 813,500 | ||||||||||||||
Related Party | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Promissory notes | $ 200,000 | ||||||||||||||
Repayments of promissory notes | $ 154,057 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Feb. 09, 2024 | Aug. 04, 2023 | Aug. 01, 2023 | Feb. 06, 2023 | Feb. 12, 2021 | Mar. 31, 2024 | Dec. 31, 2023 | |
Commitments and Contingencies [Line Items] | |||||||
Percentage of aggregate gross proceeds | 3.50% | 3.50% | |||||
Marketing fees payable to underwriters, waived in exchange for notes payable | $ 7,043,750 | ||||||
Revenue targets term | 5 years | ||||||
Aggregate shares of common stock | 2,351,800 | ||||||
Excise tax liability (in Dollars) | $ 2,067,572 | $ 1,528,101 | |||||
Subsequent event | |||||||
Commitments and Contingencies [Line Items] | |||||||
Marketing fees payable to underwriters, waived in exchange for notes payable | 7,043,750 | ||||||
Aggregate principal amount | 4,150,000 | ||||||
Initial Public Offering | |||||||
Commitments and Contingencies [Line Items] | |||||||
Purchase of additional units | 2,625,000 | ||||||
Marketing fees payable to underwriters | $ 7,043,750 | $ 7,043,750 | |||||
Over-Allotment Option | |||||||
Commitments and Contingencies [Line Items] | |||||||
Purchase of additional units | 2,625,000 | ||||||
Price per public unit (in Dollars per share) | $ 10 | ||||||
Private Warrants | |||||||
Commitments and Contingencies [Line Items] | |||||||
Common stock warrants | 1,279,427 | ||||||
Common stock and private warrant | 1,657,579 | ||||||
Common Stock | |||||||
Commitments and Contingencies [Line Items] | |||||||
Number of shares redeemed (in shares) | 4,940,885 | 406,990 | 14,667,626 | ||||
Value of shares redeemed | $ 148,523,642 | ||||||
Stockholders redeemed value (in Dollars) | $ 53,947,064 | $ 4,286,537 | |||||
Excise Taxes Payable | |||||||
Commitments and Contingencies [Line Items] | |||||||
Excise tax liability shares redeemed, percentage | 1% | 1% | |||||
AtlasClear | |||||||
Commitments and Contingencies [Line Items] | |||||||
Consideration amount (in Dollars) | $ 75,400,000 | ||||||
Purchase price (in Dollars per share) | $ 10 | ||||||
New Pubco common stock receivable | 5,944,444 | ||||||
Atlas FinTech | |||||||
Commitments and Contingencies [Line Items] | |||||||
New Pubco common stock amount (in Dollars) | $ 20,000,000 | ||||||
Quantum Ventures LLC | |||||||
Commitments and Contingencies [Line Items] | |||||||
Aggregate principal amount | $ 3,300,000 | ||||||
Aggregate shares of common stock | 235,180 | ||||||
Aggregate of warrants shares | 235,180 | ||||||
Purchase shares of common stock | 235,180 |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
STOCKHOLDERS' DEFICIT | |||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 |
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common Stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common Stock, voting rights | one | Holders of the Company’s Common Stock are entitled to one vote for each share. | |
Common Stock, shares issued | 10,081,634 | 25,156,250 | |
Common Stock, shares outstanding | 10,081,634 | 25,156,250 | |
Common Stock subject to possible redemption | 5,050,384 | 20,125,000 |
WARRANTS (Details)
WARRANTS (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 USD ($) D $ / shares shares | Dec. 31, 2023 USD ($) D $ / shares shares | Dec. 31, 2022 USD ($) shares | Feb. 12, 2021 shares | |
WARRANTS | ||||
Expire term | 5 years | 5 years | ||
Issue price per share (in Dollars per share) | $ 9.20 | $ 9.20 | ||
Equity proceeds | 60% | 60% | ||
Exercise price per share (in Dollars per share) | $ 9.50 | $ 9.50 | ||
Warrant Percentage | 115% | 115% | ||
Issue price | 16.50 | 16.50 | ||
Market value percentage | 165% | 165% | ||
Private warrants (in Dollars) | $ | $ 615,312 | $ 307,656 | $ 6,153,125 | |
Number of shares called by each warrant | shares | 0.5 | |||
Warrant exercise price (in Dollars per share) | $ 11.50 | |||
Public Warrants Member | ||||
WARRANTS | ||||
Public warrants outstanding (in Shares) | shares | 20,125,000 | 20,125,000 | 20,125,000 | |
Term from the closing of the Initial Public Offering | 1 year | |||
Number of days within which the registration statement should be declared effective | 120 days | 120 days | ||
Redemption price per warrant (in Dollars per share) | $ 0.01 | $ 0.01 | ||
Notice period redemption | 30 days | 30 days | ||
Price of the entity's common stock (in Dollars per share) | $ 16.50 | $ 16.50 | ||
Threshold number of specified trading days | D | 20 | 20 | ||
Threshold consecutive number of specified trading days | D | 30 | 30 | ||
Number of shares called by each warrant | shares | 0.5 | |||
Warrant exercise price (in Dollars per share) | $ 11.50 | |||
Private Warrants Member | ||||
WARRANTS | ||||
Public warrants outstanding (in Shares) | shares | 6,153,125 | 1,112,500 | 590,625 | |
Private warrants (in Dollars) | $ | $ 5,562,500 | |||
Number of shares called by each warrant | shares | 1 | 1 | ||
Warrant exercise price (in Dollars per share) | $ 11.50 | $ 11.50 |
INCOME TAX - Schedule of net de
INCOME TAX - Schedule of net deferred tax assets (liability) (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Net deferred tax assets (liability) | ||
Business combination expenses | $ 437,530 | $ 427,319 |
Start up costs | 974,835 | 745,713 |
Total deferred tax assets (liability) | 1,412,365 | 1,173,032 |
Valuation Allowance | (1,412,365) | (1,173,032) |
Deferred tax assets (liability), net of allowance | $ 0 | $ 0 |
INCOME TAX - Income tax (benefi
INCOME TAX - Income tax (benefit) provision (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Federal | ||||
Current | $ 726,038 | $ 536,853 | ||
Deferred | (239,332) | (575,221) | ||
Change in valuation allowance | 239,332 | 575,221 | ||
Income tax provision | $ (6,000) | $ 262,805 | $ 726,038 | $ 536,853 |
INCOME TAX - Reconciliation of
INCOME TAX - Reconciliation of the federal income tax rate (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
INCOME TAX | ||
Statutory federal income tax rate | 21% | 21% |
Business combination expenses | 15.27% | (0.51%) |
Change in fair value of warrant liability | 1.70% | (12.61%) |
Change in fair value of PIPE derivative liability | (6.07%) | (8.28%) |
Transaction costs - warrants | 0% | 0% |
Penalties & Interest | 0.08% | 0.07% |
Valuation allowance | 15.73% | 4.97% |
Income tax provision | 47.71% | 4.64% |
INCOME TAX (Details)
INCOME TAX (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Details [Line Items] | ||
Valuation allowance | $ 239,332 | $ 575,221 |
U.S. federal | ||
Income Tax Details [Line Items] | ||
Net operating loss carryovers | 0 | 0 |
State | ||
Income Tax Details [Line Items] | ||
Net operating loss carryovers | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Feb. 12, 2021 | |
FAIR VALUE MEASUREMENTS | ||||
Assets held in trust account | $ 54,799,478 | $ 204,044,469 | $ 26,250,000 | |
Withdrew amount | $ 1,374,898 | 351,474 | ||
Non-redemption agreement liability shares (in Shares) | 235,180 | 235,180 | ||
Non-redemption of common stock shares (in Shares) | 235,180 | 235,180 | ||
Fair value | $ 0 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Company's assets and liabilities that are measured at fair value on a recurring basis (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
FAIR VALUE MEASUREMENTS | |||
Marketable securities held in Trust Account | $ 55 | $ 54,799,478 | |
Level 1 | |||
FAIR VALUE MEASUREMENTS | |||
Marketable securities held in Trust Account | 54,799,478 | $ 204,044,469 | |
Level 3 | |||
FAIR VALUE MEASUREMENTS | |||
Warrant liability - Private Warrants | $ 615,312 | 307,656 | $ 184,594 |
Non-redemption agreement liability | $ 1,441,653 |
FAIR VALUE MEASUREMENTS - Sch_2
FAIR VALUE MEASUREMENTS - Schedule of Key Inputs into the Black-Scholes model for the Private Warrants (Details) - $ / shares | 3 Months Ended | 12 Months Ended | ||
Aug. 01, 2023 | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | ||||
Market price of public shares (in Dollars per share) | $ 10.57 | $ 6.20 | ||
Volatility | 19.90% | 12% | ||
Effective expiration date | Feb. 09, 2029 | Feb. 09, 2028 | ||
Private Warrants | ||||
FAIR VALUE MEASUREMENTS | ||||
Market price of public shares (in Dollars per share) | $ 6.20 | $ 10.05 | ||
Risk-free rate | 3.77% | 3.91% | ||
Dividend yield | 0% | 0% | ||
Volatility | 12% | 2.60% | ||
Probability of a business combination | 100% | 4.50% | ||
Exercise price (in Dollars per share) | $ 11.50 | $ 11.50 | ||
Effective expiration date | Feb. 09, 2029 | Feb. 09, 2028 |
FAIR VALUE MEASUREMENTS - Sch_3
FAIR VALUE MEASUREMENTS - Schedule of key inputs into the Monte Carlo model for the non-redeemable Common Stock (Details) - $ / shares | 12 Months Ended | |
Aug. 01, 2023 | Dec. 31, 2023 | |
FAIR VALUE MEASUREMENTS | ||
Market price of public shares (in Dollars per share) | $ 10.57 | $ 6.20 |
Probability of acquisition | 82% | 100% |
Equity volatility | 19.90% | 12% |
Discount for lack of marketability | 3% | 8% |
Discount for expected forfeiture | 5.10% | 5.11% |
FAIR VALUE MEASUREMENTS - Sch_4
FAIR VALUE MEASUREMENTS - Schedule of changes in the fair value of the PIPE derivative liability and the warrant liability (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | ||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Fair Value Adjustment of Warrants, Fair Value Adjustment Of Non-redemption Agreement Liability | Derivative, Gain (Loss) on Derivative, Net, Fair Value Adjustment of Warrants |
Private Placement Warrants | ||
FAIR VALUE MEASUREMENTS | ||
Fair value | $ 184,594 | $ 7,137,930 |
Change in valuation inputs or other assumptions | 123,062 | (6,953,336) |
Fair value | 307,656 | 184,594 |
Non-Redemption Agreement Liability | ||
FAIR VALUE MEASUREMENTS | ||
Fair value | ||
Initial measurement as of August 1, 2023 | 1,881,440 | |
Change in valuation inputs or other assumptions | (439,787) | |
Fair value | $ 1,441,653 | |
PIPE Derivative Liability | ||
FAIR VALUE MEASUREMENTS | ||
Fair value | 4,566,000 | |
Change in valuation inputs or other assumptions | $ (4,566,000) |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | 3 Months Ended | |||||||
Apr. 08, 2024 shares | Feb. 09, 2024 USD ($) D item $ / shares shares | Feb. 09, 2021 | Mar. 31, 2024 USD ($) $ / shares shares | Dec. 31, 2023 $ / shares shares | Aug. 04, 2023 $ / shares | Aug. 01, 2023 $ / shares | Dec. 31, 2022 $ / shares shares | |
SUBSEQUENT EVENTS | ||||||||
Common Stock, par value (in Dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Threshold period from Closing to achieve milestones considered for issuance of Earn Out Shares | 18 months | |||||||
Period for measurement of revenue targets | 5 years | |||||||
Number of shares called by each warrant | 0.5 | |||||||
Redemption price per share (in dollars per share) | $ / shares | $ 10.53 | |||||||
Common stock subject to possible redemption, shares outstanding (in shares) | 5,050,384 | 20,125,000 | ||||||
Common stock, shares issued (in shares) | 12,277,759 | 5,031,250 | 5,031,250 | |||||
Common stock, shares outstanding (in shares) | 12,277,759 | 5,031,250 | 5,031,250 | |||||
Term of the debt, after the Closing Date | 185 days | |||||||
Period to file registration statement with SEC | 30 days | |||||||
Market price of public shares (in Dollars per share) | $ / shares | $ 6.20 | $ 10.57 | ||||||
Marketing fees payable to underwriters, waived in exchange for notes payable | $ | $ 7,043,750 | |||||||
Shares issued in settlement of obligations (in shares) | 2,201,010 | |||||||
Obligations settled in shares | $ | $ 5,448,933 | |||||||
Funicular Note | ||||||||
SUBSEQUENT EVENTS | ||||||||
Aggregate principal amount | $ | $ 6,000,000 | |||||||
Interest rate (in percent) | 12.50% | |||||||
Period to file registration statement with SEC | 15 days | |||||||
Purchase price of notes | $ | $ 6,000,000 | |||||||
Interest rate in the event of default (in percent) | 20% | |||||||
Conversion Price (in dollars per share) | $ / shares | $ 10 | |||||||
Threshold trading days over which VWAP is considered to make monthly adjustments to the Conversion price | D | 5 | |||||||
Floor on Conversion price (in dollars per share) | $ / shares | $ 2 | |||||||
Market price of public shares (in Dollars per share) | $ / shares | $ 2 | |||||||
Number of days notice required for redemption of notes | 30 days | |||||||
Redemption price as a percentage of the outstanding principal amount (in percent) | 101% | |||||||
Threshold maximum percentage of outstanding common stock, above which stockholder's approval is required for conversion (in percent) | 19.90% | |||||||
Number of days within which the registration statement should be declared effective | 60 days | |||||||
Percentage of original principal amount of notes payable, upon default of filing or effecting of registration statement with SEC (in percent) | 5% | |||||||
Chardan Note | ||||||||
SUBSEQUENT EVENTS | ||||||||
Aggregate principal amount | $ | $ 4,150,000 | |||||||
Interest rate (in percent) | 13% | |||||||
Interest payable in shares, as a percentage of trailing specified trading day VWAP (in percent) | 85% | |||||||
Conversion rate, as a percentage of trailing specified trading day VWAP (in percent) | 90% | |||||||
Period to file registration statement with SEC | 45 days | |||||||
Number of years up to which the converted amount is to be held for payment of interest | 3 years | 3 years | ||||||
Beneficial ownership (in percent) | 9.99% | |||||||
Minimum period for which the registration statement with SEC is suspended, considered for increase in interest rate | 15 days | |||||||
Incremental weekly interest rate, if the registration statement is not filed or is not effective or terminated or suspended (in percent) | 2% | |||||||
Quantum Common Stock | ||||||||
SUBSEQUENT EVENTS | ||||||||
Common stock subject to possible redemption, shares outstanding (in shares) | 109,499 | |||||||
Common stock, shares issued (in shares) | 12,277,759 | |||||||
Common stock, shares outstanding (in shares) | 11,781,759 | |||||||
Market price of public shares (in Dollars per share) | $ / shares | $ 10.92 | |||||||
Atlas FinTech | ||||||||
SUBSEQUENT EVENTS | ||||||||
Earn Out Shares, maximum shares issuable to stockholders (in shares) | 5,944,444 | |||||||
Threshold period from Closing to achieve milestones considered for issuance of Earn Out Shares | 18 months | |||||||
Software Products Earn Out Shares, maximum amount of shares issuable to stockholders | $ | $ 20,000,000 | |||||||
Period for measurement of revenue targets | 5 years | |||||||
Wilson-Davis Sellers | Short-Term Notes | ||||||||
SUBSEQUENT EVENTS | ||||||||
Aggregate principal amount | $ | $ 5,000,000 | |||||||
Term of the debt, after the Closing Date | 90 days | |||||||
Interest rate (in percent) | 9% | |||||||
Interest payable in shares, as a percentage of trailing specified trading day VWAP (in percent) | 90% | |||||||
Interest payable in shares, Number of trading days over which the VWAP is considered | D | 7 | |||||||
Conversion rate, as a percentage of trailing specified trading day VWAP (in percent) | 90% | |||||||
Conversion rate, Number of trading days over which the VWAP is considered | D | 7 | |||||||
Wilson-Davis Sellers | Long-Term Notes | ||||||||
SUBSEQUENT EVENTS | ||||||||
Aggregate principal amount | $ | $ 7,971,197 | |||||||
Term of the debt, after the Closing Date | 2 years | |||||||
Interest rate (in percent) | 13% | |||||||
Interest payable in shares, as a percentage of trailing specified trading day VWAP (in percent) | 90% | |||||||
Interest payable in shares, Number of trading days over which the VWAP is considered | D | 7 | |||||||
Conversion rate, as a percentage of trailing specified trading day VWAP (in percent) | 90% | |||||||
Conversion rate, Number of trading days over which the VWAP is considered | D | 7 | |||||||
Period after the Closing Date, when the debt instrument can be converted | 6 months | |||||||
Conversion rate, as a percentage of trailing seven-trading day VWAP, if an event of default occurs and is continuing (in percent) | 85% | |||||||
Qvent, LLC | Affiliate of sponsor | ||||||||
SUBSEQUENT EVENTS | ||||||||
Shares issued in settlement of obligations (in shares) | 2,000,000 | |||||||
Obligations settled in shares | $ | $ 4,577,569 | |||||||
Quantum Fintech Acquisition Corp | ||||||||
SUBSEQUENT EVENTS | ||||||||
Share exchange ratio | 1 | |||||||
Quantum Fintech Acquisition Corp | Warrants issued in exchange for public warrants to purchase Quantum Common Stock | ||||||||
SUBSEQUENT EVENTS | ||||||||
Number of shares called by each warrant | 0.5 | |||||||
Quantum Fintech Acquisition Corp | Warrants issued in exchange for private warrants to purchase Quantum Common Stock | ||||||||
SUBSEQUENT EVENTS | ||||||||
Number of shares called by each warrant | 1 | |||||||
Subsequent event | ||||||||
SUBSEQUENT EVENTS | ||||||||
Threshold period from Closing to achieve milestones considered for issuance of Earn Out Shares | 18 months | |||||||
Period for measurement of revenue targets | 5 years | |||||||
Balance in Trust Account | $ | $ 1,200,000 | |||||||
Common stock subject to possible redemption, shares outstanding (in shares) | 109,499 | |||||||
Common stock, shares issued (in shares) | 11,781,759 | |||||||
Common stock, shares outstanding (in shares) | 11,781,759 | |||||||
Number of Founder shares instructed to be released form escrow (in shares) | 4,000,000 | |||||||
Number of amendments to Broker-Dealer Acquisition Agreement | item | 2 | |||||||
Broker-Dealer Acquisition Agreement, reduction in total purchase price payable | $ | $ 5,000,000 | |||||||
Broker-Dealer Acquisition Agreement, cash payable at the Wilson-Davis Closing | $ | 8,000,000 | |||||||
Aggregate principal amount | $ | $ 4,150,000 | |||||||
Period to file registration statement with SEC | 30 days | |||||||
Marketing fees payable to underwriters, waived in exchange for notes payable | $ | $ 7,043,750 | |||||||
Shares issued in settlement of obligations (in shares) | 2,201,010 | |||||||
Obligations settled in shares | $ | $ 5,448,933 | |||||||
Subsequent event | Funicular Note | ||||||||
SUBSEQUENT EVENTS | ||||||||
Aggregate principal amount | $ | $ 6,000,000 | |||||||
Interest rate (in percent) | 12.50% | |||||||
Conversion rate, as a percentage of trailing specified trading day VWAP (in percent) | 90% | |||||||
Period to file registration statement with SEC | 15 days | |||||||
Purchase price of notes | $ | $ 6,000,000 | |||||||
Interest rate in the event of default (in percent) | 20% | |||||||
Conversion Price (in dollars per share) | $ / shares | $ 10 | |||||||
Threshold trading days over which VWAP is considered to make monthly adjustments to the Conversion price | D | 5 | |||||||
Floor on Conversion price (in dollars per share) | $ / shares | $ 2 | |||||||
Market price of public shares (in Dollars per share) | $ / shares | $ 2 | |||||||
Number of days notice required for redemption of notes | 30 days | |||||||
Redemption price as a percentage of the outstanding principal amount (in percent) | 101% | |||||||
Threshold maximum percentage of outstanding common stock, above which stockholder's approval is required for conversion (in percent) | 19.90% | |||||||
Number of days within which the registration statement should be declared effective | 60 days | |||||||
Percentage of original principal amount of notes payable, upon default of filing or effecting of registration statement with SEC (in percent) | 5% | |||||||
Subsequent event | Chardan Note | ||||||||
SUBSEQUENT EVENTS | ||||||||
Aggregate principal amount | $ | $ 4,150,000 | |||||||
Interest rate (in percent) | 13% | |||||||
Interest payable in shares, as a percentage of trailing specified trading day VWAP (in percent) | 85% | |||||||
Period to file registration statement with SEC | 45 days | |||||||
Number of years up to which the converted amount is to be held for payment of interest | 3 years | |||||||
Beneficial ownership (in percent) | 9.99% | |||||||
Minimum period for which the registration statement with SEC is suspended, considered for increase in interest rate | 15 days | |||||||
Incremental weekly interest rate, if the registration statement is not filed or is not effective or terminated or suspended (in percent) | 2% | |||||||
Subsequent event | Quantum Common Stock | ||||||||
SUBSEQUENT EVENTS | ||||||||
Number of shares redeemed (in shares) | 4,940,885 | |||||||
Redemption price per share (in dollars per share) | $ / shares | $ 10.92 | |||||||
Value of shares redeemed | $ | $ 53,947,064.28 | |||||||
Subsequent event | AtlasClear Holdings Stockholders | ||||||||
SUBSEQUENT EVENTS | ||||||||
Earn Out Shares, maximum shares issuable to stockholders (in shares) | 5,944,444 | |||||||
Subsequent event | Atlas FinTech | ||||||||
SUBSEQUENT EVENTS | ||||||||
Software Products Earn Out Shares, maximum amount of shares issuable to stockholders | $ | $ 20,000,000 | |||||||
Subsequent event | Chardan Quantum, LLC | Sponsor | ||||||||
SUBSEQUENT EVENTS | ||||||||
Number of Founder shares instructed to be released form escrow (in shares) | 949,084 | |||||||
Subsequent event | Quantum Ventures LLC | Sponsor | ||||||||
SUBSEQUENT EVENTS | ||||||||
Number of Founder shares instructed to be released form escrow (in shares) | 3,050,916 | |||||||
Subsequent event | Wilson-Davis Sellers | ||||||||
SUBSEQUENT EVENTS | ||||||||
Period to file registration statement with SEC | 30 days | |||||||
Shares issued in settlement of obligations (in shares) | 145,210 | |||||||
Subsequent event | Wilson-Davis Sellers | Short-Term Notes | ||||||||
SUBSEQUENT EVENTS | ||||||||
Aggregate principal amount | $ | $ 5,000,000 | |||||||
Term of the debt, after the Closing Date | 90 days | |||||||
Interest rate (in percent) | 9% | |||||||
Interest payable in shares, as a percentage of trailing specified trading day VWAP (in percent) | 90% | |||||||
Interest payable in shares, Number of trading days over which the VWAP is considered | D | 7 | |||||||
Conversion rate, as a percentage of trailing specified trading day VWAP (in percent) | 90% | |||||||
Conversion rate, Number of trading days over which the VWAP is considered | D | 7 | |||||||
Subsequent event | Wilson-Davis Sellers | Long-Term Notes | ||||||||
SUBSEQUENT EVENTS | ||||||||
Aggregate principal amount | $ | $ 7,971,000 | |||||||
Term of the debt, after the Closing Date | 24 months | |||||||
Interest rate (in percent) | 13% | |||||||
Interest payable in shares, as a percentage of trailing specified trading day VWAP (in percent) | 90% | |||||||
Interest payable in shares, Number of trading days over which the VWAP is considered | D | 7 | |||||||
Conversion rate, as a percentage of trailing specified trading day VWAP (in percent) | 90% | |||||||
Conversion rate, Number of trading days over which the VWAP is considered | D | 7 | |||||||
Period after the Closing Date, when the debt instrument can be converted | 6 months | |||||||
Conversion rate, as a percentage of trailing seven-trading day VWAP, if an event of default occurs and is continuing (in percent) | 85% | |||||||
Subsequent event | Wilson-Davis Sellers | Sponsor | ||||||||
SUBSEQUENT EVENTS | ||||||||
Aggregate value of Founder Shares agreed to transfer to the Wilson-Davis Sellers | $ | $ 6,000,000 | |||||||
Number of trading days over which VWAP of Quantum Common Stock is considered for determination of Founder Shares agreed to transfer | 5 days | |||||||
Number of Founder Shares transferred (in shares) | 885,010 | |||||||
Subsequent event | Funicular | Sponsor | ||||||||
SUBSEQUENT EVENTS | ||||||||
Number of private placement warrants transferred (in shares) | 600,000 | |||||||
Subsequent event | Qvent, LLC | Affiliate of sponsor | ||||||||
SUBSEQUENT EVENTS | ||||||||
Shares issued in settlement of obligations (in shares) | 2,000,000 | |||||||
Obligations settled in shares | $ | $ 4,633,833 | |||||||
Subsequent event | AtlasClear, Inc | ||||||||
SUBSEQUENT EVENTS | ||||||||
Merger Consideration Shares (in shares) | 4,440,000 | |||||||
Common Stock, par value (in Dollars per share) | $ / shares | $ 0.0001 | |||||||
Maximum number of Founder Shares that can be transferred (in shares) | 2,500,000 | |||||||
Subsequent event | Quantum Fintech Acquisition Corp | ||||||||
SUBSEQUENT EVENTS | ||||||||
Share exchange ratio | 1 | |||||||
Subsequent event | Quantum Fintech Acquisition Corp | Warrants issued in exchange for public warrants to purchase Quantum Common Stock | ||||||||
SUBSEQUENT EVENTS | ||||||||
Number of shares called by each warrant | 0.5 | |||||||
Subsequent event | Quantum Fintech Acquisition Corp | Warrants issued in exchange for private warrants to purchase Quantum Common Stock | ||||||||
SUBSEQUENT EVENTS | ||||||||
Number of shares called by each warrant | 1 |
CONDENSED STATEMENTS OF FINANCI
CONDENSED STATEMENTS OF FINANCIAL CONDITION - USD ($) | Dec. 31, 2023 | Jun. 30, 2023 |
ASSETS | ||
Cash and cash equivalents | $ 619,554 | |
Prepaids | 58,828 | |
Total Current Assets | 678,382 | |
TOTAL ASSETS | 55,477,860 | |
LIABILITIES | ||
Total Current Liabilities | 12,064,611 | |
TOTAL LIABILITIES | 12,372,267 | |
Stockholders' Deficit | ||
Common stock, $0.10 par value, 1,000,000 shares authorized, 410,000 shares issued and outstanding | 503 | |
Retained earnings | (11,513,379) | |
TOTAL STOCKHOLDERS' DEFICIT | (11,512,876) | |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 55,477,860 | |
WILSON-DAVIS & CO., INC | ||
ASSETS | ||
Cash and cash equivalents | 8,581,340 | $ 9,094,381 |
Cash segregated - customers | 21,746,235 | 26,764,260 |
Cash segregated - PAB | 200,764 | 200,715 |
Receivables - broker-dealers and clearing organizations | 3,054,261 | 782,515 |
Receivables - customers, net | 148,601 | 195,689 |
Other receivables | 55,890 | 50,381 |
Trading securities, market value, net | 464 | 3,598 |
Prepaid income tax | 190,568 | 313,286 |
Prepaids | 74,575 | 81,107 |
Total Current Assets | 34,052,698 | 37,485,932 |
Operating Lease Right to Use Lease Asset | 63,394 | 146,247 |
Cash deposits - broker-dealers and clearing organizations | 2,536,664 | 2,536,664 |
Property and equipment, net | 25,169 | 34,307 |
Other assets | 385,058 | 385,058 |
TOTAL ASSETS | 37,062,983 | 40,588,208 |
LIABILITIES | ||
Payables to customers | 23,361,523 | 27,944,467 |
Accounts and payables to officers/directors | 670,387 | 679,775 |
Accounts payable and accrued expenses | 951,366 | 793,596 |
Payables brokers-dealers and clearing organizations | 20,046 | 19,648 |
Commissions, payroll and payroll taxes | 179,414 | 207,934 |
Current portion of lease liability | 50,441 | 115,952 |
Deferred income tax liability | 900 | 900 |
Total Current Liabilities | 25,234,077 | 29,762,272 |
Accrued contingent liability | 100,000 | 100,000 |
Subordinated borrowings | 1,950,000 | 650,000 |
Trading account deposit | 100,000 | 100,000 |
Long-term lease liability | 19,246 | 39,768 |
TOTAL LIABILITIES | 27,403,323 | 30,652,040 |
Stockholders' Deficit | ||
Common stock, $0.10 par value, 1,000,000 shares authorized, 410,000 shares issued and outstanding | 41,000 | 41,000 |
Additional paid-in capital | 303,837 | 303,837 |
Retained earnings | 9,314,823 | 9,591,331 |
TOTAL STOCKHOLDERS' DEFICIT | 9,659,660 | 9,936,168 |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 37,062,983 | $ 40,588,208 |
CONDENSED STATEMENTS OF FINAN_2
CONDENSED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - $ / shares | Dec. 31, 2023 | Jun. 30, 2023 |
Common Stock, par value (in Dollars per share) | $ 0.0001 | |
Common Stock, shares authorized | 100,000,000 | |
Common stock, shares issued | 5,031,250 | |
Common stock, shares outstanding | 5,031,250 | |
WILSON-DAVIS & CO., INC | ||
Common Stock, par value (in Dollars per share) | $ 0.10 | $ 0.10 |
Common Stock, shares authorized | 1,000,000 | 1,000,000 |
Common stock, shares issued | 410,000 | 410,000 |
Common stock, shares outstanding | 410,000 | 410,000 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
WILSON-DAVIS & CO., INC | ||
REVENUES | ||
Commissions | $ 2,282,098 | $ 3,759,392 |
Vetting fees | 569,960 | 321,356 |
Clearing fees | 244,192 | 135,053 |
Fees charged to customers | 326,170 | |
Net gain/(loss) on firm trading accounts | 19,195 | (15,066) |
Other | 9,235 | 54,280 |
TOTAL REVENUES | 3,450,850 | 4,255,015 |
EXPENSES | ||
Compensation, payroll taxes and benefits | 2,172,873 | 2,908,599 |
Data processing and clearing costs | 1,065,580 | 928,599 |
Regulatory, professional fees and related expenses | 701,425 | 540,561 |
Communications | 289,539 | 305,631 |
Occupancy and equipment | 110,389 | 127,969 |
Transfer fee | 77,918 | 30,171 |
Bank charges | 104,436 | 25,958 |
Other | 337,768 | 57,835 |
TOTAL EXPENSES | 4,859,928 | 4,925,323 |
LOSS FROM OPERATIONS | (1,409,078) | (670,308) |
OTHER INCOME/(EXPENSE) | ||
Interest income | 1,092,582 | 461,685 |
Interest expense | (56,012) | (28,905) |
TOTAL OTHER INCOME/(EXPENSE) | 1,036,570 | 432,780 |
NET INCOME/(LOSS) BEFORE INCOME TAXES | (372,508) | (237,528) |
Provision for income taxes | 96,000 | 62,000 |
NET INCOME/(LOSS) | $ (276,508) | $ (175,528) |
STATEMENT OF CHANGES IN STOCKHO
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock WILSON-DAVIS & CO., INC | Common Stock | Additional Paid-in Capital WILSON-DAVIS & CO., INC | Additional Paid-in Capital | Accumulated Deficit WILSON-DAVIS & CO., INC | Accumulated Deficit | WILSON-DAVIS & CO., INC | Total |
Balance at Dec. 31, 2021 | $ 503 | $ (13,885,707) | $ (13,885,204) | |||||
Net income (loss) | 11,045,567 | 11,045,567 | ||||||
Balance at Dec. 31, 2022 | $ 41,000 | $ 503 | $ 303,837 | $ 9,284,469 | (5,010,342) | $ 9,629,306 | $ (5,009,839) | |
Ending balance (in shares) at Dec. 31, 2022 | 410,000 | 5,031,250 | 5,031,250 | |||||
Balance at Jun. 30, 2022 | $ 41,000 | 303,837 | 9,500,997 | 9,845,834 | ||||
Beginning balance (in shares) at Jun. 30, 2022 | 410,000 | |||||||
Net income (loss) | (193,833) | (193,833) | ||||||
Balance at Sep. 30, 2022 | $ 41,000 | 303,837 | 9,307,164 | 9,652,001 | ||||
Ending balance (in shares) at Sep. 30, 2022 | 410,000 | |||||||
Balance at Jun. 30, 2022 | $ 41,000 | 303,837 | 9,500,997 | 9,845,834 | ||||
Beginning balance (in shares) at Jun. 30, 2022 | 410,000 | |||||||
Net income (loss) | (175,528) | |||||||
Balance at Dec. 31, 2022 | $ 41,000 | $ 503 | 303,837 | 9,284,469 | (5,010,342) | 9,629,306 | $ (5,009,839) | |
Ending balance (in shares) at Dec. 31, 2022 | 410,000 | 5,031,250 | 5,031,250 | |||||
Balance at Sep. 30, 2022 | $ 41,000 | 303,837 | 9,307,164 | 9,652,001 | ||||
Beginning balance (in shares) at Sep. 30, 2022 | 410,000 | |||||||
Net income (loss) | 18,305 | 18,305 | ||||||
Dividends paid | (41,000) | (41,000) | ||||||
Balance at Dec. 31, 2022 | $ 41,000 | $ 503 | 303,837 | 9,284,469 | (5,010,342) | 9,629,306 | $ (5,009,839) | |
Ending balance (in shares) at Dec. 31, 2022 | 410,000 | 5,031,250 | 5,031,250 | |||||
Net income (loss) | 192,371 | $ 192,371 | ||||||
Balance at Mar. 31, 2023 | $ 503 | (7,563,926) | (7,563,423) | |||||
Ending balance (in shares) at Mar. 31, 2023 | 5,031,250 | |||||||
Balance at Dec. 31, 2022 | $ 41,000 | $ 503 | 303,837 | 9,284,469 | (5,010,342) | 9,629,306 | $ (5,009,839) | |
Beginning balance (in shares) at Dec. 31, 2022 | 410,000 | 5,031,250 | 5,031,250 | |||||
Net income (loss) | 794,950 | $ 794,950 | ||||||
Balance at Dec. 31, 2023 | $ 41,000 | $ 503 | 303,837 | 9,314,823 | (11,513,379) | $ 9,659,660 | $ (11,512,876) | |
Ending balance (in shares) at Dec. 31, 2023 | 410,000 | 5,031,250 | 410,000 | 5,031,250 | ||||
Balance at Jun. 30, 2023 | $ 41,000 | 303,837 | 9,591,331 | $ 9,936,168 | ||||
Beginning balance (in shares) at Jun. 30, 2023 | 410,000 | 410,000 | ||||||
Net income (loss) | (290,239) | $ (290,239) | ||||||
Balance at Sep. 30, 2023 | $ 41,000 | 303,837 | 9,301,092 | 9,645,929 | ||||
Ending balance (in shares) at Sep. 30, 2023 | 410,000 | |||||||
Balance at Jun. 30, 2023 | $ 41,000 | 303,837 | 9,591,331 | $ 9,936,168 | ||||
Beginning balance (in shares) at Jun. 30, 2023 | 410,000 | 410,000 | ||||||
Net income (loss) | $ (276,508) | |||||||
Balance at Dec. 31, 2023 | $ 41,000 | $ 503 | 303,837 | 9,314,823 | (11,513,379) | $ 9,659,660 | $ (11,512,876) | |
Ending balance (in shares) at Dec. 31, 2023 | 410,000 | 5,031,250 | 410,000 | 5,031,250 | ||||
Balance at Sep. 30, 2023 | $ 41,000 | 303,837 | 9,301,092 | $ 9,645,929 | ||||
Beginning balance (in shares) at Sep. 30, 2023 | 410,000 | |||||||
Net income (loss) | 13,731 | 13,731 | ||||||
Balance at Dec. 31, 2023 | $ 41,000 | $ 503 | $ 303,837 | $ 9,314,823 | (11,513,379) | $ 9,659,660 | $ (11,512,876) | |
Ending balance (in shares) at Dec. 31, 2023 | 410,000 | 5,031,250 | 410,000 | 5,031,250 | ||||
Net income (loss) | (88,577,417) | $ (88,577,417) | ||||||
Balance at Mar. 31, 2024 | $ 1,229 | $ 97,162,370 | $ (101,222,844) | $ (4,059,245) | ||||
Ending balance (in shares) at Mar. 31, 2024 | 12,277,759 | 12,277,759 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash Flows from Financing Activities: | ||
CASH AT YEAR END | $ 619,554 | $ 129,560 |
WILSON-DAVIS & CO., INC | ||
Cash Flows from Operating Activities: | ||
Net income/(loss) | (276,508) | (175,528) |
Noncash revenue and expense adjustments: | ||
Depreciation and amortization expense | 9,138 | 14,476 |
Change in allowance for doubtful accounts | 277,416 | |
(Increase)/decrease in assets: | ||
Receivables from broker-dealers and clearing organizations | (2,271,746) | 573,439 |
Receivables from customers | (230,328) | 323,454 |
Advances and prepaid expenses | 129,250 | (153,416) |
Trading securities, market value, net | 3,134 | (20,381) |
Commissions receivable | 5,762 | 9,781 |
Cash deposits with clearing organizations and other broker-dealers | (1,000,000) | |
Income tax receivable | 677,248 | |
Operating lease right-of-use asset | 82,853 | 79,041 |
Other assets | (11,271) | (36,918) |
Increase/(decrease) in liabilities: | ||
Payables to customers | (4,582,944) | (12,518,507) |
Accounts of and payables to officers and directors | (109,388) | (611,751) |
Accounts payable and accrued expenses | 299,770 | (606,861) |
Commissions, payroll and payroll taxes payable | (28,520) | 142,559 |
Stock loan | (42,000) | |
Due from Atlas Clear | 398 | (409,429) |
Operating lease liability | (86,033) | (80,289) |
CASH USED FOR OPERATING ACTIVITIES | (6,831,017) | (13,793,082) |
Cash Flows from Financing Activities: | ||
Subordinated Notes | 1,300,000 | |
Dividends paid | (41,000) | |
CASH USED FOR FINANCING ACTIVITIES | 1,300,000 | (41,000) |
Net decrease in cash and restricted cash | (5,531,017) | (13,834,082) |
CASH AT BEGINNING OF YEAR | 36,059,356 | 59,249,523 |
CASH AT YEAR END | $ 30,528,339 | $ 45,415,441 |
CONDENSED STATEMENTS OF CASH _2
CONDENSED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
WILSON-DAVIS & CO., INC | ||
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES | ||
Interest Paid | $ 25,694 | $ 28,905 |
Cash paid for income taxes | $ 530 | $ 19,000 |
BASIS OF FINANCIAL STATEMENT PR
BASIS OF FINANCIAL STATEMENT PRESENTATION | 6 Months Ended |
Dec. 31, 2023 | |
WILSON-DAVIS & CO., INC | |
BASIS OF FINANCIAL STATEMENT PRESENTATION | NOTE 1 BASIS OF FINANCIAL STATEMENT PRESENTATION The accompanying unaudited condensed financial statements have been prepared by Wilson-Davis & Co., Inc. (“Wilson-Davis”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Wilson-Davis believes the disclosures and information presented are adequate to make the information not misleading. These interim condensed financial statements should be read in conjunction with Wilson-Davis’s most recent audited financial statements and notes thereto included in its Annual Report for the year ended June 30, 2023. Operating results for the six months ended December 31, 2023, are not necessarily indicative of the results that may be expected for the current fiscal year ending June 30, 2024. |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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 for the period ended December 31, 2023, as filed with the SEC on April 16, 2024. The accompanying condensed balance sheet as of December 31, 2023 has been derived from the audited financial statements included in this Form 10-K. The interim results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 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. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s condensed consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The more significant accounting estimates included in these condensed consolidated financial statements is the determination of the fair value of the private warrant liabilities, the fair value of the Subscription Agreement, the fair value of the conversion liabilities, fair value of the customer list, licenses acquired on February 9, 2024. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all operating accounts that hold money market funds held and short-term investments with an original maturity of three months or less when purchased to be cash equivalents. Trading Securities Securities held in the Company’s trading account and trading securities, consist primarily of over-the-counter securities and are valued based upon quoted market prices. The value of securities that are not readily marketable are estimated by management based upon quoted prices, the number of market makers, trading volume and number of shares held. Unrealized gains and losses are reflected in income in the financial statements. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation on property and equipment is provided using accelerated and straight-line methods over expected useful lives of three Leases In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right-of-use asset and a corresponding lease liability on the statement of financial condition for all leases with terms longer than 12 months. Pursuant to this standard, the Company has recorded an operating lease right-of use (“ROU”) asset and operating lease liability in the accompanying balance sheet as of March 31, 2024. The Company leases office space under the terms of several operating leases. The determination of whether an arrangement is a lease is made at the lease’s inception. Under ASC 842, a contract is (or contains) a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control is defined under the standard as having both the right to obtain substantially all of the economic benefits from use of the asset and the right to direct the use of the asset. Management only reassesses its determination if the terms and conditions of the contract are changed. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses the implicit rate when it is readily determinable. Since the Company’s leases do not provide implicit rates, to determine the present value of lease payments, management uses the Company’s estimated incremental borrowing rate based on the information available at lease commencement. Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants that do not meet all the criteria for equity classification are recognized as a non-cash gain or loss on the condensed consolidated statements of operations. The fair value of the private warrants was estimated using a Black-Scholes model approach (see Note 9). Income Taxes The Company utilizes the asset and liability method to account for income taxes. The objective of this method is to establish deferred tax assets and liabilities for the temporary differences between net income for financial reporting basis and the tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized. Income tax expense or benefit is provided based upon the financial statement earnings of the Company. The allowance for doubtful accounts is deductible for financial statement purposes, but not for tax purposes. Depreciation expense is recognized in different periods for tax and financial accounting purposes due to the use of accelerated depreciation methods for income tax purposes. The tax effects of such differences are reported as deferred income taxes in the financial statements. Revenue Recognition Wilson-Davis, a subsidiary of the Company, recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, using the modified retrospective method. This revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model to: (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when the entity satisfies a performance obligation. Wilson-Davis acts as an agent by selling securities to customers and collecting commissions. Wilson-Davis recognizes commissions on a trade date basis, which is the day the transaction is executed. Wilson-Davis believes that the performance obligation is satisfied on the trade date because that is when the security is selected, the price is determined, the trade is executed, and the risks and rewards of ownership have been transferred to/from the customer. Wilson-Davis also receives commissions on mutual funds purchased by customers. Wilson-Davis believes that the performance obligation is not satisfied until the mutual funds are purchased by customers and recognizes the commission at that time. Wilson-Davis performs vetting services to customers that wish to convert restricted stock to eligible trading stock. In addition, Wilson-Davis charges clearing fees to another broker-dealer for which it clears trades. Wilson-Davis recognizes revenue as the related performance obligations are satisfied. 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. (Loss) Income is allocated between redeemable and non-redeemable shares based on relative amounts of weighted average shares outstanding. Accretion associated with the redeemable shares of common stock is excluded from (loss) income per share as the redemption value approximates fair value. The calculation of diluted net (loss) income per share does not consider the effect of the convertible derivative liability nor the warrants issued and outstanding. The calculation excludes the dilutive impact of these instruments because the issuance of the securities underlying the exercise of the warrants are contingent upon the occurrence of future events and inclusion would be antidilutive. As a result, diluted net (loss) income per share of common stock is the same as basic net (loss) income per common stock for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per share of common stock (in dollars, except share amounts): Three Months Ended March 31, 2024 March 31, 2023 Non- Non- Redeemable redeemable Redeemable redeemable Basic and diluted net income per common stock Numerator: Allocation of net income, as adjusted $ (71,126,651) $ (17,450,766) $ 135,463 $ 56,908 Denominator: Basic and diluted weighted average common stock outstanding 9,048,173 2,219,949 11,976,319 5,031,250 Basic and diluted net income per common stock $ (7.86) $ (7.86) $ 0.01 $ 0.01 Below is a summary of the dilutive instruments as of March 31, 2024 and 2023, these were excluded as including them would be anti dilutive as of March 31, 2024 and were excluded in March 31, 2023 as the exercise was contingent: Description March 31, 2024 March 31, 2023 Short Term Notes 5,390,752 — Secured convertible note 18,000,000 — Subscription agreement 833,333 — Promissory note 704,404 — Total Shares issuable under Convertible Note obligations 24,928,489 — Public Warrants 10,062,500 10,062,500 Private Warrants 5,553,125 6,153,125 Secured convertible note warrants 600,000 — Total dilutive 41,144,114 16,153,125 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 and management believes the Company is not exposed to significant risks on such accounts. 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 condensed balance sheets, primarily due to their short-term nature, except for warrant liabilities, convertible derivatives and the earnout out liability (see Note 14). 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. 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. | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. 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. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The more significant accounting estimates included in these consolidated financial statements is the determination of the fair value of the Private Warrant liabilities, and fair value of the sale of the Founder Shares. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all operating accounts that hold money market funds held and short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had cash equivalents of $619,554 and $0, respectively, as of December 31, 2023 and 2022. Marketable Securities Held in Trust Account At December 31, 2023 and 2022, substantially all of the assets held in the Trust Account were held in mutual funds which are invested primarily in U.S. Treasury securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in income earned on marketable securities held in Trust Account in the accompanying consolidated statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information. Offering Costs Offering costs consisted of legal, and other expenses incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to Private Warrant liabilities were expensed as incurred in the statements of operations. Offering costs associated with the Common Stock issued were initially charged to temporary equity and then accreted to Common Stock subject to redemption upon the completion of the Initial Public Offering. Offering costs amounting to $5,008,178 were charged to stockholders’ equity upon the completion of the Initial Public Offering, and $9,348 of the offering costs were related to the warrant liability and charged to the operating and formation costs in the consolidated statement of operations for the year ended December 31, 2021. Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own Common Stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants that do not meet all the criteria for equity classification are recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the Private Warrants was estimated using a Binomial lattice model approach (see Note 9). Common Stock Subject to Possible Redemption The Company accounts for its Common Stock subject to possible redemption in accordance with the guidance in ASC 480. Common Stock subject to mandatory redemption are classified as a liability instrument and is measured at fair value. Conditionally redeemable Common Stock (including Common Stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, Common Stock is classified as stockholders’ equity. The Company’s Common Stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, all Common Stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable Common Stock to equal the redemption value at the end of each reporting period. The accretion of redeemable Common Stock during the year ended December 31, 2023 was an increase of $4,008,446, which represents cumulative earnings and withdrawals on the Trust Account through December 31, 2023, net of reimbursable income and franchise tax obligations as of December 31, 2023. The dissolution expense of $100,000 is not included in the redemption value of the Common Stock subject to redemption since it is only taken into account in the event of the Company’s liquidation. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Common Stock resulted in charges against additional paid-in capital, to the extent available, and accumulated deficit. At December 31, 2023 and 2022, the Common Stock reflected in the balance sheets is reconciled in the following table: Common Stock subject to possible redemption, December 31, 2021 $ 201,250,000 Plus: Accretion of carrying value to redemption value 2,170,202 Common Stock subject to possible redemption, December 31, 2022 203,420,202 Less: Redemption (152,810,179) Plus: Accretion of carrying value to redemption value 4,008,446 Common Stock subject to possible redemption, December 31, 2023 $ 54,618,469 Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the consolidated financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2023 and 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. Net Income per Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income per share of Common Stock is computed by dividing net income by the weighted average number of shares of Common Stock outstanding for the period. Income is allocated between redeemable and non-redeemable shares based on relative amounts of weighted average shares outstanding. Accretion associated with the redeemable shares of Common Stock is excluded from income per share as the redemption value approximates fair value. The calculation of diluted net income per share does not consider the effect of the PIPE derivative liability nor the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement. The calculation excludes the dilutive impact of these instruments because the issuance of the securities underlying the exercise of the warrants are contingent upon the occurrence of future events. The warrants are exercisable to purchase 16,215,625 shares of Common Stock in the aggregate. As of December 31, 2023 and 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into Common Stocks and then share in the earnings of the Company. As a result, diluted net income per share of Common Stock is the same as basic net income per Common Stock for the periods presented. The following table reflects the calculation of basic and diluted net income per share of Common Stock (in dollars, except share amounts): For the Year Ended December 31, 2023 2022 Non- Non- Redeemable redeemable Redeemable redeemable Basic and diluted net income per share of Common Stock Numerator: Allocation of net income $ 460,174 $ 335,609 $ 8,836,454 $ 2,209,113 Denominator: Basic and diluted weighted average shares outstanding 6,898,644 5,031,250 20,125,000 5,031,250 Basic and diluted net income per share of Common Stock $ 0.07 $ 0.07 $ 0.44 $ 0.44 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 and management believes the Company is not exposed to significant risks on such accounts. 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 (see Note 9). The non-redemption agreement liability was recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the non-redemption agreement liability were recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the non-redemption agreement liability is discussed in Note 9. 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. The PIPE derivative was terminated in congruence with the termination of the Merger Agreement with TradeStation. The PIPE derivative met the criteria for derivative liability classification. As such, the PIPE derivative liability was recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the derivative liability were recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the derivative liability is discussed in Note 9. Recent Accounting Standards In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have an impact on its financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. ASU 2023-09 will become effective for Annual periods beginning after December 15, 2024. The Company is still reviewing the impact of ASU 2023-09. 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 consolidated financial statements. | |
WILSON-DAVIS & CO., INC | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition Wilson-Davis recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, using the modified retrospective method. This revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model to: (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when the entity satisfies a performance obligation. Wilson-Davis acts as an agent by selling securities to customers and collecting commissions. Wilson-Davis recognizes commissions on a trade date basis, which is the day the transaction is executed. Wilson-Davis believes that the performance obligation is satisfied on the trade date because that is when the security is selected, the price is determined, the trade is executed, and the risks and rewards of ownership have been transferred to/from the customer. Wilson-Davis also receives commissions on mutual funds purchased by customers. Wilson-Davis believes that the performance obligation is not satisfied until the mutual funds are purchased by customers and recognizes the commission at that time. Wilson-Davis performs vetting services to customers that wish to convert restricted stock to eligible trading stock. In addition, Wilson-Davis charges clearing fees to another broker-dealer for which it clears trades. Wilson-Davis recognizes revenue as the related performance obligations are satisfied. Financial Statement Reclassification Certain account balances from current periods have been reclassified in these financial statements to conform to prior period classifications. Recent Accounting Pronouncements Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC, did not, or are not believed by management to, have a material impact on the Wilson-Davis’s present or future financial position, results of operations, or cash flows. |
CASH SEGREGATED IN ACCORDANCE W
CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS | 3 Months Ended | 6 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS | NOTE 3. CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS Wilson-Davis is required by Rule 15c3-3 of the SEC 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, 2024, was calculated to be $19,296,856. Wilson-Davis had $19,200,000 cash which was $96,856 less than the amount required. On April 1, 2024, Wilson-Davis deposited $600,000 to the reserve account in accordance with the rule, which resulted in an excess of $504,026. Wilson-Davis is required by Rule 15c3-3 of the SEC 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, 2024, was calculated to be $100,000. Wilson-Davis had $200,000 cash on deposit in the reserve account, which was $100,000 more than the amount required. | |
WILSON-DAVIS & CO., INC | ||
CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS | NOTE 3 CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS Wilson-Davis is required by Rule 15c3-3 of the SEC 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 June 30, 2023, was calculated to be $27,111,239. Wilson-Davis had $26,764,260 cash on deposit in the reserve account, which was $346,979 less than the amount required. On July 3, 2023, Wilson-Davis deposited $701,893 to the reserve account in accordance with the rule, which resulted in an excess of $354,914. The required reserve as of December 29, 2023, was calculated to be $20,309,118. Wilson-Davis had $20,600,000 cash on deposit in the reserve account which was $290,882 over the amount required. Wilson-Davis is required by Rule 15c3-3 of the SEC 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 June 30, 2023, and December 31, 2023, was calculated to be $100,000. Wilson-Davis had $200,000 cash on deposit in the reserve account, which was $100,000 more than the amount required. |
NET CAPITAL REQUIREMENTS
NET CAPITAL REQUIREMENTS | 3 Months Ended | 6 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
NET CAPITAL REQUIREMENTS | 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, 2024, Wilson-Davis’s net capital was $10,449,178, which was $10,199,178 in excess of the minimum required. | |
WILSON-DAVIS & CO., INC | ||
NET CAPITAL REQUIREMENTS | 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 June 30, 2023, Wilson-Davis’s net capital was $9,727,713, which was $9,477,713 in excess of the minimum required. On December 31, 2023, Wilson-Davis’s net capital was $10,882,713, which was $10,632,713 in excess of the minimum required. |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | NOTE 7. COMMITMENTS AND CONTINGENCIES Registration Rights Pursuant to a registration rights agreement entered into on February 4, 2021, the holders of the Founder Shares, as well as the holders of the Private Warrants (and underlying securities) and any warrants issued in payment of Working Capital Loans made to the Company (and underlying securities) will have registration and stockholder rights pursuant to an agreement to be signed prior to or on the effective date of the Initial Public Offering. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Warrants (and underlying securities) can elect to exercise these registration rights at any time after the consummation of a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. The registration and stockholder rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. On May 14, 2024, the Company filed a registration statement on Form S-1 to register the resale of up to 37,885,852 shares of Common Stock by the selling stockholders named in the registration statement. The Company will not receive any of the proceeds from these sales. Business Combination Marketing Agreement The Company engaged the underwriters as advisors in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’s attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with the potential Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the underwriters the marketing fee for such services upon the consummation of our initial business combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of the Initial Public offering or $7,043,750. In connection with the Closing, the Company and Chardan Capital Markets LLC (“Chardan”) agreed that the fee, in the amount of $7,043,750, payable by the Company to Chardan upon the Closing pursuant to the terms of the business combination marketing agreement entered into in connection with Quantum’s initial public offering, would be waived in exchange for the issuance by the Company to Chardan of a convertible promissory note in the aggregate principal amount of $4,150,000. Such note (the “Chardan Note”) was issued by the Company at the Closing. The Chardan Note has a stated maturity date of February 9, 2028. Interest accrues at a rate per annum equal to 13%, and is payable quarterly on the first day of each calendar quarter. On each interest payment date, the accrued and unpaid interest shall, at the election of the Company, be either paid in cash or, subject to the satisfaction of certain conditions, in shares of Common Stock, at a rate equal to 85% of the VWAP for the trading day immediately prior to the applicable interest payment date. The Chardan Note is convertible, in whole or in part, into shares of Common Stock at the election of the holder at any time at a conversion price equal to 90% of the VWAP of the Common Stock for the trading day immediately preceding the applicable conversion date. In addition, on each conversion date the Company is required to pay to Chardan in cash (or, at the Company’s option and subject to certain conditions, a combination of cash and Common Stock) all accrued interest on the Chardan Note and all interest that would otherwise accrue on the amount of the Note being converted if such converted amount would be held to three years Also on February 9, 2024, the Company entered into a registration rights agreement with Chardan (the “Chardan Registration Rights Agreement”), pursuant to which the Company agreed, among other things, to file with the U.S. Securities and Exchange Commission within 45 days after the Closing Date a registration statement registering the resale of the shares of Common Stock issuable upon exercise of the Chardan Note and to use its reasonable best efforts to have such registration statement declared effective as soon as possible after filing. If the registration statement is not filed within 45 days after the Closing or is not effective within a specified period after the Closing (or if effectiveness is subsequently suspended or terminated for at least 15 days, subject to certain exceptions), then the interest rate of the Chardan Note will increase by 2% for each week that such event continues. The Chardan Registration Rights Agreement also provides that the Company is obligated to file additional registration statements under certain circumstances, and provides Chardan with customary “piggyback” registration rights. Non-Redemption Agreement On August 1, 2023, the Company and Quantum Ventures entered into a non-redemption agreement (the “Non-Redemption Agreement”) with Funicular Funds, LP (the “Holder”) in exchange for the Holder agreeing either not to request redemption in connection with the Extension (as defined below) or to reverse any previously submitted redemption demand in connection with the Extension with respect to an aggregate of 2,351,800 shares of common stock at the special meeting of stockholders called by the Company to, among other things, approve an amendment to the Company’s amended and restated certificate of incorporation to extend the date by which the Company must consummate an initial business combination to up to February 9, 2024 or such earlier date as is determined by the board of directors of the Company to be in the best interests of the Company (the “Extension”). In consideration of the foregoing agreement, immediately prior to, and substantially concurrently with, the closing of an initial business combination, (i) Quantum Ventures (or its designees or transferees) will surrender and forfeit to the Company for no consideration an aggregate of 235,180 shares of common stock held by Quantum Ventures (the “Forfeited Shares”) and an aggregate of 235,180 warrants held by Quantum Ventures to purchase 235,180 shares of common stock (the “Forfeited Warrants”) and (ii) the Company shall issue to the Holder a number shares of common stock equal to the number of Forfeited Shares and a number of warrants to purchase shares of common stock equal to the number of Forfeited Warrants. As a result of the closing of the Business Combination, there is no further obligation regarding the Non-Redemption Agreement, as such the liability was trued up as of February 9, 2024 and transferred to permanent equity as the shares have been transferred. Expense Settlements In connection with the Closing, AtlasClear Holdings agreed to settle certain accrued expenses and other obligations to certain parties through the issuance of shares of Common Stock. Pursuant to such arrangements, on February 9, 2024, AtlasClear Holdings issued an aggregate of 2,201,010 shares of Common Stock in settlement of obligations in the aggregate amount of $5,448,933, including the issuance of 2,000,000 shares of Common Stock to Qvent, LLC, an affiliate of Quantum Ventures, in settlement of an aggregate of $4,577,569 advanced to Quantum through the Closing Date. Additionally, on the Closing Date, AtlasClear Holdings issued notes to settle other expenses of Quantum in the aggregate principal amount of approximately $3.3 million, some of which are convertible into shares of Common Stock. Additional Settlements ● Grant Thornton LLP – 46,010 shares of Common Stock that were issued to Grant Thornton LLP (“Grant Thornton”), pursuant to a Satisfaction and Discharge Agreement, dated as of February 9, 2024, between Grant Thornton and the Company (the “Grant Thornton Agreement”), in lieu of payment for services in the amount of $460,100 , at a price per share of $10.00 . ● IB Capital LLC – 155,000 shares of Common Stock that were issued to IB Capital LLC (“IB”), pursuant to a Satisfaction and Discharge Agreement, dated as of February 9, 2024, between IB and the Company (the “IB Agreement”), in lieu of payment for services in the amount of $355,000, at a price per share of $2.29. ● Outside The Box Capital Inc. – 20,000 shares of Common Stock that were issued to Outside The Box Capital Inc. (“OTB”), pursuant to a Marketing Services Agreement, dated as of September 13, 2023, between OTB and Quantum (the “OTB Agreement”), as payment in shares for services rendered to Quantum valued at $10 per share for total consideration paid of $200,000. ● Carriage House Capital, Inc. – up to 350,000 shares of Common Stock that were issued, or may become issuable, to Carriage House Capital, Inc. (“Carriage”), pursuant to the Consulting Agreement, dated as of February 19, 2024, between Carriage and the Company (the “Carriage Agreement”), as partial consideration for consulting services rendered to the Company, at the price per share of $4.98 on the day of issuance. The total consideration due under the Consulting Agreement is 350,000 shares of Common Stock, 100,007 shares of which were due upon signing of the contract and 27,777 shares of which are due in months four through twelve from the date of signing. As of March 31, 2024, 100,000 shares were issued, and were valued at $4.98 per share as agreed upon consideration. The Stock payable for the remaining 250,000 shares was valued at $1,244,965 and recorded as a stock payable. ● Interest Solutions, LLC – up to 298,017 shares of Common Stock that may become 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 $1.00. Accrued interest on the Interest Solutions Note is 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 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. As of March 31, 2024, the amount is included in Promissory note payable. ● JonesTrading Institutional Services LLC – up to 375,000 shares of Common Stock that may become 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 $1.00. Accrued interest on the JonesTrading Note is 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 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. As of March 31, 2024, the amount is included in Promissory note payable. ● Winston & Strawn LLP – up to 833,333 shares of Common Stock that may become 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”) at a price per share of $1.00. Pursuant to the Winston Agreement, the Company may 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 March 31, 2024, the amount is included in Subscription agreement as an asset of $1,875,150. Due to the nature of the settlement terms, the subreption agreement was deemed to be a derivative asset to the Company as of March 31, 2024. 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 14. ● 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 is February 8, 2026 and the note accrues interest at a rate of 13% per annum. The principal and interest payments due under the note is not payable in shares of Common Stock. As of March 31, 2024, the amount is included in Promissory note payable. ● Lead Nectar – up to 12,000 shares of Common Stock that may become issuable to Lead Nectar in lieu of payment for internet marketing services in the amount of $20,000. Excise Taxes Payable On February 6, 2023, the Company’s stockholders redeemed 14,667,626 shares of common stock for a total of $148,523,642. On August 4, 2023, the Company’s stockholders redeemed 406,990 shares of common stock for a total of $4,286,537. On February 9, 2024, the Company’s stockholders redeemed 4,940,885 shares of common stock for a total of $53,947,064. The Company evaluated the classification and accounting of the excise tax related to these stock redemptions under ASC 450, “Contingencies”. ASC 450 states that when a loss contingency exists the likelihood that the future event(s) will confirm the loss or impairment of an asset, or the incurrence of a liability can range from probable to remote. A contingent liability must be reviewed at each reporting period to determine appropriate treatment. The Company evaluated the current status and probability of completing a Business Combination as of September 30, 2023 and determined that a contingent liability should be calculated and recorded. As of March 31, 2024 and December 31, 2023, the Company recorded $2,067,572 and $1,528,101, respectively, of excise tax liability calculated as 1% of shares redeemed. Convertible Note Financing On February 9, 2024, Wilson-Davis and Quantum entered into a securities purchase agreement (the “Purchase Agreement”) with Funicular Funds, LP, a Delaware limited partnership (“Funicular”), pursuant to which the Company sold and issued to Funicular, on that date, a secured convertible promissory note in the principal amount of $6,000,000 (the “Funicular Note”) for a purchase price of $6,000,000, in a private placement (the “Note Financing”). The proceeds raised in the Note Financing were used to pay a portion of the purchase price paid at Closing to the Wilson-Davis Sellers. The Funicular Note has a stated maturity date of November 9, 2025. Interest accrues at a rate per annum equal to 12.5%, 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 Funicular Note. In the event of an Event of Default (as defined in the Funicular Note), in addition to Funicular’s other rights and remedies, the interest rate would increase to 20% per annum. The Funicular Note is convertible, in whole or in part, into shares of Common Stock at the election of the holder at any time at an initial conversion price of $10.00 per share (the “Conversion Price”). The Conversion Price is subject to adjustment monthly to a price equal to the trailing five-day VWAP, subject to a floor of $2.00 per share (provided that if the Company sells stock at an effective price below $2.00 per share, such floor would be reduced to such effective price), and is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like. The Company has the right to redeem the Funicular Note upon 30 days’ notice after the earlier of August 7, 2024 and the effectiveness of the Registration Statement (as defined in the Funicular Note), and Funicular would have the right to require the Company to redeem the Note in connection with a Change of Control (as defined in the Note), in each case for a price equal to 101% of the outstanding principal amount of the Note plus accrued and unpaid interest. The Funicular 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 Funicular 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) a security agreement, dated as of February 9, 2024 (the “Security Agreement”), entered into among the Company, each of the Company’s subsidiaries and Funicular, and (ii) a 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 Funicular Note and the other Loan Documents (as defined in the Funicular Note). Pursuant to the Purchase Agreement, the Company agreed, among other things, that if the Funicular 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 Funicular Note in excess of that amount, in accordance with the rules of the NYSE American. Also pursuant to the Purchase Agreement, at the Closing the Sponsor transferred 600,000 Founder Shares and 600,000 private placement warrants to Funicular, which transfers terminated Quantum’s obligation to issue shares to Funicular pursuant to the terms of the non-redemption agreement, dated August 1, 2023, between Quantum and Funicular. The purchase price was allocated on a relative fair value basis resulting in the allocated value of the warrants transferred at $24,982 and the value of the shares transferred at $978,650 for a total value of $1,003,632 recorded as additional paid in capital. In connection with the Note Financing, on February 9, 2024, the Company entered into a registration rights agreement with Funicular (the “Funicular Registration Rights Agreement”), pursuant to which the Company agreed, among other things, to file with the U.S. Securities and Exchange Commission within 15 days after the Closing Date a registration statement registering the resale of the shares of Common Stock issuable upon exercise of the Funicular Note (the “Funicular Registration Statement”), and the Company agreed to use its best efforts to have the Funicular Registration Statement declared effective as promptly as reasonably possible after the filing thereof, but in any event within 60 days of the Closing Date. If the registration statement is not filed within 30 days after the Closing or is not declared effective by the applicable deadline set forth in the Registration Rights Agreement, or under certain other circumstances described in the Registration Rights Agreement, then the Company shall be obligated to pay to the Buyer an amount in cash equal to 5% of the original principal amount of the Note on a monthly basis until the applicable event giving rise to such payments is cured. The Funicular Registration Rights Agreement also provides that the Company is obligated to file additional registration statements under certain circumstances, and provides Funicular with customary “piggyback” registration rights. Subscription Agreement and Satisfaction and Discharge Agreement On February 9, 2024, the Registrant entered into a Subscription Agreement (the “Subscription Agreement”) and Satisfaction and Discharge Agreement (“Discharge Agreement”) with Winston & Strawn LLP (“Winston”), Calculator New Pubco, Inc. and Quantum. The Registrant accepted the offer of Winston to subscribe for an aggregate of $2.5 million worth of shares of its common stock in lieu of fees accrued prior to the Business Combination. In accordance with the Discharge Agreement, Winston, the service provider, has irrevocably waived their rights to receive the professional fees for the Prior Services in cash and has agreed to the Company tendering the full amount of the Fees in cash at Closing, Winston accept common stock of the Post-Closing Company as satisfaction of the Fees. As a result of the Discharge Agreement, Winston has legally released the Company from being the primary obligor under the liability. As a result, the Company has concluded that such liabilities are no longer an obligation of the Company and therefore qualify for extinguishment. The Subscription Agreement is considered a variable-share obligation under ASC Topic 480 (“Distinguishing Liabilities from Equity”). The Subscription 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 Consolidated Balance Sheets. The Company will record a change in fair value on each reporting period until settlement in its Consolidated Statement of Operations. See foot note 14 for additional disclosures. 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 the Financial Industry Regulatory Authority, Inc. (“FINRA”), Office of Hearing Officers, issued its decision ordering 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 $1.265 million. Wilson-Davis made a timely appeal to the SEC to hear the case. Pursuant to FINRA rules, Wilson-Davis’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, Wilson-Davis believes that the final amount is not reasonably estimable. Wilson-Davis has booked a contingent liability totaling $100,000, which represents the estimated low end of the possible range of fines. On December 28, 2023, the SEC issued an Opinion sustaining FINRA’s findings of violations against Wilson-Davis. The Opinion set aside the fines FINRA imposed on Wilson-Davis for the Reg SHO violations and the supervisory and AML violations. The SEC remanded the case to FINRA to reconsider the appropriate sanctions. On October 16, 2023, Wilson-Davis entered into a Fifth Addendum to Lease for the Salt Lake City office. The lease is for three years. On December 21, 2023, Wilson-Davis entered into a Second Amendment to Office Lease for the Denver office. The lease is for one year. | NOTE 6. COMMITMENTS AND CONTINGENCIES Registration Rights Pursuant to a registration rights agreement entered into on February 4, 2021, the holders of the Founder Shares, as well as the holders of the Private Warrants (and underlying securities) and any warrants issued in payment of Working Capital Loans made to the Company (and underlying securities) will have registration and stockholder rights pursuant to an agreement to be signed prior to or on the effective date of the Initial Public Offering. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of Common Stock are to be released from escrow. The holders of a majority of the Private Warrants (and underlying securities) can elect to exercise these registration rights at any time after the consummation of a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. The registration and stockholder rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement The Company granted the underwriters a 45-day option to purchase up to 2,625,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. On February 12, 2021, the underwriter’s elected to fully exercise the over-allotment option to purchase an additional 2,625,000 Public Units at a price of $10.00 per Public Unit. Business Combination Marketing Agreement The Company engaged the underwriters as advisors in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’s attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with the potential Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the underwriters the marketing fee for such services upon the consummation of our initial business combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of the Initial Public offering or $7,043,750. On February 9, 2024, upon the closing of the Business Combination, the $7,043,750 fee was waived in exchange for the issuance by the Company to the Underwriters a convertible promissory note in the aggregate principal amount of $4,150,000. Such note (the “Chardan Note”) was issued by the Company at the Closing. Business Combination Agreement Throughout the notes to the condensed consolidated financial statements, unless otherwise noted or otherwise suggested by context, the “Company” refers to Quantum FinTech Acquisition Corporation prior to the consummation of the Business Combination, and to AtlasClear Holdings, Inc. after the consummation of the Business Combination. On November 16, 2022, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) by and among the Company, Calculator New Pubco, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“New Pubco”), Calculator Merger Sub 1, Inc., a Delaware corporation and a wholly-owned subsidiary of New Pubco (“Merger Sub 1”), Calculator Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of New Pubco (“Merger Sub 2”), AtlasClear, Inc., a Wyoming corporation (“AtlasClear”), Atlas FinTech Holdings Corp., a Delaware corporation (“Atlas FinTech”) and Robert McBey. The Business Combination Agreement was unanimously approved by the Company’s Board based upon the unanimous recommendation of a special committee of independent directors. If the Business Combination Agreement is approved by the Company’s stockholders, and the transactions contemplated by the Business Combination Agreement are consummated, (i) Merger Sub 1 will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly-owned subsidiary of New Pubco and (ii) Merger Sub 2 will merge with and into AtlasClear, with AtlasClear continuing as the surviving corporation and a wholly-owned subsidiary of New Pubco (collectively, the “Business Combination”). Prior to the closing of the Business Combination (the “Closing”), AtlasClear will receive certain assets from Atlas FinTech and Atlas Financial Technologies Corp., will complete the acquisition of broker-dealer Wilson-Davis & Co., Inc. (“WDCO”) and will seek to consummate a transaction with Pacsquare Technologies, LLC (“Pacsquare”). In addition, at Closing, the definitive agreement pursuant to which AtlasClear has agreed to acquire Commercial Bancorp, a Wyoming corporation (“CB”) shall continue to be in full force and effect (the “CB Merger Agreement”). The Company expects the Closing to occur before the closing of the transactions contemplated by the CB Merger Agreement (the “CB Closing”). At the Closing, AtlasClear stockholders will receive merger consideration in shares of New Pubco Common Stock equal to the quotient of (i) $75.4 million, less the purchase prices for WDCO and CB, divided by (ii) $10. In addition, the AtlasClear stockholders will receive up to 5,944,444 shares of New Pubco Common Stock (the “Earn Out Shares”). The Earn Out Shares will be issued to AtlasClear stockholders upon certain milestones (based on the achievement of certain price targets of New Pubco Common Stock following the Closing). In the event such milestones are not met within the first 18 months following the Closing, the Earn Out Shares will be forfeited. Atlas FinTech will also receive up to $20 million of New Pubco 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 the five years following Closing, with no catch-up between the years. In connection with the Closing, each share of the Company’s Common Stock (“Company Common Stock”) (other than shares held by Atlas FinTech) that is outstanding and has not been redeemed will be converted into one share of New Pubco Common Stock. Each outstanding warrant to purchase Company Common Stock (“Company Warrant”) (other than Private Warrants, described below) will become a warrant to purchase one-half of a share of New Pubco Common Stock. Each outstanding warrant to purchase Company Common Stock initially issued in a private placement in connection with the Company’s initial public offering (“Private Warrant”) will become a warrant to purchase one share of New Pubco Common Stock. Atlas FinTech, which directly or indirectly holds shares of Company Common Stock and Private Warrants, has agreed to transfer, or cause to transfer, up to 1,279,427 of Company Common Stock and up to 1,657,579 of the Private Warrants held indirectly by it to potential sources of debt, equity or financing if the Company pursues financing between signing and the Closing. Any of such Company Common Stock or Private Warrants remaining following any transfers for potential financing will be forfeited for no consideration. On April 28, 2023, the Company and AtlasClear entered into Amendment No. 1 to the Business Combination Agreement (the “Amendment”). The Amendment amends the Business Combination Agreement to provide that the consummation of the transactions contemplated by the letter of intent pursuant to which AtlasClear expects to acquire certain technology assets of Pacsquare Technologies, LLC, will no longer be required to be completed prior to the closing of the Business Combination. On August 8, 2023, the Company and AtlasClear entered into Amendment No. 2 to the Business Combination Agreement (the “Second Amendment”). The Second Amendment amends the Business Combination Agreement to extend the Outside Date to November 6, 2023. On October 12, 2023, the Company announced the effectiveness of the registration statement on Form S-4 for the Business Combination Agreement. On October 19, 2023, the Company and AtlasClear entered into a Business Combination Agreement Waiver (the “Business Combination Agreement Waiver”) to waive the Minimum Cash Condition closing condition (as defined in the Business Combination Agreement) set forth in Section 8.1(j) of the Business Combination Agreement. On November 6, 2023, the Company and AtlasClear entered into Amendment No. 3 to the Business Combination Agreement (the “Amendment”). The Amendment amends the Business Combination Agreement to extend the date after which either Quantum or AtlasClear may terminate the Business Combination Agreement from November 6, 2023 to November 22, 2023. On February 9, 2024, the Company completed its business combination with AtlasClear (see Note 10.) Non-Redemption Agreement On August 1, 2023, the Company and Quantum Ventures entered into a non-redemption agreement (the “Non-Redemption Agreement”) with Funicular Funds, LP (the “Holder”) in exchange for the Holder agreeing either not to request redemption in connection with the Extension (as defined below) or to reverse any previously submitted redemption demand in connection with the Extension with respect to an aggregate of 2,351,800 shares of Common Stock at the special meeting of stockholders called by the Company to, among other things, approve an amendment to the Company’s amended and restated certificate of incorporation to extend the date by which the Company must consummate an initial business combination to up to February 9, 2024 or such earlier date as is determined by the board of directors of the Company to be in the best interests of the Company (the “Extension”). In consideration of the foregoing agreement, immediately prior to, and substantially concurrently with, the closing of an initial business combination, (i) Quantum Ventures (or its designees or transferees) will surrender and forfeit to the Company for no consideration an aggregate of 235,180 shares of Common Stock held by Quantum Ventures (the “Forfeited Shares”) and an aggregate of 235,180 warrants held by Quantum Ventures to purchase 235,180 shares of Common Stock (the “Forfeited Warrants”) and (ii) the Company shall issue to the Holder a number shares of Common Stock equal to the number of Forfeited Shares and a number of warrants to purchase shares of Common Stock equal to the number of Forfeited Warrants. The non-redemption agreement liability was recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the non-redemption agreement liability were recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the non-redemption agreement liability is discussed in Note 10. As of February 9, 2024, there are no further obligations under the Non-Redemption Agreement and the agreement is terminated. Excise Taxes Payable On February 6, 2023, the Company’s stockholders redeemed 14,667,626 shares of Common Stock for a total of $148,523,642. On August 4, 2023, the Company’s stockholders redeemed 406,990 shares of Common Stock for a total of $4,286,537. The Company evaluated the classification and accounting of the excise tax related to these stock redemptions under ASC 450, “Contingencies”. ASC 450 states that when a loss contingency exists the likelihood that the future event(s) will confirm the loss or impairment of an asset, or the incurrence of a liability can range from probable to remote. A contingent liability must be reviewed at each reporting period to determine appropriate treatment. The Company evaluated the current status and probability of completing a Business Combination as of December 31, 2023 and determined that a contingent liability should be calculated and recorded. As of December 31, 2023, the Company recorded $1,528,101 of excise tax liability calculated as 1% of shares redeemed. | |
WILSON-DAVIS & CO., INC | |||
COMMITMENTS AND CONTINGENCIES | NOTE 5 COMMITMENTS AND CONTINGENCIES On February 27, 2018, an extended hearing panel of the Department of Enforcement of the Financial Industry Regulatory Authority, Inc. (“FINRA”), Office of Hearing Officers, issued its decision ordering 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 $1.265 million. Wilson-Davis made a timely appeal to the SEC to hear the case. Pursuant to FINRA rules, Wilson-Davis’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, Wilson-Davis believes that the final amount is not reasonably estimable. Wilson-Davis has booked a contingent liability totaling $100,000, which represents the estimated low end of the possible range of fines. On December 28, 2023, the SEC issued an Opinion sustaining FINRA’s findings of violations against Wilson-Davis. The Opinion set aside the fines FINRA imposed on Wilson-Davis for the Reg SHO violations and the supervisory and AML violations. The SEC remanded the case to FINRA to reconsider the appropriate sanctions. On October 16, 2023, Wilson-Davis entered into a Fifth Addendum to Lease for the Salt Lake City office. The lease is for three years. On December 21, 2023, Wilson-Davis entered into a Second Amendment to Office Lease for the Denver office. The lease is for one year. |
CASH AND RESTRICTED CASH
CASH AND RESTRICTED CASH | 3 Months Ended | 6 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
CASH AND RESTRICTED CASH | 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: For the Three Months Ended March 31, 2024 Cash and cash equivalents $ 7,194,912 Cash segregated - customers 20,161,017 Cash segregated - PAB 200,762 Total cash and restricted cash shown in the statement of cash flows. $ 27,556,691 | |
WILSON-DAVIS & CO., INC | ||
CASH AND RESTRICTED CASH | NOTE 6 – 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: For the Six Months Ended December 31, 2023 2022 Cash and cash equivalents $ 8,581,340 $ 8,287,084 Cash segregated - customers 21,746,235 36,927,721 Cash segregated - PAB 200,764 200,636 Total cash and restricted cash shown in the statement of cash flows. $ 30,528,339 $ 45,415,441 |
SUBSEQUENT EVENTS_2
SUBSEQUENT EVENTS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2023 | |
SUBSEQUENT EVENTS | NOTE 16. 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, other than described below, 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 4, 2024, 32,188 shares of Common Stock were issued to Calabrese Consulting LLC (“Calabrese”), pursuant to a Satisfaction and Discharge Agreement between Calabrese and the Company (the “Calabrese Agreement”), in lieu of payment for accounting services in the amount of $64,236, at a price per share of $2.00. On April 8, 2024, the Company issued an aggregate of 145,210 shares of Common Stock to the Wilson-Davis Sellers to settle the first quarterly interest payments on the Seller Notes. On May 14, 2024, the Company filed a registration statement on Form S-1 to register the resale of up to 37,885,852 shares of Common Stock by the selling stockholders named in the registration statement. The Company will not receive any of the proceeds from these sales. | NOTE 11. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, other than described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements. On February 9, 2024 (the “Closing Date”), the registrant consummated the previously announced transactions pursuant to that certain Business Combination Agreement, dated November 16, 2022 (as amended, the “Business Combination Agreement”), by and among the registrant, the Company, Calculator Merger Sub 1, Inc., a Delaware corporation and a wholly-owned subsidiary of the registrant (“Merger Sub 1”), Calculator Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of the registrant (“Merger Sub 2”), AtlasClear, Inc., a Wyoming corporation (“AtlasClear”), Atlas FinTech Holdings Corp., a Delaware corporation (“Atlas FinTech”) and Robert McBey. The transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Business Combination.” In connection with the consummation of the Business Combination (the “Closing”), the registrant changed its name from “Calculator New Pubco, Inc.” to “AtlasClear Holdings, Inc.” (hereinafter referred to as “AtlasClear Holdings”). Pursuant to the Business Combination Agreement, among other things, (i) Merger Sub 1 merged with and into the Company, with the Company continuing as the surviving corporation and a wholly-owned subsidiary of AtlasClear Holdings and (ii) Merger Sub 2 merged with and into AtlasClear, with AtlasClear continuing as the surviving corporation and a wholly-owned subsidiary of AtlasClear Holdings. Prior to the Closing, pursuant to the (i) Contribution Agreement (as defined in the Business Combination Agreement), AtlasClear received certain assets from Atlas FinTech and Atlas Financial Technologies Corp., a Delaware corporation, and (ii) Broker-Dealer Acquisition Agreement (as defined in the Business Combination Agreement), completed the acquisition of broker-dealer, Wilson-Davis & Co., Inc. (“Wilson-Davis”). In addition, at Closing, the Bank Acquisition Agreement (as defined in the Business Combination Agreement), pursuant to which AtlasClear has agreed to acquire Commercial Bancorp, a Wyoming corporation and parent of Farmers State Bank (“Commercial Bancorp”), continued to be in full force and effect. Pursuant to the transactions contemplated by a letter of intent, AtlasClear expects to acquire certain technology assets of Pacsquare Technologies, LLC (“Pacsquare”) after the Closing. In connection with the Closing, and pursuant to the terms of the Business Combination Agreement, AtlasClear Stockholders received merger consideration (the “Merger Consideration Shares”) consisting of 4,440,000 shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”). In addition, the AtlasClear Holdings Stockholders will 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). In the event such milestones are not met within the first 18 months following the Closing, the 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 Closing, with no catch-up between the years. In connection with the Closing, each share of the Company’s Common Stock (“Quantum Common Stock” or “Public Shares”) that was outstanding and had not been redeemed was converted into one share of Common Stock. Each outstanding public warrant to purchase Quantum Common Stock became a warrant to purchase one In connection with the stockholder vote to approve the Business Combination Agreement and the Business Combination, holders of an aggregate of 4,940,885 shares of Quantum Common Stock properly exercised their right to have their shares redeemed for a full pro rata portion of the Trust Account holding the proceeds from the IPO, which was approximately $10.92 per share, or $53,947,064.28 in the aggregate. The remaining balance of the Trust Account immediately prior to the Closing of approximately $1.2 million was used to partially fund the Business Combination. As a result of such redemptions, a total of 109,499 Public Shares remained outstanding at the Closing. After giving effect to the Business Combination, the redemption of the Public Shares described above, the separation of the former Company Units and the issuance of Merger Consideration Shares and the issuance of shares of Common Stock pursuant to Expense Settlements (described below), as of the Closing Date, there were 11,781,759 shares of Common Stock issued and outstanding In connection with the Closing, the Company instructed Continental Stock Transfer & Trust Company (“CST”), as escrow agent under the Stock Escrow Agreement, dated as of February 4, 2021 (the “Stock Escrow Agreement”), between the Company and CST, to release from escrow 4,000,000 of the Founder Shares that were held in escrow pursuant to the terms of the Stock Escrow Agreement (consisting of 949,084 shares owned by Chardan Quantum, LLC and 3,050,916 shares owned by the Sponsor; as contemplated by the previously-disclosed amendment to the Stock Escrow Agreement entered into on October 31, 2023. The Common Stock commenced trading on the NYSE American LLC (“NYSE”) under the symbol “ATCH” on February 12, 2024. AtlasClear Holdings’ warrants commenced trading on the over-the-counter market (the “OTC”) under the symbol “ATCH WS” on February 12, 2024. Amendments to Broker-Dealer Acquisition Agreement Prior to the Closing, AtlasClear and the Company entered into two amendments to the Broker-Dealer Acquisition Agreement with Wilson-Davis and the then-owners of Wilson-Davis (the “Wilson-Davis Sellers”), Amendment No. 8 dated January 9, 2024 (“Amendment No. 8”) and Amendment No. 9 dated February 7, 2024 (“Amendment No. 9” and, together with Amendment No. 8, the “Amendments”). Among other things, the Amendments reduced the total purchase price payable under the Broker- Dealer Acquisition Agreement by $5 million and reduced the cash payable at the Wilson-Davis Closing as part of the purchase price to $8 million, with the balance of the purchase price paid in the form of convertible promissory notes issued by AtlasClear to the Wilson-Davis Sellers, as follows: (i) $5,000,000 in aggregate principal amount of notes due 90 days after the Closing Date (the “Short-Term Notes”) and (ii) $7,971,000 in aggregate principal amount of notes due 24 months after the Closing Date (the “Long-Term Notes” and, together with the Short-Term Notes, the “Seller Notes”). The Short-Term Notes accrue interest at a rate of 9% per annum, payable quarterly in arrears, in shares of Common Stock at a rate equal to 90% of the trailing seven-trading day VWAP prior to payment (or, at the Company’s option, cash), and are convertible at the option of the holder at any time during the continuance of an event of default, at a rate equal to 90% of the trailing seven-trading day VWAP prior to conversion. The Long-Term Notes accrue interest at a rate of 13% per annum, payable quarterly in arrears, in shares of Common Stock at a rate equal to 90% of the trailing seven-trading day VWAP prior to payment (or, at the Company’s option, in cash), and are convertible at the option of the holder at any time commencing six months after the Closing Date, at a rate equal to 90% of the trailing seven-trading day VWAP prior to conversion (or 85% if an event of default occurs and is continuing). Pursuant to the terms of the Amendments, at the closing of the transactions contemplated by the Broker-Dealer Acquisition Agreement (the “Wilson-Davis Closing”) the Company entered into a parent guaranty and registration rights agreement with the Wilson-Davis Sellers (the “Wilson-Davis Guaranty and RRA”), pursuant to which the Company guaranteed the obligations of AtlasClear under the Notes. The Company also agreed (i) to file, within 30 days of the Closing Date, a registration statement with the SEC, registering the resale of the shares of Common Stock issuable upon conversion of the Notes and (ii) if necessary to allow any of the Notes to be converted into shares of Common Stock in accordance with the rules of the NYSE, to seek stockholder approval for the issuance of such shares, including by filing a proxy statement by no later than April 30, 2024. The Sponsor also entered into Amendment No. 9, for the limited purpose of agreeing to transfer certain Founder Shares owned by the Sponsor to the Wilson-Davis Sellers. The Sponsor agreed to transfer to the Wilson-Davis Sellers, at the Wilson-Davis Closing, Founder Shares having an aggregate value of $6 million, based on the VWAP of Quantum Common Stock for the five Convertible Note Financing On February 9, 2024, the WDCO and Quantum entered into a securities purchase agreement (the “Purchase Agreement”) with Funicular Funds, LP, a Delaware limited partnership (“Funicular”), pursuant to which the Company sold and issued to Funicular, on that date, a secured convertible promissory note in the principal amount of $6,000,000 (the “Funicular Note”) for a purchase price of $6,000,000, in a private placement (the “Note Financing”). The proceeds raised in the Note Financing were used to pay a portion of the purchase price paid at Closing to the Wilson-Davis Sellers. The Funicular Note has a stated maturity date of November 9, 2025. Interest accrues at a rate per annum equal to 12.5%, 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 Funicular Note. In the event of an Event of Default (as defined in the Funicular Note), in addition to Funicular’s other rights and remedies, the interest rate would increase to 20% per annum. The Funicular Note is convertible, in whole or in part, into shares of Common Stock at the election of the holder at any time at an initial conversion price of $10.00 per share (the “Conversion Price”). The Conversion Price is subject to adjustment monthly to a price equal to the trailing five-day VWAP, subject to a floor of $2.00 per share (provided that if the Company sells stock at an effective price below $2.00 per share, such floor would be reduced to such effective price), and is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like. The Company has the right to redeem the Funicular Note upon 30 days’ notice after the earlier of August 7, 2024 and the effectiveness of the Registration Statement (as defined in the Funicular Note), and Funicular would have the right to require the Company to redeem the Note in connection with a Change of Control (as defined in the Note), in each case for a price equal to 101% of the outstanding principal amount of the Note plus accrued and unpaid interest. The Funicular 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 Funicular 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) a security agreement, dated as of February 9, 2024 (the “Security Agreement”), entered into among the Company, each of the Company’s subsidiaries and Funicular, and (ii) a 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 Funicular Note and the other Loan Documents (as defined in the Funicular Note). Pursuant to the Purchase Agreement, the Company agreed, among other things, that if the Funicular 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 Funicular Note in excess of that amount, in accordance with the rules of the NYSE American. Also pursuant to the Purchase Agreement, at the Closing the Sponsor transferred 600,000 Founder Shares and 600,000 private placement warrants to Funicular, which transfers terminated Quantum’s obligation to issue shares to Funicular pursuant to the terms of the non-redemption agreement, dated August 1, 2023, between Quantum and Funicular and previously disclosed in the Proxy Statement/Prospectus. In connection with the Note Financing, on February 9, 2024, the Company entered into a registration rights agreement with Funicular (the “Funicular Registration Rights Agreement”), pursuant to which the Company agreed, among other things, to file with the U.S. Securities and Exchange Commission within 15 days after the Closing Date a registration statement registering the resale of the shares of Common Stock issuable upon exercise of the Funicular Note (the “Funicular Registration Statement”), and the Company agreed to use its best efforts to have the Funicular Registration Statement declared effective as promptly as reasonably possible after the filing thereof, but in any event within 60 days of the Closing Date. If the registration statement is not filed within 30 days after the Closing or is not declared effective by the applicable deadline set forth in the Registration Rights Agreement, or under certain other circumstances described in the Registration Rights Agreement, then the Company shall be obligated to pay to the Buyer an amount in cash equal to 5% of the original principal amount of the Note on a monthly basis until the applicable event giving rise to such payments is cured. The Funicular Registration Rights Agreement also provides that the Company is obligated to file additional registration statements under certain circumstances, and provides Funicular with customary “piggyback” registration rights. Expense Settlements In connection with the Closing, the Company and Chardan Capital Markets LLC (“Chardan”) agreed that the fee, in the amount of $7,043,750, payable by the Company to Chardan upon the Closing pursuant to the terms of the business combination marketing agreement entered into in connection with Quantum’s initial public offering, would be waived in exchange for the issuance by the Company to Chardan of a convertible promissory note in the aggregate principal amount of $4,150,000. Such note (the “Chardan Note”) was issued by the Company at the Closing. The Chardan Note has a stated maturity date of February 9, 2028. Interest accrues at a rate per annum equal to 13%, and is payable quarterly on the first day of each calendar quarter. On each interest payment date, the accrued and unpaid interest shall, at the election of the Company, be either paid in cash or, subject to the satisfaction of certain conditions, in shares of Common Stock, at a rate equal to 85% of the VWAP for the trading day immediately prior to the applicable interest payment date. The Chardan Note is convertible, in whole or in part, into shares of Common Stock at the election of the holder at any time at a conversion price equal to 90% of the VWAP of the Common Stock for the trading day immediately preceding the applicable conversion date. In addition, on each conversion date the Company is required to pay to Chardan in cash (or, at the Company’s option and subject to certain conditions, a combination of cash and Common Stock) all accrued interest on the Chardan Note and all interest that would otherwise accrue on the amount of the Note being converted if such converted amount would be held to three years after the applicable conversion date. Conversion of the Chardan Note, including the issuance of shares to pay interest thereon, is limited to the extent that such conversion would result in Chardan (together with its affiliates and any other persons acting as a group together with Chardan or its affiliates) beneficially owning in excess of 9.99% of the outstanding shares of Common Stock outstanding immediately prior to such conversion. The conversion price applicable to the Chardan Note is subject to adjustment is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and is subject to price-based adjustment, on a “full ratchet” basis, in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for, Common Stock at a price below the then-applicable conversion price (subject to certain exceptions). The Chardan Note is subject to a demand for immediate repayment in cash upon the occurrence of certain events of default specified therein. Also on February 9, 2024, the Company entered into a registration rights agreement with Chardan (the “Chardan Registration Rights Agreement”), pursuant to which the Company agreed, among other things, to file with the U.S. Securities and Exchange Commission within 45 days after the Closing Date a registration statement registering the resale of the shares of Common Stock issuable upon exercise of the Chardan Note and to use its reasonable best efforts to have such registration statement declared effective as soon as possible after filing. If the registration statement is not filed within 45 days after the Closing or is not effective within a specified period after the Closing (or if effectiveness is subsequently suspended or terminated for at least 15 days, subject to certain exceptions), then the interest rate of the Chardan Note will increase by 2% for each week that such event continues. The Chardan Registration Rights Agreement also provides that the Company is obligated to file additional registration statements under certain circumstances, and provides Chardan with customary “piggyback” registration rights. Also in connection with the Closing, the Company agreed to settle certain accrued expenses and other obligations to certain parties through the issuance of shares of Common Stock. Pursuant to such arrangements, the Company issued an aggregate of 2,201,010 shares of Common Stock in settlement of obligations in the aggregate amount of $5,448,933, including the issuance of 2,000,000 shares of Common Stock to Qvent, LLC, an affiliate of the Sponsor, in settlement of an aggregate of $4,633,833 advanced to Quantum through the Closing Date. 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 Charter (as defined below) and the Amended and Restated Bylaws (as defined below). Assignment, Assumption and Amendment Agreement On the Closing Date, the Company, AtlasClear Holdings and CST entered into that certain Assignment, Assumption and Amendment Agreement (the “New Warrant Agreement”). The New Warrant Agreement amends that certain Warrant Agreement, dated as of February 4, 2021, by and between the Company and CST (the “Existing Warrant Agreement”), to provide for the assignment by the Company of all its rights, title and interest in the warrants of the Company to AtlasClear Holdings. Pursuant to the New Warrant Agreement, all Company warrants under the Existing Warrant Agreement will no longer be exercisable for shares of Quantum Common Stock, but instead will be exercisable for shares of Common Stock. | |
WILSON-DAVIS & CO., INC | |||
SUBSEQUENT EVENTS | NOTE 7 – SUBSEQUENT EVENTS On February 9, 2024, the Company was acquired by Atlas Clear Holding Corporation. |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2023 | |
Revenue Recognition | Revenue Recognition Wilson-Davis, a subsidiary of the Company, recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, using the modified retrospective method. This revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model to: (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when the entity satisfies a performance obligation. Wilson-Davis acts as an agent by selling securities to customers and collecting commissions. Wilson-Davis recognizes commissions on a trade date basis, which is the day the transaction is executed. Wilson-Davis believes that the performance obligation is satisfied on the trade date because that is when the security is selected, the price is determined, the trade is executed, and the risks and rewards of ownership have been transferred to/from the customer. Wilson-Davis also receives commissions on mutual funds purchased by customers. Wilson-Davis believes that the performance obligation is not satisfied until the mutual funds are purchased by customers and recognizes the commission at that time. Wilson-Davis performs vetting services to customers that wish to convert restricted stock to eligible trading stock. In addition, Wilson-Davis charges clearing fees to another broker-dealer for which it clears trades. Wilson-Davis recognizes revenue as the related performance obligations are satisfied. | ||
Recent Accounting Standards | 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. | Recent Accounting Standards In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have an impact on its financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. ASU 2023-09 will become effective for Annual periods beginning after December 15, 2024. The Company is still reviewing the impact of ASU 2023-09. 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 consolidated financial statements. | |
WILSON-DAVIS & CO., INC | |||
Revenue Recognition | Revenue Recognition Wilson-Davis recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, using the modified retrospective method. This revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model to: (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when the entity satisfies a performance obligation. Wilson-Davis acts as an agent by selling securities to customers and collecting commissions. Wilson-Davis recognizes commissions on a trade date basis, which is the day the transaction is executed. Wilson-Davis believes that the performance obligation is satisfied on the trade date because that is when the security is selected, the price is determined, the trade is executed, and the risks and rewards of ownership have been transferred to/from the customer. Wilson-Davis also receives commissions on mutual funds purchased by customers. Wilson-Davis believes that the performance obligation is not satisfied until the mutual funds are purchased by customers and recognizes the commission at that time. Wilson-Davis performs vetting services to customers that wish to convert restricted stock to eligible trading stock. In addition, Wilson-Davis charges clearing fees to another broker-dealer for which it clears trades. Wilson-Davis recognizes revenue as the related performance obligations are satisfied. | ||
Financial Statement Reclassification | Financial Statement Reclassification Certain account balances from current periods have been reclassified in these financial statements to conform to prior period classifications. | ||
Recent Accounting Standards | Recent Accounting Pronouncements Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC, did not, or are not believed by management to, have a material impact on the Wilson-Davis’s present or future financial position, results of operations, or cash flows. |
CASH AND RESTRICTED CASH (Table
CASH AND RESTRICTED CASH (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Summary of reconciliation of cash and restricted cash as shown in the condensed statements of cash flows | For the Three Months Ended March 31, 2024 Cash and cash equivalents $ 7,194,912 Cash segregated - customers 20,161,017 Cash segregated - PAB 200,762 Total cash and restricted cash shown in the statement of cash flows. $ 27,556,691 |
CASH SEGREGATED IN ACCORDANCE_2
CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS (Details) - USD ($) | Apr. 01, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 29, 2023 | Jul. 03, 2023 | Jun. 30, 2023 |
Customers' transactions and credit balances | ||||||
CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS | ||||||
Calculated required reserve | $ 19,296,856 | |||||
Cash on deposit in the reserve account | 19,200,000 | |||||
Cash on deposit in the reserve account less than the amount required | 96,856 | |||||
Amount deposited to reserve account in accordance with the rule | $ 600,000 | |||||
Cash on deposit in the reserve account in excess of the amount required | $ 504,026 | |||||
Customers' transactions and credit balances | WILSON-DAVIS & CO., INC | ||||||
CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS | ||||||
Calculated required reserve | $ 20,309,118 | $ 27,111,239 | ||||
Cash on deposit in the reserve account | 20,600,000 | 26,764,260 | ||||
Cash on deposit in the reserve account less than the amount required | 346,979 | |||||
Amount deposited to reserve account in accordance with the rule | $ 701,893 | |||||
Cash on deposit in the reserve account in excess of the amount required | $ 290,882 | $ 354,914 | ||||
Broker-dealer transactions and credit balances | ||||||
CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS | ||||||
Calculated required reserve | 100,000 | |||||
Cash on deposit in the reserve account | 200,000 | |||||
Cash on deposit in the reserve account less than the amount required | $ 100,000 | |||||
Broker-dealer transactions and credit balances | WILSON-DAVIS & CO., INC | ||||||
CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS | ||||||
Calculated required reserve | $ 100,000 | 100,000 | ||||
Cash on deposit in the reserve account | 200,000 | 200,000 | ||||
Cash on deposit in the reserve account in excess of the amount required | $ 100,000 | $ 100,000 |
NET CAPITAL REQUIREMENTS (Detai
NET CAPITAL REQUIREMENTS (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 30, 2023 |
Net capital | $ 10,449,178 | ||
Net capital in excess of the minimum required | $ 10,199,178 | ||
WILSON-DAVIS & CO., INC | |||
Net capital | $ 10,882,713 | $ 9,727,713 | |
Net capital in excess of the minimum required | $ 10,632,713 | $ 9,477,713 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details) - WILSON-DAVIS & CO., INC - USD ($) | Dec. 19, 2019 | Feb. 27, 2018 | Dec. 31, 2023 | Jun. 30, 2023 |
Damage awarded for violations of the applicable short sales and anti-money laundering rules | $ 1,265,000 | $ 1,470,000 | ||
Damage reduced | 205,000 | |||
Accrued contingent liability | $ 100,000 | $ 100,000 | $ 100,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Leases (Details) - WILSON-DAVIS & CO., INC | Dec. 21, 2023 | Oct. 16, 2023 |
Lease for the Salt Lake City office | ||
COMMITMENTS AND CONTINGENCIES | ||
Term of lease | 3 years | |
Office Lease for the Denver office | ||
COMMITMENTS AND CONTINGENCIES | ||
Term of lease | 1 year |
CASH AND RESTRICTED CASH (Detai
CASH AND RESTRICTED CASH (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Cash and cash equivalents | $ 7,194,912 | $ 619,554 | $ 129,560 | ||||
Total cash and restricted cash shown in the statement of cash flows. | $ 27,556,691 | 619,554 | $ 1,395,548 | 129,560 | $ 63,179 | ||
WILSON-DAVIS & CO., INC | |||||||
Cash and cash equivalents | 8,581,340 | $ 9,094,381 | |||||
Cash segregated - customers | 21,746,235 | 26,764,260 | |||||
Cash segregated - PAB | 200,764 | 200,715 | |||||
Total cash and restricted cash shown in the statement of cash flows. | $ 30,528,339 | $ 36,059,356 | $ 45,415,441 | $ 59,249,523 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
ASSETS | ||
Cash and cash equivalents | $ 7,194,912 | $ 619,554 |
Cash segregated - customers | 20,161,017 | |
Cash segregated - PAB | 200,762 | |
Receivables - broker-dealers and clearing organizations | 3,489,804 | |
Receivables - customers, net | 687,937 | |
Other receivables | 79,543 | |
Prepaid income tax | 139,316 | |
Prepaids | 106,362 | 58,828 |
Trading securities, market value, net | 55 | 54,799,478 |
Total Current Assets | 32,059,708 | 678,382 |
Operating Lease Right to Use Lease Asset | 368,965 | |
Property and equipment, net | 20,599 | |
Customer list, net | 14,238,178 | |
Identified licenses | 4,553,944 | |
Pacsquare asset purchase | 1,416,000 | |
Technology acquired, net | 17,845,813 | |
Cash deposits - broker-dealers and clearing organizations | 3,515,000 | |
Winston Strawn Subscription Agreement | 1,875,150 | |
Commercial bank acquisition deposit | 91,200 | |
Other assets | 388,418 | |
Marketable securities held in Trust Account | 54,799,478 | |
TOTAL ASSETS | 76,372,975 | 55,477,860 |
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||
Payables to customers | 22,025,211 | |
Accounts and payables to officers/directors | 551,007 | |
Accounts payable and accrued expenses | 3,652,809 | 5,510,760 |
Non-redemption agreement liability | 1,441,653 | |
Payables - broker-dealers and clearing organizations | 486,958 | |
Commissions, payroll and payroll taxes | 219,765 | |
Current portion of lease liability | 159,933 | |
Advances from related parties | 3,104,097 | |
Stock payable | 1,244,965 | |
Convertible Notes, net | 3,775,017 | |
Secured Convertible Note, net | 5,101,163 | |
Short-term merger financing, net | 4,788,824 | |
Excise tax payable | 2,067,572 | 1,528,101 |
Deferred income tax liability | 900 | |
Total Current Liabilities | 46,650,838 | 12,064,611 |
Accrued contingent liability | 100,000 | |
Long-term merger financing, net | 7,249,309 | |
Derivative liability - convertible notes | 12,369,480 | |
Derivative liability - Warrants | 615,312 | 307,656 |
Earnout - liability | 11,183,000 | |
Subordinated borrowings | 1,950,000 | |
Trading account deposit | 100,000 | |
Long-term lease liability | 214,281 | |
TOTAL LIABILITIES | 80,432,220 | 12,372,267 |
Commitments and Contingencies (Note 6) | ||
Common stock subject to possible redemption | 54,618,469 | |
STOCKHOLDERS' DEFICIT | ||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding | ||
Common stock, $0.0001 par value; 100,000,000 shares authorized; 12,277,759 and 5,031,250 shares issued and outstanding (excluding 0 and 5,050,384 shares subject to possible redemption) at March 31, 2024 and December 31, 2023, respectively | 1,229 | 503 |
Additional paid-in-capital | 97,162,370 | |
Accumulated Deficit | (101,222,844) | (11,513,379) |
TOTAL STOCKHOLDERS' DEFICIT | (4,059,245) | (11,512,876) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 76,372,975 | 55,477,860 |
Nonrelated Party | ||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||
Promissory notes | $ 2,576,714 | |
Related Party | ||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||
Promissory notes | $ 480,000 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
Subject to possible redemption shares | 0 | 5,050,384 | 20,125,000 |
Common stock subject to possible redemption value (in Dollars per share) | $ 10.81 | $ 10.11 | |
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Common Stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued | 12,277,759 | 5,031,250 | 5,031,250 |
Common stock, shares outstanding | 12,277,759 | 5,031,250 | 5,031,250 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
REVENUES | ||
Commissions | $ 929,514 | |
Vetting fees | 159,075 | |
Clearing fees | 131,843 | |
Net gain/(loss) on firm trading accounts | 3,656 | |
Other | 46,596 | |
TOTAL REVENUES | 1,270,684 | |
EXPENSES | ||
Compensation, payroll taxes and benefits | 1,031,779 | |
Data processing and clearing costs | 455,703 | |
Regulatory, professional fees and related expenses | 11,537,254 | $ 907,809 |
Stock compensation - founder share transfer | 1,462,650 | |
Communications | 82,590 | |
Occupancy and equipment | 21,559 | |
Transfer fees | 20,618 | |
Bank charges | 36,176 | |
Intangible assets amortization | 453,464 | |
Other | 38,798 | |
TOTAL EXPENSES | 15,140,591 | 907,809 |
LOSS FROM OPERATIONS | (13,869,907) | (907,809) |
OTHER INCOME/(EXPENSE) | ||
Interest income | 607,444 | 1,301,453 |
Loss on AtlasClear asset acquisition | (68,546,956) | |
Vendor settlements | 765,274 | 61,532 |
Change in fair value of warrant liability derivative | (307,656) | |
Change in fair value, convertible note derivative | (2,593,750) | |
Change in fair value, long-term and short-term note derivative | (8,106,998) | |
Change in fair value of non-redemption agreement | (164,626) | |
Change in fair value of earnout liability | (220,000) | |
Change in fair value of subscription agreement | 4,375,150 | |
Interest expense | (521,392) | |
TOTAL OTHER INCOME/(EXPENSE) | (74,713,510) | 1,362,985 |
NET INCOME/(LOSS) BEFORE INCOME TAXES | (88,583,417) | 455,176 |
Income tax (expense) benefit | 6,000 | (262,805) |
NET INCOME/(LOSS) | $ (88,577,417) | $ 192,371 |
Redeemable Common Stock | ||
OTHER INCOME/(EXPENSE) | ||
Basic weighted average shares outstanding (in shares) | 9,048,173 | 11,976,319 |
Diluted weighted average shares outstanding (in Shares) | 9,048,173 | 11,976,319 |
Basic net income (loss) per share (in Dollars per share) | $ (7.86) | $ 0.01 |
Diluted net income (loss) per share (in Dollars per share) | $ (7.86) | $ 0.01 |
Non-redeemable Common Stock | ||
OTHER INCOME/(EXPENSE) | ||
Basic weighted average shares outstanding (in shares) | 2,219,949 | 5,031,250 |
Diluted weighted average shares outstanding (in Shares) | 2,219,949 | 5,031,250 |
Basic net income (loss) per share (in Dollars per share) | $ (7.86) | $ 0.01 |
Diluted net income (loss) per share (in Dollars per share) | $ (7.86) | $ 0.01 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Common Stock ATLASCLEAR, INC | Common Stock Pacsquare | Common Stock | Additional Paid-in Capital ATLASCLEAR, INC | Additional Paid-in Capital Pacsquare | Additional Paid-in Capital | Accumulated Deficit | ATLASCLEAR, INC | Pacsquare | Total |
Balance at Dec. 31, 2021 | $ 503 | $ (13,885,707) | $ (13,885,204) | |||||||
Accretion of Common Stock subject to Possible Redemption | (2,170,202) | (2,170,202) | ||||||||
Net income (loss) | 11,045,567 | 11,045,567 | ||||||||
Balance at Dec. 31, 2022 | $ 503 | (5,010,342) | $ (5,009,839) | |||||||
Ending balance (in shares) at Dec. 31, 2022 | 5,031,250 | 5,031,250 | ||||||||
Balance at Dec. 31, 2022 | $ 503 | (5,010,342) | $ (5,009,839) | |||||||
Ending balance (in shares) at Dec. 31, 2022 | 5,031,250 | 5,031,250 | ||||||||
Balance at Dec. 31, 2022 | $ 503 | (5,010,342) | $ (5,009,839) | |||||||
Ending balance (in shares) at Dec. 31, 2022 | 5,031,250 | 5,031,250 | ||||||||
Accretion of Common Stock subject to Possible Redemption | (1,260,719) | $ (1,260,719) | ||||||||
Excise taxes related to redemptions | (1,485,236) | (1,485,236) | ||||||||
Net income (loss) | 192,371 | 192,371 | ||||||||
Balance at Mar. 31, 2023 | $ 503 | (7,563,926) | (7,563,423) | |||||||
Ending balance (in shares) at Mar. 31, 2023 | 5,031,250 | |||||||||
Balance at Dec. 31, 2022 | $ 503 | (5,010,342) | $ (5,009,839) | |||||||
Beginning balance (in shares) at Dec. 31, 2022 | 5,031,250 | 5,031,250 | ||||||||
Accretion of Common Stock subject to Possible Redemption | $ (120,000) | (3,888,446) | $ (4,008,446) | |||||||
Net income (loss) | 794,950 | 794,950 | ||||||||
Balance at Dec. 31, 2023 | $ 503 | (11,513,379) | $ (11,512,876) | |||||||
Ending balance (in shares) at Dec. 31, 2023 | 5,031,250 | 5,031,250 | ||||||||
Balance at Dec. 31, 2023 | $ 503 | (11,513,379) | $ (11,512,876) | |||||||
Ending balance (in shares) at Dec. 31, 2023 | 5,031,250 | 5,031,250 | ||||||||
Balance at Dec. 31, 2023 | $ 503 | (11,513,379) | $ (11,512,876) | |||||||
Ending balance (in shares) at Dec. 31, 2023 | 5,031,250 | 5,031,250 | ||||||||
Common stock no longer subject to redemption | $ 11 | 1,195,555 | $ 1,195,566 | |||||||
Common stock no longer subject to redemption (in shares) | 109,499 | |||||||||
Common stock issued to settled vendor obligations | $ 32 | 1,513,068 | 1,513,100 | |||||||
Common stock issued to settled vendor obligations (in shares) | 321,010 | |||||||||
Stock Compensation Expense - Founder Shares transferred at closing | 1,462,650 | 1,462,650 | ||||||||
Founder Shares transferred at closing to non-redemption agreement holders | 1,606,279 | 1,606,279 | ||||||||
Founder Shares transferred at closing as consideration for Wilson Davis Acquisition | 8,850,100 | 8,850,100 | ||||||||
Founder Shares and warrants transferred to Secured convertible note holders | 1,003,632 | 1,003,632 | ||||||||
Shares issued to settle related party advances and promissory notes | $ 200 | 4,577,369 | $ 4,577,569 | |||||||
Shares issued to settle related party advances and promissory notes (in shares) | 2,000,000 | |||||||||
Shares issued as purchase consideration for the assets | $ 445 | $ 34 | $ 44,399,555 | $ 1,115,966 | $ 44,400,000 | $ 1,116,000 | ||||
Shares issued as purchase consideration for the assets (in shares) | 4,440,000 | 336,000 | 4,440,000 | 4,400,000 | ||||||
Earnout shares granted as purchase consideration for the assets of AtlasClear, Inc. | $ 31,347,000 | $ 31,347,000 | ||||||||
Shares issued as deposit for the Commercial Bank acquisition | $ 4 | 91,196 | $ 91,200 | |||||||
Shares issued as deposit for the Commercial Bank acquisition (in shares) | 40,000 | |||||||||
Accretion of Common Stock subject to Possible Redemption | (592,577) | (592,577) | ||||||||
Excise taxes related to redemptions | (539,471) | (539,471) | ||||||||
Net income (loss) | (88,577,417) | (88,577,417) | ||||||||
Balance at Mar. 31, 2024 | $ 1,229 | $ 97,162,370 | $ (101,222,844) | $ (4,059,245) | ||||||
Ending balance (in shares) at Mar. 31, 2024 | 12,277,759 | 12,277,759 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash Flows from Operating Activities: | ||
Net income (loss) | $ (88,577,417) | $ 192,371 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Change in fair value of warrants | 307,656 | (61,532) |
Change in Fair Value, non-redemption agreement liability | 164,626 | |
Loss on Business Combination | 68,546,955 | |
Transaction costs incurred in connection with IPO | (765,274) | |
Change in Fair Value, Chardan Note Payable Conversion Liability | 2,593,750 | |
Change in Fair Value, Long-Term and Short-Term Investor Notes | 8,106,998 | |
Interest expense on convertible notes | 497,052 | |
Transaction costs paid with stock | 1,513,101 | |
Stockbased compensation | 1,462,650 | |
Change in Fair Value, Earnout Liability | 220,000 | |
Consulting expenses as stock payable | 1,244,965 | |
Change in operating lease expense | (529) | |
Interest expenses (earned) on marketable securities held in Trust Account | (251,569) | (1,301,453) |
Change in Fair Value, Subscription Agreement Convertible Asset | (4,375,150) | |
Depreciation expense | 3,046 | |
Amortization of intangibles | 453,464 | |
Change in allowance for Doubtful accounts | (277,416) | |
Changes in operating assets and liabilities: | ||
Marketable securities | 6,820 | |
Receivables from brokers & dealers | 46,773 | |
Receivables from customers | 112,251 | |
Receivables from others | (73,744) | |
Advances & prepaid expenses | (44,553) | 1,881 |
Cash deposits with clearing organization & other B/Ds | 21,664 | |
Other assets | (3,360) | |
Payables to customers | (3,262,502) | |
Payables to officers & directors | (37,524) | (38,986) |
Payable to brokers & dealers | 469,140 | |
Accounts payable and accrued expenses | (377,175) | 409,756 |
Commissions and payroll taxes payable | (13,983) | |
Stock Loan | (1,048,168) | |
CASH USED FOR OPERATING ACTIVITIES | (13,337,453) | (797,963) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Cash paid for purchase of Pacsquare | (300,000) | |
Cash received from acquisition of Wilson-Davis | 33,333,876 | |
Investment of cash into Trust Account | (160,000) | (350,000) |
Cash withdrawn from Trust Account to pay franchise and income taxes | 68,418 | 1,015,001 |
Cash withdrawn from Trust Account for working capital purposes | 1,195,565 | |
Cash withdrawn from Trust Account in connection with redemption | 53,947,064 | 148,523,642 |
Cash paid to Wilson Davis shareholders | (7,127,569) | |
CASH PROVIDED BY INVESTING ACTIVITIES | 80,957,354 | 149,188,643 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Advances from related party | 1,052,300 | 1,398,950 |
Proceeds from Secured Convertible Note | 6,000,000 | |
Transaction cost financed | 6,212,000 | |
Redemption of common stock | (53,947,064) | (148,523,642) |
CASH USED FOR FINANCING ACTIVITIES | (40,682,764) | (147,124,692) |
NET INCREASE (DECREASE) IN CASH | 26,937,137 | 1,265,988 |
CASH AT BEGINNING OF YEAR | 619,554 | 129,560 |
CASH AT YEAR END | 27,556,691 | 1,395,548 |
Non-cash investing and financing activities: | ||
Shares issued to settled advances from related party and notes payable related party | 4,577,569 | |
Transaction cost settled with subscription payable | 2,500,000 | |
Fair value of equity treated earnout in AtlasClear, Inc asset acquisition | 31,347,000 | |
Fair value of liability treated earnout in AtlasClear, Inc asset acquisition | 10,963,000 | |
Fair value of shares transferred to Wilson Davis shareholders | 8,850,100 | |
Short term notes issued to Wilson Davis shareholder | 5,000,000 | |
Long term notes issued to Wilson Davis shareholders | 7,971,197 | |
Common stock issued to settled vendor obligations | 1,513,100 | |
Fair value of shares transferred to Secured convertible note holders | 1,003,632 | |
Redeemable shares transferred to permanent equity | 1,195,555 | |
Non-redemption agreement re-classed to permanent equity | 1,606,279 | |
Accretion of common stock subject to possible redemption | 592,577 | 1,260,719 |
Excise tax related to redemptions | 539,471 | $ 1,485,236 |
Shares issued as deposit for Commercial bank acquisition | 91,200 | |
ATLASCLEAR, INC | ||
Non-cash investing and financing activities: | ||
Fair value of equity treated earnout in AtlasClear, Inc asset acquisition | 31,347,000 | |
Fair value of shaes issued | 44,000,000 | |
Fair value of liability treated earnout in AtlasClear, Inc asset acquisition | 10,963,000 | |
Pacsquare | ||
Non-cash investing and financing activities: | ||
Shares issued to purchase Pacsquare | $ 1,116,000 |
DESCRIPTION OF ORGANIZATION A_3
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 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 a direct, wholly-owned subsidiary of Quantum FinTech Acquisition Corporation (“Quantum”) formed solely for the purpose of effectuating a business combination. 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 previously announced transactions pursuant to that certain Business Combination Agreement, dated November 16, 2022 (as amended, the “Business Combination Agreement”), by and among the Company, Quantum, Calculator Merger Sub 1, Inc., a Delaware corporation and a wholly-owned subsidiary of the registrant (“Merger Sub 1”), Calculator Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of the registrant (“Merger Sub 2”), AtlasClear, Inc., a Wyoming corporation (“AtlasClear”), Atlas FinTech Holdings Corp., a Delaware corporation (“Atlas FinTech”) and Robert McBey. The transactions contemplated by 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, among other things, (i) Merger Sub 1 merged with and into Quantum, with Quantum continuing as the surviving corporation and a wholly-owned subsidiary of AtlasClear Holdings and (ii) Merger Sub 2 merged with and into AtlasClear, with AtlasClear continuing as the surviving corporation and a wholly-owned subsidiary of AtlasClear Holdings. Prior to the Closing, pursuant to the (i) Contribution Agreement (as defined in the Business Combination Agreement), AtlasClear received certain assets from Atlas FinTech and Atlas Financial Technologies Corp., a Delaware corporation, and (ii) Broker-Dealer Acquisition Agreement (as defined in the Business Combination Agreement), AtlasClear completed the acquisition of broker-dealer, Wilson-Davis & Co., Inc. (“Wilson-Davis”). In addition, at Closing, the Bank Acquisition Agreement (as defined in the Business Combination Agreement), pursuant to which AtlasClear has agreed to acquire Commercial Bancorp, a Wyoming corporation and parent of Farmers State Bank (“Commercial Bancorp”), continued to be in full force and effect. Pursuant to the transactions contemplated by a letter of intent, 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”). The Business Combination has been accounted for in accordance with the acquisition method of accounting, with Quantum considered to be the accounting acquirer of Wilson-Davis. Under the acquisition method of accounting, the preliminary purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair market values, with the excess purchase price, if any, allocated to goodwill. Costs related to the transaction were expensed as incurred. (See Note 8 – Acquisition of Wilson-Davis). AtlasClear Holdings’ goal is to build 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 expects to power innovation in fintech, investing, and trading. AtlasClear does not meet the definition of a business and therefore was treated as an asset acquisition by AtlasClear Holdings. As such the assets contributed from Atlas Fintech and the net assets of AtlasClear were recognized at historical cost. ASC 350 prohibits the recognition of goodwill in an asset purchase. (See Note 9 – Acquisition of Assets of AtlasClear, Inc.) Quantum was deemed the accounting acquirer based on the following factors: i) Quantum issued cash and shares of its common stock; ii) Quantum controlled the voting rights under the no redemption and the maximum contractual redemption scenarios; iii) Quantum had the largest minority voting interest; iv) Quantum has control over the board of directors of the post-combination company and most of senior management of the post-combination company are former officers of Quantum. 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. Revenue is derived principally 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. Going Concern As of March 31, 2024, the Consolidated Company had $7,194,912 in its operating bank accounts and working capital deficit of $14,591,130. The Company has raised and intends to raise additional capital through loans or additional investments from its stockholders, officers, directors, or third parties. The Company’s officers and directors may, but are not obligated to loan the Company funds, from time to time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Codification Subtopic 205-40, “Presentation of Financial Statements – Going Concern,” the liquidity of the Company raises substantial doubt about the Company’s ability to continue as a going concern through the twelve months following the issuance of the financial statements. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. No adjustments have been made to the carrying amounts of assets or liabilities as a result of this uncertainty. Inflation Reduction Act of 2022 On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. As such the Company has accrued for the estimated excise tax as a result of the redemptions that occurred after December 31, 2022. | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Calculator New Pubco, Inc. (the “Registrant”) is a Delaware corporation and a direct, wholly-owned subsidiary of Quantum formed solely for the purpose of effectuating the Business Combination. On February 9, 2024 (the “Closing Date”), the registrant consummated the previously announced transactions pursuant to that certain Business Combination Agreement, dated November 16, 2022 (as amended, the “Business Combination Agreement”), by and among the registrant, Quantum FinTech Acquisition Corporation (“Quantum”), Calculator Merger Sub 1, Inc., a Delaware corporation and a wholly-owned subsidiary of the registrant (“Merger Sub 1”), Calculator Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of the registrant (“Merger Sub 2”), AtlasClear, Inc., a Wyoming corporation (“AtlasClear”), Atlas FinTech Holdings Corp., a Delaware corporation (“Atlas FinTech”) and Robert McBey. The transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Business Combination.” In connection with the consummation of the Business Combination (the “Closing”), the registrant changed its name from “Calculator New Pubco, Inc.” to “AtlasClear Holdings, Inc.” (hereinafter referred to as “AtlasClear Holdings”). As of December 31, 2023 the registrant, was a wholly owned subsidiary of Quantum and had minimal activity since its inception, as such the financial statements represent the consolidated financial statement of Quantum as of and for the year ended December 31, 2023. Quantum was incorporated in Delaware on October 1, 2020. Quantum is 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 (the “Business Combination”). Quantum has three wholly owned subsidiaries. Calculator New Pubco, Inc, a Delaware corporation, and Calculator Merger Sub I, Inc., a Delaware corporation, were formed on October 13, 2022. Calculator Merger Sub II, LLC (“Merger Sub II”), a Delaware corporation was formed on October 17, 2022. Quantum and its subsidiaries are collectively referred to as “the Company”. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. On November 4, 2021, the Company entered into a Merger Agreement by and among the Company, TradeStation, and Merger Sub. The Merger Agreement, as amended, and other parties thereto, were described in previous filings. On August 2, 2022, the Company received a notice from TradeStation that purported to terminate the Merger Agreement pursuant to Section 12.01(c) thereof (the “Purported Termination Notice”). Section 12.01(c) provides that the Merger Agreement may be terminated by either party if the merger of the Company with Merger Sub has not occurred on or before August 1, 2022 (the “Termination Date”); provided that such termination right is not available to any party whose breach of any provision of the Merger Agreement has been the primary cause of, or primarily resulted in, the failure of the closing of the Business Combination to occur on or before such date. On August 2, 2022, the Company sent a letter to TradeStation stating that TradeStation is not permitted to terminate the Merger Agreement pursuant to Section 12.01(c) because TradeStation’s breaches of, and failure to perform under, the Merger Agreement are the primary cause of the failure of the closing of the Business Combination to occur on or before the Termination Date. On November 15, 2022, the Company sent a notice to TradeStation terminating the Merger Agreement pursuant to Section 12.01(b) thereof. On November 16, 2022, the Company entered into a Business Combination Agreement by and among the Company, Calculator New Pubco, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“New Pubco”), Calculator Merger Sub 1, Inc., a Delaware corporation and a wholly-owned subsidiary of New Pubco (“Merger Sub 1”), Calculator Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of New Pubco (“Merger Sub 2”), AtlasClear, Inc., a Wyoming corporation (“AtlasClear”), Atlas FinTech Holdings Corp., a Delaware corporation (“Atlas FinTech”) and Robert McBey (see Note 6). As of December 31, 2023, the Company had not commenced any operations. All activity through December 31, 2023 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, and identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income and expenses in the form of investment income from the proceeds derived from the Initial Public Offering and change in fair value of derivative liabilities. The registration statements for the Company’s Initial Public Offering were declared effective on February 4, 2021. On February 9, 2021, the Company consummated the Initial Public Offering of 17,500,000 units (the “Units” and, with respect to the shares of Common Stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $175,000,000, which is described in Note 3. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 5,562,500 warrants (each, a “Private Warrant” and, collectively, the “Private Warrants”) at a price of $1.00 per Private Warrant in a private placement to Quantum Ventures LLC (“Quantum Ventures”), who purchased 4,450,000 Private Warrants and Chardan Quantum LLC (“Chardan Quantum” and together with Quantum Ventures, the “Co-Sponsors”) who purchased 1,112,500 Private Warrants, generating gross proceeds of $5,562,500, which is described in Note 4. Following the closing of the Initial Public Offering on February 9, 2021, an amount of $175,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Warrants was placed in a trust account (the “Trust Account”), invested in U.S. government treasury bills, notes or bonds having a maturity of 185 days or less and/or (ii) in money market funds meeting certain conditions under Rule 2a-7 of the Investment Company Act of 1940, as amended (the “Investment Company Act”), as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below. On February 12, 2021, the underwriters fully exercised their over-allotment option, resulting in an additional 2,625,000 Units issued for an aggregate amount of $26,250,000. In connection with the underwriters’ full exercise of their over-allotment option, the Company also consummated the sale of an additional 590,625 Private Warrants at $1.00 per Private Warrant, generating total proceeds of $590,625. A total of $26,250,000 was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $201,250,000. Transaction costs amounted to $5,017,526, consisting of $4,528,125 of underwriting fees, and $489,401 of other offering costs. Offering costs amounting to $5,008,178 were charged to stockholders’ equity upon the completion of the Initial Public Offering, and $9,348 of the offering costs were related to the warrant liability and charged to the operating and formation costs in the consolidated statement of operations for the year ended December 31, 2021. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Warrants, although substantially all of the net proceeds are intended to be applied generally toward completing a Business Combination. The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (as defined below) (excluding the taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an initial Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to complete a Business Combination successfully. On February 6, 2023, as approved by the Company’s stockholders at the special meeting in lieu of annual meeting of stockholders held (the “Special Meeting”), the Company entered into an amendment to the Investment Management Trust Agreement on February 6, 2023 (the “Trust Amendment”) and filed an amendment to our amended and restated certificate of incorporation with the Delaware Secretary of State on February 6, 2023 (the “Charter Amendment”). Pursuant to the Trust Amendment, the amendment extended the initial date on which the Company must commence liquidation of the Trust Account to up to August 9, 2023, or such earlier date as determined by the Company’s board of directors (the “Board”), unless the closing of the Company’s initial business combination shall have occurred, provided that Quantum Ventures (or its affiliates or permitted designees) will deposit into a trust account established for the benefit of the Company’s public stockholders (the “Trust Account”) an amount determined by multiplying $0.055 by the number of public shares then outstanding, up to a maximum of $175,000 for each such one-month extension unless the closing of the Company’s initial business combination shall have occurred, in exchange for a non-interest bearing, unsecured promissory note payable upon consummation of a business combination. In connection with the Special Meeting, the holders of 14,667,626 shares of Common Stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.13 per share, for an aggregate redemption amount of approximately $148.5 million. On August 2, 2023, the Company completed the transfer of the listing of the public shares from the New York Stock Exchange to the NYSE American LLC (“NYSE American”). Also effective August 2, 2023, the Company’s units were mandatorily separated into shares of Common Stock and warrants underlying the units, and the units no longer trade on the New York Stock Exchange. The Common Stock included in the units trades on the NYSE, and the warrants included in the units continued to trade on the over-the-counter market. This was a mandatory and automatic separation, and no action was required by the holders of the units. On August 4, 2023 at a special meeting, the stockholders approved a proposal to amend the Company’s amended and restated certificate of incorporation, to extend the date by which the Company has to consummate a business combination for an additional six months, from August 9, 2023 to up to February 9, 2024, by electing to extend the date to consummate an initial business combination on a monthly basis for up to six times by an additional one month each time, provided that Quantum Ventures (or its affiliates or permitted designees) will deposit into the Trust Account an amount determined by multiplying $0.04 by the number of public shares then outstanding, up to a maximum of $160,000 for each such one-month extension unless the closing of the Company’s initial business combination shall have occurred, in exchange for a non-interest bearing, unsecured promissory note payable upon consummation of a business combination. In connection with the special meeting on August 4, 2023, the holders of 406,990 shares of Common Stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.53 per share, for an aggregate redemption amount of approximately $4.3 million. On November 3, 2023, the Company held a special meeting of stockholders (the “November Meeting”), which was called to approve the proposals relating to the entry into and consummation of the Business Combination Agreement. An aggregate of 8,500,897 shares of Quantum’s Common Stock that were entitled to vote as of the record date of September 18, 2023, were represented in person or by proxy at the November Meeting. In connection with the November Meeting, stockholders holding 4,940,885 shares of Quantum’s Common Stock (the “Public Shares”) exercised (and did not subsequently reverse) their right to redeem their shares for a pro rata portion of the funds in Quantum’s trust account (the “Trust Account”). The trustee of the Trust Account is calculating the final amount of the funds to be removed from the Trust Account in connection with such redemptions, but the current preliminary calculations are that approximately $53.0 million (approximately $10.73 per Public Share) will be removed from the Trust Account to pay such holders. The Company had until up to February 9, 2024 to complete a Business Combination (the “Combination Period”). On February 9, 2024, the Company completed its business combination with AtlasClear Inc. (see Note 6 and 10.) The Business Combination will be accounted for in accordance with the acquisition method of accounting, with Quantum considered to be the accounting acquirer of Wilson-Davis. Under the acquisition method of accounting, the preliminary purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair market values, with the excess purchase price, if any, allocated to goodwill. Costs related to the transaction are expensed as incurred. AtlasClear does not meet the definition of a business and will therefore be treated as an asset acquisition by Quantum, which will include the assets contributed from Atlas Fintech. AtlasClear’s assets and liabilities will be measured and recognized at their relative fair values, as estimated in good faith by management, and allocated to the net assets acquired as of the transaction date, and combined with the assets, liabilities, and results of operations of Quantum on consummation of the Business Combination. The reported consolidated financial condition and results of operations of the combined company after completion of the Business Combination will reflect these fair values. Quantum was deemed the accounting acquirer based on the following factors: i) Quantum will be issuing cash and shares of its common stock; ii) Quantum will control the voting rights under the no redemption and the maximum contractual redemption scenarios; iii) Quantum will have the largest minority voting interest; iv) Quantum will have control over the Board; and most of senior management of the post-combination company will be former Quantum officers. Going Concern As of December 31, 2023, the Company had $619,554 in its operating bank accounts ($619,554 of which is required to be used to pay taxes, as described below), $54,799,478 in marketable securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem stock in connection therewith and a working capital deficit of $11,386,299. In October 2021, Quantum Ventures committed to provide the Company an aggregate of $2,000,000 in loans in connection with the Working Capital Loans as described in Note 5. The Company may raise additional capital through loans or additional investments from Quantum Ventures or its stockholders, officers, directors, or third parties. The Company’s officers and directors and Quantum Ventures may, but are not obligated to (except as described above), loan the Company funds, from time to time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. The Company has drawn $480,000 on the promissory note, evidencing the Working Capital Loans, as of December 31, 2023 (see Note 5). In February 2022, Quantum Ventures committed to provide the Company an additional $1,000,000 for a total of $3,000,000 in loans in connection with the Working Capital Loans as described in Note 5. Through the date of this filing, the Co-Sponsors have advanced an aggregate total of $3,116,097 to the Company. In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Codification Subtopic 205-40, “Presentation of Financial Statements – Going Concern,” the liquidity of the Company raises substantial doubt about the Company’s ability to continue as a going concern through the twelve months following the issuance of the financial statements. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. No adjustments have been made to the carrying amounts of assets or liabilities as a result of this uncertainty. Inflation Reduction Act of 2022 On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination. |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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 for the period ended December 31, 2023, as filed with the SEC on April 16, 2024. The accompanying condensed balance sheet as of December 31, 2023 has been derived from the audited financial statements included in this Form 10-K. The interim results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 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. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s condensed consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The more significant accounting estimates included in these condensed consolidated financial statements is the determination of the fair value of the private warrant liabilities, the fair value of the Subscription Agreement, the fair value of the conversion liabilities, fair value of the customer list, licenses acquired on February 9, 2024. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all operating accounts that hold money market funds held and short-term investments with an original maturity of three months or less when purchased to be cash equivalents. Trading Securities Securities held in the Company’s trading account and trading securities, consist primarily of over-the-counter securities and are valued based upon quoted market prices. The value of securities that are not readily marketable are estimated by management based upon quoted prices, the number of market makers, trading volume and number of shares held. Unrealized gains and losses are reflected in income in the financial statements. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation on property and equipment is provided using accelerated and straight-line methods over expected useful lives of three Leases In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right-of-use asset and a corresponding lease liability on the statement of financial condition for all leases with terms longer than 12 months. Pursuant to this standard, the Company has recorded an operating lease right-of use (“ROU”) asset and operating lease liability in the accompanying balance sheet as of March 31, 2024. The Company leases office space under the terms of several operating leases. The determination of whether an arrangement is a lease is made at the lease’s inception. Under ASC 842, a contract is (or contains) a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control is defined under the standard as having both the right to obtain substantially all of the economic benefits from use of the asset and the right to direct the use of the asset. Management only reassesses its determination if the terms and conditions of the contract are changed. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses the implicit rate when it is readily determinable. Since the Company’s leases do not provide implicit rates, to determine the present value of lease payments, management uses the Company’s estimated incremental borrowing rate based on the information available at lease commencement. Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants that do not meet all the criteria for equity classification are recognized as a non-cash gain or loss on the condensed consolidated statements of operations. The fair value of the private warrants was estimated using a Black-Scholes model approach (see Note 9). Income Taxes The Company utilizes the asset and liability method to account for income taxes. The objective of this method is to establish deferred tax assets and liabilities for the temporary differences between net income for financial reporting basis and the tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized. Income tax expense or benefit is provided based upon the financial statement earnings of the Company. The allowance for doubtful accounts is deductible for financial statement purposes, but not for tax purposes. Depreciation expense is recognized in different periods for tax and financial accounting purposes due to the use of accelerated depreciation methods for income tax purposes. The tax effects of such differences are reported as deferred income taxes in the financial statements. Revenue Recognition Wilson-Davis, a subsidiary of the Company, recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, using the modified retrospective method. This revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model to: (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when the entity satisfies a performance obligation. Wilson-Davis acts as an agent by selling securities to customers and collecting commissions. Wilson-Davis recognizes commissions on a trade date basis, which is the day the transaction is executed. Wilson-Davis believes that the performance obligation is satisfied on the trade date because that is when the security is selected, the price is determined, the trade is executed, and the risks and rewards of ownership have been transferred to/from the customer. Wilson-Davis also receives commissions on mutual funds purchased by customers. Wilson-Davis believes that the performance obligation is not satisfied until the mutual funds are purchased by customers and recognizes the commission at that time. Wilson-Davis performs vetting services to customers that wish to convert restricted stock to eligible trading stock. In addition, Wilson-Davis charges clearing fees to another broker-dealer for which it clears trades. Wilson-Davis recognizes revenue as the related performance obligations are satisfied. 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. (Loss) Income is allocated between redeemable and non-redeemable shares based on relative amounts of weighted average shares outstanding. Accretion associated with the redeemable shares of common stock is excluded from (loss) income per share as the redemption value approximates fair value. The calculation of diluted net (loss) income per share does not consider the effect of the convertible derivative liability nor the warrants issued and outstanding. The calculation excludes the dilutive impact of these instruments because the issuance of the securities underlying the exercise of the warrants are contingent upon the occurrence of future events and inclusion would be antidilutive. As a result, diluted net (loss) income per share of common stock is the same as basic net (loss) income per common stock for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per share of common stock (in dollars, except share amounts): Three Months Ended March 31, 2024 March 31, 2023 Non- Non- Redeemable redeemable Redeemable redeemable Basic and diluted net income per common stock Numerator: Allocation of net income, as adjusted $ (71,126,651) $ (17,450,766) $ 135,463 $ 56,908 Denominator: Basic and diluted weighted average common stock outstanding 9,048,173 2,219,949 11,976,319 5,031,250 Basic and diluted net income per common stock $ (7.86) $ (7.86) $ 0.01 $ 0.01 Below is a summary of the dilutive instruments as of March 31, 2024 and 2023, these were excluded as including them would be anti dilutive as of March 31, 2024 and were excluded in March 31, 2023 as the exercise was contingent: Description March 31, 2024 March 31, 2023 Short Term Notes 5,390,752 — Secured convertible note 18,000,000 — Subscription agreement 833,333 — Promissory note 704,404 — Total Shares issuable under Convertible Note obligations 24,928,489 — Public Warrants 10,062,500 10,062,500 Private Warrants 5,553,125 6,153,125 Secured convertible note warrants 600,000 — Total dilutive 41,144,114 16,153,125 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 and management believes the Company is not exposed to significant risks on such accounts. 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 condensed balance sheets, primarily due to their short-term nature, except for warrant liabilities, convertible derivatives and the earnout out liability (see Note 14). 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. 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. | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. 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. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The more significant accounting estimates included in these consolidated financial statements is the determination of the fair value of the Private Warrant liabilities, and fair value of the sale of the Founder Shares. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all operating accounts that hold money market funds held and short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had cash equivalents of $619,554 and $0, respectively, as of December 31, 2023 and 2022. Marketable Securities Held in Trust Account At December 31, 2023 and 2022, substantially all of the assets held in the Trust Account were held in mutual funds which are invested primarily in U.S. Treasury securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in income earned on marketable securities held in Trust Account in the accompanying consolidated statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information. Offering Costs Offering costs consisted of legal, and other expenses incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to Private Warrant liabilities were expensed as incurred in the statements of operations. Offering costs associated with the Common Stock issued were initially charged to temporary equity and then accreted to Common Stock subject to redemption upon the completion of the Initial Public Offering. Offering costs amounting to $5,008,178 were charged to stockholders’ equity upon the completion of the Initial Public Offering, and $9,348 of the offering costs were related to the warrant liability and charged to the operating and formation costs in the consolidated statement of operations for the year ended December 31, 2021. Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own Common Stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants that do not meet all the criteria for equity classification are recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the Private Warrants was estimated using a Binomial lattice model approach (see Note 9). Common Stock Subject to Possible Redemption The Company accounts for its Common Stock subject to possible redemption in accordance with the guidance in ASC 480. Common Stock subject to mandatory redemption are classified as a liability instrument and is measured at fair value. Conditionally redeemable Common Stock (including Common Stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, Common Stock is classified as stockholders’ equity. The Company’s Common Stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, all Common Stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable Common Stock to equal the redemption value at the end of each reporting period. The accretion of redeemable Common Stock during the year ended December 31, 2023 was an increase of $4,008,446, which represents cumulative earnings and withdrawals on the Trust Account through December 31, 2023, net of reimbursable income and franchise tax obligations as of December 31, 2023. The dissolution expense of $100,000 is not included in the redemption value of the Common Stock subject to redemption since it is only taken into account in the event of the Company’s liquidation. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Common Stock resulted in charges against additional paid-in capital, to the extent available, and accumulated deficit. At December 31, 2023 and 2022, the Common Stock reflected in the balance sheets is reconciled in the following table: Common Stock subject to possible redemption, December 31, 2021 $ 201,250,000 Plus: Accretion of carrying value to redemption value 2,170,202 Common Stock subject to possible redemption, December 31, 2022 203,420,202 Less: Redemption (152,810,179) Plus: Accretion of carrying value to redemption value 4,008,446 Common Stock subject to possible redemption, December 31, 2023 $ 54,618,469 Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the consolidated financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2023 and 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. Net Income per Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income per share of Common Stock is computed by dividing net income by the weighted average number of shares of Common Stock outstanding for the period. Income is allocated between redeemable and non-redeemable shares based on relative amounts of weighted average shares outstanding. Accretion associated with the redeemable shares of Common Stock is excluded from income per share as the redemption value approximates fair value. The calculation of diluted net income per share does not consider the effect of the PIPE derivative liability nor the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement. The calculation excludes the dilutive impact of these instruments because the issuance of the securities underlying the exercise of the warrants are contingent upon the occurrence of future events. The warrants are exercisable to purchase 16,215,625 shares of Common Stock in the aggregate. As of December 31, 2023 and 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into Common Stocks and then share in the earnings of the Company. As a result, diluted net income per share of Common Stock is the same as basic net income per Common Stock for the periods presented. The following table reflects the calculation of basic and diluted net income per share of Common Stock (in dollars, except share amounts): For the Year Ended December 31, 2023 2022 Non- Non- Redeemable redeemable Redeemable redeemable Basic and diluted net income per share of Common Stock Numerator: Allocation of net income $ 460,174 $ 335,609 $ 8,836,454 $ 2,209,113 Denominator: Basic and diluted weighted average shares outstanding 6,898,644 5,031,250 20,125,000 5,031,250 Basic and diluted net income per share of Common Stock $ 0.07 $ 0.07 $ 0.44 $ 0.44 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 and management believes the Company is not exposed to significant risks on such accounts. 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 (see Note 9). The non-redemption agreement liability was recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the non-redemption agreement liability were recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the non-redemption agreement liability is discussed in Note 9. 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. The PIPE derivative was terminated in congruence with the termination of the Merger Agreement with TradeStation. The PIPE derivative met the criteria for derivative liability classification. As such, the PIPE derivative liability was recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the derivative liability were recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the derivative liability is discussed in Note 9. Recent Accounting Standards In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have an impact on its financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. ASU 2023-09 will become effective for Annual periods beginning after December 15, 2024. The Company is still reviewing the impact of ASU 2023-09. 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 consolidated financial statements. |
CASH SEGREGATED IN ACCORDANCE_3
CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS | 3 Months Ended |
Mar. 31, 2024 | |
CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS | |
CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS | NOTE 3. CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS Wilson-Davis is required by Rule 15c3-3 of the SEC 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, 2024, was calculated to be $19,296,856. Wilson-Davis had $19,200,000 cash which was $96,856 less than the amount required. On April 1, 2024, Wilson-Davis deposited $600,000 to the reserve account in accordance with the rule, which resulted in an excess of $504,026. Wilson-Davis is required by Rule 15c3-3 of the SEC 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, 2024, was calculated to be $100,000. Wilson-Davis had $200,000 cash on deposit in the reserve account, which was $100,000 more than the amount required. |
NET CAPITAL REQUIREMENTS_2
NET CAPITAL REQUIREMENTS | 3 Months Ended |
Mar. 31, 2024 | |
NET CAPITAL REQUIREMENTS | |
NET CAPITAL REQUIREMENTS | 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, 2024, Wilson-Davis’s net capital was $10,449,178, which was $10,199,178 in excess of the minimum required. |
CASH AND RESTRICTED CASH_2
CASH AND RESTRICTED CASH | 3 Months Ended |
Mar. 31, 2024 | |
CASH AND RESTRICTED CASH | |
CASH AND RESTRICTED CASH | 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: For the Three Months Ended March 31, 2024 Cash and cash equivalents $ 7,194,912 Cash segregated - customers 20,161,017 Cash segregated - PAB 200,762 Total cash and restricted cash shown in the statement of cash flows. $ 27,556,691 |
RELATED PARTY TRANSACTIONS_2
RELATED PARTY TRANSACTIONS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
RELATED PARTY TRANSACTIONS | ||
RELATED PARTY TRANSACTIONS | NOTE 6. RELATED PARTY TRANSACTIONS Founder Shares On October 23, 2020, Quantum Ventures LLC (“Quantum Ventures”), an affiliate of the Company, purchased 4,312,500 shares (the “Founder Shares”) of the Company’s common stock for an aggregate price of $25,000. In January 2021, Quantum Ventures sold 813,500 Founder Shares to Chardan Quantum LLC (“Chardan Quantum” and together with Quantum Ventures, the “Co-Sponsors”) and 35,000 Founder Shares to each of the Company’s directors and director nominees, for a total of 245,000 Founder Shares, in each case at the original price per share, resulting in Quantum Ventures holding a balance of 3,254,000 Founder Shares. On February 4, 2021, the Company effected a stock dividend of 718,750 shares with respect to its common stock, resulting in the initial stockholders holding an aggregate of 5,031,250 Founder Shares. The Founder Shares included an aggregate of up to 656,250 shares that were subject to forfeiture. As a result of the underwriters’ election to fully exercise their over-allotment option on February 12, 2021, no Founder Shares are currently subject to forfeiture. As of December 31, 2023 there were 5,031,250 Founder Shares issued and outstanding At the time of the Initial Public Offering, the initial stockholders placed the Founder Shares into an escrow account maintained by Continental Stock Transfer & Trust Company until (1) with respect to 50% of the Founder Shares, the earlier of six months six months The sale of the Founders Shares to the Company’s directors and director nominees is in the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The fair value of the 245,000 shares granted to the Company’s directors and director nominees was $1,462,650 or $5.97 per share. The Founders Shares were granted subject to a performance condition (i.e., the occurrence of a Business Combination). Compensation expense related to the Founders Shares is recognized only when the performance condition is probable of occurrence under the applicable accounting literature in this circumstance. As of December 31, 2023, the Company determined that a Business Combination is not considered probable, and, therefore, no stock-based compensation expense had been recognized. Stock-based compensation would be recognized at the date a Business Combination is considered probable (i.e., upon consummation of a Business Combination) in an amount equal to the number of Founders Shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the Founders Shares. Since the transaction closed on February 9, 2024 the transaction was recognized as of February 9, 2024. Related Party Loans In order to finance transaction costs in connection with a Business Combination, Quantum Ventures or an affiliate of Quantum Ventures, or certain of the Company’s officers and directors may have, but were not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans were to be evidenced by promissory notes. The notes were to be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may have been converted upon completion of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Warrants. In October 2021, Quantum Ventures committed to provide the Company an aggregate of $2,000,000 in loans in connection with the Working Capital Loans. In February 2022, Quantum Ventures committed to provide the Company an additional $1,000,000 for a total of $3,000,000 in loans in connection with the Working Capital Loans. On March 14, 2022, the Company issued an unsecured promissory note, effective as of January 3, 2022, in the amount of up to $480,000 to Quantum Ventures to evidence the Working Capital Loans. The note bore no interest and was payable in full upon the earlier (i) February 9, 2023 and (ii) the effective date of the consummation of an initial business combination. The note was required to be repaid in cash at the Closing and was not convertible into Private Warrants. As of December 31, 2023, a principal balance of $480,000 had been advanced. The promissory note was past due as of December 31, 2023 and on February 9, 2024, upon the Closing of the Business Combination, the unsecured promissory note was settled with the issuance of 2,000,000 shares (see Note 7.) Advances from Related Parties As of March 31, 2024 and December 31, 2023, the Co-Sponsors had advanced $0 and $3,104,097, respectively, to the Company. Through February 9, 2024, the Co-Sponsors advanced an additional $1,052,300 for an aggregate of $4,156,397 advanced to the Company and offset the balance by $58,828 in receivable from Co-Sponsor. On February 9, 2024, upon the Closing of the Business Combination, the advances from related party, the related party loan of $480,000 as described above and the $58,828 receivable from related party was settled with the issuance of 2,000,000 shares settling a total of $4,636,397 in liabilities and $58,828 in receivables (see Note 7.) | NOTE 5. RELATED PARTY TRANSACTIONS Founder Shares On October 23, 2020, Quantum Ventures purchased 4,312,500 shares (the “Founder Shares”) of the Company’s Common Stock for an aggregate price of $25,000. In January 2021, Quantum Ventures sold 813,500 Founder Shares to Chardan Quantum and 35,000 Founder Shares to each of the Company’s directors and director nominees, in each case at the original price per share, resulting in Quantum Ventures holding a balance of 3,254,000 Founder Shares. On February 4, 2021, the Company effected a stock dividend of 718,750 shares with respect to its Common Stock, resulting in the initial stockholders holding an aggregate of 5,031,250 Founder Shares. The Founder Shares included an aggregate of up to 656,250 shares that were subject to forfeiture. As a result of the underwriters’ election to fully exercise their over-allotment option on February 12, 2021, no Founder Shares are currently subject to forfeiture. At the time of the Initial Public Offering, the initial stockholders placed the Founder Shares into an escrow account maintained by Continental Stock Transfer & Trust Company until (1) with respect to 50% of the Founder Shares, the earlier of six months six months The sale of the Founders Shares to the Company’s directors and director nominees is in the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The fair value of the 245,000 shares granted to the Company’s directors and director nominees was $1,462,650 or $5.97 per share. The Founders Shares were granted subject to a performance condition (i.e., the occurrence of a Business Combination). Compensation expense related to the Founders Shares is recognized only when the performance condition is probable of occurrence under the applicable accounting literature in this circumstance. As of December 31, 2023, the Company determined that a Business Combination is not considered probable, and, therefore, no stock-based compensation expense has been recognized. Stock-based compensation would be recognized at the date a Business Combination is considered probable (i.e., upon consummation of a Business Combination) in an amount equal to the number of Founders Shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the Founders Shares. Since the transaction closed on February 9, 2024 the transaction will be recognized in the first quarter. Administrative Services Agreement The Company agreed, commencing on February 4, 2021, to pay Quantum Ventures a total of $10,000 per month for office space, utilities and secretarial support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. For the year ended December 31, 2022, the Company incurred $120,000, in fees for these services. As of December 31, 2023 and 2022, included in accounts payable and accrued expenses in the accompanying balance sheets is $0 and $120,000, respectively, for these services. On May 9, 2023, Quantum Ventures notified the Company that the administrative support fee of $10,000 will no longer be charged and cancelled all outstanding fees due amounting to $120,000. The cancelled fee was accounted for as contributed capital in additional paid-in-capital. Promissory Note – Related Party On October 1, 2020, the Company issued an unsecured promissory note to Quantum Ventures (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $200,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) January 31, 2021 and (ii) the completion of the Initial Public Offering. At December 31, 2023 and 2022, there was no balance under this Promissory Note. The outstanding amount of $154,057 was repaid at the closing of the Initial Public Offering on February 9, 2021. Related Party Loans In order to finance transaction costs in connection with a Business Combination, Quantum Ventures or an affiliate of Quantum Ventures, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon completion of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Warrants. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. In October 2021, Quantum Ventures committed to provide the Company an aggregate of $2,000,000 in loans in connection with the Working Capital Loans. In February 2022, Quantum Ventures committed to provide the Company an additional $1,000,000 for a total of $3,000,000 in loans in connection with the Working Capital Loans. On March 14, 2022, the Company issued an unsecured promissory note, effective as of January 3, 2022, in the amount of up to $480,000 to Quantum Ventures to evidence the Working Capital Loans. The note bears no interest and is payable in full upon the earlier (i) February 9, 2023 and (ii) the effective date of the consummation of our initial business combination. The note is required to be repaid in cash at the Closing and is not convertible into Private Warrants. As of December 31, 2023, a principal balance of $480,000 has been advanced. The promissory note is past due as of December 31, 2023 and on February 9, 2024, during the Closing of the Business Combination, the unsecured promissory note was settled (see Note 10.) Advances from Related Parties As of December 31, 2023 and 2022, the Co-Sponsors have advanced $3,104,097 and $319,166, respectively, to the Company. Through the date of this filing, the Co-Sponsors have advanced an additional $795,000 for an aggregate of $3,116,097 advanced to the Company. |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | ||
COMMITMENTS AND CONTINGENCIES | NOTE 7. COMMITMENTS AND CONTINGENCIES Registration Rights Pursuant to a registration rights agreement entered into on February 4, 2021, the holders of the Founder Shares, as well as the holders of the Private Warrants (and underlying securities) and any warrants issued in payment of Working Capital Loans made to the Company (and underlying securities) will have registration and stockholder rights pursuant to an agreement to be signed prior to or on the effective date of the Initial Public Offering. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Warrants (and underlying securities) can elect to exercise these registration rights at any time after the consummation of a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. The registration and stockholder rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. On May 14, 2024, the Company filed a registration statement on Form S-1 to register the resale of up to 37,885,852 shares of Common Stock by the selling stockholders named in the registration statement. The Company will not receive any of the proceeds from these sales. Business Combination Marketing Agreement The Company engaged the underwriters as advisors in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’s attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with the potential Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the underwriters the marketing fee for such services upon the consummation of our initial business combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of the Initial Public offering or $7,043,750. In connection with the Closing, the Company and Chardan Capital Markets LLC (“Chardan”) agreed that the fee, in the amount of $7,043,750, payable by the Company to Chardan upon the Closing pursuant to the terms of the business combination marketing agreement entered into in connection with Quantum’s initial public offering, would be waived in exchange for the issuance by the Company to Chardan of a convertible promissory note in the aggregate principal amount of $4,150,000. Such note (the “Chardan Note”) was issued by the Company at the Closing. The Chardan Note has a stated maturity date of February 9, 2028. Interest accrues at a rate per annum equal to 13%, and is payable quarterly on the first day of each calendar quarter. On each interest payment date, the accrued and unpaid interest shall, at the election of the Company, be either paid in cash or, subject to the satisfaction of certain conditions, in shares of Common Stock, at a rate equal to 85% of the VWAP for the trading day immediately prior to the applicable interest payment date. The Chardan Note is convertible, in whole or in part, into shares of Common Stock at the election of the holder at any time at a conversion price equal to 90% of the VWAP of the Common Stock for the trading day immediately preceding the applicable conversion date. In addition, on each conversion date the Company is required to pay to Chardan in cash (or, at the Company’s option and subject to certain conditions, a combination of cash and Common Stock) all accrued interest on the Chardan Note and all interest that would otherwise accrue on the amount of the Note being converted if such converted amount would be held to three years Also on February 9, 2024, the Company entered into a registration rights agreement with Chardan (the “Chardan Registration Rights Agreement”), pursuant to which the Company agreed, among other things, to file with the U.S. Securities and Exchange Commission within 45 days after the Closing Date a registration statement registering the resale of the shares of Common Stock issuable upon exercise of the Chardan Note and to use its reasonable best efforts to have such registration statement declared effective as soon as possible after filing. If the registration statement is not filed within 45 days after the Closing or is not effective within a specified period after the Closing (or if effectiveness is subsequently suspended or terminated for at least 15 days, subject to certain exceptions), then the interest rate of the Chardan Note will increase by 2% for each week that such event continues. The Chardan Registration Rights Agreement also provides that the Company is obligated to file additional registration statements under certain circumstances, and provides Chardan with customary “piggyback” registration rights. Non-Redemption Agreement On August 1, 2023, the Company and Quantum Ventures entered into a non-redemption agreement (the “Non-Redemption Agreement”) with Funicular Funds, LP (the “Holder”) in exchange for the Holder agreeing either not to request redemption in connection with the Extension (as defined below) or to reverse any previously submitted redemption demand in connection with the Extension with respect to an aggregate of 2,351,800 shares of common stock at the special meeting of stockholders called by the Company to, among other things, approve an amendment to the Company’s amended and restated certificate of incorporation to extend the date by which the Company must consummate an initial business combination to up to February 9, 2024 or such earlier date as is determined by the board of directors of the Company to be in the best interests of the Company (the “Extension”). In consideration of the foregoing agreement, immediately prior to, and substantially concurrently with, the closing of an initial business combination, (i) Quantum Ventures (or its designees or transferees) will surrender and forfeit to the Company for no consideration an aggregate of 235,180 shares of common stock held by Quantum Ventures (the “Forfeited Shares”) and an aggregate of 235,180 warrants held by Quantum Ventures to purchase 235,180 shares of common stock (the “Forfeited Warrants”) and (ii) the Company shall issue to the Holder a number shares of common stock equal to the number of Forfeited Shares and a number of warrants to purchase shares of common stock equal to the number of Forfeited Warrants. As a result of the closing of the Business Combination, there is no further obligation regarding the Non-Redemption Agreement, as such the liability was trued up as of February 9, 2024 and transferred to permanent equity as the shares have been transferred. Expense Settlements In connection with the Closing, AtlasClear Holdings agreed to settle certain accrued expenses and other obligations to certain parties through the issuance of shares of Common Stock. Pursuant to such arrangements, on February 9, 2024, AtlasClear Holdings issued an aggregate of 2,201,010 shares of Common Stock in settlement of obligations in the aggregate amount of $5,448,933, including the issuance of 2,000,000 shares of Common Stock to Qvent, LLC, an affiliate of Quantum Ventures, in settlement of an aggregate of $4,577,569 advanced to Quantum through the Closing Date. Additionally, on the Closing Date, AtlasClear Holdings issued notes to settle other expenses of Quantum in the aggregate principal amount of approximately $3.3 million, some of which are convertible into shares of Common Stock. Additional Settlements ● Grant Thornton LLP – 46,010 shares of Common Stock that were issued to Grant Thornton LLP (“Grant Thornton”), pursuant to a Satisfaction and Discharge Agreement, dated as of February 9, 2024, between Grant Thornton and the Company (the “Grant Thornton Agreement”), in lieu of payment for services in the amount of $460,100 , at a price per share of $10.00 . ● IB Capital LLC – 155,000 shares of Common Stock that were issued to IB Capital LLC (“IB”), pursuant to a Satisfaction and Discharge Agreement, dated as of February 9, 2024, between IB and the Company (the “IB Agreement”), in lieu of payment for services in the amount of $355,000, at a price per share of $2.29. ● Outside The Box Capital Inc. – 20,000 shares of Common Stock that were issued to Outside The Box Capital Inc. (“OTB”), pursuant to a Marketing Services Agreement, dated as of September 13, 2023, between OTB and Quantum (the “OTB Agreement”), as payment in shares for services rendered to Quantum valued at $10 per share for total consideration paid of $200,000. ● Carriage House Capital, Inc. – up to 350,000 shares of Common Stock that were issued, or may become issuable, to Carriage House Capital, Inc. (“Carriage”), pursuant to the Consulting Agreement, dated as of February 19, 2024, between Carriage and the Company (the “Carriage Agreement”), as partial consideration for consulting services rendered to the Company, at the price per share of $4.98 on the day of issuance. The total consideration due under the Consulting Agreement is 350,000 shares of Common Stock, 100,007 shares of which were due upon signing of the contract and 27,777 shares of which are due in months four through twelve from the date of signing. As of March 31, 2024, 100,000 shares were issued, and were valued at $4.98 per share as agreed upon consideration. The Stock payable for the remaining 250,000 shares was valued at $1,244,965 and recorded as a stock payable. ● Interest Solutions, LLC – up to 298,017 shares of Common Stock that may become 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 $1.00. Accrued interest on the Interest Solutions Note is 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 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. As of March 31, 2024, the amount is included in Promissory note payable. ● JonesTrading Institutional Services LLC – up to 375,000 shares of Common Stock that may become 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 $1.00. Accrued interest on the JonesTrading Note is 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 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. As of March 31, 2024, the amount is included in Promissory note payable. ● Winston & Strawn LLP – up to 833,333 shares of Common Stock that may become 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”) at a price per share of $1.00. Pursuant to the Winston Agreement, the Company may 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 March 31, 2024, the amount is included in Subscription agreement as an asset of $1,875,150. Due to the nature of the settlement terms, the subreption agreement was deemed to be a derivative asset to the Company as of March 31, 2024. 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 14. ● 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 is February 8, 2026 and the note accrues interest at a rate of 13% per annum. The principal and interest payments due under the note is not payable in shares of Common Stock. As of March 31, 2024, the amount is included in Promissory note payable. ● Lead Nectar – up to 12,000 shares of Common Stock that may become issuable to Lead Nectar in lieu of payment for internet marketing services in the amount of $20,000. Excise Taxes Payable On February 6, 2023, the Company’s stockholders redeemed 14,667,626 shares of common stock for a total of $148,523,642. On August 4, 2023, the Company’s stockholders redeemed 406,990 shares of common stock for a total of $4,286,537. On February 9, 2024, the Company’s stockholders redeemed 4,940,885 shares of common stock for a total of $53,947,064. The Company evaluated the classification and accounting of the excise tax related to these stock redemptions under ASC 450, “Contingencies”. ASC 450 states that when a loss contingency exists the likelihood that the future event(s) will confirm the loss or impairment of an asset, or the incurrence of a liability can range from probable to remote. A contingent liability must be reviewed at each reporting period to determine appropriate treatment. The Company evaluated the current status and probability of completing a Business Combination as of September 30, 2023 and determined that a contingent liability should be calculated and recorded. As of March 31, 2024 and December 31, 2023, the Company recorded $2,067,572 and $1,528,101, respectively, of excise tax liability calculated as 1% of shares redeemed. Convertible Note Financing On February 9, 2024, Wilson-Davis and Quantum entered into a securities purchase agreement (the “Purchase Agreement”) with Funicular Funds, LP, a Delaware limited partnership (“Funicular”), pursuant to which the Company sold and issued to Funicular, on that date, a secured convertible promissory note in the principal amount of $6,000,000 (the “Funicular Note”) for a purchase price of $6,000,000, in a private placement (the “Note Financing”). The proceeds raised in the Note Financing were used to pay a portion of the purchase price paid at Closing to the Wilson-Davis Sellers. The Funicular Note has a stated maturity date of November 9, 2025. Interest accrues at a rate per annum equal to 12.5%, 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 Funicular Note. In the event of an Event of Default (as defined in the Funicular Note), in addition to Funicular’s other rights and remedies, the interest rate would increase to 20% per annum. The Funicular Note is convertible, in whole or in part, into shares of Common Stock at the election of the holder at any time at an initial conversion price of $10.00 per share (the “Conversion Price”). The Conversion Price is subject to adjustment monthly to a price equal to the trailing five-day VWAP, subject to a floor of $2.00 per share (provided that if the Company sells stock at an effective price below $2.00 per share, such floor would be reduced to such effective price), and is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like. The Company has the right to redeem the Funicular Note upon 30 days’ notice after the earlier of August 7, 2024 and the effectiveness of the Registration Statement (as defined in the Funicular Note), and Funicular would have the right to require the Company to redeem the Note in connection with a Change of Control (as defined in the Note), in each case for a price equal to 101% of the outstanding principal amount of the Note plus accrued and unpaid interest. The Funicular 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 Funicular 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) a security agreement, dated as of February 9, 2024 (the “Security Agreement”), entered into among the Company, each of the Company’s subsidiaries and Funicular, and (ii) a 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 Funicular Note and the other Loan Documents (as defined in the Funicular Note). Pursuant to the Purchase Agreement, the Company agreed, among other things, that if the Funicular 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 Funicular Note in excess of that amount, in accordance with the rules of the NYSE American. Also pursuant to the Purchase Agreement, at the Closing the Sponsor transferred 600,000 Founder Shares and 600,000 private placement warrants to Funicular, which transfers terminated Quantum’s obligation to issue shares to Funicular pursuant to the terms of the non-redemption agreement, dated August 1, 2023, between Quantum and Funicular. The purchase price was allocated on a relative fair value basis resulting in the allocated value of the warrants transferred at $24,982 and the value of the shares transferred at $978,650 for a total value of $1,003,632 recorded as additional paid in capital. In connection with the Note Financing, on February 9, 2024, the Company entered into a registration rights agreement with Funicular (the “Funicular Registration Rights Agreement”), pursuant to which the Company agreed, among other things, to file with the U.S. Securities and Exchange Commission within 15 days after the Closing Date a registration statement registering the resale of the shares of Common Stock issuable upon exercise of the Funicular Note (the “Funicular Registration Statement”), and the Company agreed to use its best efforts to have the Funicular Registration Statement declared effective as promptly as reasonably possible after the filing thereof, but in any event within 60 days of the Closing Date. If the registration statement is not filed within 30 days after the Closing or is not declared effective by the applicable deadline set forth in the Registration Rights Agreement, or under certain other circumstances described in the Registration Rights Agreement, then the Company shall be obligated to pay to the Buyer an amount in cash equal to 5% of the original principal amount of the Note on a monthly basis until the applicable event giving rise to such payments is cured. The Funicular Registration Rights Agreement also provides that the Company is obligated to file additional registration statements under certain circumstances, and provides Funicular with customary “piggyback” registration rights. Subscription Agreement and Satisfaction and Discharge Agreement On February 9, 2024, the Registrant entered into a Subscription Agreement (the “Subscription Agreement”) and Satisfaction and Discharge Agreement (“Discharge Agreement”) with Winston & Strawn LLP (“Winston”), Calculator New Pubco, Inc. and Quantum. The Registrant accepted the offer of Winston to subscribe for an aggregate of $2.5 million worth of shares of its common stock in lieu of fees accrued prior to the Business Combination. In accordance with the Discharge Agreement, Winston, the service provider, has irrevocably waived their rights to receive the professional fees for the Prior Services in cash and has agreed to the Company tendering the full amount of the Fees in cash at Closing, Winston accept common stock of the Post-Closing Company as satisfaction of the Fees. As a result of the Discharge Agreement, Winston has legally released the Company from being the primary obligor under the liability. As a result, the Company has concluded that such liabilities are no longer an obligation of the Company and therefore qualify for extinguishment. The Subscription Agreement is considered a variable-share obligation under ASC Topic 480 (“Distinguishing Liabilities from Equity”). The Subscription 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 Consolidated Balance Sheets. The Company will record a change in fair value on each reporting period until settlement in its Consolidated Statement of Operations. See foot note 14 for additional disclosures. 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 the Financial Industry Regulatory Authority, Inc. (“FINRA”), Office of Hearing Officers, issued its decision ordering 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 $1.265 million. Wilson-Davis made a timely appeal to the SEC to hear the case. Pursuant to FINRA rules, Wilson-Davis’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, Wilson-Davis believes that the final amount is not reasonably estimable. Wilson-Davis has booked a contingent liability totaling $100,000, which represents the estimated low end of the possible range of fines. On December 28, 2023, the SEC issued an Opinion sustaining FINRA’s findings of violations against Wilson-Davis. The Opinion set aside the fines FINRA imposed on Wilson-Davis for the Reg SHO violations and the supervisory and AML violations. The SEC remanded the case to FINRA to reconsider the appropriate sanctions. On October 16, 2023, Wilson-Davis entered into a Fifth Addendum to Lease for the Salt Lake City office. The lease is for three years. On December 21, 2023, Wilson-Davis entered into a Second Amendment to Office Lease for the Denver office. The lease is for one year. | NOTE 6. COMMITMENTS AND CONTINGENCIES Registration Rights Pursuant to a registration rights agreement entered into on February 4, 2021, the holders of the Founder Shares, as well as the holders of the Private Warrants (and underlying securities) and any warrants issued in payment of Working Capital Loans made to the Company (and underlying securities) will have registration and stockholder rights pursuant to an agreement to be signed prior to or on the effective date of the Initial Public Offering. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of Common Stock are to be released from escrow. The holders of a majority of the Private Warrants (and underlying securities) can elect to exercise these registration rights at any time after the consummation of a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. The registration and stockholder rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement The Company granted the underwriters a 45-day option to purchase up to 2,625,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. On February 12, 2021, the underwriter’s elected to fully exercise the over-allotment option to purchase an additional 2,625,000 Public Units at a price of $10.00 per Public Unit. Business Combination Marketing Agreement The Company engaged the underwriters as advisors in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’s attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with the potential Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the underwriters the marketing fee for such services upon the consummation of our initial business combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of the Initial Public offering or $7,043,750. On February 9, 2024, upon the closing of the Business Combination, the $7,043,750 fee was waived in exchange for the issuance by the Company to the Underwriters a convertible promissory note in the aggregate principal amount of $4,150,000. Such note (the “Chardan Note”) was issued by the Company at the Closing. Business Combination Agreement Throughout the notes to the condensed consolidated financial statements, unless otherwise noted or otherwise suggested by context, the “Company” refers to Quantum FinTech Acquisition Corporation prior to the consummation of the Business Combination, and to AtlasClear Holdings, Inc. after the consummation of the Business Combination. On November 16, 2022, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) by and among the Company, Calculator New Pubco, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“New Pubco”), Calculator Merger Sub 1, Inc., a Delaware corporation and a wholly-owned subsidiary of New Pubco (“Merger Sub 1”), Calculator Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of New Pubco (“Merger Sub 2”), AtlasClear, Inc., a Wyoming corporation (“AtlasClear”), Atlas FinTech Holdings Corp., a Delaware corporation (“Atlas FinTech”) and Robert McBey. The Business Combination Agreement was unanimously approved by the Company’s Board based upon the unanimous recommendation of a special committee of independent directors. If the Business Combination Agreement is approved by the Company’s stockholders, and the transactions contemplated by the Business Combination Agreement are consummated, (i) Merger Sub 1 will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly-owned subsidiary of New Pubco and (ii) Merger Sub 2 will merge with and into AtlasClear, with AtlasClear continuing as the surviving corporation and a wholly-owned subsidiary of New Pubco (collectively, the “Business Combination”). Prior to the closing of the Business Combination (the “Closing”), AtlasClear will receive certain assets from Atlas FinTech and Atlas Financial Technologies Corp., will complete the acquisition of broker-dealer Wilson-Davis & Co., Inc. (“WDCO”) and will seek to consummate a transaction with Pacsquare Technologies, LLC (“Pacsquare”). In addition, at Closing, the definitive agreement pursuant to which AtlasClear has agreed to acquire Commercial Bancorp, a Wyoming corporation (“CB”) shall continue to be in full force and effect (the “CB Merger Agreement”). The Company expects the Closing to occur before the closing of the transactions contemplated by the CB Merger Agreement (the “CB Closing”). At the Closing, AtlasClear stockholders will receive merger consideration in shares of New Pubco Common Stock equal to the quotient of (i) $75.4 million, less the purchase prices for WDCO and CB, divided by (ii) $10. In addition, the AtlasClear stockholders will receive up to 5,944,444 shares of New Pubco Common Stock (the “Earn Out Shares”). The Earn Out Shares will be issued to AtlasClear stockholders upon certain milestones (based on the achievement of certain price targets of New Pubco Common Stock following the Closing). In the event such milestones are not met within the first 18 months following the Closing, the Earn Out Shares will be forfeited. Atlas FinTech will also receive up to $20 million of New Pubco 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 the five years following Closing, with no catch-up between the years. In connection with the Closing, each share of the Company’s Common Stock (“Company Common Stock”) (other than shares held by Atlas FinTech) that is outstanding and has not been redeemed will be converted into one share of New Pubco Common Stock. Each outstanding warrant to purchase Company Common Stock (“Company Warrant”) (other than Private Warrants, described below) will become a warrant to purchase one-half of a share of New Pubco Common Stock. Each outstanding warrant to purchase Company Common Stock initially issued in a private placement in connection with the Company’s initial public offering (“Private Warrant”) will become a warrant to purchase one share of New Pubco Common Stock. Atlas FinTech, which directly or indirectly holds shares of Company Common Stock and Private Warrants, has agreed to transfer, or cause to transfer, up to 1,279,427 of Company Common Stock and up to 1,657,579 of the Private Warrants held indirectly by it to potential sources of debt, equity or financing if the Company pursues financing between signing and the Closing. Any of such Company Common Stock or Private Warrants remaining following any transfers for potential financing will be forfeited for no consideration. On April 28, 2023, the Company and AtlasClear entered into Amendment No. 1 to the Business Combination Agreement (the “Amendment”). The Amendment amends the Business Combination Agreement to provide that the consummation of the transactions contemplated by the letter of intent pursuant to which AtlasClear expects to acquire certain technology assets of Pacsquare Technologies, LLC, will no longer be required to be completed prior to the closing of the Business Combination. On August 8, 2023, the Company and AtlasClear entered into Amendment No. 2 to the Business Combination Agreement (the “Second Amendment”). The Second Amendment amends the Business Combination Agreement to extend the Outside Date to November 6, 2023. On October 12, 2023, the Company announced the effectiveness of the registration statement on Form S-4 for the Business Combination Agreement. On October 19, 2023, the Company and AtlasClear entered into a Business Combination Agreement Waiver (the “Business Combination Agreement Waiver”) to waive the Minimum Cash Condition closing condition (as defined in the Business Combination Agreement) set forth in Section 8.1(j) of the Business Combination Agreement. On November 6, 2023, the Company and AtlasClear entered into Amendment No. 3 to the Business Combination Agreement (the “Amendment”). The Amendment amends the Business Combination Agreement to extend the date after which either Quantum or AtlasClear may terminate the Business Combination Agreement from November 6, 2023 to November 22, 2023. On February 9, 2024, the Company completed its business combination with AtlasClear (see Note 10.) Non-Redemption Agreement On August 1, 2023, the Company and Quantum Ventures entered into a non-redemption agreement (the “Non-Redemption Agreement”) with Funicular Funds, LP (the “Holder”) in exchange for the Holder agreeing either not to request redemption in connection with the Extension (as defined below) or to reverse any previously submitted redemption demand in connection with the Extension with respect to an aggregate of 2,351,800 shares of Common Stock at the special meeting of stockholders called by the Company to, among other things, approve an amendment to the Company’s amended and restated certificate of incorporation to extend the date by which the Company must consummate an initial business combination to up to February 9, 2024 or such earlier date as is determined by the board of directors of the Company to be in the best interests of the Company (the “Extension”). In consideration of the foregoing agreement, immediately prior to, and substantially concurrently with, the closing of an initial business combination, (i) Quantum Ventures (or its designees or transferees) will surrender and forfeit to the Company for no consideration an aggregate of 235,180 shares of Common Stock held by Quantum Ventures (the “Forfeited Shares”) and an aggregate of 235,180 warrants held by Quantum Ventures to purchase 235,180 shares of Common Stock (the “Forfeited Warrants”) and (ii) the Company shall issue to the Holder a number shares of Common Stock equal to the number of Forfeited Shares and a number of warrants to purchase shares of Common Stock equal to the number of Forfeited Warrants. The non-redemption agreement liability was recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the non-redemption agreement liability were recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the non-redemption agreement liability is discussed in Note 10. As of February 9, 2024, there are no further obligations under the Non-Redemption Agreement and the agreement is terminated. Excise Taxes Payable On February 6, 2023, the Company’s stockholders redeemed 14,667,626 shares of Common Stock for a total of $148,523,642. On August 4, 2023, the Company’s stockholders redeemed 406,990 shares of Common Stock for a total of $4,286,537. The Company evaluated the classification and accounting of the excise tax related to these stock redemptions under ASC 450, “Contingencies”. ASC 450 states that when a loss contingency exists the likelihood that the future event(s) will confirm the loss or impairment of an asset, or the incurrence of a liability can range from probable to remote. A contingent liability must be reviewed at each reporting period to determine appropriate treatment. The Company evaluated the current status and probability of completing a Business Combination as of December 31, 2023 and determined that a contingent liability should be calculated and recorded. As of December 31, 2023, the Company recorded $1,528,101 of excise tax liability calculated as 1% of shares redeemed. |
ACQUISITION OF WILSON-DAVIS
ACQUISITION OF WILSON-DAVIS | 3 Months Ended |
Mar. 31, 2024 | |
ACQUISITION OF WILSON-DAVIS | |
ACQUISITION OF WILSON-DAVIS | NOTE 8. ACQUISITION OF WILSON-DAVIS Prior to the Closing, AtlasClear and the Company entered into two amendments to the Broker-Dealer Acquisition Agreement with Wilson-Davis and the then-owners of Wilson-Davis (the “Wilson-Davis Sellers”), Amendment No. 8 dated January 9, 2024 (“Amendment No. 8”) and Amendment No. 9 dated February 7, 2024 (“Amendment No. 9” and, together with Amendment No. 8, the “Amendments”). Among other things, the Amendments reduced the total purchase price payable under the Broker- Dealer Acquisition Agreement by $5 million and reduced the cash payable at the Wilson-Davis Closing as part of the purchase price to $8 million, with the balance of the purchase price paid in the form of convertible promissory notes issued by AtlasClear to the Wilson-Davis Sellers, as follows: (i) $5,000,000 in aggregate principal amount of notes due 90 days after the Closing Date (the “Short-Term Notes”) and (ii) $7,971,000 in aggregate principal amount of notes due 24 months after the Closing Date (the “Long-Term Notes” and, together with the Short-Term Notes, the “Seller Notes”). The Short-Term Notes accrue interest at a rate of 9% per annum, payable quarterly in arrears, in shares of Common Stock at a rate equal to 90% of the trailing seven-trading day VWAP prior to payment (or, at the Company’s option, cash), and are convertible at the option of the holder at any time during the continuance of an event of default, at a rate equal to 90% of the trailing seven-trading day VWAP prior to conversion. The Long-Term Notes accrue interest at a rate of 13% per annum, payable quarterly in arrears, in shares of Common Stock at a rate equal to 90% of the trailing seven-trading day VWAP prior to payment (or, at the Company’s option, in cash), and are convertible at the option of the holder at any time commencing six months after the Closing Date, at a rate equal to 90% of the trailing seven-trading day VWAP prior to conversion (or 85% if an event of default occurs and is continuing). Pursuant to the terms of the Amendments, at the closing of the transactions contemplated by the Broker-Dealer Acquisition Agreement (the “Wilson-Davis Closing”) the Company entered into a parent guaranty and registration rights agreement with the Wilson-Davis Sellers (the “Wilson-Davis Guaranty and RRA”), pursuant to which the Company guaranteed the obligations of AtlasClear under the Notes. The Company also agreed (i) to file, within 30 days of the Closing Date, a registration statement with the SEC, registering the resale of the shares of Common Stock issuable upon conversion of the Notes and (ii) if necessary to allow any of the Notes to be converted into shares of Common Stock in accordance with the rules of the NYSE, to seek stockholder approval for the issuance of such shares, including by filing a proxy statement by no later than April 30, 2024. The Sponsor also entered into Amendment No. 9, for the limited purpose of agreeing to transfer certain Founder Shares owned by the Sponsor to the Wilson-Davis Sellers. The Sponsor agreed to transfer to the Wilson-Davis Sellers, at the Wilson-Davis Closing, Founder Shares having an aggregate value of $6 million, based on the VWAP of Quantum Common Stock for the five trading days immediately prior to the Wilson-Davis Closing, which resulted in the transfer of an aggregate of 885,010 Founder Shares at the Closing valued at $10 per share based on the estimated value of the business combination agreement resulting in a value of $8,850,100 recorded in additional paid in capital. From time to time prior to the six month anniversary of the Closing, the Sponsor may be required to transfer additional Founder Shares to the Wilson-Davis Sellers, as set forth in Amendment No. 9, provided that in no event will the Sponsor be required to transfer more than an aggregate of 2,500,000 Founder Shares (including the Founder Shares transferred at the Closing). As a result of the closing of the business combination the Company allocated the purchase price with the acquisition of Wilson-Davis under the acquisition method of accounting. The final allocation of the purchase consideration for the Mergers will be determined after the completion of a thorough analysis to determine the fair value of all assets acquired and liabilities assumed, but in no event later than one year following the completion of the Mergers. Accordingly, the final acquisition accounting adjustments could differ. The preliminary allocation of the purchase price is as follows: Cash paid to Wilson-Davis shareholders $ 7,127,569 Short-term notes 5,000,000 Long-term notes 7,971,197 Fair value of shares transferred from sponsor 8,850,100 Total consideration paid 28,948,866 Allocated to: Cash $ 11,333,271 Cash segregated 22,000,605 Receivables 4,065,148 Trading Securities, market value 6,875 Prepaid Income Tax 201,125 Accounts payable, accrued expenses and other current liabilities (28,045,034) Current portion of lease liability (161,212) Property and equipment 23,645 Cash deposit BDs and Clearing Organizations 3,536,664 Operating Lease Right-to-Use Lease Assets 395,063 Other Assets 385,058 Stock loan (1,431,068) Long-term Lease liability (239,629) Subordinated Borrowing (1,950,000) Trading Account deposit (100,000) Net assets acquired 10,020,511 Excess of purchase price over net liabilities assumed before allocation to identifiable intangible assets and goodwill $ 18,928,355 The fair value of property and equipment was determined using the indirect cost approach which utilizes fixed asset record information including historical costs, acquisition dates, and asset descriptions and applying asset category specific nationally recognized indices to the historical cost of each asset to derive replacement cost new less depreciation. Management has also made the initial determination that all other assets and liabilities to be acquired are primarily estimated to be stated at their fair values, which approximates their recorded cost. While a final determination of the value of the identifiable intangibles has not been completed, management has made an initial determination that approximately $18.93 million of the excess of the purchase price over the net assets acquired should be allocated to identifiable intangible assets. Estimated Useful Life Amount (Years) Licenses(a) $ 4,553,944 Indefinite Customer Lists(b) 14,374,411 15 Intangible Assets $ 18,928,355 — (a) The value of the licenses was based on replacement costs for an operating enterprise which are estimated to be $4.55 million over 16 months. The replication cost was then allocated a 12% estimated. The development period was estimated as 1.25 years. The rate of return was based on an annual rate of return of 27.9%. (b) The Wilson Davis customer relationships were valued using the Multi-Period Excess Earnings Method (“MPEEM”). The MPEEM reflects the present value of the operating cash flows generated by existing customer relationships after taking into account the cost to realize the revenue and an appropriate discount rate to reflect the time value and risk associated with the cash flows. |
ACQUISITION OF THE ASSETS OF AT
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC | 3 Months Ended |
Mar. 31, 2024 | |
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC | |
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC | NOTE 9. ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC 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 4,440,000 shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”). In addition, the AtlasClear Stockholders will 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). In the event such milestones are not met within the first 18 months following the Closing, the 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 Closing, with no catch-up between the years. To reflect the purchase of Developed Technology identified under the Assignment and Assumption Agreement and Bill of Sale (the “Contribution Agreement”) between AtlasClear, Atlas FinTech and Atlas Financial Technologies Corp., pursuant to which Atlas FinTech and Atlas Financial Technologies Corp. contributed to AtlasClear all rights, title and interest in certain intellectual property, among other things. There are no historical revenues for the Developed Technology and AtlasClear’s management determined the fair value based on their experience and expectations from running similar models in previous companies. The value was derived based on the purchase price allocation as follows: (the table below is expressed in thousands) Total Purchase Price (a) $ 44,400,000 Fair value of Software Product Earn Out Shares (b) 10,963,000 Fair value of Earn Out Shares (c) 31,347,000 Purchase price allocated to Contribution Agreement $ 86,710,000 SURFACExchange $ 381,461 Bond Quantum 32,284 Atlas 7,749,299 Rubicon 10,000,000 Total Developed Technology acquired (d) $ 18,163,044 Transaction cost (e) $ 68,546,956 (a) The closing consideration of $44.40 million is to be delivered in common stock. As such 4,400,000 were delivered based on $10 per share presumed value of common stock. (b) Atlas FinTech will receive up to $20.00 million 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 the five years following Closing, with no catch-up between the years. The value was determined based on projected revenue based on a discount factor. 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 will be accounted for as a liability and included in the purchase price consideration. The revenue earnout was estimated 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. The Monte Carlo simulation was performed simultaneously on both the share price and revenue to account for the correlation between revenue and equity. (c) Atlas FinTech will receive up to 5,944,444 shares of Common Stock (the “Earn Out Shares”). The Earn Out Shares will be issued to AtlasClear Stockholders upon certain milestones (based on the achievement of certain price targets of Common Stock following the Closing). In the event such milestones are not met within the first 18 months following the Closing, the Earn Out Shares will be cancelled. The Earn Out provision was analyzed under ASC 480 and ASC 815. The earnout provision was deemed to be indexed to the Company’s own stock and therefore equity classified. The share based earnout was estimated using a Monte Carlo simulation to determine if and when the stock price hurdles would be achieved. The expected stock price volatility was based upon guideline public companies. (d) Under SAB topic 5G transfers of nonmonetary assets for stock prior to an initial offering should be recorded at predecessor cost in accordance with GAAP. As such the value of the Developed Technology was based on the carrying value of Atlas FinTech of $18.16 million. The estimated useful life was determined to be eight years. There are no historical revenues for the Developed Technology and AtlasClear’s management determined the fair value based on their experience and expectations from running similar models in previous companies. (e) ASC 350 prohibits the recognition of goodwill in an asset purchase. As such the difference between the purchase price of $86.98 million was charged as transactions and recorded under accumulated deficit of $68.55 million. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2024 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 10. INTANGIBLE ASSETS Pacsquare Purchase Agreement Pursuant to the transactions contemplated by a letter of intent, on February 16, 2024, AtlasClear and Pacsquare entered into a Source Code Purchase Agreement and Master Services Agreement (the “Pacsquare Purchase Agreement”), pursuant to which AtlasClear acquired the AtlasClear Platform. Pursuant to the Pacsquare Purchase Agreement, Pacsquare will develop, implement and launch the AtlasClear Platform and provide maintenance and support services as described in the agreement. The Pacsquare Purchase Agreement provides that Pacsquare will develop and deliver to AtlasClear the Level 1 equities trading platform and that it will develop and deliver all modules of the clearing platform within 12 months of signing the Pacsquare Purchase Agreement. AtlasClear owns all the intellectual property relating to the AtlasClear Platform, including the software and source code. The Pacsquare Purchase Agreement also granted AtlasClear a right of first refusal to any products or services that relate to trading, settlement, clearance or any other business of AtlasClear that Pacsquare proposes to offer to other persons. The purchase price for the assets was $4.8 million as follows: (i) $1.9 million, consisting of (A) $100,000 payable in a cash upon delivery of the source code and execution of the Pacsquare Purchase Agreement; (B) $850,000 payable in shares of Common Stock at a price of $6.00 per share; and (C) $950,000 to be paid in four monthly installments of $237,500, payable in shares of Common Stock at the price per share on the day of issuance and (ii) $2.7 million to be paid ratably on a module-by-module basis upon delivery and acceptance of each of the AtlasClear Platform modules. AtlasClear has sole discretion to determine whether any of the foregoing payments will be made in cash or shares of Common Stock. As of March 31, 2024, the Company has issued 336,000 shares of Common Stock 136,000 valued at $6 per share as per agreed upon terms and 200,000 valued at $1.50 per share based on the fair value of common stock on March 12, 2024 date share were issued to Pacsquare pursuant to the terms of the Pacsquare Purchase Agreement and paid $300,000 in cash for total carrying value of $1,416,000. Intangible Assets of the company at March 31, 2024 are summarized as follows: March 31, 2024 Accumulated Impairment Cost Amortization of Asset Net Licenses $ 4,553,944 $ — $ — $ 4,553,944 Pacsquare assets – Proprietary Software 1,416,000 — — 1,416,000 Technology acquired 18,163,044 (317,231) — 17,845,813 Customer Lists 14,374,411 (136,233) — 14,238,178 Intangible Assets $ 38,507,399 $ (453,464) $ — $ 38,053,935 |
DEPOSIT ON ACQUISITION OF COMME
DEPOSIT ON ACQUISITION OF COMMERCIAL BANCORP | 3 Months Ended |
Mar. 31, 2024 | |
DEPOSIT ON ACQUISITION OF COMMERCIAL BANCORP | |
DEPOSIT ON ACQUISITION OF COMMERCIAL BANCORP | NOTE 11. DEPOSIT ON ACQUISITION OF COMMERCIAL BANCORP Amendment to Bank Acquisition Agreement On February 26, 2024, AtlasClear and Commercial Bancorp entered into an amendment (the “Amendment”) to the Amended and Restated Agreement and Plan of Merger, dated as of November 16, 2022, by and between AtlasClear and Commercial Bancorp (the “Bank Acquisition Agreement”), pursuant to which, among other things, Commercial Bancorp is expected to merge with and into a subsidiary of AtlasClear. Pursuant to the Amendment Commercial Bancorp received 40,000 shares of Common Stock in lieu of a nonrefundable escrow deposit valued at $2.28 based on the fair value of common stock on February 26, 2024 date of the amended agreement. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2024 | |
LEASES | |
LEASES | NOTE 12. LEASES In February 2020, Wilson-Davis entered into a 63-month lease for 2,539 square feet of office space in Addison, Texas. The lease commenced on April 1, 2020. The terms call for specific annual escalations in rents and two five-year renewal options at market rates. A right-of-use asset and lease liability for $172,562 was recorded, with monthly payments ranging from $3,120 to $3,544. The lease did not include an implicit rate of return, so Wilson-Davis used an incremental borrowing rate of 4.75%. On December 21, 2023, Wilson-Davis renewed a 12-month lease for 464 square feet of office space in Denver, Colorado. The lease commenced January 1, 2024. A right-of-use asset and lease liability for $12,903 was recorded, with monthly payments of $1,100. The lease did not include an implicit rate of return, so Wilson-Davis used an incremental borrowing rate of 5%. On October 16, 2023, Wilson-Davis renewed a three-year lease for 5,334 square feet of office space in Salt Lake City, Utah. The lease commenced February 1, 2024. The terms call for an annual 3% escalation in rents and one three-year renewal option at market prices. A right-of-use asset and lease liability for $333,010 was recorded with monthly payments ranging from $9,476 to $10,053. The lease did not include an implicit rate of return, so Wilson-Davis used an incremental borrowing rate of 5%. Other information related to the operating leases are as follows: March 31, 2024 Operating lease ROU Asset - February 9, 2024 $ 395,064 Increase — Decrease — Amortization (26,099) Operating lease ROU Asset - Ending Balance $ 368,965 Operating lease liability - February 9, 2024 $ 400,840 Increase — Decrease — Amortization (26,626) Operating lease liability - ending balance $ 374,214 Operating lease liability - Short Term $ 159,933 Operating lease liability - Long Term 214,281 Operating lease liability - Total $ 374,214 The following table presents the weighted-average remaining lease term and weighted-average discount rates related to the Company’s operating leases as of March 31, 2024: March 31, 2024 Weighted average remaining lease term 2.57 years Weighted average discount rate 4.96 % The future minimum payments required by the lease agreements in effect at March 31, 2024 are as follows: 2024 $ 126,769 2025 134,985 2026 113,721 2027 9,477 Total minimum lease payments 384,952 Less interest factor (10,738) Total operating lease liability 374,214 Less operating lease liability - current portion (159,933) Operating lease liability - long term portion $ 214,281 |
STOCKHOLDERS' DEFICIT_2
STOCKHOLDERS' DEFICIT | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
STOCKHOLDERS' DEFICIT | ||
STOCKHOLDERS' DEFICIT | NOTE 13. STOCKHOLDERS’ DEFICIT Preferred Stock — Common stock — March 31, 2024 December 31, 2023 In connection with the Closing, each share of Quantum’s common stock (“Quantum Common Stock” or “Public Shares”) that was outstanding and had not been redeemed was converted into one share of Common Stock. Each outstanding public warrant to purchase Quantum Common Stock became a warrant to purchase one In connection with the stockholder vote to approve the Business Combination Agreement and the Business Combination, holders of an aggregate of 4,940,885 shares of Quantum Common Stock properly exercised their right to have their shares redeemed for a full pro rata portion of the Trust Account holding the proceeds from the IPO, which was approximately $10.92 per share, or $53,947,064.28 in the aggregate. The remaining balance of the Trust Account immediately prior to the Closing of approximately $1.2 million was used to partially fund the Business Combination. As a result of such redemptions, a total of 109,499 Public Shares remained outstanding at the Closing. After giving effect to the Business Combination, the redemption of the Public Shares described above, the separation of the Quantum Units and the issuance of Merger Consideration Shares and the issuance of shares of Common Stock pursuant to Expense Settlements (described below), as of the Closing Date, there were 12,277,759 shares of Common Stock issued and outstanding In connection with the Closing, the Company instructed Continental Stock Transfer & Trust Company (“CST”), as escrow agent under the Stock Escrow Agreement, dated as of February 4, 2021 (the “Stock Escrow Agreement”), between the Company and CST, to release from escrow 4,000,000 of the Founder Shares that were held in escrow pursuant to the terms of the Stock Escrow Agreement (consisting of 949,084 shares owned by Chardan Quantum, LLC and 3,050,916 shares owned by the Sponsor; as contemplated by the previously-disclosed amendment to the Stock Escrow Agreement entered into on October 31, 2023.) The Common Stock commenced trading on the NYSE American LLC (“NYSE”) under the symbol “ATCH” on February 12, 2024. AtlasClear Holdings’ warrants commenced trading on the over-the-counter market (the “OTC”) under the symbol “ATCH WS” on February 12, 2024. | NOTE 7. STOCKHOLDERS’ DEFICIT Preferred Stock — Common Stock — issued outstanding |
WARRANTS_2
WARRANTS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
WARRANTS | ||
WARRANTS | NOTE 14. WARRANTS As of March 31, 2024 and December 31, 2023, there are 20,125,000 Public Warrants outstanding, each Public Warrant entitles the holder to purchase one the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within 120 days from the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. Once the warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per warrant; ● at any time after the warrants become exercisable; ● upon not less than 30 days ’ prior written notice of redemption; ● if, and only if, the reported last sale price of the shares of common stock equals or exceeds $16.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period ending on the third business day prior to the notice of redemption to warrant holders; and ● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants at the time of redemption and for the entire 30 - day trading period referred to above and continuing each day thereafter until the date of redemption. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. In addition, if (x) the Company issues additional common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the initial stockholders or their affiliates, without taking into account any Founder Shares or Private Warrants held by the initial stockholders or their affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and income thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.50 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and Newly Issued Price, and the $16.50 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 165% of the higher of the Market Value and the Newly Issued Price. As of March 31, 2024 and December 31, 2023, there are 6,153,125 Private Warrants to purchase an equal number of common shares that are outstanding that are classified and accounted for as derivative liabilities. Under this accounting treatment, the Company is required to measure the fair value of the Private Warrants at the end of each reporting period as well as re-evaluate the treatment of the Private Warrants and recognize changes in the fair value from the prior period in the Company’s operating results for the current period. The Private Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that (i) each private warrant is exercisable for one share of common stock at an exercise price of $11.50 per share, and (ii) the Private Warrants will be non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. On the Closing Date, the Company, AtlasClear Holdings and CST entered into that certain Assignment, Assumption and Amendment Agreement (the “New Warrant Agreement”). The New Warrant Agreement amends that certain Warrant Agreement, dated as of February 4, 2021, by and between the Company and CST (the “Existing Warrant Agreement”), to provide for the assignment by the Company of all its rights, title and interest in the warrants of the Company to AtlasClear Holdings. Pursuant to the New Warrant Agreement, all Company warrants under the Existing Warrant Agreement will no longer be exercisable for shares of Quantum Common Stock, but instead will be exercisable for shares of Common Stock. | NOTE 8. WARRANTS As of December 31, 2023 and 2022, there are 20,125,000 Public Warrants outstanding that are classified and accounted for as equity instruments. The Public Warrants will become exercisable on the later of (a) the completion of a Business Combination or (b) one year 120 days Once the warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per warrant; ● at any time after the warrants become exercisable; ● upon not less than 30 days ’ prior written notice of redemption; ● if, and only if, the reported last sale price of the shares of Common Stock equals or exceeds $16.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period ending on the third business day prior to the notice of redemption to warrant holders; and ● if, and only if, there is a current registration statement in effect with respect to the shares of Common Stock underlying the warrants at the time of redemption and for the entire 30 - day trading period referred to above and continuing each day thereafter until the date of redemption. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Common Stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuance of Common Stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. In addition, if (x) the Company issues additional Common Stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of Common Stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the initial stockholders or their affiliates, without taking into account any Founder Shares or Private Warrants held by the initial stockholders or their affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and income thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Common Stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.50 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and Newly Issued Price, and the $16.50 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 165% of the higher of the Market Value and the Newly Issued Price. As of December 31, 2023 and 2022, there are 6,153,125 Private Warrants to purchase an equal number of common shares that are outstanding that are classified and accounted for as derivative liabilities. Under this accounting treatment, the Company is required to measure the fair value of the Private Warrants at the end of each reporting period as well as re-evaluate the treatment of the Private Warrants and recognize changes in the fair value from the prior period in the Company’s operating results for the current period. The Private Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that (i) each Private Warrant is exercisable for one share of Common Stock at an exercise price of $11.50 per share, and (ii) the Private Warrants will be non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. |
FAIR VALUE MEASUREMENTS_2
FAIR VALUE MEASUREMENTS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
FAIR VALUE MEASUREMENTS | ||
FAIR VALUE MEASUREMENTS | NOTE 15. 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. 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, 2024 and December 31, 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: March 31, December 31, Description Level 2024 2023 Assets: Marketable securities held in Trust Account 1 $ — $ 54,799,478 Liabilities: Warrant liability – Private Warrants 3 $ 615,312 $ 307,656 Non-redemption agreement liability 3 $ — $ 1,441,653 Convertible notes derivative 3 $ 12,369,480 $ — Earnout liability 3 $ 11,183,000 $ — The Private Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the condensed 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 condensed consolidated statements of operations. The Private Placement 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 Placement 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: March 31, December 31, Input 2024 2023 Market price of public shares $ 1.60 $ 6.20 Risk-free rate 4.14 % 3.77 % Dividend yield 0.00 % 0.00 % Volatility 51.1 % 12.0 % Probability of a business combination 100 % 100 % Exercise price $ 11.50 $ 11.50 Effective expiration date 2/09/29 02/09/28 The non-redemption agreement liability was measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of non-redemption agreement liability in the condensed consolidated statements of operations. The non-redemption agreement liability is comprised of 235,180 shares of non-redeemable common stock and 235,180 Private Placement Warrants. The non-redeemable common stock was valued using a Monte Carlo model, which is considered to be a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the non-redeemable common stock is equity volatility, probability of acquisition, the discount for marketability and discount for expected forfeiture. As of February 9, 2024, the shares and warrants were transferred and valued based on the trading prices of the stock and warrants and reclassified as permanent equity at total value of $1,606,279. The key inputs into the Monte Carlo model for the non-redeemable common stock were as follows: December 31, Input 2023 Market price of public shares $ 6.20 Probability of acquisition 100.0 % Equity volatility 12.0 % Discount for lack of marketability 8.0 % Discount for expected forfeiture 5.11 % The Earnout liability was, initially and 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. 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: February 9, March 31, 2024 Input 2024 (initial measurement) Market price of public shares $ 1.60 $ 10.26 Revenue volatility 15.00 % 15.00 % Discount factor for revenue 96.9 % 99.5 % The Conversion derivative, associated with Short-term notes, Long-Term notes, and the Chardan Note was accounted for as a liability in accordance with ASC 815-40. The Conversion derivative liability was 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 condensed consolidated statements of operations. On February 9, 2004, the Company issued short-term notes to the former officers and directors of Wilson-Davis. The terms of the short-term notes are as follows: (i) $5,000,000 in aggregate principal amount of notes due 90 days after the closing date; (ii) the short term notes accrue interest at 9% per annum, payable quarterly in arrears, in shares of Common Stock at a rate equal to 90% of the trailing seven-trading day VWAP prior to payment (or, at the Company’s option, cash) and are convertible at the option of the holder at any time during the continuance of an event of default, at a rate equal to 90% of the trailing seven-trading day VWAP prior to conversion; (iii) the short-term notes have a conversion feature that qualifies for derivative treatment in accordance with ASC 815-40. On February 9, 2024, the Company valued the derivatives using a Black-Scholes model which is considered to be a Level 3 fair value measurement. The key inputs into the Black-Scholes model for the Conversion derivative were as follows: February 9, 2024 March 31, (initial Input 2024 measurement) Market price of public shares $ 1.60 $ 10.26 Risk-free rate 5.49 % 4.48 % Dividend yield 0.00 % 0.00 % Volatility 10,274.0 % 4,120.0 % Exercise price $ 1.60 $ 10.26 Effective expiration date 5/9/2024 5/9/2024 (iv) The conversion feature is deemed to include an embedded derivative that requires bifurcation and separate account. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability with the offset being a discount to the note. The discount will be amortized as interest expense over the term of the short-term note(s). The derivative liability will be revalued at each reporting period with the change being charged to the income statement. The original derivative liability – convertible notes valued at $487,329. On March 31, 2024, a Black-Scholes calculation was performed (see above chart) and the value of the fair value of the derivative liability – convertible notes increased $3,125,000 to $3,582,929. The original $487,929 discount will be amortized over the 90-day maturity. Through March 31, 2024, $276,153 had been amortized bringing the carrying amount of the short-term notes to $4,788,824. On February 9, 2004, the Company issued long-term notes to the former officers and directors of Wilson-Davis. The terms of the long-term notes are as follows: (i) $7,971,197 in aggregate principal amount of notes due two years after the closing date; (ii) the long term notes accrue interest at 13% per annum, payable quarterly in arrears, in shares of Common Stock at a rate equal to 90% of the trailing seven-trading day VWAP prior to payment (or, at the Company’s option, cash) and are convertible at the option of the holder at any time commencing six months after the closing date, at a rate equal to 90% of the trailing seven-trading VWAP prior to conversion (or 85% if an event of default occurs and is continuing); (iii) the long-term notes have a conversion feature that qualifies for derivative treatment in accordance with ASC 815-40. On February 9, 2024, the Company valued the derivatives using a Black-Scholes model which is considered to be a Level 3 fair value measurement. The key inputs into the Black-Scholes model for the Conversion derivative were as follows: February 9, 2024 March 31, (initial Input 2024 measurement) Market price of public shares $ 1.60 $ 10.26 Risk-free rate 4.59 % 4.48 % Dividend yield 0.00 % 0.00 % Volatility 10,274 % 41,200 % Exercise price $ 1.60 $ 10.26 Effective expiration date 2/9/2026 2/9/2026 The conversion feature is deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability with the offset being a discount to the notes. The discount will be amortized as interest expense over the term of the note. The derivative liability will be revalued at each reporting period with the change being charged to Derivative liability – convertible notes. The derivative liability was valued at $404,483 on February 9, 2024. On March 31, 2024, the fair value of the derivative liability was updated with the value increasing $2,593,750 to $2,998,233. Through March 31, 2024, $12,640 had been amortized bringing the carrying amount of the note to $3,775,017. In connection with the Closing, AtlasClear Holdings and Chardan agreed that the fee, in the amount of $7,043,750, payable by Quantum to Chardan upon the Closing pursuant to the terms of the business combination marketing agreement entered into in connection with Quantum’s IPO, would be waived in exchange for the issuance by AtlasClear Holdings to Chardan of a convertible promissory note in the aggregate principal amount of $4,150,000. The Chardan Note was issued by AtlasClear Holdings at the Closing. The Chardan Note has a stated maturity date of February 9, 2028. Interest accrues at a rate per annum equal to 13%, and is payable quarterly on the first day of each calendar quarter. On each interest payment date, the accrued and unpaid interest shall, at the election of AtlasClear Holdings, be either paid in cash or, subject to the satisfaction of certain conditions, in shares of Common Stock, at a rate equal to 85% of the VWAP for the trading day immediately prior to the applicable interest payment date. The Chardan Note is convertible, in whole or in part, into shares of Common Stock at the election of the holder at any time at a conversion price equal to 90% of the VWAP of the Common Stock for the trading day immediately preceding the applicable conversion date. The Chardan Note qualifies for derivative treatment in accordance with ASC 814-40. On February 9, 2024, the Company valued the derivatives using a Black-Scholes model which is considered to be a Level 3 fair value measurement. The key inputs into the Black-Scholes model for the conversion derivative are as follows: February 9, 2024 March 31, (initial Input 2024 measurement) Market price of public shares $ 1.60 $ 10.26 Risk-free rate 4.31 % 4.48 % Dividend yield 0.00 % 0.00 % Volatility 166,681.0 % 4,120.0 % Exercise price $ 1.43 $ 10.26 Effective expiration date 2/9/2028 2/9/2028 In addition, on each conversion date AtlasClear Holdings is required to pay to Chardan in cash (or, at AtlasClear Holding’s option and subject to certain conditions, a combination of cash and Common Stock) all accrued interest on the Chardan Note and all interest that would otherwise accrue on the amount of the Note being converted if such converted amount would be held to three On February 9, 2004, the Company issued a long-term note to Interest Solutions in the amount of $275,000. The Company also issued a long-term note to JonesTrading Institutional Services for $375,000. Both of the notes accrue interest On February 9, 2004, the Company issued a long-term note to Funicular Funds in the amount of $6,000,000. The note accrues interest at 12.5% per annum. The outstanding principal, together with any then unpaid and accrued interest and other amounts payable, shall be due and payable at the earlier of (i) when requested by the note holder on or after February 9, 2025, or (ii) when, upon the occurrence and during the continuance of an event of default. The conversion feature in the note does not qualify for derivative treatment. On February 9, 2024, the Registrant entered into a Subscription Agreement and Discharge Agreement with Winston & Strawn LLP (“Winston”) Calculator New Pubco, Inc. and Quantum, as described in Note 1. The Company has concluded that such liabilities are no longer an obligation of the Company and therefore qualify for extinguishment. The Subscription Agreement is considered a variable-share obligation under ASC Topic 480 (“Distinguishing Liabilities from Equity”). The Subscription 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 Consolidated Balance Sheets. The Company will record a change in fair value in each reporting period until settlement in its Consolidated Statement of Operations. The following table presents the changes in the fair value of the Conversion derivative liability and the warrant liability: Private Non-Redemption Placement Agreement Warrants Liability Fair value as of December 31, 2023 $ 307,656 $ 1,441,653 Change in valuation inputs or other assumptions 307,656 164,626 Transferred to equity — (1,606,279) Fair value as of March 31, 2024 $ 615,312 $ — Conversion Earnout derivative Liability Fair value as of December 31, 2023 $ — $ — Initial measurement as of February 9, 2024 1,668,730 10,963,000 Change in valuation inputs or other assumptions 10,700,750 220,000 Fair value as of March 31, 2024 $ 12,369,480 $ 11,183,000 There were no transfers between levels during the three months ended March 31, 2024 and 2023. | NOTE 10. 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. 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. At December 31, 2023 and 2022, assets held in the Trust Account were comprised of $54,799,478 and $204,044,469, respectively, in money market funds which are primarily invested in U.S. Treasury securities. During the year ended December 31, 2023, the Company withdrew an amount of $1,374,898 in income from the Trust Account that will be used to pay franchise and income taxes. During the year ended December 31, 2022, the Company withdrew an amount of $351,474 in income from the Trust Account that will be used to pay franchise and income taxes. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2023 and 2022, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: December 31, December 31, Description Level 2023 2022 Assets: Marketable securities held in Trust Account 1 $ 54,799,478 $ 204,044,469 Liabilities: Warrant liability – Private Warrants 3 $ 307,656 $ 184,594 Non-redemption agreement liability 3 1,441,653 $ — 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 Placement 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 Placement 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: December 31, December 31, Input 2023 2022 Market price of public shares $ 6.20 $ 10.05 Risk-free rate 3.77 % 3.91 % Dividend yield 0.00 % 0.00 % Volatility 12.0 % 2.6 % Probability of a business combination 100.0 % 4.5 % Exercise price $ 11.50 $ 11.50 Effective expiration date 02/09/2029 02/09/2028 The non-redemption agreement liability was measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of non-redemption agreement liability in the consolidated statements of operations. The non-redemption agreement liability is comprised of 235,180 shares of non-redeemable Common Stock and 235,180 Private Placement Warrants. The non-redeemable Common Stock was valued using a Monte Carlo model, which is considered to be a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the non-redeemable Common Stock is equity volatility, probability of acquisition, the discount for marketability and discount for expected forfeiture. The key inputs into the Monte Carlo model for the non-redeemable Common Stock were as follows: December 31, August 1, 2023 Input 2023 (Initial Measurement) Market price of public shares $ 6.20 $ 10.57 Probability of acquisition 100.0 % 82.0 % Equity volatility 12.0 % 19.9 % Discount for lack of marketability 8.00 % 3.0 % Discount for expected forfeiture 5.11 % 5.1 % The PIPE derivative, associated with the terminated TradeStation merger agreement, was accounted for as a liability in accordance with ASC 815-40. The PIPE derivative liability was measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of PIPE derivative liability in the consolidated statements of operations. The PIPE derivative was, initially and as of March 31, 2022, valued using a Monte Carlo model, which is considered to be a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the PIPE derivative liability 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 PIPE derivative was terminated in congruence with the Company’s termination of the merger agreement with TradeStation, and as a result, the fair value was determined to be $0 as of December 31, 2022. The following table presents the changes in the fair value of the PIPE derivative liability and the warrant liability: Private Non-Redemption PIPE Placement Agreement Derivative Warrants Liability Liability Fair value as of December 31, 2022 $ 184,594 $ — $ — Initial measurement as of August 1, 2023 — 1,881,440 — Change in valuation inputs or other assumptions 123,062 (439,787) — Fair value as of December 31, 2023 $ 307,656 $ 1,441,653 $ — PIPE Private Derivative Placement Warrants Liability Fair value as of December 31, 2021 $ 7,137,930 4,566,000 Change in valuation inputs or other assumptions (6,953,336) (4,566,000) Fair value as of December 31, 2022 $ 184,594 — There were no transfers between levels during the year ended December 31, 2023 and 2022. |
SUBSEQUENT EVENTS_2_3
SUBSEQUENT EVENTS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
SUBSEQUENT EVENTS | ||
SUBSEQUENT EVENTS | NOTE 16. 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, other than described below, 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 4, 2024, 32,188 shares of Common Stock were issued to Calabrese Consulting LLC (“Calabrese”), pursuant to a Satisfaction and Discharge Agreement between Calabrese and the Company (the “Calabrese Agreement”), in lieu of payment for accounting services in the amount of $64,236, at a price per share of $2.00. On April 8, 2024, the Company issued an aggregate of 145,210 shares of Common Stock to the Wilson-Davis Sellers to settle the first quarterly interest payments on the Seller Notes. On May 14, 2024, the Company filed a registration statement on Form S-1 to register the resale of up to 37,885,852 shares of Common Stock by the selling stockholders named in the registration statement. The Company will not receive any of the proceeds from these sales. | NOTE 11. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, other than described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements. On February 9, 2024 (the “Closing Date”), the registrant consummated the previously announced transactions pursuant to that certain Business Combination Agreement, dated November 16, 2022 (as amended, the “Business Combination Agreement”), by and among the registrant, the Company, Calculator Merger Sub 1, Inc., a Delaware corporation and a wholly-owned subsidiary of the registrant (“Merger Sub 1”), Calculator Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of the registrant (“Merger Sub 2”), AtlasClear, Inc., a Wyoming corporation (“AtlasClear”), Atlas FinTech Holdings Corp., a Delaware corporation (“Atlas FinTech”) and Robert McBey. The transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Business Combination.” In connection with the consummation of the Business Combination (the “Closing”), the registrant changed its name from “Calculator New Pubco, Inc.” to “AtlasClear Holdings, Inc.” (hereinafter referred to as “AtlasClear Holdings”). Pursuant to the Business Combination Agreement, among other things, (i) Merger Sub 1 merged with and into the Company, with the Company continuing as the surviving corporation and a wholly-owned subsidiary of AtlasClear Holdings and (ii) Merger Sub 2 merged with and into AtlasClear, with AtlasClear continuing as the surviving corporation and a wholly-owned subsidiary of AtlasClear Holdings. Prior to the Closing, pursuant to the (i) Contribution Agreement (as defined in the Business Combination Agreement), AtlasClear received certain assets from Atlas FinTech and Atlas Financial Technologies Corp., a Delaware corporation, and (ii) Broker-Dealer Acquisition Agreement (as defined in the Business Combination Agreement), completed the acquisition of broker-dealer, Wilson-Davis & Co., Inc. (“Wilson-Davis”). In addition, at Closing, the Bank Acquisition Agreement (as defined in the Business Combination Agreement), pursuant to which AtlasClear has agreed to acquire Commercial Bancorp, a Wyoming corporation and parent of Farmers State Bank (“Commercial Bancorp”), continued to be in full force and effect. Pursuant to the transactions contemplated by a letter of intent, AtlasClear expects to acquire certain technology assets of Pacsquare Technologies, LLC (“Pacsquare”) after the Closing. In connection with the Closing, and pursuant to the terms of the Business Combination Agreement, AtlasClear Stockholders received merger consideration (the “Merger Consideration Shares”) consisting of 4,440,000 shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”). In addition, the AtlasClear Holdings Stockholders will 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). In the event such milestones are not met within the first 18 months following the Closing, the 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 Closing, with no catch-up between the years. In connection with the Closing, each share of the Company’s Common Stock (“Quantum Common Stock” or “Public Shares”) that was outstanding and had not been redeemed was converted into one share of Common Stock. Each outstanding public warrant to purchase Quantum Common Stock became a warrant to purchase one In connection with the stockholder vote to approve the Business Combination Agreement and the Business Combination, holders of an aggregate of 4,940,885 shares of Quantum Common Stock properly exercised their right to have their shares redeemed for a full pro rata portion of the Trust Account holding the proceeds from the IPO, which was approximately $10.92 per share, or $53,947,064.28 in the aggregate. The remaining balance of the Trust Account immediately prior to the Closing of approximately $1.2 million was used to partially fund the Business Combination. As a result of such redemptions, a total of 109,499 Public Shares remained outstanding at the Closing. After giving effect to the Business Combination, the redemption of the Public Shares described above, the separation of the former Company Units and the issuance of Merger Consideration Shares and the issuance of shares of Common Stock pursuant to Expense Settlements (described below), as of the Closing Date, there were 11,781,759 shares of Common Stock issued and outstanding In connection with the Closing, the Company instructed Continental Stock Transfer & Trust Company (“CST”), as escrow agent under the Stock Escrow Agreement, dated as of February 4, 2021 (the “Stock Escrow Agreement”), between the Company and CST, to release from escrow 4,000,000 of the Founder Shares that were held in escrow pursuant to the terms of the Stock Escrow Agreement (consisting of 949,084 shares owned by Chardan Quantum, LLC and 3,050,916 shares owned by the Sponsor; as contemplated by the previously-disclosed amendment to the Stock Escrow Agreement entered into on October 31, 2023. The Common Stock commenced trading on the NYSE American LLC (“NYSE”) under the symbol “ATCH” on February 12, 2024. AtlasClear Holdings’ warrants commenced trading on the over-the-counter market (the “OTC”) under the symbol “ATCH WS” on February 12, 2024. Amendments to Broker-Dealer Acquisition Agreement Prior to the Closing, AtlasClear and the Company entered into two amendments to the Broker-Dealer Acquisition Agreement with Wilson-Davis and the then-owners of Wilson-Davis (the “Wilson-Davis Sellers”), Amendment No. 8 dated January 9, 2024 (“Amendment No. 8”) and Amendment No. 9 dated February 7, 2024 (“Amendment No. 9” and, together with Amendment No. 8, the “Amendments”). Among other things, the Amendments reduced the total purchase price payable under the Broker- Dealer Acquisition Agreement by $5 million and reduced the cash payable at the Wilson-Davis Closing as part of the purchase price to $8 million, with the balance of the purchase price paid in the form of convertible promissory notes issued by AtlasClear to the Wilson-Davis Sellers, as follows: (i) $5,000,000 in aggregate principal amount of notes due 90 days after the Closing Date (the “Short-Term Notes”) and (ii) $7,971,000 in aggregate principal amount of notes due 24 months after the Closing Date (the “Long-Term Notes” and, together with the Short-Term Notes, the “Seller Notes”). The Short-Term Notes accrue interest at a rate of 9% per annum, payable quarterly in arrears, in shares of Common Stock at a rate equal to 90% of the trailing seven-trading day VWAP prior to payment (or, at the Company’s option, cash), and are convertible at the option of the holder at any time during the continuance of an event of default, at a rate equal to 90% of the trailing seven-trading day VWAP prior to conversion. The Long-Term Notes accrue interest at a rate of 13% per annum, payable quarterly in arrears, in shares of Common Stock at a rate equal to 90% of the trailing seven-trading day VWAP prior to payment (or, at the Company’s option, in cash), and are convertible at the option of the holder at any time commencing six months after the Closing Date, at a rate equal to 90% of the trailing seven-trading day VWAP prior to conversion (or 85% if an event of default occurs and is continuing). Pursuant to the terms of the Amendments, at the closing of the transactions contemplated by the Broker-Dealer Acquisition Agreement (the “Wilson-Davis Closing”) the Company entered into a parent guaranty and registration rights agreement with the Wilson-Davis Sellers (the “Wilson-Davis Guaranty and RRA”), pursuant to which the Company guaranteed the obligations of AtlasClear under the Notes. The Company also agreed (i) to file, within 30 days of the Closing Date, a registration statement with the SEC, registering the resale of the shares of Common Stock issuable upon conversion of the Notes and (ii) if necessary to allow any of the Notes to be converted into shares of Common Stock in accordance with the rules of the NYSE, to seek stockholder approval for the issuance of such shares, including by filing a proxy statement by no later than April 30, 2024. The Sponsor also entered into Amendment No. 9, for the limited purpose of agreeing to transfer certain Founder Shares owned by the Sponsor to the Wilson-Davis Sellers. The Sponsor agreed to transfer to the Wilson-Davis Sellers, at the Wilson-Davis Closing, Founder Shares having an aggregate value of $6 million, based on the VWAP of Quantum Common Stock for the five Convertible Note Financing On February 9, 2024, the WDCO and Quantum entered into a securities purchase agreement (the “Purchase Agreement”) with Funicular Funds, LP, a Delaware limited partnership (“Funicular”), pursuant to which the Company sold and issued to Funicular, on that date, a secured convertible promissory note in the principal amount of $6,000,000 (the “Funicular Note”) for a purchase price of $6,000,000, in a private placement (the “Note Financing”). The proceeds raised in the Note Financing were used to pay a portion of the purchase price paid at Closing to the Wilson-Davis Sellers. The Funicular Note has a stated maturity date of November 9, 2025. Interest accrues at a rate per annum equal to 12.5%, 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 Funicular Note. In the event of an Event of Default (as defined in the Funicular Note), in addition to Funicular’s other rights and remedies, the interest rate would increase to 20% per annum. The Funicular Note is convertible, in whole or in part, into shares of Common Stock at the election of the holder at any time at an initial conversion price of $10.00 per share (the “Conversion Price”). The Conversion Price is subject to adjustment monthly to a price equal to the trailing five-day VWAP, subject to a floor of $2.00 per share (provided that if the Company sells stock at an effective price below $2.00 per share, such floor would be reduced to such effective price), and is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like. The Company has the right to redeem the Funicular Note upon 30 days’ notice after the earlier of August 7, 2024 and the effectiveness of the Registration Statement (as defined in the Funicular Note), and Funicular would have the right to require the Company to redeem the Note in connection with a Change of Control (as defined in the Note), in each case for a price equal to 101% of the outstanding principal amount of the Note plus accrued and unpaid interest. The Funicular 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 Funicular 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) a security agreement, dated as of February 9, 2024 (the “Security Agreement”), entered into among the Company, each of the Company’s subsidiaries and Funicular, and (ii) a 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 Funicular Note and the other Loan Documents (as defined in the Funicular Note). Pursuant to the Purchase Agreement, the Company agreed, among other things, that if the Funicular 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 Funicular Note in excess of that amount, in accordance with the rules of the NYSE American. Also pursuant to the Purchase Agreement, at the Closing the Sponsor transferred 600,000 Founder Shares and 600,000 private placement warrants to Funicular, which transfers terminated Quantum’s obligation to issue shares to Funicular pursuant to the terms of the non-redemption agreement, dated August 1, 2023, between Quantum and Funicular and previously disclosed in the Proxy Statement/Prospectus. In connection with the Note Financing, on February 9, 2024, the Company entered into a registration rights agreement with Funicular (the “Funicular Registration Rights Agreement”), pursuant to which the Company agreed, among other things, to file with the U.S. Securities and Exchange Commission within 15 days after the Closing Date a registration statement registering the resale of the shares of Common Stock issuable upon exercise of the Funicular Note (the “Funicular Registration Statement”), and the Company agreed to use its best efforts to have the Funicular Registration Statement declared effective as promptly as reasonably possible after the filing thereof, but in any event within 60 days of the Closing Date. If the registration statement is not filed within 30 days after the Closing or is not declared effective by the applicable deadline set forth in the Registration Rights Agreement, or under certain other circumstances described in the Registration Rights Agreement, then the Company shall be obligated to pay to the Buyer an amount in cash equal to 5% of the original principal amount of the Note on a monthly basis until the applicable event giving rise to such payments is cured. The Funicular Registration Rights Agreement also provides that the Company is obligated to file additional registration statements under certain circumstances, and provides Funicular with customary “piggyback” registration rights. Expense Settlements In connection with the Closing, the Company and Chardan Capital Markets LLC (“Chardan”) agreed that the fee, in the amount of $7,043,750, payable by the Company to Chardan upon the Closing pursuant to the terms of the business combination marketing agreement entered into in connection with Quantum’s initial public offering, would be waived in exchange for the issuance by the Company to Chardan of a convertible promissory note in the aggregate principal amount of $4,150,000. Such note (the “Chardan Note”) was issued by the Company at the Closing. The Chardan Note has a stated maturity date of February 9, 2028. Interest accrues at a rate per annum equal to 13%, and is payable quarterly on the first day of each calendar quarter. On each interest payment date, the accrued and unpaid interest shall, at the election of the Company, be either paid in cash or, subject to the satisfaction of certain conditions, in shares of Common Stock, at a rate equal to 85% of the VWAP for the trading day immediately prior to the applicable interest payment date. The Chardan Note is convertible, in whole or in part, into shares of Common Stock at the election of the holder at any time at a conversion price equal to 90% of the VWAP of the Common Stock for the trading day immediately preceding the applicable conversion date. In addition, on each conversion date the Company is required to pay to Chardan in cash (or, at the Company’s option and subject to certain conditions, a combination of cash and Common Stock) all accrued interest on the Chardan Note and all interest that would otherwise accrue on the amount of the Note being converted if such converted amount would be held to three years after the applicable conversion date. Conversion of the Chardan Note, including the issuance of shares to pay interest thereon, is limited to the extent that such conversion would result in Chardan (together with its affiliates and any other persons acting as a group together with Chardan or its affiliates) beneficially owning in excess of 9.99% of the outstanding shares of Common Stock outstanding immediately prior to such conversion. The conversion price applicable to the Chardan Note is subject to adjustment is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and is subject to price-based adjustment, on a “full ratchet” basis, in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for, Common Stock at a price below the then-applicable conversion price (subject to certain exceptions). The Chardan Note is subject to a demand for immediate repayment in cash upon the occurrence of certain events of default specified therein. Also on February 9, 2024, the Company entered into a registration rights agreement with Chardan (the “Chardan Registration Rights Agreement”), pursuant to which the Company agreed, among other things, to file with the U.S. Securities and Exchange Commission within 45 days after the Closing Date a registration statement registering the resale of the shares of Common Stock issuable upon exercise of the Chardan Note and to use its reasonable best efforts to have such registration statement declared effective as soon as possible after filing. If the registration statement is not filed within 45 days after the Closing or is not effective within a specified period after the Closing (or if effectiveness is subsequently suspended or terminated for at least 15 days, subject to certain exceptions), then the interest rate of the Chardan Note will increase by 2% for each week that such event continues. The Chardan Registration Rights Agreement also provides that the Company is obligated to file additional registration statements under certain circumstances, and provides Chardan with customary “piggyback” registration rights. Also in connection with the Closing, the Company agreed to settle certain accrued expenses and other obligations to certain parties through the issuance of shares of Common Stock. Pursuant to such arrangements, the Company issued an aggregate of 2,201,010 shares of Common Stock in settlement of obligations in the aggregate amount of $5,448,933, including the issuance of 2,000,000 shares of Common Stock to Qvent, LLC, an affiliate of the Sponsor, in settlement of an aggregate of $4,633,833 advanced to Quantum through the Closing Date. 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 Charter (as defined below) and the Amended and Restated Bylaws (as defined below). Assignment, Assumption and Amendment Agreement On the Closing Date, the Company, AtlasClear Holdings and CST entered into that certain Assignment, Assumption and Amendment Agreement (the “New Warrant Agreement”). The New Warrant Agreement amends that certain Warrant Agreement, dated as of February 4, 2021, by and between the Company and CST (the “Existing Warrant Agreement”), to provide for the assignment by the Company of all its rights, title and interest in the warrants of the Company to AtlasClear Holdings. Pursuant to the New Warrant Agreement, all Company warrants under the Existing Warrant Agreement will no longer be exercisable for shares of Quantum Common Stock, but instead will be exercisable for shares of Common Stock. |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Basis of Presentation | 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 for the period ended December 31, 2023, as filed with the SEC on April 16, 2024. The accompanying condensed balance sheet as of December 31, 2023 has been derived from the audited financial statements included in this Form 10-K. The interim results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any future periods. | Basis of Presentation The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. |
Principles of Consolidation | 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. | 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. |
Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s condensed consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The more significant accounting estimates included in these condensed consolidated financial statements is the determination of the fair value of the private warrant liabilities, the fair value of the Subscription Agreement, the fair value of the conversion liabilities, fair value of the customer list, licenses acquired on February 9, 2024. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The more significant accounting estimates included in these consolidated financial statements is the determination of the fair value of the Private Warrant liabilities, and fair value of the sale of the Founder Shares. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all operating accounts that hold money market funds held and short-term investments with an original maturity of three months or less when purchased to be cash equivalents. | Cash and Cash Equivalents The Company considers all operating accounts that hold money market funds held and short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had cash equivalents of $619,554 and $0, respectively, as of December 31, 2023 and 2022. |
Trading Securities | Trading Securities Securities held in the Company’s trading account and trading securities, consist primarily of over-the-counter securities and are valued based upon quoted market prices. The value of securities that are not readily marketable are estimated by management based upon quoted prices, the number of market makers, trading volume and number of shares held. Unrealized gains and losses are reflected in income in the financial statements. | Marketable Securities Held in Trust Account At December 31, 2023 and 2022, substantially all of the assets held in the Trust Account were held in mutual funds which are invested primarily in U.S. Treasury securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in income earned on marketable securities held in Trust Account in the accompanying consolidated statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation on property and equipment is provided using accelerated and straight-line methods over expected useful lives of three | |
Leases | Leases In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right-of-use asset and a corresponding lease liability on the statement of financial condition for all leases with terms longer than 12 months. Pursuant to this standard, the Company has recorded an operating lease right-of use (“ROU”) asset and operating lease liability in the accompanying balance sheet as of March 31, 2024. The Company leases office space under the terms of several operating leases. The determination of whether an arrangement is a lease is made at the lease’s inception. Under ASC 842, a contract is (or contains) a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control is defined under the standard as having both the right to obtain substantially all of the economic benefits from use of the asset and the right to direct the use of the asset. Management only reassesses its determination if the terms and conditions of the contract are changed. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses the implicit rate when it is readily determinable. Since the Company’s leases do not provide implicit rates, to determine the present value of lease payments, management uses the Company’s estimated incremental borrowing rate based on the information available at lease commencement. | |
Warrant Liabilities | Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants that do not meet all the criteria for equity classification are recognized as a non-cash gain or loss on the condensed consolidated statements of operations. The fair value of the private warrants was estimated using a Black-Scholes model approach (see Note 9). | Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own Common Stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants that do not meet all the criteria for equity classification are recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the Private Warrants was estimated using a Binomial lattice model approach (see Note 9). |
Income Taxes | Income Taxes The Company utilizes the asset and liability method to account for income taxes. The objective of this method is to establish deferred tax assets and liabilities for the temporary differences between net income for financial reporting basis and the tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized. Income tax expense or benefit is provided based upon the financial statement earnings of the Company. The allowance for doubtful accounts is deductible for financial statement purposes, but not for tax purposes. Depreciation expense is recognized in different periods for tax and financial accounting purposes due to the use of accelerated depreciation methods for income tax purposes. The tax effects of such differences are reported as deferred income taxes in the financial statements. | Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the consolidated financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2023 and 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. |
Revenue Recognition | Revenue Recognition Wilson-Davis, a subsidiary of the Company, recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, using the modified retrospective method. This revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model to: (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when the entity satisfies a performance obligation. Wilson-Davis acts as an agent by selling securities to customers and collecting commissions. Wilson-Davis recognizes commissions on a trade date basis, which is the day the transaction is executed. Wilson-Davis believes that the performance obligation is satisfied on the trade date because that is when the security is selected, the price is determined, the trade is executed, and the risks and rewards of ownership have been transferred to/from the customer. Wilson-Davis also receives commissions on mutual funds purchased by customers. Wilson-Davis believes that the performance obligation is not satisfied until the mutual funds are purchased by customers and recognizes the commission at that time. Wilson-Davis performs vetting services to customers that wish to convert restricted stock to eligible trading stock. In addition, Wilson-Davis charges clearing fees to another broker-dealer for which it clears trades. Wilson-Davis recognizes revenue as the related performance obligations are satisfied. | |
Net (Loss) Income per Common Stock | 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. (Loss) Income is allocated between redeemable and non-redeemable shares based on relative amounts of weighted average shares outstanding. Accretion associated with the redeemable shares of common stock is excluded from (loss) income per share as the redemption value approximates fair value. The calculation of diluted net (loss) income per share does not consider the effect of the convertible derivative liability nor the warrants issued and outstanding. The calculation excludes the dilutive impact of these instruments because the issuance of the securities underlying the exercise of the warrants are contingent upon the occurrence of future events and inclusion would be antidilutive. As a result, diluted net (loss) income per share of common stock is the same as basic net (loss) income per common stock for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per share of common stock (in dollars, except share amounts): Three Months Ended March 31, 2024 March 31, 2023 Non- Non- Redeemable redeemable Redeemable redeemable Basic and diluted net income per common stock Numerator: Allocation of net income, as adjusted $ (71,126,651) $ (17,450,766) $ 135,463 $ 56,908 Denominator: Basic and diluted weighted average common stock outstanding 9,048,173 2,219,949 11,976,319 5,031,250 Basic and diluted net income per common stock $ (7.86) $ (7.86) $ 0.01 $ 0.01 Below is a summary of the dilutive instruments as of March 31, 2024 and 2023, these were excluded as including them would be anti dilutive as of March 31, 2024 and were excluded in March 31, 2023 as the exercise was contingent: Description March 31, 2024 March 31, 2023 Short Term Notes 5,390,752 — Secured convertible note 18,000,000 — Subscription agreement 833,333 — Promissory note 704,404 — Total Shares issuable under Convertible Note obligations 24,928,489 — Public Warrants 10,062,500 10,062,500 Private Warrants 5,553,125 6,153,125 Secured convertible note warrants 600,000 — Total dilutive 41,144,114 16,153,125 | Net Income per Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income per share of Common Stock is computed by dividing net income by the weighted average number of shares of Common Stock outstanding for the period. Income is allocated between redeemable and non-redeemable shares based on relative amounts of weighted average shares outstanding. Accretion associated with the redeemable shares of Common Stock is excluded from income per share as the redemption value approximates fair value. The calculation of diluted net income per share does not consider the effect of the PIPE derivative liability nor the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement. The calculation excludes the dilutive impact of these instruments because the issuance of the securities underlying the exercise of the warrants are contingent upon the occurrence of future events. The warrants are exercisable to purchase 16,215,625 shares of Common Stock in the aggregate. As of December 31, 2023 and 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into Common Stocks and then share in the earnings of the Company. As a result, diluted net income per share of Common Stock is the same as basic net income per Common Stock for the periods presented. The following table reflects the calculation of basic and diluted net income per share of Common Stock (in dollars, except share amounts): For the Year Ended December 31, 2023 2022 Non- Non- Redeemable redeemable Redeemable redeemable Basic and diluted net income per share of Common Stock Numerator: Allocation of net income $ 460,174 $ 335,609 $ 8,836,454 $ 2,209,113 Denominator: Basic and diluted weighted average shares outstanding 6,898,644 5,031,250 20,125,000 5,031,250 Basic and diluted net income per share of Common Stock $ 0.07 $ 0.07 $ 0.44 $ 0.44 |
Concentration of Credit Risk | 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 and management believes the Company is not exposed to significant risks on such accounts. | 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 and management believes the Company is not exposed to significant risks on such accounts. |
Fair Value of Financial Instruments | 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 condensed balance sheets, primarily due to their short-term nature, except for warrant liabilities, convertible derivatives and the earnout out liability (see Note 14). | 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 (see Note 9). The non-redemption agreement liability was recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the non-redemption agreement liability were recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the non-redemption agreement liability is discussed in Note 9. |
Derivative Financial Instruments | 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. | 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. The PIPE derivative was terminated in congruence with the termination of the Merger Agreement with TradeStation. The PIPE derivative met the criteria for derivative liability classification. As such, the PIPE derivative liability was recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the derivative liability were recognized as a non-cash gain or loss on the consolidated statements of operations. The fair value of the derivative liability is discussed in Note 9. |
Recent Accounting Standards | 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. | Recent Accounting Standards In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have an impact on its financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. ASU 2023-09 will become effective for Annual periods beginning after December 15, 2024. The Company is still reviewing the impact of ASU 2023-09. 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 consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Schedule of basic and diluted net income per share of Common Stock | The following table reflects the calculation of basic and diluted net income (loss) per share of common stock (in dollars, except share amounts): Three Months Ended March 31, 2024 March 31, 2023 Non- Non- Redeemable redeemable Redeemable redeemable Basic and diluted net income per common stock Numerator: Allocation of net income, as adjusted $ (71,126,651) $ (17,450,766) $ 135,463 $ 56,908 Denominator: Basic and diluted weighted average common stock outstanding 9,048,173 2,219,949 11,976,319 5,031,250 Basic and diluted net income per common stock $ (7.86) $ (7.86) $ 0.01 $ 0.01 | The following table reflects the calculation of basic and diluted net income per share of Common Stock (in dollars, except share amounts): For the Year Ended December 31, 2023 2022 Non- Non- Redeemable redeemable Redeemable redeemable Basic and diluted net income per share of Common Stock Numerator: Allocation of net income $ 460,174 $ 335,609 $ 8,836,454 $ 2,209,113 Denominator: Basic and diluted weighted average shares outstanding 6,898,644 5,031,250 20,125,000 5,031,250 Basic and diluted net income per share of Common Stock $ 0.07 $ 0.07 $ 0.44 $ 0.44 |
Schedule of dilutive instruments | Description March 31, 2024 March 31, 2023 Short Term Notes 5,390,752 — Secured convertible note 18,000,000 — Subscription agreement 833,333 — Promissory note 704,404 — Total Shares issuable under Convertible Note obligations 24,928,489 — Public Warrants 10,062,500 10,062,500 Private Warrants 5,553,125 6,153,125 Secured convertible note warrants 600,000 — Total dilutive 41,144,114 16,153,125 |
CASH AND RESTRICTED CASH (Tab_2
CASH AND RESTRICTED CASH (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
CASH AND RESTRICTED CASH | |
Schedule of reconciliation of cash and restricted cash as shown in condensed statements of cash flows | For the Three Months Ended March 31, 2024 Cash and cash equivalents $ 7,194,912 Cash segregated - customers 20,161,017 Cash segregated - PAB 200,762 Total cash and restricted cash shown in the statement of cash flows. $ 27,556,691 |
ACQUISITION OF WILSON-DAVIS (Ta
ACQUISITION OF WILSON-DAVIS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
ACQUISITION OF WILSON-DAVIS | |
Summary of preliminary allocation of the purchase price | Accordingly, the final acquisition accounting adjustments could differ. The preliminary allocation of the purchase price is as follows: Cash paid to Wilson-Davis shareholders $ 7,127,569 Short-term notes 5,000,000 Long-term notes 7,971,197 Fair value of shares transferred from sponsor 8,850,100 Total consideration paid 28,948,866 Allocated to: Cash $ 11,333,271 Cash segregated 22,000,605 Receivables 4,065,148 Trading Securities, market value 6,875 Prepaid Income Tax 201,125 Accounts payable, accrued expenses and other current liabilities (28,045,034) Current portion of lease liability (161,212) Property and equipment 23,645 Cash deposit BDs and Clearing Organizations 3,536,664 Operating Lease Right-to-Use Lease Assets 395,063 Other Assets 385,058 Stock loan (1,431,068) Long-term Lease liability (239,629) Subordinated Borrowing (1,950,000) Trading Account deposit (100,000) Net assets acquired 10,020,511 Excess of purchase price over net liabilities assumed before allocation to identifiable intangible assets and goodwill $ 18,928,355 |
Summary of identifiable intangible assets acquired | Estimated Useful Life Amount (Years) Licenses(a) $ 4,553,944 Indefinite Customer Lists(b) 14,374,411 15 Intangible Assets $ 18,928,355 — (a) The value of the licenses was based on replacement costs for an operating enterprise which are estimated to be $4.55 million over 16 months. The replication cost was then allocated a 12% estimated. The development period was estimated as 1.25 years. The rate of return was based on an annual rate of return of 27.9%. (b) The Wilson Davis customer relationships were valued using the Multi-Period Excess Earnings Method (“MPEEM”). The MPEEM reflects the present value of the operating cash flows generated by existing customer relationships after taking into account the cost to realize the revenue and an appropriate discount rate to reflect the time value and risk associated with the cash flows. |
ACQUISITION OF THE ASSETS OF _2
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC | |
Schedule of asset purchase price allocation | Total Purchase Price (a) $ 44,400,000 Fair value of Software Product Earn Out Shares (b) 10,963,000 Fair value of Earn Out Shares (c) 31,347,000 Purchase price allocated to Contribution Agreement $ 86,710,000 SURFACExchange $ 381,461 Bond Quantum 32,284 Atlas 7,749,299 Rubicon 10,000,000 Total Developed Technology acquired (d) $ 18,163,044 Transaction cost (e) $ 68,546,956 (a) The closing consideration of $44.40 million is to be delivered in common stock. As such 4,400,000 were delivered based on $10 per share presumed value of common stock. (b) Atlas FinTech will receive up to $20.00 million 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 the five years following Closing, with no catch-up between the years. The value was determined based on projected revenue based on a discount factor. 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 will be accounted for as a liability and included in the purchase price consideration. The revenue earnout was estimated 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. The Monte Carlo simulation was performed simultaneously on both the share price and revenue to account for the correlation between revenue and equity. (c) Atlas FinTech will receive up to 5,944,444 shares of Common Stock (the “Earn Out Shares”). The Earn Out Shares will be issued to AtlasClear Stockholders upon certain milestones (based on the achievement of certain price targets of Common Stock following the Closing). In the event such milestones are not met within the first 18 months following the Closing, the Earn Out Shares will be cancelled. The Earn Out provision was analyzed under ASC 480 and ASC 815. The earnout provision was deemed to be indexed to the Company’s own stock and therefore equity classified. The share based earnout was estimated using a Monte Carlo simulation to determine if and when the stock price hurdles would be achieved. The expected stock price volatility was based upon guideline public companies. (d) Under SAB topic 5G transfers of nonmonetary assets for stock prior to an initial offering should be recorded at predecessor cost in accordance with GAAP. As such the value of the Developed Technology was based on the carrying value of Atlas FinTech of $18.16 million. The estimated useful life was determined to be eight years. There are no historical revenues for the Developed Technology and AtlasClear’s management determined the fair value based on their experience and expectations from running similar models in previous companies. (e) ASC 350 prohibits the recognition of goodwill in an asset purchase. As such the difference between the purchase price of $86.98 million was charged as transactions and recorded under accumulated deficit of $68.55 million. |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
INTANGIBLE ASSETS | |
Summary of intangible assets | March 31, 2024 Accumulated Impairment Cost Amortization of Asset Net Licenses $ 4,553,944 $ — $ — $ 4,553,944 Pacsquare assets – Proprietary Software 1,416,000 — — 1,416,000 Technology acquired 18,163,044 (317,231) — 17,845,813 Customer Lists 14,374,411 (136,233) — 14,238,178 Intangible Assets $ 38,507,399 $ (453,464) $ — $ 38,053,935 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
LEASES | |
Schedule of other information related to the Company's operating leases | March 31, 2024 Operating lease ROU Asset - February 9, 2024 $ 395,064 Increase — Decrease — Amortization (26,099) Operating lease ROU Asset - Ending Balance $ 368,965 Operating lease liability - February 9, 2024 $ 400,840 Increase — Decrease — Amortization (26,626) Operating lease liability - ending balance $ 374,214 Operating lease liability - Short Term $ 159,933 Operating lease liability - Long Term 214,281 Operating lease liability - Total $ 374,214 |
Schedule of weighted-average remaining lease term and weighted-average discount rates related to the Company's operating leases | March 31, 2024 Weighted average remaining lease term 2.57 years Weighted average discount rate 4.96 % |
Tabular disclosure of future minimum payments required by the lease agreements | 2024 $ 126,769 2025 134,985 2026 113,721 2027 9,477 Total minimum lease payments 384,952 Less interest factor (10,738) Total operating lease liability 374,214 Less operating lease liability - current portion (159,933) Operating lease liability - long term portion $ 214,281 |
FAIR VALUE MEASUREMENTS (Tabl_2
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
FAIR VALUE MEASUREMENTS | ||
Schedule of Company's assets and liabilities that are measured at fair value on a recurring basis | March 31, December 31, Description Level 2024 2023 Assets: Marketable securities held in Trust Account 1 $ — $ 54,799,478 Liabilities: Warrant liability – Private Warrants 3 $ 615,312 $ 307,656 Non-redemption agreement liability 3 $ — $ 1,441,653 Convertible notes derivative 3 $ 12,369,480 $ — Earnout liability 3 $ 11,183,000 $ — | December 31, December 31, Description Level 2023 2022 Assets: Marketable securities held in Trust Account 1 $ 54,799,478 $ 204,044,469 Liabilities: Warrant liability – Private Warrants 3 $ 307,656 $ 184,594 Non-redemption agreement liability 3 1,441,653 $ — |
Schedule of Key Inputs into the models | March 31, December 31, Input 2024 2023 Market price of public shares $ 1.60 $ 6.20 Risk-free rate 4.14 % 3.77 % Dividend yield 0.00 % 0.00 % Volatility 51.1 % 12.0 % Probability of a business combination 100 % 100 % Exercise price $ 11.50 $ 11.50 Effective expiration date 2/09/29 02/09/28 December 31, Input 2023 Market price of public shares $ 6.20 Probability of acquisition 100.0 % Equity volatility 12.0 % Discount for lack of marketability 8.0 % Discount for expected forfeiture 5.11 % February 9, March 31, 2024 Input 2024 (initial measurement) Market price of public shares $ 1.60 $ 10.26 Revenue volatility 15.00 % 15.00 % Discount factor for revenue 96.9 % 99.5 % February 9, 2024 March 31, (initial Input 2024 measurement) Market price of public shares $ 1.60 $ 10.26 Risk-free rate 5.49 % 4.48 % Dividend yield 0.00 % 0.00 % Volatility 10,274.0 % 4,120.0 % Exercise price $ 1.60 $ 10.26 Effective expiration date 5/9/2024 5/9/2024 February 9, 2024 March 31, (initial Input 2024 measurement) Market price of public shares $ 1.60 $ 10.26 Risk-free rate 4.59 % 4.48 % Dividend yield 0.00 % 0.00 % Volatility 10,274 % 41,200 % Exercise price $ 1.60 $ 10.26 Effective expiration date 2/9/2026 2/9/2026 February 9, 2024 March 31, (initial Input 2024 measurement) Market price of public shares $ 1.60 $ 10.26 Risk-free rate 4.31 % 4.48 % Dividend yield 0.00 % 0.00 % Volatility 166,681.0 % 4,120.0 % Exercise price $ 1.43 $ 10.26 Effective expiration date 2/9/2028 2/9/2028 | December 31, December 31, Input 2023 2022 Market price of public shares $ 6.20 $ 10.05 Risk-free rate 3.77 % 3.91 % Dividend yield 0.00 % 0.00 % Volatility 12.0 % 2.6 % Probability of a business combination 100.0 % 4.5 % Exercise price $ 11.50 $ 11.50 Effective expiration date 02/09/2029 02/09/2028 December 31, August 1, 2023 Input 2023 (Initial Measurement) Market price of public shares $ 6.20 $ 10.57 Probability of acquisition 100.0 % 82.0 % Equity volatility 12.0 % 19.9 % Discount for lack of marketability 8.00 % 3.0 % Discount for expected forfeiture 5.11 % 5.1 % |
Schedule of changes in the fair value of the PIPE derivative liability and the warrant liability | Private Non-Redemption Placement Agreement Warrants Liability Fair value as of December 31, 2023 $ 307,656 $ 1,441,653 Change in valuation inputs or other assumptions 307,656 164,626 Transferred to equity — (1,606,279) Fair value as of March 31, 2024 $ 615,312 $ — Conversion Earnout derivative Liability Fair value as of December 31, 2023 $ — $ — Initial measurement as of February 9, 2024 1,668,730 10,963,000 Change in valuation inputs or other assumptions 10,700,750 220,000 Fair value as of March 31, 2024 $ 12,369,480 $ 11,183,000 | Private Non-Redemption PIPE Placement Agreement Derivative Warrants Liability Liability Fair value as of December 31, 2022 $ 184,594 $ — $ — Initial measurement as of August 1, 2023 — 1,881,440 — Change in valuation inputs or other assumptions 123,062 (439,787) — Fair value as of December 31, 2023 $ 307,656 $ 1,441,653 $ — PIPE Private Derivative Placement Warrants Liability Fair value as of December 31, 2021 $ 7,137,930 4,566,000 Change in valuation inputs or other assumptions (6,953,336) (4,566,000) Fair value as of December 31, 2022 $ 184,594 — |
DESCRIPTION OF ORGANIZATION A_4
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ||
Cash in bank account | $ 7,194,912 | $ 619,554 |
Working capital deficit | $ 14,591,130 | $ 11,386,299 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Cash equivalents | $ 619,554 | $ 0 | ||
Offering costs | $ 9,348 | |||
Accretion of redeemable common stock increase | 4,008,446 | |||
Dissolution expense | 100,000 | |||
Unrecognized tax benefits | 0 | 0 | ||
Amounts accrued for interest and penalties | $ 0 | $ 0 | ||
Effective tax rate | 47.71% | 4.64% | ||
Statutory tax rate | 21% | 21% | ||
Warrants exercised to purchase of common stock | 16,215,625 | |||
FDIC insurance limit | $ 250,000 | |||
Minimum | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Useful lives | 3 years | |||
Maximum | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Useful lives | 7 years |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of basic and diluted net income per share of common stock - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Numerator: | ||||
Allocation of net income, as adjusted | $ (88,577,417) | $ 192,371 | $ 794,950 | $ 11,045,567 |
Redeemable | ||||
Numerator: | ||||
Allocation of net income, as adjusted | $ (71,126,651) | $ 135,463 | $ 460,174 | $ 8,836,454 |
Denominator: | ||||
Basic weighted average shares outstanding (in shares) | 9,048,173 | 11,976,319 | 6,898,644 | 20,125,000 |
Diluted weighted average shares outstanding (in shares) | 9,048,173 | 11,976,319 | 6,898,644 | 20,125,000 |
Basic net income per share of Common Stock (in dollars per share) | $ (7.86) | $ 0.01 | $ 0.07 | $ 0.44 |
Diluted net income per share of Common Stock (in dollars per share) | $ (7.86) | $ 0.01 | $ 0.07 | $ 0.44 |
Non-redeemable | ||||
Numerator: | ||||
Allocation of net income, as adjusted | $ (17,450,766) | $ 56,908 | $ 335,609 | $ 2,209,113 |
Denominator: | ||||
Basic weighted average shares outstanding (in shares) | 2,219,949 | 5,031,250 | 5,031,250 | 5,031,250 |
Diluted weighted average shares outstanding (in shares) | 2,219,949 | 5,031,250 | 5,031,250 | 5,031,250 |
Basic net income per share of Common Stock (in dollars per share) | $ (7.86) | $ 0.01 | $ 0.07 | $ 0.44 |
Diluted net income per share of Common Stock (in dollars per share) | $ (7.86) | $ 0.01 | $ 0.07 | $ 0.44 |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of dilutive instruments (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 41,144,114 | 16,153,125 |
Total Shares issuable under Convertible Note obligations | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 24,928,489 | |
Short Term Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 5,390,752 | |
Secured convertible note | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 18,000,000 | |
Subscription agreement | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 833,333 | |
Promissory note | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 704,404 | |
Public Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 10,062,500 | 10,062,500 |
Private Placement Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 5,553,125 | 6,153,125 |
Secured convertible note warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 600,000 |
CASH SEGREGATED IN ACCORDANCE_4
CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS (Details) - USD ($) | Apr. 01, 2024 | Mar. 31, 2024 |
Customers transactions and credit balances | ||
CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS | ||
Calculated required reserve | $ 19,296,856 | |
Cash on deposit in the reserve account | 19,200,000 | |
Cash on deposit in the reserve account less than the amount required | 96,856 | |
Amount deposited to reserve account in accordance with the rule | $ 600,000 | |
Cash on deposit in the reserve account in excess of the amount required | $ 504,026 | |
Broker-dealer transactions and credit balances | ||
CASH SEGREGATED IN ACCORDANCE WITH FEDERAL REGULATIONS | ||
Calculated required reserve | 100,000 | |
Cash on deposit in the reserve account | 200,000 | |
Cash on deposit in the reserve account less than the amount required | $ 100,000 |
NET CAPITAL REQUIREMENTS (Det_2
NET CAPITAL REQUIREMENTS (Details) | Mar. 31, 2024 USD ($) |
NET CAPITAL REQUIREMENTS | |
Net capital | $ 10,449,178 |
Net capital in excess of the minimum required | $ 10,199,178 |
CASH AND RESTRICTED CASH (Det_2
CASH AND RESTRICTED CASH (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Cash and Cash Equivalents [Line Items] | |||||||
Cash and cash equivalents | $ 7,194,912 | $ 619,554 | $ 129,560 | ||||
Cash segregated - customers | 20,161,017 | ||||||
Cash segregated - PAB | 200,762 | ||||||
Total cash and restricted cash shown in the statement of cash flows. | $ 27,556,691 | 619,554 | $ 1,395,548 | 129,560 | $ 63,179 | ||
Wilson Davis Co Inc | |||||||
Cash and Cash Equivalents [Line Items] | |||||||
Cash and cash equivalents | 8,581,340 | $ 9,094,381 | |||||
Total cash and restricted cash shown in the statement of cash flows. | $ 30,528,339 | $ 36,059,356 | $ 45,415,441 | $ 59,249,523 |
RELATED PARTY TRANSACTIONS - Fo
RELATED PARTY TRANSACTIONS - Founder Shares (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Feb. 04, 2021 shares | Oct. 23, 2020 USD ($) shares | Jan. 31, 2021 shares | Mar. 31, 2024 USD ($) D $ / shares shares | Dec. 31, 2023 USD ($) D $ / shares shares | Nov. 03, 2023 $ / shares | Aug. 01, 2023 $ / shares | Dec. 31, 2022 shares | Feb. 09, 2021 $ / shares | |
RELATED PARTY TRANSACTIONS | |||||||||
Common stock dividend (in Shares) | 718,750 | ||||||||
Common stock, shares issued | 12,277,759 | 5,031,250 | 5,031,250 | ||||||
Common stock, shares outstanding | 12,277,759 | 5,031,250 | 5,031,250 | ||||||
Market price of public shares (in Dollars per share) | $ / shares | $ 6.20 | $ 10.57 | |||||||
Sale price per share (in Dollars per share) | $ / shares | $ 10 | $ 10.73 | |||||||
Initial Public Offering | |||||||||
RELATED PARTY TRANSACTIONS | |||||||||
Sale price per share (in Dollars per share) | $ / shares | $ 10 | ||||||||
Over-Allotment Option | |||||||||
RELATED PARTY TRANSACTIONS | |||||||||
Stock issued subject to forfeiture (in Shares) | 656,250 | ||||||||
Initial Stockholders | |||||||||
RELATED PARTY TRANSACTIONS | |||||||||
Stock issued during period shares (in Shares) | 5,031,250 | ||||||||
Founder Shares | |||||||||
RELATED PARTY TRANSACTIONS | |||||||||
Number of shares outstanding (in Shares) | 3,254,000 | ||||||||
Common stock, shares issued | 5,031,250 | ||||||||
Common stock, shares outstanding | 5,031,250 | ||||||||
Founder Shares | First 50% of founder shares | |||||||||
RELATED PARTY TRANSACTIONS | |||||||||
Percentage of shares | 50% | 50% | |||||||
Commencement period for placing shares in Escrow account | 6 months | 6 months | |||||||
Market price of public shares (in Dollars per share) | $ / shares | $ 12.50 | $ 12.50 | |||||||
Threshold trading days | D | 20 | 20 | |||||||
Threshold consecutive trading days | D | 30 | 30 | |||||||
Founder Shares | Second 50% of Founder Shares | |||||||||
RELATED PARTY TRANSACTIONS | |||||||||
Percentage of shares | 50% | 50% | |||||||
Commencement period for placing shares in Escrow account | 6 months | 6 months | |||||||
Director | |||||||||
RELATED PARTY TRANSACTIONS | |||||||||
Stock issued during period shares (in Shares) | 245,000 | 245,000 | |||||||
Stock issued during period value | $ | $ 1,462,650 | $ 1,462,650 | |||||||
Sponsor purchased shares (in Shares) | 35,000 | ||||||||
Sale price per share (in Dollars per share) | $ / shares | $ 5.97 | $ 5.97 | |||||||
Sponsor | |||||||||
RELATED PARTY TRANSACTIONS | |||||||||
Stock issued during period shares (in Shares) | 4,312,500 | ||||||||
Stock issued during period value | $ | $ 25,000 | ||||||||
Sponsor purchased shares (in Shares) | 813,500 | ||||||||
Sponsor | Director | |||||||||
RELATED PARTY TRANSACTIONS | |||||||||
Number of Founder Shares transferred (in shares) | 245,000 |
RELATED PARTY TRANSACTIONS - Re
RELATED PARTY TRANSACTIONS - Related Party Loans (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Feb. 09, 2024 | Feb. 28, 2022 | Mar. 31, 2024 | Dec. 31, 2023 | Jan. 03, 2023 | Mar. 14, 2022 | Oct. 31, 2021 | |
RELATED PARTY TRANSACTIONS | |||||||
Price per warrant (in Dollars per share) | $ 1 | $ 1 | |||||
Working capital loans | $ 480,000 | $ 480,000 | $ 2,000,000 | ||||
Additional working capital loans | $ 1,000,000 | ||||||
Working capital loan total net | $ 3,000,000 | ||||||
Principal balance amount | $ 480,000 | ||||||
Shares issued in settlement of obligations (in shares) | 2,201,010 | ||||||
Qvent, LLC | Affiliate of sponsor | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Shares issued in settlement of obligations (in shares) | 2,000,000 | ||||||
Promissory Notes | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Conversion amount | $ 1,500,000 | $ 1,500,000 |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Advances from Related Parties (Details) - USD ($) | 12 Months Ended | ||||
Feb. 09, 2024 | Feb. 09, 2023 | Dec. 31, 2022 | Mar. 31, 2024 | Dec. 31, 2023 | |
RELATED PARTY TRANSACTIONS | |||||
Advances from related parties | $ 319,166 | $ 3,104,097 | |||
Proceeds from related party | 480,000 | ||||
Co-sponsors have advanced | 795,000 | ||||
Related party loan | $ 480,000 | 480,000 | |||
Number of shares issued for settlement | 2,000,000 | ||||
Liabilities settled | $ 4,636,397 | ||||
Receivables settled | 58,828 | ||||
Related Party Loan | |||||
RELATED PARTY TRANSACTIONS | |||||
Related party loan | 480,000 | ||||
Co-Sponsors | |||||
RELATED PARTY TRANSACTIONS | |||||
Advances from related parties | $ 4,156,397 | $ 0 | $ 3,104,097 | ||
Proceeds from related party | $ 1,052,300 | ||||
Co-sponsors have advanced | $ 58,828 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES - Registration Rights (Details) | May 14, 2024 shares |
COMMITMENTS AND CONTINGENCIES | |
Number of to be resale | 37,885,852 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES - Business Combination Marketing Agreement (Details) - USD ($) | 3 Months Ended | ||
Feb. 09, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |||
Percentage of aggregate gross proceeds | 3.50% | 3.50% | |
Marketing Fees Payable To Underwriters, Waived In Exchange For Notes Payable | $ 7,043,750 | ||
Period to file registration statement with SEC | 30 days | ||
Chardan Note | |||
COMMITMENTS AND CONTINGENCIES | |||
Aggregate principal amount | $ 4,150,000 | ||
Interest rate (in percent) | 13% | ||
Interest payable in shares, as a percentage of trailing specified trading day VWAP (in percent) | 85% | ||
Conversion rate, as a percentage of trailing specified trading day VWAP (in percent) | 90% | ||
Number of years up to which the converted amount is to be held for payment of interest | 3 years | 3 years | |
Beneficial ownership (in percent) | 9.99% | ||
Period to file registration statement with SEC | 45 days | ||
Minimum period for which the registration statement with SEC is suspended, considered for increase in interest rate | 15 days | ||
Incremental weekly interest rate, if the registration statement is not filed or is not effective or terminated or suspended (in percent) | 2% | ||
Initial Public Offering | |||
COMMITMENTS AND CONTINGENCIES | |||
Marketing fees payable to underwriters | $ 7,043,750 | $ 7,043,750 |
COMMITMENTS AND CONTINGENCIES_7
COMMITMENTS AND CONTINGENCIES - Non-Redemption Agreement (Details) | Aug. 01, 2023 shares |
COMMITMENTS AND CONTINGENCIES | |
Aggregate shares of common stock | 2,351,800 |
Quantum Ventures LLC | |
COMMITMENTS AND CONTINGENCIES | |
Aggregate shares of common stock | 235,180 |
Aggregate of warrants shares | 235,180 |
Purchase shares of common stock | 235,180 |
COMMITMENTS AND CONTINGENCIES_8
COMMITMENTS AND CONTINGENCIES - Expense Settlements (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Feb. 09, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |||
Shares issued in settlement of obligations (in shares) | 2,201,010 | ||
Obligations Settled In Shares | $ 5,448,933 | ||
Affiliate Of Sponsor [Member] | Qvent, LLC | |||
COMMITMENTS AND CONTINGENCIES | |||
Shares issued in settlement of obligations (in shares) | 2,000,000 | ||
Obligations Settled In Shares | $ 4,577,569 | ||
AtlasClear | |||
COMMITMENTS AND CONTINGENCIES | |||
Consideration amount (in Dollars) | $ 75,400,000 | ||
Purchase price (in Dollars per share) | $ 10 | ||
Quantum Ventures LLC | |||
COMMITMENTS AND CONTINGENCIES | |||
Aggregate principal amount | $ 3,300,000 | ||
Chardan Note | |||
COMMITMENTS AND CONTINGENCIES | |||
Interest rate (in percent) | 13% | ||
Interest payable in shares, as a percentage of trailing specified trading day VWAP (in percent) | 85% | ||
Conversion rate, as a percentage of trailing specified trading day VWAP (in percent) | 90% | ||
Number of years up to which the converted amount is to be held for payment of interest | 3 years | 3 years | |
Aggregate principal amount | $ 4,150,000 |
COMMITMENTS AND CONTINGENCIES_9
COMMITMENTS AND CONTINGENCIES - Additional Settlements (Details) | 3 Months Ended | ||||
Feb. 19, 2024 $ / shares shares | Feb. 09, 2024 USD ($) installment $ / shares shares | Sep. 13, 2023 USD ($) $ / shares shares | Mar. 31, 2024 USD ($) $ / shares shares | Nov. 03, 2023 $ / shares | |
COMMITMENTS AND CONTINGENCIES | |||||
Value of stock issued for services | $ 1,513,100 | ||||
Sale price per share (in Dollars per share) | $ / shares | $ 10 | $ 10.73 | |||
Stock payable | $ 1,244,965 | ||||
Subscription agreement for assets | $ 1,875,150 | ||||
Interest solutions note | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Sale price per share (in Dollars per share) | $ / shares | $ 1 | ||||
Convertible amount | $ 275,000 | ||||
Interest rate (in percent) | 13% | ||||
Jones Trading Note | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Sale price per share (in Dollars per share) | $ / shares | $ 1 | ||||
Convertible amount | $ 375,000 | ||||
Interest rate (in percent) | 13% | ||||
Toppan Note | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Interest rate (in percent) | 13% | ||||
Aggregate principal amount | $ 160,025 | ||||
Maximum | Interest solutions note | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Number of shares issuable upon debt conversion | shares | 298,017 | ||||
Maximum | Jones Trading Note | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Number of shares issuable upon debt conversion | shares | 375,000 | ||||
Grant Thornton LLP | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Stock issued for services | shares | 46,010 | ||||
Value of stock issued for services | $ 460,100 | ||||
Sale price per share (in Dollars per share) | $ / shares | $ 10 | ||||
IB Capital LLC | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Stock issued for services | shares | 155,000 | ||||
Value of stock issued for services | $ 355,000 | ||||
Sale price per share (in Dollars per share) | $ / shares | $ 2.29 | ||||
Outside The Box Capital Inc | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Stock issued for services | shares | 20,000 | ||||
Value of stock issued for services | $ 200,000 | ||||
Sale price per share (in Dollars per share) | $ / shares | $ 10 | ||||
Carriage House Capital, Inc | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Stock issued for services | shares | 100,000 | ||||
Sale price per share (in Dollars per share) | $ / shares | $ 4.98 | $ 4.98 | |||
Stock payable | $ 1,244,965 | ||||
Stock payable for remaining shares | shares | 250,000 | ||||
Carriage House Capital, Inc | Due upon signing of the contract | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Stock issued for services | shares | 100,007 | ||||
Carriage House Capital, Inc | Due in months four through twelve from the date of signing | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Stock issued for services | shares | 27,777 | ||||
Carriage House Capital, Inc | Maximum | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Stock issued for services | shares | 350,000 | ||||
Winston & Strawn LLP | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Sale price per share (in Dollars per share) | $ / shares | $ 1 | ||||
Value of shares issuable for services | $ 2,500,000 | ||||
Number of installments | installment | 3 | ||||
Value of shares issuable for services in each installment | $ 833,333 | ||||
Aggregate principal amount | $ 2,500,000 | ||||
Subscription agreement for assets | $ 1,875,150 | ||||
Winston & Strawn LLP | Maximum | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Number of shares issuable for services | shares | 833,333 | ||||
Lead Nectar | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Number of shares issuable for services | shares | 12,000 | ||||
Value of shares payable for internet marketing services | $ 20,000 |
COMMITMENTS AND CONTINGENCIE_10
COMMITMENTS AND CONTINGENCIES - Excise Taxes Payable (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Feb. 09, 2024 | Aug. 04, 2023 | Feb. 06, 2023 | Mar. 31, 2024 | Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |||||
Excise tax liability (in Dollars) | $ 2,067,572 | $ 1,528,101 | |||
Excise Taxes Payable | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Excise tax liability shares redeemed, percentage | 1% | 1% | |||
Common Stock | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Number of shares redeemed (in shares) | 4,940,885 | 406,990 | 14,667,626 | ||
Value of shares redeemed | $ 148,523,642 | ||||
Stockholders redeemed value (in Dollars) | $ 53,947,064 | $ 4,286,537 |
COMMITMENTS AND CONTINGENCIE_11
COMMITMENTS AND CONTINGENCIES - Convertible Note Financing (Details) | Feb. 09, 2024 USD ($) D $ / shares shares | Oct. 23, 2020 USD ($) | Dec. 31, 2023 $ / shares | Aug. 01, 2023 $ / shares |
COMMITMENTS AND CONTINGENCIES | ||||
Market price of public shares (in Dollars per share) | $ / shares | $ 6.20 | $ 10.57 | ||
Period To File Registration Statement With SEC | 30 days | |||
Sponsor | ||||
COMMITMENTS AND CONTINGENCIES | ||||
Value of shares issued | $ 25,000 | |||
Funicular Note | ||||
COMMITMENTS AND CONTINGENCIES | ||||
Aggregate principal amount | $ 6,000,000 | |||
Purchase price of notes | $ 6,000,000 | |||
Interest rate (in percent) | 12.50% | |||
Interest rate in the event of default (in percent) | 20% | |||
Conversion Price (in dollars per share) | $ / shares | $ 10 | |||
Threshold trading days over which VWAP is considered to make monthly adjustments to the Conversion price | D | 5 | |||
Floor on Conversion price (in dollars per share) | $ / shares | $ 2 | |||
Market price of public shares (in Dollars per share) | $ / shares | $ 2 | |||
Number of days notice required for redemption of notes | 30 days | |||
Redemption price as a percentage of the outstanding principal amount (in percent) | 101% | |||
Threshold maximum percentage of outstanding common stock, above which stockholder's approval is required for conversion (in percent) | 19.90% | |||
Period To File Registration Statement With SEC | 15 days | |||
Number Of Days Within Which The Registration Statement Should Be Declared Effective | 60 days | |||
Stock issued for purchase price adjusted to additional paid in capital | 5% | |||
Funicular Note | Sponsor | ||||
COMMITMENTS AND CONTINGENCIES | ||||
Value of warrants issued | $ 24,982 | |||
Value of shares issued | 978,650 | |||
Stock issued for purchase price adjusted to additional paid in capital | $ 1,003,632 | |||
Funicular Note | Sponsor | Private Placement | ||||
COMMITMENTS AND CONTINGENCIES | ||||
Number of private placement warrants transferred (in shares) | shares | 600,000 | |||
Funicular Note | Sponsor | Founder Shares | ||||
COMMITMENTS AND CONTINGENCIES | ||||
Number of private placement warrants transferred (in shares) | shares | 600,000 |
COMMITMENTS AND CONTINGENCIE_12
COMMITMENTS AND CONTINGENCIES - Subscription Agreement and Satisfaction and Discharge Agreement (Details) $ in Millions | Feb. 09, 2024 USD ($) |
Winston & Strawn LLP | |
COMMITMENTS AND CONTINGENCIES | |
Aggregate principal amount | $ 2.5 |
COMMITMENTS AND CONTINGENCIE_13
COMMITMENTS AND CONTINGENCIES - Wilson-Davis (Details) - Wilson Davis Co Inc - USD ($) | Dec. 19, 2019 | Feb. 27, 2018 | Dec. 31, 2023 | Dec. 21, 2023 | Oct. 16, 2023 | Jun. 30, 2023 |
COMMITMENTS AND CONTINGENCIES | ||||||
Amount of damages awarded to the plaintiff in the legal matter. | $ 1,265,000 | $ 1,470,000 | ||||
Damage reduced | 205,000 | |||||
Accrued contingent liability | $ 100,000 | $ 100,000 | $ 100,000 | |||
Lease For Salt Lake City Office | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||
Term of lease | 3 years | |||||
Office Lease For Denver Office | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||
Term of lease | 1 year |
ACQUISITION OF WILSON-DAVIS - B
ACQUISITION OF WILSON-DAVIS - Broker-Dealer Acquisition Agreement (Details) | 3 Months Ended | ||
Feb. 07, 2024 USD ($) D item | Feb. 09, 2021 | Mar. 31, 2024 USD ($) | |
ACQUISITION OF WILSON-DAVIS | |||
Number of amendments to the Broker-Dealer Acquisition Agreement | item | 2 | ||
Reduction in total purchase price payable | $ 5,000,000 | ||
Cash payable | $ 8,000,000 | $ 7,127,569 | |
Maturity (in days) | 185 days | ||
Conversion term at the option of holder after the closing date | 6 months | ||
WILSON-DAVIS | |||
ACQUISITION OF WILSON-DAVIS | |||
Cash payable | $ 7,127,569 | ||
Term to file registration statement with the SEC | 30 days | ||
WILSON-DAVIS | Short term | |||
ACQUISITION OF WILSON-DAVIS | |||
Short-term and long-term notes | $ 5,000,000 | ||
Maturity (in days) | 90 days | ||
Interest rate (in percent) | 9% | ||
Interest payable in shares, as a percentage of trailing specified trading day VWAP (in percent) | 90% | ||
Conversion rate, Number of trading days over which the VWAP is considered | D | 7 | ||
WILSON-DAVIS | Long term | |||
ACQUISITION OF WILSON-DAVIS | |||
Short-term and long-term notes | $ 7,971,197 | ||
Maturity (in days) | 24 months | ||
Interest rate (in percent) | 13% | ||
Interest payable in shares, as a percentage of trailing specified trading day VWAP (in percent) | 90% | ||
Conversion rate, as a percentage of trailing specified trading day VWAP (in percent) | 90% | ||
Conversion rate, Number of trading days over which the VWAP is considered | D | 7 | ||
Conversion rate, as a percentage of trailing seven-trading day VWAP, if an event of default occurs and is continuing (in percent) | 85% |
ACQUISITION OF WILSON-DAVIS - S
ACQUISITION OF WILSON-DAVIS - Sponsors (Details) | 3 Months Ended | |
Feb. 07, 2024 USD ($) D $ / shares shares | Mar. 31, 2024 USD ($) | |
ACQUISITION OF WILSON-DAVIS | ||
Founder Shares transferred at closing as consideration for Wilson Davis Acquisition | $ 8,850,100 | |
WILSON-DAVIS | ||
ACQUISITION OF WILSON-DAVIS | ||
Aggregate value of Founder Shares agreed to transfer to the Wilson-Davis Sellers | $ 6,000,000 | |
Number of trading days over which VWAP of Quantum Common Stock is considered for determination of Founder Shares agreed to transfer | D | 5 | |
Number of Founder Shares transferred (in shares) | shares | 885,010 | |
Share price | $ / shares | $ 10 | |
Founder Shares transferred at closing as consideration for Wilson Davis Acquisition | $ 8,850,100 | |
Term within which additional founder shares can be transferred | 6 months | |
Maximum number of Founder Shares that can be transferred (in shares) | shares | 2,500,000 |
ACQUISITION OF WILSON-DAVIS - P
ACQUISITION OF WILSON-DAVIS - Preliminary allocation of the purchase price (Details) - USD ($) | 3 Months Ended | |
Feb. 07, 2024 | Mar. 31, 2024 | |
ACQUISITION OF WILSON-DAVIS | ||
Cash payable | $ 8,000,000 | $ 7,127,569 |
WILSON-DAVIS | ||
ACQUISITION OF WILSON-DAVIS | ||
Cash payable | 7,127,569 | |
Fair value of shares transferred from sponsor | 8,850,100 | |
Total consideration paid | 28,948,866 | |
Cash | 11,333,271 | |
Cash segregated | 22,000,605 | |
Receivables | 4,065,148 | |
Trading Securities, market value | 6,875 | |
Prepaid Income Tax | 201,125 | |
Accounts payable, accrued expenses and other current liabilities | (28,045,034) | |
Current portion of lease liability | (161,212) | |
Property and equipment | 23,645 | |
Cash deposit BDs and Clearing Organizations | 3,536,664 | |
Operating Lease Right-to-Use Lease Assets | 395,063 | |
Other Assets | 385,058 | |
Stock loan | (1,431,068) | |
Long-term Lease liability | (239,629) | |
Subordinated Borrowing | (1,950,000) | |
Trading Account deposit | (100,000) | |
Net assets acquired | 10,020,511 | |
Excess of purchase price over net liabilities assumed before allocation to identifiable intangible assets and goodwill | 18,928,355 | $ 18,928,355 |
WILSON-DAVIS | Short term | ||
ACQUISITION OF WILSON-DAVIS | ||
Short-term and long-term notes | 5,000,000 | |
WILSON-DAVIS | Long term | ||
ACQUISITION OF WILSON-DAVIS | ||
Short-term and long-term notes | $ 7,971,197 |
ACQUISITION OF WILSON-DAVIS - U
ACQUISITION OF WILSON-DAVIS - Unidentified excess of the purchase price over the fair value of the net assets acquired recorded as goodwill (Details) - USD ($) | 3 Months Ended | |
Feb. 07, 2024 | Mar. 31, 2024 | |
ACQUISITION OF WILSON-DAVIS | ||
Intangible assets excluding goodwill | $ 38,053,935 | |
WILSON-DAVIS | ||
ACQUISITION OF WILSON-DAVIS | ||
Intangible Assets | $ 18,928,355 | 18,928,355 |
Value of licenses based on replacement costs | $ 4,550,000 | |
Term of licenses replacement costs | 16 months | |
Estimated replication cost (as a percent) | 12% | |
Development period (in years) | 1 year 3 months | |
Annual rate of return (as a percent) | 27.90% | |
WILSON-DAVIS | Customer Lists | ||
ACQUISITION OF WILSON-DAVIS | ||
Intangible assets excluding goodwill | $ 14,374,411 | |
Estimated Useful Life (Years) | 15 years | |
WILSON-DAVIS | Licenses | ||
ACQUISITION OF WILSON-DAVIS | ||
Intangible assets excluding goodwill | $ 4,553,944 |
ACQUISITION OF THE ASSETS OF _3
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC | |||
Shares issued as purchase consideration for the assets (in shares) | 4,400,000 | ||
Common Stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Threshold period from Closing to achieve milestones considered for issuance of Earn Out Shares | 18 months | ||
Period for measurement of revenue targets | 5 years | ||
Atlas FinTech | |||
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC | |||
Earn Out Shares, maximum shares issuable to stockholders (in shares) | 5,944,444 | ||
Threshold period from Closing to achieve milestones considered for issuance of Earn Out Shares | 18 months | ||
Software Products Earn Out Shares, maximum amount of shares issuable to stockholders | $ 20,000 | ||
Period for measurement of revenue targets | 5 years | ||
ATLASCLEAR, INC | |||
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC | |||
Shares issued as purchase consideration for the assets (in shares) | 4,440,000 | ||
Common Stock, par value (in Dollars per share) | $ 0.0001 | ||
Earn Out Shares, maximum shares issuable to stockholders (in shares) | 5,944,444 | ||
Software Products Earn Out Shares, maximum amount of shares issuable to stockholders | $ 20,000 |
ACQUISITION OF THE ASSETS OF _4
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC - Purchase price allocation (Details) | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC | |
Fair value of Software Product Earn Out Shares | $ 10,963,000 |
Fair value of Earn Out Shares | 31,347,000 |
ATLASCLEAR, INC | |
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC | |
Total Purchase Price | 44,400,000 |
Fair value of Software Product Earn Out Shares | 10,963,000 |
Fair value of Earn Out Shares | 31,347,000 |
Purchase price allocated to Contribution Agreement | 86,710,000 |
Total Developed Technology acquired | 18,163,044 |
Transaction cost | 68,546,956 |
ATLASCLEAR, INC | SURFACExchange | |
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC | |
Total Developed Technology acquired | 381,461 |
ATLASCLEAR, INC | Bond Quantum | |
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC | |
Total Developed Technology acquired | 32,284 |
ATLASCLEAR, INC | Atlas | |
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC | |
Total Developed Technology acquired | 7,749,299 |
ATLASCLEAR, INC | Rubicon | |
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC | |
Total Developed Technology acquired | $ 10,000,000 |
ACQUISITION OF THE ASSETS OF _5
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC - Additional information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Nov. 03, 2023 | |
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC | ||
Shares issued as purchase consideration for the assets (in shares) | 4,400,000 | |
Price per public share (in Dollars per share) | $ 10 | $ 10.73 |
Period for measurement of revenue targets | 5 years | |
Threshold period from Closing to achieve milestones considered for issuance of Earn Out Shares | 18 months | |
Atlas FinTech | ||
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC | ||
Software Products Earn Out Shares, maximum amount of shares issuable to stockholders | $ 20,000,000 | |
Period for measurement of revenue targets | 5 years | |
Earn Out Shares, maximum shares issuable to stockholders (in shares) | 5,944,444 | |
Threshold period from Closing to achieve milestones considered for issuance of Earn Out Shares | 18 months | |
Total Developed Technology acquired | $ 18,160,000 | |
Estimated Useful Life (Years) | 8 years | |
Purchase price | $ 86,980,000 | |
Transaction cost | 68,550,000 | |
ATLASCLEAR, INC | ||
ACQUISITION OF THE ASSETS OF ATLASCLEAR, INC | ||
Total Purchase Price | $ 44,400,000 | |
Shares issued as purchase consideration for the assets (in shares) | 4,440,000 | |
Software Products Earn Out Shares, maximum amount of shares issuable to stockholders | $ 20,000,000 | |
Earn Out Shares, maximum shares issuable to stockholders (in shares) | 5,944,444 | |
Total Developed Technology acquired | $ 18,163,044 | |
Transaction cost | $ 68,546,956 |
INTANGIBLE ASSETS - Pacsquare P
INTANGIBLE ASSETS - Pacsquare Purchase Agreement (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2024 | Dec. 31, 2023 | Aug. 01, 2023 | Dec. 31, 2022 | |
INTANGIBLE ASSES | ||||
Market price of public shares (in Dollars per share) | $ 6.20 | $ 10.57 | ||
Common stock, shares issued | 12,277,759 | 5,031,250 | 5,031,250 | |
Common Stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
AtlasClear Platform | Pacsquare | ||||
INTANGIBLE ASSES | ||||
Threshold period to receive level 1 equities trading platform from signing of agreement | 12 months | |||
Purchase price | $ 4,800,000 | |||
Payable in cash and in shares of common stock | 1,900,000 | |||
Payable in cash upon delivery of source code and execution of purchase agreement | 100,000 | |||
Total Purchase Price | $ 850,000 | |||
Market price of public shares (in Dollars per share) | $ 6 | |||
Four monthly installments payable | $ 950,000 | |||
Monthly installments payable | $ 4 | |||
Number of monthly installments | 237,500 | |||
Payable ratably on module-by-module basis upon delivery and acceptance of each of platform modules | $ 2,700,000 | |||
Common stock, shares issued | 336,000 | |||
Cash consideration | $ 300,000 | |||
Purchase price allocated to Contribution Agreement | $ 1,416,000 | |||
AtlasClear Platform | Pacsquare | Price per share at $6.00 | ||||
INTANGIBLE ASSES | ||||
Common stock, shares issued | 136,000 | |||
Common Stock, par value (in Dollars per share) | $ 6 | |||
AtlasClear Platform | Pacsquare | Price per share at $1.50 | ||||
INTANGIBLE ASSES | ||||
Common stock, shares issued | 200,000 | |||
Common Stock, par value (in Dollars per share) | $ 1.50 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) | Mar. 31, 2024 USD ($) |
Cost | |
Total intangible assets | $ 38,507,399 |
Accumulated Amortization | (453,464) |
Net | |
Total intangible assets | 38,053,935 |
Technology acquired | |
Cost | |
Finite lived | 18,163,044 |
Accumulated Amortization | (317,231) |
Net | |
Finite lived | 17,845,813 |
Customer Lists | |
Cost | |
Finite lived | 14,374,411 |
Accumulated Amortization | (136,233) |
Net | |
Finite lived | 14,238,178 |
Licenses | |
Cost | |
Indefinite lived | 4,553,944 |
Net | |
Indefinite lived | 4,553,944 |
Pacsquare assets - Proprietary Software | |
Cost | |
Indefinite lived | 1,416,000 |
Net | |
Indefinite lived | $ 1,416,000 |
DEPOSIT ON ACQUISITION OF COM_2
DEPOSIT ON ACQUISITION OF COMMERCIAL BANCORP - Amendment to Bank Acquisition Agreement (Details) | Feb. 26, 2024 USD ($) shares |
DEPOSIT ON ACQUISITION OF COMMERCIAL BANCORP | |
Shares issued in lieu of nonrefundable escrow deposit | shares | 40,000 |
Nonrefundable escrow deposit | $ | $ 2.28 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | Feb. 01, 2024 USD ($) | Jan. 01, 2024 USD ($) | Apr. 01, 2020 USD ($) | Mar. 31, 2024 USD ($) | Feb. 09, 2024 USD ($) | Dec. 21, 2023 ft² | Oct. 16, 2023 ft² | Feb. 29, 2020 ft² |
LEASES | ||||||||
Operating Lease Right to Use Lease Asset | $ 368,965 | $ 395,064 | ||||||
Operating lease liability | $ 374,214 | $ 400,840 | ||||||
Texas | ||||||||
LEASES | ||||||||
Term of lease | 63 months | |||||||
Area of land leased | ft² | 2,539 | |||||||
Lease renewal term | 5 years | |||||||
Operating Lease Right to Use Lease Asset | $ 172,562 | |||||||
Operating lease liability | $ 172,562 | |||||||
Incremental borrowing rate used as discount rate | 4.75% | |||||||
Colorado | ||||||||
LEASES | ||||||||
Term of lease | 12 years | |||||||
Area of land leased | ft² | 464 | |||||||
Operating Lease Right to Use Lease Asset | $ 12,903 | |||||||
Operating lease liability | 12,903 | |||||||
Operating lease monthly payments made | $ 1,100 | |||||||
Incremental borrowing rate used as discount rate | 5% | |||||||
Utah | ||||||||
LEASES | ||||||||
Term of lease | 3 years | |||||||
Area of land leased | ft² | 5,334 | |||||||
Lease renewal term | 3 years | |||||||
Operating Lease Right to Use Lease Asset | $ 333,010 | |||||||
Operating lease liability | $ 333,010 | |||||||
Incremental borrowing rate used as discount rate | 5% | |||||||
Annual rent escalation (in percent) | 3% | |||||||
Minimum | Texas | ||||||||
LEASES | ||||||||
Operating lease monthly payments made | $ 3,120 | |||||||
Minimum | Utah | ||||||||
LEASES | ||||||||
Operating lease monthly payments made | $ 9,476 | |||||||
Maximum | Texas | ||||||||
LEASES | ||||||||
Operating lease monthly payments made | $ 3,544 | |||||||
Maximum | Utah | ||||||||
LEASES | ||||||||
Operating lease monthly payments made | $ 10,053 |
LEASES - Schedule of other info
LEASES - Schedule of other information related to the Company's operating leases (Details) | 2 Months Ended |
Mar. 31, 2024 USD ($) | |
LEASES | |
Operating lease ROU Asset - February 9, 2024 | $ 395,064 |
Amortization | (26,099) |
Operating lease ROU Asset - Ending Balance | 368,965 |
Operating lease liability - February 9, 2024 | 400,840 |
Amortization | (26,626) |
Operating lease liability - ending balance | 374,214 |
Operating lease liability - Short Term | 159,933 |
Operating lease liability - Long Term | 214,281 |
Total operating lease liability | $ 374,214 |
LEASES - Schedule of weighted-a
LEASES - Schedule of weighted-average remaining lease term and weighted-average discount rates related to the Company's operating leases (Details) | Mar. 31, 2024 |
LEASES | |
Weighted average remaining lease term | 2 years 6 months 25 days |
Weighted average discount rate | 4.96% |
LEASES - Tabular disclosure of
LEASES - Tabular disclosure of future minimum payments required by the lease agreements (Details) - USD ($) | Mar. 31, 2024 | Feb. 09, 2024 |
LEASES | ||
2024 | $ 126,769 | |
2025 | 134,985 | |
2026 | 113,721 | |
2027 | 9,477 | |
Total minimum lease payments | 384,952 | |
Less interest factor | (10,738) | |
Total operating lease liability | 374,214 | $ 400,840 |
Current portion of lease liability | (159,933) | |
Long-term lease liability | $ 214,281 |
STOCKHOLDERS' DEFICIT (Detail_2
STOCKHOLDERS' DEFICIT (Details) | 3 Months Ended | 12 Months Ended | ||||
Feb. 09, 2024 shares | Feb. 04, 2021 shares | Mar. 31, 2024 USD ($) $ / shares shares | Dec. 31, 2023 $ / shares shares | Aug. 01, 2023 $ / shares | Dec. 31, 2022 $ / shares shares | |
STOCKHOLDERS' DEFICIT | ||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 | |||
Preferred stock, par value (in Dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Preferred stock, shares issued | 0 | 0 | 0 | |||
Preferred stock, shares outstanding | 0 | 0 | 0 | |||
Common Stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | |||
Common Stock, par value (in Dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Common Stock, voting rights | one | Holders of the Company’s Common Stock are entitled to one vote for each share. | ||||
Common stock, shares issued | 12,277,759 | 5,031,250 | 5,031,250 | |||
Common stock, shares outstanding | 12,277,759 | 5,031,250 | 5,031,250 | |||
Common Stock subject to possible redemption | 5,050,384 | 20,125,000 | ||||
Market price of public shares (in Dollars per share) | $ / shares | $ 6.20 | $ 10.57 | ||||
Number of shares called by each warrant | 0.5 | |||||
Quantum Fintech Acquisition Corp | ||||||
STOCKHOLDERS' DEFICIT | ||||||
Share exchange ratio | 1 | |||||
Quantum Fintech Acquisition Corp | Warrants issued in exchange for public warrants to purchase Quantum Common Stock | ||||||
STOCKHOLDERS' DEFICIT | ||||||
Number of shares called by each warrant | 0.5 | |||||
Quantum Fintech Acquisition Corp | Warrants issued in exchange for private warrants to purchase Quantum Common Stock | ||||||
STOCKHOLDERS' DEFICIT | ||||||
Number of shares called by each warrant | 1 | |||||
Founder Shares | ||||||
STOCKHOLDERS' DEFICIT | ||||||
Shares owned | 4,000,000 | |||||
Chardan Quantum LLC | ||||||
STOCKHOLDERS' DEFICIT | ||||||
Shares owned | 949,084 | |||||
Sponsor | ||||||
STOCKHOLDERS' DEFICIT | ||||||
Shares owned | 3,050,916 | |||||
Quantum Common Stock | ||||||
STOCKHOLDERS' DEFICIT | ||||||
Common stock, shares issued | 12,277,759 | |||||
Common stock, shares outstanding | 11,781,759 | |||||
Common Stock subject to possible redemption | 109,499 | |||||
Aggregate shares | 4,940,885 | |||||
Market price of public shares (in Dollars per share) | $ / shares | $ 10.92 | |||||
Shares redeemed | $ | $ 53,947,064.28 | |||||
Remaining balance of trust account | $ | $ 1,200,000 |
WARRANTS (Details)_2
WARRANTS (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 USD ($) D $ / shares shares | Dec. 31, 2023 USD ($) D $ / shares shares | Dec. 31, 2022 USD ($) shares | Feb. 12, 2021 shares | |
WARRANTS | ||||
Expire term | 5 years | 5 years | ||
Issue price per share (in Dollars per share) | $ 9.20 | $ 9.20 | ||
Equity proceeds | 60% | 60% | ||
Exercise price per share (in Dollars per share) | $ 9.50 | $ 9.50 | ||
Warrant Percentage | 115% | 115% | ||
Issue price | 16.50 | 16.50 | ||
Market value percentage | 165% | 165% | ||
Private warrants (in Dollars) | $ | $ 615,312 | $ 307,656 | $ 6,153,125 | |
Number of shares called by each warrant | shares | 0.5 | |||
Warrant exercise price (in Dollars per share) | $ 11.50 | |||
Public Warrants Member | ||||
WARRANTS | ||||
Public warrants outstanding (in Shares) | shares | 20,125,000 | 20,125,000 | 20,125,000 | |
Term from the closing of the Initial Public Offering | 1 year | |||
Number of days within which the registration statement should be declared effective | 120 days | 120 days | ||
Redemption price per warrant (in Dollars per share) | $ 0.01 | $ 0.01 | ||
Notice period redemption | 30 days | 30 days | ||
Price of the entity's common stock (in Dollars per share) | $ 16.50 | $ 16.50 | ||
Threshold number of specified trading days | D | 20 | 20 | ||
Threshold consecutive number of specified trading days | D | 30 | 30 | ||
Number of shares called by each warrant | shares | 0.5 | |||
Warrant exercise price (in Dollars per share) | $ 11.50 | |||
Private Warrants Member | ||||
WARRANTS | ||||
Public warrants outstanding (in Shares) | shares | 6,153,125 | 1,112,500 | 590,625 | |
Private warrants (in Dollars) | $ | $ 5,562,500 | |||
Number of shares called by each warrant | shares | 1 | 1 | ||
Warrant exercise price (in Dollars per share) | $ 11.50 | $ 11.50 |
FAIR VALUE MEASUREMENTS - Sch_5
FAIR VALUE MEASUREMENTS - Schedule of Company's assets and liabilities that are measured at fair value on a recurring basis (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
FAIR VALUE MEASUREMENTS | |||
Marketable securities held in Trust Account | $ 55 | $ 54,799,478 | |
Convertible notes derivative | 12,369,480 | ||
Level 1 | |||
FAIR VALUE MEASUREMENTS | |||
Marketable securities held in Trust Account | 54,799,478 | $ 204,044,469 | |
Level 3 | |||
FAIR VALUE MEASUREMENTS | |||
Warrant liability - Private Warrants | 615,312 | 307,656 | $ 184,594 |
Non-redemption agreement liability | $ 1,441,653 | ||
Convertible notes derivative | 12,369,480 | ||
Earnout liability | $ 11,183,000 |
FAIR VALUE MEASUREMENTS - Sch_6
FAIR VALUE MEASUREMENTS - Schedule of Key Inputs into the Black-Scholes model for the Private Warrants (Details) | 3 Months Ended | 12 Months Ended | |
Feb. 09, 2024 USD ($) | Mar. 31, 2024 USD ($) $ / shares shares | Dec. 31, 2023 $ / shares shares | |
FAIR VALUE MEASUREMENTS | |||
Effective expiration date | Feb. 09, 2029 | Feb. 09, 2028 | |
Non-redemption agreement liability shares (in Shares) | shares | 235,180 | 235,180 | |
Non-redemption of common stock shares (in Shares) | shares | 235,180 | 235,180 | |
Warrants reclassified as permanent equity at total value | $ | $ 1,606,279 | $ 1,606,279 | |
Market price of public shares | |||
FAIR VALUE MEASUREMENTS | |||
Private warrants | $ / shares | 1.60 | 6.20 | |
Risk-free rate | |||
FAIR VALUE MEASUREMENTS | |||
Private warrants | 4.14 | 3.77 | |
Dividend yield | |||
FAIR VALUE MEASUREMENTS | |||
Private warrants | 0 | 0 | |
Volatility | |||
FAIR VALUE MEASUREMENTS | |||
Private warrants | 51.1 | 12 | |
Probability of a business combination | |||
FAIR VALUE MEASUREMENTS | |||
Private warrants | 100 | 100 | |
Exercise price | |||
FAIR VALUE MEASUREMENTS | |||
Private warrants | $ / shares | 11.50 | 11.50 |
FAIR VALUE MEASUREMENTS - Sch_7
FAIR VALUE MEASUREMENTS - Schedule of key inputs into the Monte Carlo model for the non-redeemable Common Stock (Details) | Dec. 31, 2023 $ / shares |
Market price of public shares | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Non-redeemable common stock | 6.20 |
Probability of acquisition | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Non-redeemable common stock | 100 |
Equity volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Non-redeemable common stock | 12 |
Discount for lack of marketability | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Non-redeemable common stock | 8 |
Discount for expected forfeiture | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Non-redeemable common stock | 5.11 |
FAIR VALUE MEASUREMENTS - Monte
FAIR VALUE MEASUREMENTS - Monte Carlo model for the Earnout liability (Details) | Mar. 31, 2024 $ / shares | Feb. 09, 2024 $ / shares |
Market price of public shares | ||
FAIR VALUE MEASUREMENTS | ||
Earnout liability | 1.60 | 10.26 |
Revenue volatility | ||
FAIR VALUE MEASUREMENTS | ||
Earnout liability | 15 | 15 |
Discount factor for revenue | ||
FAIR VALUE MEASUREMENTS | ||
Earnout liability | 96.9 | 99.5 |
FAIR VALUE MEASUREMENTS - Sch_8
FAIR VALUE MEASUREMENTS - Schedule of changes in the fair value of the PIPE derivative liability and the warrant liability (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | |
Feb. 09, 2024 | Mar. 31, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |||||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Fair Value Adjustment of Warrants, Fair Value Adjustment Of Non-redemption Agreement Liability | Derivative, Gain (Loss) on Derivative, Net, Fair Value Adjustment of Warrants | |||
Private Placement Warrants | |||||
FAIR VALUE MEASUREMENTS | |||||
Fair value | $ 307,656 | $ 307,656 | |||
Change in valuation inputs or other assumptions | 307,656 | ||||
Fair value | $ 615,312 | 615,312 | $ 307,656 | ||
Non-Redemption Agreement Liability | |||||
FAIR VALUE MEASUREMENTS | |||||
Fair value | 1,441,653 | 1,441,653 | |||
Change in valuation inputs or other assumptions | 164,626 | ||||
Transferred to equity | (1,606,279) | ||||
Fair value | 1,441,653 | ||||
Conversion derivative | |||||
FAIR VALUE MEASUREMENTS | |||||
Fair value | 0 | 0 | |||
Initial measurement as of February 9, 2024 | 1,668,730 | ||||
Change in valuation inputs or other assumptions | 10,700,750 | ||||
Fair value | 12,369,480 | 12,369,480 | 0 | ||
Earnout Liability | |||||
FAIR VALUE MEASUREMENTS | |||||
Fair value | 0 | 0 | |||
Initial measurement as of February 9, 2024 | 10,963,000 | ||||
Change in valuation inputs or other assumptions | 220,000 | ||||
Fair value | $ 11,183,000 | 11,183,000 | 0 | ||
Private Placement Warrants | |||||
FAIR VALUE MEASUREMENTS | |||||
Fair value | 307,656 | 307,656 | 184,594 | $ 7,137,930 | |
Change in valuation inputs or other assumptions | 123,062 | (6,953,336) | |||
Fair value | 307,656 | 184,594 | |||
Non-Redemption Agreement Liability | |||||
FAIR VALUE MEASUREMENTS | |||||
Fair value | $ 1,441,653 | $ 1,441,653 | |||
Initial measurement as of February 9, 2024 | 1,881,440 | ||||
Change in valuation inputs or other assumptions | (439,787) | ||||
Fair value | $ 1,441,653 | ||||
PIPE Derivative Liability | |||||
FAIR VALUE MEASUREMENTS | |||||
Fair value | 4,566,000 | ||||
Change in valuation inputs or other assumptions | $ (4,566,000) |
FAIR VALUE MEASUREMENTS - Level
FAIR VALUE MEASUREMENTS - Level 3 fair value measurement key inputs into the Black-Scholes model for the Conversion derivative (Details) | Mar. 31, 2024 $ / shares | Feb. 09, 2024 $ / shares |
Market price of public shares | Short Term Notes | ||
FAIR VALUE MEASUREMENTS | ||
Convertible derivative liability, measurement input | 1.60 | 10.26 |
Market price of public shares | Long-Term Notes | ||
FAIR VALUE MEASUREMENTS | ||
Convertible derivative liability, measurement input | 1.60 | 10.26 |
Market price of public shares | Chardan Note | ||
FAIR VALUE MEASUREMENTS | ||
Convertible derivative liability, measurement input | 1.60 | 10.26 |
Risk-free rate | Short Term Notes | ||
FAIR VALUE MEASUREMENTS | ||
Convertible derivative liability, measurement input | 5.49 | 4.48 |
Risk-free rate | Long-Term Notes | ||
FAIR VALUE MEASUREMENTS | ||
Convertible derivative liability, measurement input | 4.59 | 4.48 |
Risk-free rate | Chardan Note | ||
FAIR VALUE MEASUREMENTS | ||
Convertible derivative liability, measurement input | 4.31 | 4.48 |
Dividend yield | Short Term Notes | ||
FAIR VALUE MEASUREMENTS | ||
Convertible derivative liability, measurement input | 0 | 0 |
Dividend yield | Long-Term Notes | ||
FAIR VALUE MEASUREMENTS | ||
Convertible derivative liability, measurement input | 0 | 0 |
Dividend yield | Chardan Note | ||
FAIR VALUE MEASUREMENTS | ||
Convertible derivative liability, measurement input | 0 | 0 |
Volatility | Short Term Notes | ||
FAIR VALUE MEASUREMENTS | ||
Convertible derivative liability, measurement input | 10,274 | 4,120 |
Volatility | Long-Term Notes | ||
FAIR VALUE MEASUREMENTS | ||
Convertible derivative liability, measurement input | 10,274 | 41,200 |
Volatility | Chardan Note | ||
FAIR VALUE MEASUREMENTS | ||
Convertible derivative liability, measurement input | 166,681 | 4,120 |
Exercise price | Short Term Notes | ||
FAIR VALUE MEASUREMENTS | ||
Convertible derivative liability, measurement input | 1.60 | 10.26 |
Exercise price | Long-Term Notes | ||
FAIR VALUE MEASUREMENTS | ||
Convertible derivative liability, measurement input | 1.60 | 10.26 |
Exercise price | Chardan Note | ||
FAIR VALUE MEASUREMENTS | ||
Convertible derivative liability, measurement input | 1.43 | 10.26 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) | 1 Months Ended | 2 Months Ended | 3 Months Ended | ||
Feb. 09, 2024 USD ($) D | Feb. 09, 2021 | Feb. 09, 2024 USD ($) | Mar. 31, 2024 USD ($) | Mar. 31, 2024 USD ($) | |
Short-Term Debt [Line Items] | |||||
Maturity (in days) | 185 days | ||||
Carrying value of short term notes | $ 4,788,824 | $ 4,788,824 | |||
Carrying value of long term notes | 7,249,309 | 7,249,309 | |||
Marketing fees payable to underwriters | $ 7,043,750 | ||||
Carrying value of chardan note | 3,775,017 | 3,775,017 | |||
Conversion derivative | |||||
Short-Term Debt [Line Items] | |||||
Initial measurement as of February 9, 2024 | $ 1,668,730 | ||||
Increase in fair value of derivative liability | 10,700,750 | ||||
Short Term Notes | Conversion derivative | |||||
Short-Term Debt [Line Items] | |||||
Initial measurement as of February 9, 2024 | 487,329 | ||||
Increased fair value | 3,582,929 | 3,582,929 | |||
Unamortized discount | 487,929 | 487,929 | |||
Amortization of discount | 276,153 | ||||
Increase in fair value of derivative liability | 3,125,000 | ||||
Short Term Notes | Wilson-Davis Sellers | |||||
Short-Term Debt [Line Items] | |||||
Aggregate principal amount | $ 5,000,000 | $ 5,000,000 | |||
Maturity (in days) | 90 days | ||||
Interest rate (in percent) | 9% | 9% | |||
Interest payable in shares, as a percentage of trailing specified trading day VWAP (in percent) | 90% | ||||
Interest payable in shares, Number of trading days over which the VWAP is considered | D | 7 | ||||
Conversion rate, as a percentage of trailing specified trading day VWAP (in percent) | 90% | ||||
Conversion rate, Number of trading days over which the VWAP is considered | D | 7 | ||||
Long-Term Notes | Conversion derivative | |||||
Short-Term Debt [Line Items] | |||||
Initial measurement as of February 9, 2024 | $ 404,483 | ||||
Amortization of discount | 12,640 | ||||
Carrying value of short term notes | 3,775,017 | 3,775,017 | |||
Long-Term Notes | Conversion derivative | Minimum | |||||
Short-Term Debt [Line Items] | |||||
Increase in fair value of derivative liability | 2,593,750 | ||||
Long-Term Notes | Conversion derivative | Maximum | |||||
Short-Term Debt [Line Items] | |||||
Increase in fair value of derivative liability | $ 2,998,233 | ||||
Long-Term Notes | Wilson-Davis Sellers | |||||
Short-Term Debt [Line Items] | |||||
Aggregate principal amount | $ 7,971,197 | $ 7,971,197 | |||
Maturity (in days) | 2 years | ||||
Interest rate (in percent) | 13% | 13% | |||
Interest payable in shares, as a percentage of trailing specified trading day VWAP (in percent) | 90% | ||||
Interest payable in shares, Number of trading days over which the VWAP is considered | D | 7 | ||||
Period after the Closing Date, when the debt instrument can be converted | 6 months | ||||
Conversion rate, as a percentage of trailing specified trading day VWAP (in percent) | 90% | ||||
Conversion rate, Number of trading days over which the VWAP is considered | D | 7 | ||||
Conversion rate, as a percentage of trailing seven-trading day VWAP, if an event of default occurs and is continuing (in percent) | 85% | ||||
Long-Term Notes | Interest Solutions | |||||
Short-Term Debt [Line Items] | |||||
Aggregate principal amount | $ 275,000 | $ 275,000 | |||
Interest rate (in percent) | 13% | 13% | |||
Long-Term Notes | JonesTrading Institutional Services | |||||
Short-Term Debt [Line Items] | |||||
Interest rate (in percent) | 13% | 13% | |||
Long-Term Notes | Funicular Funds | |||||
Short-Term Debt [Line Items] | |||||
Aggregate principal amount | $ 6,000,000 | $ 6,000,000 | |||
Interest rate (in percent) | 12.50% | 12.50% | |||
Chardan Note | |||||
Short-Term Debt [Line Items] | |||||
Aggregate principal amount | $ 4,150,000 | $ 4,150,000 | |||
Interest rate (in percent) | 13% | 13% | |||
Interest payable in shares, as a percentage of trailing specified trading day VWAP (in percent) | 85% | ||||
Conversion rate, as a percentage of trailing specified trading day VWAP (in percent) | 90% | ||||
Number of years up to which the converted amount is to be held for payment of interest | 3 years | 3 years | |||
Chardan Note | Chardan Capital Market LLC | |||||
Short-Term Debt [Line Items] | |||||
Aggregate principal amount | $ 4,150,000 | $ 4,150,000 | |||
Interest rate (in percent) | 13% | 13% | |||
Interest payable in shares, as a percentage of trailing specified trading day VWAP (in percent) | 85% | ||||
Conversion rate, as a percentage of trailing specified trading day VWAP (in percent) | 90% | ||||
Marketing fees payable to underwriters | $ 7,043,750 | ||||
Chardan Note | JonesTrading Institutional Services | |||||
Short-Term Debt [Line Items] | |||||
Aggregate principal amount | $ 375,000 | $ 375,000 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair value Assets and Liabilities Transfer Amount (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
FAIR VALUE MEASUREMENTS | ||
Asset transfers from level1 to level2 | $ 0 | $ 0 |
Asset transfers from level2 to level1 | 0 | 0 |
Liability transfers from level1 to level2 | 0 | 0 |
Liability transfers from level2 to level1 | 0 | 0 |
Asset transfers into or out of level 3 | 0 | 0 |
Liability transfers into or out of level 3 | $ 0 | $ 0 |
SUBSEQUENT EVENTS (Details)_2
SUBSEQUENT EVENTS (Details) - USD ($) | 3 Months Ended | |||||||
Apr. 08, 2024 | Apr. 04, 2024 | Feb. 09, 2024 | Mar. 31, 2024 | May 14, 2024 | Dec. 31, 2023 | Nov. 03, 2023 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | ||||||||
Common Stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Common stock issued to settled vendor obligations | $ 1,513,100 | |||||||
Price per public share (in Dollars per share) | $ 10 | $ 10.73 | ||||||
Shares issued in settlement of obligations (in shares) | 2,201,010 | |||||||
Subsequent event | ||||||||
Subsequent Event [Line Items] | ||||||||
Shares issued in settlement of obligations (in shares) | 2,201,010 | |||||||
Maximum number of resale shares registered | 37,885,852 | |||||||
Calabrese Consulting LLC | Subsequent event | ||||||||
Subsequent Event [Line Items] | ||||||||
Common Stock, par value (in Dollars per share) | $ 2 | |||||||
Common stock issued to settled vendor obligations (in shares) | 32,188 | |||||||
Common stock issued to settled vendor obligations | $ 64,236 | |||||||
Wilson-Davis Sellers | Subsequent event | ||||||||
Subsequent Event [Line Items] | ||||||||
Shares issued in settlement of obligations (in shares) | 145,210 |