Comparison of the Year Ended December 31, 2023 Compared to Year Ended December 31, 2022
We had neither engaged in any operations nor generated any revenues through December 31, 2023. Our only activities through December 31, 2023, were organizational activities, the initial public offering of Quantum, and subsequent to the initial public offering, identifying a target company for, and completing, a business combination.
For the year ended December 31, 2023, we had net income of $794,950, which consists of income earned on marketable securities held in trust account of $3,090,086, net gain on settlement of $829,853, change in fair value of non-redemption agreement liability of $439,787 and interest income from bank of $22,195, partially offset by change in fair value of warrant liability of $123,062, operating costs of $2,737,871 and provision for income taxes of $726,038.
For the year ended December 31, 2022, we had a net income of $11,045,567, which consists of income earned on marketable securities held in trust account of $3,087,315, change in fair value of PIPE derivative liability of $4,566,000 and change in fair value of warrant liability of $6,953,336, partially offset by operating costs of $3,024,231 and provision for income taxes of $536,853.
Liquidity and Capital Resources
Cash provided by operating activities for the three-month period ended September 30, 2024 was $175,607 as compared to cash used in operating activities for the three-month period ended September 30, 2023 of $637,971. This was primarily affected by $371,396 in changes in operational assets and liabilities and the impact of operating revenue and operating expense due to the Business Combination and asset purchase transaction with AtlasClear. Adjustment to net income primarily consisted of change in fair value related to various financial instruments as discussed above resulting in an adjustment of $12,561,125. Further adjustments for the income was non-cash interest expense on convertible notes and other financial instruments of $1,403,503, Fee on sellers note $16,340, amortization of intangible assets of $307,191 and a gain on Tau agreement of $30,562.
Cash used in operating activities for the six months period ended June 30, 2024 was $11,227,227 as compared 785,611 for the six month period ended June 30, 2023. This was primarily affected by $3,879,692 in changes in operational assets and liabilities and the impact of operating revenue and operating expense due to the business combination and asset purchase transaction with AtlasClear, Inc. Adjustment to net loss primarily consisted of change in fair value related to the Non-redemption Agreement resulting in a loss of $164,626. As settlement with Chardan the company issued a convertible note to Chardan which required the conversion element to be accounted for as a derivative resulting in a loss of $3,585,902. The sellers of Wilson-Davis received convertible short term and long term note which required the conversion element to be accounted for as a derivative resulting in a loss of $11,208,055 as well as a Commitment guarantee resulting in a loss of $3,256,863. The Company granted earnout shares as part of the consideration paid to AtlasClear, Inc which resulted in a loss of $1,335,000. The Company entered into a Subscription Agreement with a Winston & Strawn which required fair value accounting under ASC 480 creating a loss of $38,796. Further adjusted for the loss on business combination for the assets acquired from AtlasClear of $86,392,769, stock based compensation of $1,462,650, non-cash interest expense on convertible notes of $1,896,714, transaction cost paid with stock of $1,401,937, Fee on Secured Convertible note of $1,500,000 and $616,098 other non-cash operating changes.
For the year ended December 31, 2023, net cash used in operating activities was $1,819,835. Net income of $794,950 was affected by income earned on marketable securities held in the trust account of $3,090,086, change in fair value of warrant liability of $123,062, and change in fair value of non-redemption agreement liability of $439,787. Changes in operating assets and liabilities provided $791,193 of cash for operating activities, primarily due to an increase in accounts payable and accrued expenses.
For the year ended December 31, 2022, net cash used in operating activities was $1,084,259. Net income of $11,045,567 was affected by income earned on marketable securities held in the trust account of $3,087,315, change in fair value of PIPE derivative liability of $4,566,000 and the change in fair value of warrant liability of $6,953,336. Changes in operating assets and liabilities provided $2,476,825 of cash for operating activities, primarily due to an increase in accounts payable and accrued expenses.
Cash used for investing activities for the three-month period ended September 30, 2024 was $65,000 as compared to $4,151,434 for the three-month period ended September 30, 2023. This is primarily due to the redemptions of cash held in Quantum’s trust account of $4,286,537. The $65,000 of cash used for investing activities in the period ended September 30, 2024 represents cash payment towards the AtlasClear Platform.