AtlasClear Holdings, Inc. (NYSE American:ATCH) has reached a settlement agreement with Quantum (NASDAQ:QMCO) Ventures LLC and Chardan Capital Markets, LLC, resolving claims mentioned in an April 17, 2024, SEC filing. The settlement, dated October 23, 2024, involves exchanging a $4,150,000 convertible note for a new $5,209,764 non-interest-bearing convertible note, with the conversion terms largely unchanged and the maturity date consistent with the original note.
Additionally, AtlasClear Holdings has amended its registration rights agreement with Chardan, committing to file a resale registration statement with the SEC by December 31, 2024, for shares issuable upon conversion of the new note. If the filing is delayed, interest on the note will increase by 2% per annum until the filing date, and if not effective by March 31, 2025, the interest will rise to 19.99% per annum from that date until it becomes effective.
In other company news, on Monday, AtlasClear Holdings held a special stockholder meeting, where several proposals were approved. Stockholders voted in favor of a range of reverse stock split proposals, including 1-for-30, 1-for-40, 1-for-50, and 1-for-60 options, authorizing the board to enact or abandon the reverse stock split by October 25, 2025. Furthermore, stockholders approved an increase in authorized shares of common stock from 100 million to 500 million and preferred stock from 1 million to 25 million.
In other recent news, AtlasClear Holdings, Inc. reported significant developments. The company announced the resignation of two board members, Steven Carlson and James Tabacchi. The company made it clear that the resignations were not due to any disagreements with the company's operations, policies, or practices.
AtlasClear also reported a change in its fiscal year-end from December 31 to June 30, a decision made to streamline financial reporting and align the company's fiscal calendar with operational cycles. Furthermore, the company has entered into a significant agreement with Tau Investment Partners LLC, establishing an at-the-market equity line of credit (ELOC). This deal allows AtlasClear to instruct Tau to purchase up to $10 million of its common stock over the next 24 months.
InvestingPro Insights
Recent data from InvestingPro sheds light on AtlasClear Holdings' (NYSE American:ATCH) current financial situation, providing context to the recent settlement and stockholder decisions. The company's market capitalization stands at a modest $15.98 million, reflecting its small-cap status. This valuation aligns with the company's recent actions, including the settlement of claims and the approval of reverse stock split options, which are often strategies employed by smaller companies facing financial challenges.
InvestingPro data reveals that ATCH's stock price has experienced significant declines across various timeframes. Most notably, the year-to-date price total return is -97.34%, with a one-year return of -98.46%. These figures underscore the severe market pressure the company has been under, potentially explaining the need for the recently approved reverse stock split options and the increase in authorized shares.
An InvestingPro Tip indicates that the stock generally trades with high price volatility, which is evident in the recent price performance and aligns with the company's current strategic moves. Another relevant InvestingPro Tip suggests that ATCH suffers from weak gross profit margins, which may have contributed to the financial situation necessitating the recent settlement and capital structure changes.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide further insights into AtlasClear Holdings' financial health and market position.
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