What changed in this filing

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Item 1. Business

2025-09-29 compared with 2024-04-16 · 52 added, 149 removed, 265 unchanged (43% of the section changed)

On February 9, 2024 (the “Closing Date”), we consummated the previously announced transactions contemplated by that certain Business Combination Agreement, dated November 16, 2022 (as amended, the “Business Combination Agreement”), by and among the Company, Quantum FinTech Acquisition Corporation (“Quantum”), Calculator Merger Sub 1, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub 1”), Calculator Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“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.” (hereinafter referred to as “AtlasClear Holdings”).

Prior to the Closing, pursuant to (i) the Assignment and Assumption Agreement and Bill of Sale, dated November 16, 2022, by and among AtlasClear, Atlas FinTech and Atlas Financial Technologies, Corp.

(the “Contribution Agreement”), AtlasClear received certain assets from Atlas FinTech and Atlas Financial Technologies Corp., and (ii) the Stock Purchase Agreement, dated as of April 11, 2022, between Wilson-Davis & Co., Inc.

(“Wilson-Davis”) and AtlasClear (as amended, the “Broker-Dealer Acquisition Agreement”), AtlasClear completed the acquisition of broker-dealer, Wilson-Davis.

In addition, at Closing, the Agreement and Plan of Merger between Commercial Bancorp, a Wyoming corporation and parent of Farmers State Bank (“Commercial Bancorp”) and AtlasClear (as amended, the “Bank Acquisition Agreement”), pursuant to which AtlasClear has agreed to acquire Commercial Bancorp (the “CB Merger”), continued to be in full force and effect.

On February 26, 2024, AtlasClear and Commercial Bancorp entered into an amendment to the Bank Acquisition Agreement pursuant to which Commercial Bancorp received 40,000 shares of common stock, par value $0.0001 per share (the “Common Stock”), in lieu of an escrow deposit.

At Closing, AtlasClear stockholders received merger consideration in the form of 4,440,000 shares of Common Stock.

In addition, the AtlasClear stockholders 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.

Atlas FinTech will also receive up to $20 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.

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”).

Our Common Stock is now listed on the NYSE under the symbol “ATCH”.

Warrants to purchase the Common Stock at an exercise price of $11.50 per share are listed on the over-the-counter market under the symbol “ATCHW.”

Because we closed the Business Combination after the end of our fiscal year, this Annual Report principally describes our business and operations following the Closing, but includes the financial statements of Quantum and related Management’s Discussion and Analysis of Results of Operations, which describe the business, financial condition, results of operations, liquidity and capital resources of Quantum prior to the Business Combination, and disclosure in “Item 14.

Principal Accountant Fees and Services” relates to fees paid in respect of Quantum’s financial statements.

BUSINESS OF ATLASCLEAR HOLDINGS

Our 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.

We are a fintech driven business-to-business platform that expects to power innovation in fintech, investing, and trading .

We are a fintech driven business-to-business platform that expects to power innovation in fintech, investing, underwriting and trading .

We believe we are positioned to provide a modern, mission-critical suite of solutions to our clients, enabling them to reduce their transactions costs and compete more effectively in their businesses.

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As a result, such financial services firms are ideal clients for the “one stop shop” solutions our integrated business model intends to provide.

Through the acquisition of Wilson-Davis, a correspondent clearing company, and our anticipated acquisition of Commercial Bancorp, a federal reserve member, we expect to acquire the capabilities to provide specialized clearing and banking services to financial services firms, with an emphasis on global markets currently underserviced by larger vendors.

Once properly integrated, anticipated synergies between Commercial Bancorp and Wilson-Davis are expected to allow for lower cost of capital, higher net interest margins, expanded product development and greater credit extension.

In addition, we believe the AtlasClear Platform that we are currently developing and integrating following the acquisition of the Pacsquare Assets and the Fintech Assets (as described below) are cutting-edge, flexible and scalable.

Through the acquisition of Wilson-Davis, a correspondent clearing company, our acquisition of Quantum FinTech Acquisition Corporation (“Quantum”), and our anticipated acquisition of Commercial Bancorp, a federal reserve member, we expect to acquire the capabilities to provide specialized clearing and banking services to financial services firms, with an emphasis on global markets currently underserviced by larger vendors.

Once properly integrated, anticipated synergies between Commercial Bancorp, Quantum, and Wilson-Davis are expected to allow for lower cost of capital, higher net interest margins, expanded product development and greater credit extension.

In addition, we believe the AtlasClear Platform is cutting-edge, flexible and scalable.

Unlike other companies that are beholden to legacy technology stacks, that may struggle to keep pace with rapidly evolving client and customer expectations in an ever-increasing digital world, we believe our platform is modern, nimble and unencumbered.

Our team is comprised of experienced fintech innovators - a characteristic that we expect will drive our corporate culture.

Prior to the Business Combination, none of AtlasClear, Wilson-Davis, Commercial Bancorp or Quantum were managed on a combined basis with each other and have each historically operated independently.

Prior to the closing of the business combination 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 Company, Calculator Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company, AtlasClear, Inc., a Wyoming corporation (“AtlasClear”), Atlas FinTech Holdings Corp., a Delaware corporation (“Atlas FinTech”) and Robert McBey (the “Business Combination”), none of AtlasClear, Wilson-Davis or Quantum were managed on a combined basis with each other and had each historically operated independently.

The future success of the Business Combination, including its anticipated benefits, depends, in part, on our ability to optimize our combined operations, which may be a complex, costly and time-consuming process.

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Technology has opened up financial services to new users and changed expectations for customers of legacy financial services firms.

Both expect a modern and frictionless financial services experience that we beleive AtlasClear Holdings is well positioned to deliver.

Once integrated, we believe our technology platform and specialized clearing and banking services will be mission-critical to our clients, given the complexities of investing infrastructure, the complications around collateral and capital requirements, and the complicated regulatory landscape.

Both expect a modern and frictionless financial services experience that we believe AtlasClear Holdings is well positioned to deliver.

Once fully integrated, we believe our technology platform and specialized clearing and banking services will be mission-critical to our clients, given the complexities of investing infrastructure, the complications around collateral and capital requirements, and the complicated regulatory landscape.

We expect to benefit as new fintech firms launch and existing firms scale, potentially outpacing legacy financial firms in their own categories.

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Further, we anticipate increased interest from non-financial services firms (e.g., consumer retail firms) in leveraging their brand and customer reach to offer financial services as a means to drive incremental revenue and customer engagement.

We believe AtlasClear Holdings is well positioned to provide the “investing-as-a-service” platform these firms require to develop such offerings.

We believe AtlasClear Holdings is well positioned to provide the “investing-as-a-service” platform these firms may require to develop such offerings.

In addition, we believe incumbents in the wealth ecosystem, such as traditional wealth advisors, are trying to modernize their investment management offerings and better meet the digital demands of their existing end customer and potential customers.

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(e.g., growth of mobile and digital solutions).

Initially, we plan to focus on serving international clients seeking to access U.S.

Identifying and executing strategic acquisitions

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Pursuant to the Contribution Agreement, Atlas FinTech and Atlas Financial Technologies Corp.

contributed to AtlasClear all their rights, title and interest to the following software products and intellectual property assets upon the Closing (the “FinTech Assets”):

contributed to AtlasClear all their rights, title and interest to the following software products and intellectual property assets upon the closing of the Business Combination (the “FinTech Assets”).

At present, none of the FinTech assets are in production.

Further, due to limited capital contributions from the Quantum’s trust account, management views timelines for revenue recognition from the FinTech Assets to be unknowable and therefore has decided to write down the assets described below.

Although the assets have been written down, Management anticipates integrating and deploying the technology timely upon adequate capitalization and in conjunction with the proposed acquisition of Commercial Bancorp of Wyoming.

AtlasFX and Rubicon

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No customers currently utilize the Atlas FX and Rubicon FX systems.

Following the Closing, however, the number of customers which are expected to utilize the Atlas FX and Rubicon FX systems is projected to increase from 6 in Year 1 to up to 30 in Year 5.

Direct Trading Application

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An institution can use the Rubicon FX system to send market quotes to clients, and receive them in the AtlasFX application, where clients can execute their currency exchange and settlement operations in the main world currencies.

The technology is expected to provide the client with the possibility of executing most types of transactions, deliverable and non-deliverable, in the main global currencies and liquidating them in the market.

The technology is expected to provide the client with the

possibility of executing most types of transactions, deliverable and non-deliverable, in the main global currencies and liquidating them in the market.

Clearing and Settlement

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We believe a white labelled product would allow the institution to expand its business, volume and profitability in the clearing and settlement operations, since the liquidity and flow of orders can be routed through the Rubicon FX proprietary system and ultimately to the institution’s back- office system.

In other words, we anticipate that the AtlasFX application would allow an institution to offer a value-added tool to its clients which routes transactions through its own trading platform, generating income for the institution at each stage of the life cycle — analysis, trading, clearing and settlement.

Risk Management

AtlasFX is also a risk management, margin, and back-office control system where an institution has the ability to control client exposure to different markets and its own credit limitations.

Rubicon FX’s Risk Management Monitor is used by banks to manage collateral and trading risk via mark-to-market pricing.

It monitors Client Throttles, Street Exposure Monitor, Liquidity Provider Rejection Monitor, Internalized Exposure Monitor, Internalized P&L Monitor, Client Exposure Monitor, Client P&L Monitor, Strategy Server, and Fast Mode Service.

Client Throttle is a safety monitor controlling trading activity from all clients including internal activity that stops trading and notifies operators if a predefined threshold is reached.

Client Throttles thresholds include max daily volume, max street exposure, max internalized exposure, max pending street orders number, and max pending street orders exposure.

Street Exposure Monitor is used to intercept all orders going outside the system and calculates buy/sell daily volumes and street exposure for every client, including internal activity.

Internalized Exposure Monitor and Client Exposure Monitor notify operators if internalized or client exposures exceed configured thresholds.

Internalized P&L Monitor and Client P&L Monitor are used to send alarms when internalized or client P&L, floating P&L, or change in P&L exceeds configured thresholds.

Fast Mode Service controls 16 spreads during news releases.

It is backed up by a calendar table in the database that defines when widening starts, when it ends, the spread shifts either global or per client, and some additional options to control execution and risk during high-impacting events or news releases around the world.

Rubicon FX Middle Office Services

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The platform’s use of a central clearing model is expected to help facilitate anonymity.

Importantly, the SE technology platform is modular, which is expected to allow institutions to leverage different modules of the platform in different businesses with minimal customization.

SE is also expected to support real-time credit management.

While an investment has already been made in developing SE, the technology requires further development and investment before it can be deployed profitably in the market.

We cannot assure you that we would have sufficient funds following the Closing, or even if we had sufficient funds, that we would be able to successfully develop the SE technology to a point that it can be profitably deployed in the market.

We cannot assure you that we would have sufficient funds to be able to successfully develop the SE technology to a point that it can be profitably deployed in the market.

Atlas FinTech also owns BondQuantum which was fully developed by Atlas FinTech.

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Pacsquare is a fintech-focused company which provides a suite of technologies aimed at enhancing the fintech ecosystem and making it easier for businesses to accelerate their business growth.

Pacsquare offers proprietary trading applications including real time trading applications which includes options up to Level 6, digital account opening, AML risk assessment verification and the ability to customize customer and broker dealer experience including risk management and compliance.

Pacsquare’s architecture is Microservices and infrastructure is cloud based.

Microservices provides high modularity, fault isolation, threat isolation and maximum flexibility for future changes.

Cloud provides scalability, geographic redundancy, security and cutting edge technologies.

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 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”).

Pursuant to the Pacsquare Purchase Agreement, Pacsquare agreed to develop and provide, for the exclusive use of AtlasClear and its affiliates, the AtlasClear Platform and any future versions or modifications of the AtlasClear Platform and source code and any other materials necessary in connection with the services to be provided by Pacsquare for a period of six years, commencing on the date of execution of the Pacsquare Acquisition Agreement.

After the six-year term, Pacsquare is expected to continue to provide services on terms to be mutually agreed to by Pacsquare and AtlasClear.

Following the Closing, in addition to the AtlasClear Platform, AtlasClear acquired, or will acquire in time, the following technology from Pacsquare:

customer accounting;

anti-money laundering automation;

margin accounting;

regulatory compliance;

risk management;

streetside settlement — fail processing;

purchase and sales — contract compare;

new accounts;

mutual funds;

tax reporting;

cash management — wire, ACH, check;

regulatory reporting;

stock receipts and transfer;

a smart loan module;

and reports for all modules.

In addition, Pacsquare performs services for AtlasClear, including system modification;

product testing;

internet specification and installation;

training AtlasClear personnel;

implementation support;

system testing;

project control (monitoring) and reporting, as requested by AtlasClear.

Pacsquare’s business services to the Company will not include offering to a customer the ability to invest or trade in cryptocurrencies or to participate in any type of staking.

Pacsquare technology uses innovative cloud based multiple thread processing technology which AtlasClear believes will create beneficial efficiencies.

Currently, competitive systems utilize main frame technology with single thread processing that runs in a batch environment, requires more time to make changes and are prone to downtime.

Pacsquare technology operates in a real time, multiple thread processing environment which limits the down time of the system.

Wilson-Davis currently uses Fidelity National Information Services Inc.

(“FIS”) for its clearing services, pursuant to an FIS contract which is due to expire on May 2025 but will be extended as needed until the implementation of Pacsquare.

It is anticipated that the Pacsquare software applications will be fully tested before implementation and that the Company will provide demonstrations to FINRA before the software applications are put into production.

Upon the delivery, testing and implementation of these modules, we believe the Company will have a real time cloud based trading, clearing and custody solution.

Trading Level 1 Application

This application is expected to offer stock trading and options level 1 trading including real time balances calculations, risk management, trade history view, dash board and market watch list.

It will include a separate broker administrative portal to monitor customers and place trades on their behalf.

It is also expected to provide the ability to view all customers trades in real time including real time trade blotter.

We expect customers will be able to place trades in real time and get real time market data and news including fundamental data.

This includes routing trades for both equities and options through an order management system (“OMS”) engine developed for AtlasClear.

The Pacsquare software application is expected to provide the ability to trade equities, options and fixed income products, as does the current FIS software.

Although the Pacsquare software will have the ability to trade fractional equity shares, the Company does not currently anticipate using the fractional trading application in the near future.

With respect to the organizational and transactional structure to implement the new trading platform, the Company will utilize the existing organizational and transactional procedures currently in place.

Pursuant to the Pacsquare Purchase Agreement, Pacsquare agreed to develop and provide, for the use of AtlasClear and its affiliates, the AtlasClear Platform and any future versions or modifications of the AtlasClear Platform and source code and any other materials necessary in connection with the services to be provided by Pacsquare.

On June 10, 2025, the Company and Pacsquare entered into Software Development and License Agreement which supersedes and amends the terms under the Purchase Agreement.

Software Development and License Agreement, Pacquare agreed to develop and provide services for a period of thirty six (36) months, commencing on the date of execution of the Software Development and License Agreement.

OLA Digital Online Account Opening

Online Account (“OLA”) will allow customers to open accounts online.

This process is expected to allow Wilson-Davis to automate the entire customer on-boarding process while tracking compliance related activities such as customer identity verification, document retention and regulatory reporting.

This process typically involves customers filling out an online account application, providing an Electronic Signature, undergoing an identity verification and AML and Office of Foreign Assets Control (“OFAC”) screenings and finally funding the account.

Options Level 6 — Broker back-office portal

● Broker back-office portals are expected to help facilitate the following for AtlasClear:

● Development and integration of complex options trading.

● Options up to Level 6 including condors, butterflies, spreads and straddle.

● Naked calls and Puts.

● Real time margin calculation and risk management module.

● Development of Web, iOS and Android applications.

● Integration with Clearing Firm and FIS back office.

This includes both client and broker portals.

Includes routing trades to marker makers and exchanges through OMS.

Online Account (“OLA”) is now implemented and in use, allowing customers to open accounts online.

This process allows Wilson-Davis to automate their entire customer on-boarding process while tracking compliance-related activities such as customer identity verification, document retention, and regulatory reporting.

Customers typically fill out an online account application, provide an Electronic Signature, undergo identity verification and AML and Office of Foreign Assets Control screenings, and finally fund the account.

Revenue Sources

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While several participants offer a subset of our solutions, we do not believe any single competitor has a comparable modern platform or ability to offer a truly frictionless investing, clearing, custody and banking experience, such as we will strive to offer.

Custody and clearing businesses such as Wilson-Davis, which we acquired, and banking businesses such as Commercial Bancorp, which we are in the process of acquiring, are scale-driven businesses with high barriers to entry, including expansive overhead and technology costs, complicated capital and collateral management requirements, and a complex regulatory and legal environment.

Custody and clearing businesses such as Wilson-Davis, which we acquired, and banking businesses such as Commercial Bancorp, which we expect to acquire, are scale-driven businesses with high barriers to entry, including expansive overhead and technology costs, complicated capital and collateral management requirements, and a complex regulatory and legal environment.

We believe that legacy providers will not be able to offer our combination of flexibility, speed, execution, and broad asset-class capabilities.

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The team has held leadership and operational roles at firms such ICE, Penson Clearing, Southwest Securities, NexTrade, Anderen Bank, Stonex and The Chicago Board of Trade, among others.

Clearing, custody and banking are highly regulated and complex businesses, and we believe that our team’s combined experience, coupled with the technological capabilities we acquired from the Pacsquare Assets and the Fintech Assets provide us an advantage over our competitors.

Clearing, custody and banking are highly regulated and complex businesses, and we believe that our team’s combined experience, coupled our technological capabilities provide us an advantage over our competitors.

Large trust banks as well as large financial firms have historically been the providers of clearing and custody services.

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In contrast to these legacy custodians, we believe that our systems make use of highly virtualized systems operating in a hybrid cloud model using cloud infrastructure as well as private data centers for redundancy.

HISTORICAL BUSINESS OF WILSON-DAVIS

Wilson-Davis is a self-clearing correspondent securities broker-dealer registered with the SEC, licensed in 52 states and territories, and a member in good standing of FINRA.

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Wilson-Davis also executes transactions in exchange-traded securities.

It derives its revenue from the liquidation of restricted and control microcap securities;

It derives its

revenue from the liquidation of restricted and control microcap securities;

clearing transactions on behalf of an introducing broker-dealer on a fully disclosed basis;

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During its history, Wilson-Davis has underwritten at-the-market offerings for publicly traded companies, placed private offerings, sold mutual funds, introduced margin accounts cleared by other firms on a fully disclosed basis, and provided ancillary financial services.

During the six months ended December 31, 2023 and 2022, revenues from commissions and related vetting fees accounted for approximately 83% and 95% of total revenues, respectively.

For the six months ended December 31, 2023 and 2022, 10.3% and 15.8% of revenues, respectively, were attributable to Wilson-Davis’ securities liquidations of private placement and open market purchased securities for U.S.

During the year ended June 30, 2025, revenues from commissions and related vetting fees accounted for approximately 55% and 13%, of total revenue, respectively.

For the transition period ended June 30, 2024, revenues from commissions and related vetting fees accounted for approximately 67% and 12% of total revenues, respectively.

During the year ended June 30, 2025, and for the transition period ended June 30, 2024, 13% and 25% of commissions respectively, were attributable to Wilson-Davis’ securities liquidations of private placement and open market purchased securities for U.S.

customers in Canadian traded securities in companies engaged in the legal cannabis industry in Canada and other businesses referred by Canaccord Genuity, a global full-service investment banking firm with principal activities in Canada.

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The transaction thereafter is non-cancelable.

As of December 31, 2023, Wilson-Davis had approximately 300 customers referred by Canaccord Genuity with approximately $69 million in securities on deposit in its Wilson-Davis customer accounts.

There is no agreement with Canaccord Genuity to continue such referrals.

The termination or material reduction in the securities liquidation for customers of Canaccord Genuity would have a material adverse effect on the revenues and results of operation of Wilson-Davis.

Wilson-Davis had approximately 6,656 active customer accounts in the six months ended December 31, 2023, and over 6,871 active customer accounts in the six months ended December 31, 2022.

Wilson-Davis maintains its headquarters in Salt Lake City, Utah, a branch office in Denver, Colorado, and a branch office in Dallas, Texas.

Wilson-Davis had approximately 4,652 active customer accounts as of June 30, 2025 and over 4,325 active customer accounts as of the transition period ended June 30, 2024.

Wilson-Davis maintains its headquarters in Salt Lake City, Utah, a branch office in Denver, Colorado.

It also has registered representatives who work remotely from California, New York, Arizona, Nevada, Oklahoma, and Florida.

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This includes Wilson-Davis’ own transactions and transactions cleared on a fully disclosed basis on behalf of Glendale, as introducing broker.

Glendale is an indirect 20% stockholder of Wilson-Davis.

Wilson-Davis generates revenue from the service charges to Glendale for the clearing services provided by Wilson-Davis.

Under Wilson-Davis’ clearing agreement with Glendale Securities, Wilson-Davis provides fully disclosed clearing services to Glendale Securities, as introducing broker.

Under this agreement, Wilson-Davis (i) executes orders for Glendale customers, (ii) settles contracts and transactions in securities, (iii) prepares and distributes transaction confirmations and monthly account statements to Glendale’s customers, (iv) provides back-office services, (v) creates and maintain books and records of all transactions, and (vi) monitors all customer accounts for AML, Federal Reserve Regulation T violations.

customers, (iv) provides back-office services, (v) creates and maintain books and records of all transactions, and (vi) monitors all customer accounts for AML, Federal Reserve Regulation T violations.

The clearing houses through which Wilson-Davis clears securities transactions, DTCC and NSCC, require margin deposits in amounts determined by them to mitigate the risk to them of potential losses resulting from transactions that fail to clear for one reason or another.

To meet these anticipated contingencies, Wilson-Davis maintains a margin deposit at NSCC larger than required.

As of December 31, 2023, Wilson-Davis’ margin deposit at NSCC was $2.5 million, which was well over the requirement of $569,303.

As of June 30, 2025 and 2024, Wilson-Davis’ margin deposit at NSCC was $4.5 million and $2.9 million, respectively, which was well over the requirement of $2,303,839 and $535,045, respectively.

DTCC and NSCC have the authority to, and frequently do, require additional margin deposits that must be deposited on the same business day, otherwise, Wilson-Davis could face liquidation of the clearing position and damages.

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Wilson-Davis believes that its market making activities principally facilitate obtaining favorable execution terms for the securities liquidation transactions for its customers.

On a limited basis, Wilson-Davis sells mutual funds and real estate investment trusts or “REIT” securities, Wilson-Davis has underwritten at-the-market public offerings of issuers whose securities are publicly traded.

Wilson Davis acts as an underwriter for securities offerings, it is anticipated that offers led by Wilson Davis will be generally limited to Best Effort underwritings.

On a limited basis, Wilson-Davis sells mutual funds and real estate investment trusts or “REIT” securities.

Wilson-Davis relies on its industry contacts and customer referrals to market its services.

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Wilson-Davis believes that it benefits from its ability to provide clearing services for all kinds of securities.

Competition among firms that clear microcap stocks may be affected by recently adopted NSCC rules that will require firms clearing for other introducing brokers to maintain at least $10.0 million in excess net capital, beginning October 26, 2023.

Competition among firms that clear microcap stocks may be affected by NSCC rules that require firms clearing for other introducing brokers to maintain at least $10.0 million in excess net capital.

The failure of any firm, including Wilson-Davis, to maintain excess net capital as required by the new rule may limit access of firms liquidating microcap stocks to clearing services.

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Securities firms are also subject to regulation by state securities commissions in the states in which they are registered.

Wilson-Davis is registered in 43 states.

Wilson-Davis is registered in 50 states and two territories.

The regulations to which broker-dealers are subject cover numerous aspects of the securities industry, including:

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Laws and regulations resulting from this trend may negatively impact Wilson-Davis’ results of operations and capital requirements and may result in increased legal, compliance, information technology, and other costs, as well as increased legal risks.

The GENIUS Act, enacted in July 2025, is the United States’ first federal law establishing a comprehensive regulatory framework for payment stablecoins—digital tokens pegged to monetary value and intended for payments.

The law authorizes only permitted financial institutions and approved nonbank issuers to create stablecoins, requires strict 1:1 reserve backing using U.S.

dollars or U.S.

Treasuries, and mandates public disclosure and audits of reserves to protect consumers and ensure transparency.

Issuers must comply with anti-money laundering laws, cannot promote stablecoins as federally insured or legal tender, and are subject to routine regulatory oversight and risk management rules.

The GENIUS Act affirms that compliant stablecoins are neither securities nor commodities, and holders have prioritized claims in any issuer insolvency.

The Act harmonizes federal and state oversight, helping position the U.S.

as a leader in responsible digital asset innovation.

The USA PATRIOT Act of 2001 contains AML and financial transparency laws and mandates the implementation of various regulations applicable to broker-dealers and other financial services companies.

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Wilson-Davis and its personnel have been and are subject to various such disciplinary proceedings.

See “ Legal Proceedings ” below.

See “ Item 3 – Legal Proceedings ”.

Net Capital Requirements

Wilson-Davis is required under applicable rules of the SEC and FINRA to maintain net capital of at least $250,000.

As of December 31, 2023, Wilson-Davis had net capital, computed in accordance with the applicable detailed calculation requirements, of $10.8 million or excess net capital of $10.6 million.

As of December 31, 2023, Wilson-Davis’ net capital included $1,950,000 in subordinated loans.

Wilson-Davis has not applied to repay these subordinated loans.

As of June 30, 2025 and 2024, Wilson-Davis had net capital, computed in accordance with the applicable detailed calculation requirements, of $11.2 million and $10.4 million, respectively or excess net capital by $10.9 million and $10.1 million, respectively.

As of June 30, 2025 and 2024, Wilson-Davis’ net capital included $1,950,000 in subordinated loans.

Wilson-Davis has not applied to repay these subordinated loans and expects to renew the subordinated loans in the 3 rd calendar quarter of 2025.

Failure to maintain the required net capital may subject Wilson-Davis to fines, suspension, or expulsion by FINRA, the SEC, and other regulatory bodies and may require its liquidation.

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Human Capital Resources

On December 31, 2023, Wilson-Davis had 45 full-time and six part-time employees and consultants, consisting of 28 full-time and one part-time registered representatives, or consultants, eight full-time and two part-time operating personnel, and seven executives and supervisors.

On June 30, 2025, Wilson-Davis had 39 full-time and four part-time employees and consultants, consisting of 27 full-time registered representatives, or consultants, thirteen full-time and one part-time operating personnel, and six executives and supervisors.

No employees or consultants are represented by a collective bargaining agreement.

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Wilson-Davis considers its relationship with its employees and consultants to be good.

Legal Proceedings

Wilson-Davis is not a party to any material legal proceedings, and no material legal proceedings have been threatened by Wilson-Davis or, to the best of its knowledge, against it, except that in December 2016, FINRA filed a complaint (FINRA Enforcement Matter No.

20120327318) asserting potential violations of several securities laws and regulations.

Wilson-Davis denied the allegations and the hearing was held in November 2017.

The FINRA panel issued its decision against Wilson-Davis in February 2018.

Wilson-Davis was fined $1,170,000 and ordered to disgorge $51,624 for purported improper short sales.

Wilson-Davis was fined an additional $300,000 for its purported failure to supervise and implement adequate AML procedures.

Wilson-Davis filed a timely appeal.

All sanctions were stayed while the appeal was pending before the FINRA National Adjudicatory Council (“NAC”).

The appeal hearing before the NAC occurred in October 2018.

On December 27, 2019, NAC issued a ruling that affirmed Wilson-Davis’ liability but reduced the sanctions imposed.

Wilson-Davis was fined $350,000 and ordered to disgorge $51,624 for purported improper short sales.

Wilson-Davis was fined an additional $750,000 for its purported failure to supervise and implement adequate AML procedures.

Wilson-Davis timely appealed the ruling to the SEC.

All sanctions are stayed while the appeal is pending before the SEC.

The SEC has not made a ruling in this matter.

In the ordinary course of business, securities broker-dealers such as Wilson-Davis are highly regulated and are routinely and frequently examined by the SEC, FINRA, and the securities regulatory authorities of states in which they are licensed or conduct business.

Such examinations review a broad ranges of business activities for compliance with the myriad statutes, rules, regulations, and interpretations governing Wilson-Davis’ activities.

Examinations by any of the above authorities may lead to enforcement actions that expose Wilson-Davis and its personnel to defense costs and potential fines or other sanctions.

Further, customers may assert claims against Wilson-Davis or its personnel in legal suits or arbitration proceedings.

Our principal executive offices are located at 4030 Henderson Blvd., Suite 712, Tampa, FL 33629 and our phone number is (727) 446 6660.

Our principal executive offices are located at 2203 Lois Avenue, Suite 814, Tampa, FL 33607 and our phone number is (727) 446 6660.

Wilson-Davis’ office is located in Salt Lake City, Utah, with a branch office in Denver, Colorado, and a branch office in Dallas, Texas.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business