NYSE: ATCH

Through
our 2024 acquisitions of Wilson-Davis (now known as AtlasClearing, Inc. “AtlasClearing”), a correspondent clearing company,
and Quantum FinTech Acquisition Corporation (“Quantum”), and our anticipated acquisition of Commercial Bancorp, a federal
reserve member, and our anticipated acquisition of Ark Financial Services, Inc., the holding company of Dawson James, 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, Ark, Quantum,
and AtlasClearing are expected to allow for lower cost of capital, higher net interest margins, expanded product development and greater
credit extension. We cannot assure you that the Commercial Bancorp acquisition, the Ark acquisition or any other acquisition will be
consummated or that, if consummated, any anticipated synergies or benefits will be realized by the Company.

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 believe drives our corporate culture.

Business
Opportunity

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 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.

2

We
believe consumer expectations for a one-stop shop for their investing, banking, spending, insurance and borrowing needs is driving the
convergence of financial services. As a result, financial companies that traditionally operated as single-product specialists (e.g.,
savings-focused platform, lending-focused platform) are now seeking to integrate trading and investing capabilities into their broader
offering. 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 may require to develop such offerings.

Our
Growth Strategy

Our
growth strategy includes:

Growing
our base of clients organically and through channel partners

We
believe that attracting and acquiring new clients will be a key growth driver for our combined business. Looking ahead, our technology
platforms, combined with the rapidly accelerating demand for cost efficiencies - are expected to drive growth in our prospective
client base. For new market entrants, we believe the efficiencies of our prospective turnkey solutions, and speed at which we expect
to be able to bring a client’s offering to market will position us to win new clients. With respect to the traditional wealth advisor
landscape, we expect to be a beneficiary of clients seeking to transition to a new provider that can offer the digital-focused solutions
required to compete in the rapidly changing environment.

Growing
our clients’ revenue

We
believe we will succeed when our clients succeed. The more assets, services or transactions that customers direct through our prospective
platform, the more revenue we and our clients would be able to generate. Through innovation, we also expect to enhance our product offerings
and add more products, capabilities, and functionality for our clients, which in turn should allow such clients to drive growth in their
business. We expect to provide the tools to streamline the complex aspects of custody clearing and banking to empower our clients to
focus on attracting new end customers as well as growing their share of revenue from existing ones.

Pursuing
potential international expansion opportunities

While
we expect our operations will initially be U.S.-focused, we see opportunity to grow our business and total addressable market by expanding
into international markets. As we assess international opportunities, we believe our core competencies and operational excellence position
us well to win in new markets, many of which are experiencing secular tailwinds similar to what we are seeing in the U.S. (e.g., growth
of mobile and digital solutions).

Identifying
and executing strategic acquisitions

We
expect to selectively pursue acquisitions that we believe will create value for our shareholders. We plan to evaluate acquisition opportunities
based on a number of strategic parameters, including their ability to (i) enhance our product capabilities, (ii) broaden our client reach,
(iii) drive further scale, (iv) increase our presence in new geographies, and (v) generate attractive financial returns. We also plan
to weigh the potential benefits from an acquisition against other alternatives, such as building similar capabilities in-house or partnering
with third parties.

Our
Product Offerings

We
offer clients the flexibility to choose from a variety of pre-built suites that serve a wide range of business models. For example, clients
who do not wish to build a complete user interface will be able to opt for our white label solutions. Once fully integrated, we expect
to be a turnkey brokerage solution, offering highly configurable front office functions for launching and running investing applications.
This offering “extends” beyond our “back” and “middle” office roots into direct customer facing experience.
We expect that customers that choose our white label solutions will also be able to take advantage of our “middle” and “back”
office offerings to ensure smooth processes around risk management, profit and loss, and account maintenance.

3

Back
and Middle Office Solutions

Our
full technology stack is expected to automate “back office” and “middle office” processes that were typically
manual paper-based process, creating a seamless and unified experience for our clients. Typically, new financial services firms or advisors
would need to individually source multiple middle and back office solutions from multiple vendors. By partnering with us, we believe
our clients will get a seamless and unified middle and back-office experience that is based on the technology we expect to acquire.

We
offer a range of technical services that we believe will support the mission-critical functions needed to run a modern financial services
company. We believe this self-service platform will provide clients with the operational online tools they need, including:

●
Trading:
Flexible suite of APIs enabling clients to execute across several major asset classes.

●
Lending:
Integrated and automated margin lending and fully paid stock lending program. Previously only available to the largest firms, professional
investors, and wealthiest shareholders, we believe AtlasClear Holdings will expand the availability of fully paid stock lending (and
its income generating interest).

●
Portfolios:
APIs allowing clients to build portfolio models, assign them to accounts and automate rebalancing trade proposal generation, including
straight through processing of order execution and trade allocation to maximize operational efficiency. We believe these are essential
tools for financial advisors, as well as robo-advisor platforms for do-it-yourself investors.

●
Accounts:
Everything clients need to open, authenticate, qualify, approve, onboard and maintain accounts including in-line investor verification,
applicant verification, risk and compliance management, suitability requirements, paperless enrollments, and account preference configurations.

●
Cash:
APIs to streamline cash movements in every direction, including ACH and wire transactions, recurring scheduled transfers, authorizing
and managing bank linkages and more. We believe efficiency and scale are achieved by aggregation and net settlement workflows for
real time transfers of cash with banking partners.

●
Transfers:
APIs to streamline, initiate, manage and report on Automated Customer Account Transfer Service account transfers. Provides transparency
and controls to enable specific user business requirements. We believe this will be a critical onboarding capability for AtlasClear
Holdings clients to bring on high quality customers who hold assets elsewhere.

●
Regulations:
We expect to provide consolidated oversight and services for relevant regulations applicable to brokerage and investment services.
These laws, rules, regulations and requirements are ever-changing and include back-end compliance processes and regulatory requirements
like Consolidated Audit Trail and Order Audit Trail System reporting, compliance with Reg 606 (Best Execution), trade surveillance
and anti-money laundering rules. This is an often-underestimated burden for fintech disruptors.

●
Communications:
Everything that allows clients to manage and distribute end investor communications including electronic delivery of trade confirmations,
statements, tax reporting and more.

Commercial
Bancorp Share Purchase Agreement

On
February 5, 2026, the Company entered into a share purchase agreement (the “Purchase Agreement”) with Commercial Bancorp,
and each of the shareholders of Commercial Bancorp (collectively, the “Sellers”). The Purchase Agreement provides for the
Company to acquire (the “CB Acquisition”) from the Sellers all of the outstanding shares (the “Shares”) of common
stock of Commercial Bancorp, which is the owner of all of the outstanding stock of Farmers State Bank, a Wyoming state-chartered member
bank (the “Bank”), subject to the terms and conditions set forth in the Purchase Agreement. As previously disclosed, the
Company had previously entered into an agreement and plan of merger, as amended, to acquire Commercial Bancorp, which agreement has expired
in accordance with its terms.

Pursuant
to the terms of the Purchase Agreement, the Company has agreed to purchase the Shares from the Sellers for consideration consisting of
a combination of cash and shares of Common Stock, with the total amount of consideration to be determined based on (i) each Seller’s
election to receive cash, shares of Common Stock, or a combination thereof, (ii) the adjusted book value of the operational portion of
the equity capital of Commercial Bancorp as of the closing of the CB Acquisition (the “CB Closing”), determined in accordance
with the provisions of the Purchase Agreement (the “ABV”), (iii) the value of the existing building and land comprising the
physical location of the Bank (the “Premises”), and (iv) Commercial Bancorp’s net operating loss as reflected on its
most recent tax return prior to the CB Closing, multiplied by the maximum corporate federal income tax rate in effect as of the date
of the CB Closing (the “NOL Tax Benefit”). Each Seller may elect (the “Election”) to receive an amount equal
to any of the following three options: (i) three times such Seller’s pro rata portion of the ABV, plus such Seller’s pro
rata portion of the value of the Premises and the NOL Tax Benefit, payable one-third in cash and two-thirds in shares of Common Stock;
(ii) two times such Seller’s pro rata portion of the ABV, plus such Seller’s pro rata portion of the value of the Premises
and the NOL Tax Benefit, payable entirely in cash; or (iii) three times such Seller’s pro rata portion of the ABV, plus such Seller’s
pro rata portion of the value of the Premises and the NOL Tax Benefit, payable entirely in shares of Common Stock. The Company has made
an earnest money deposit payment in the amount of $100,000 to Commercial Bancorp, which deposit will be applied to the cash portion of
the consideration payable at the CB Closing or, if the CB Closing does not occur under certain circumstances, retained by Commercial
Bancorp.

The
shares of Common Stock to be issued pursuant to the Purchase Agreement will be valued based on either the closing price of the Common
Stock on the date of execution of the Purchase Agreement ($0.23), or on the business day immediately preceding the date of the CB Closing,
at each Seller’s option. The Company agreed to file with the Securities Exchange Commission (the “SEC”) a resale registration
statement with respect to the shares of Common Stock issuable pursuant to the Purchase Agreement (the “Resale Registration Statement”),
which was filed on June 8, 2026.

The
obligations of each of the Sellers and the Company under the Purchase Agreement are subject to specified conditions, including, among
other matters: (i) the receipt of all required regulatory approvals, (ii) the Resale Registration Statement having been declared effective
by the SEC, such that all shares of Common Stock to be issued pursuant to the Purchase Agreement shall be registered for resale and freely
tradeable (which occurred on June 17, 2026), (iii) the receipt of certain specified third-party consents, and (iv) the absence of any
injunctions being entered into or law being adopted that would make the CB Acquisition illegal.

4

The
Purchase Agreement contains customary representations and warranties of Commercial Bancorp and the Bank, the Sellers and the
Company. It also contains customary covenants, including (i) covenants providing for each of the parties to use reasonable best
efforts to cause the CB Acquisition to be consummated and to receive all required regulatory approvals, including from the Federal
Reserve Board and the Wyoming Division of Banking, (ii) covenants providing for Commercial Bancorp and the Bank to carry on their
respective businesses in the ordinary course of business, and to refrain from taking certain actions, during the period between the execution of the Purchase Agreement and the CB Closing, and (iii) granting the Company observation rights with respect
to meetings of the boards of directors of Commercial Bancorp and the Bank during the period between the execution of the Purchase
Agreement and the CB Closing. Commercial Bancorp, the Bank and the Sellers have also agreed not to initiate, solicit, encourage or
otherwise facilitate the making of any proposal or offer relating to alternate transactions or, engage in any discussions or
negotiations with respect to alternate transactions.

The
Purchase Agreement contains termination rights for each of the Sellers and the Company, including, without limitation, in the event that
(i) any governmental entity issues a non-appealable final order denying approval of the CB Acquisition; (ii) the CB Acquisition is not
consummated within two years of the execution of the Purchase Agreement, subject to extension under certain circumstances; or (iii) the
other party breaches its representations, warranties or covenants under the Purchase Agreement which would give rise to the failure of
a closing condition and such breach is not cured within 30-days of receipt of written notice of such breach.

Revenue
Sources

We
generate revenue through transactional and recurring sources. Transactional revenue is reliant upon customer-driven activity that ultimately
results in fees being paid to us. Examples of these are clearing, execution, banking, confirms, and more. Further, we expect to generate
recurring revenue streams simply by acting as the custodian of customer assets and customer cash through our anticipated acquisition
of Commercial Bancorp, and to generate investment banking, underwriting and brokerage revenue through our anticipated acquisition of
Ark Financial Services, Inc., the holding company of Dawson James. Examples of these are platform minimums, asset-based fees, credit
and debit balances, securities lending, statements, and account maintenance. Since all revenue generating activities can be tied back
to the account, we believe the best proxy for future revenue is the number of customer accounts on our platform.

AtlasClear
Holdings Competition

We
believe that through our technology and source code acquisitions discussed herein, we have the capabilities to deliver a complete and
modern platform that would give our clients the flexibility, speed, risk-management expertise and scale they need to grow. 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 AtlasClearing, 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.

AtlasClear
Holdings is led by a seasoned team of industry executives supported by a purpose-built board of directors. Collectively, our leadership
team will have over 30 years of combined experience spanning the technology, investing, custody, banking and clearing lifecycles. 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 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. We believe their
solutions are more limited, more expensive and less responsive for clients because of their legacy technology, analog processes, outdated
compliance processes, and less flexible architecture. For clients, this translates to slower account opening and funding, higher embedded
costs and limited flexibility.

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.

ATLASCLEARING

AtlasClearing
is a correspondent securities broker-dealer registered with the SEC, licensed in 50 states District of Columbia, and Puerto Rico, and a member in good standing
of FINRA. AtlasClearing has operated continuously since it was incorporated as a Utah corporation and obtained its license in December
1968. Effective August 25, 2026, Wilson-Davis was rebranded as AtlasClearing Inc. References in this Annual Report to “Wilson-Davis”
or “AtlasClearing” refer to that entity, which now conducts business under the AtlasClearing Inc. name.

5

AtlasClearing
is engaged principally in the over-the-counter, or “OTC,” markets in microcap securities. Microcap securities generally are
issued by companies with low or “micro” capitalizations, meaning the total market capitalization value of the company’s
stock is less than $250 million, which includes low-priced securities, or penny stocks, that trade for less than $5.00 per share and
have a market capitalization of less than $50 million. AtlasClearing also executes transactions in exchange-traded 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; and trading in equity securities for its own account. It receives limited revenues from fully paid stock
lending and margin accounts. During its history, AtlasClearing 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 year ended June 30, 2026, revenues from commissions and related vetting fees accounted for approximately 46% and 7%, of total revenue,
respectively. During the year ended June 30, 2025, revenues from commissions and related vetting fees accounted for approximately 55%
and 13%, of total revenue, respectively. During the year ended June 30, 2026 and 2025, 7% and 13% of commissions respectively, were attributable
to AtlasClearing’s 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. During the year ended June 30, 2026 and 2025 revenue
from Stock locate fees accounted for approximately 34% and 3%, respectively. The increase in stock locate fees is due to stock locate
services being, in effect, an entirely new line of business that the Company implemented and rapidly expanded during the year ended June
30, 2026. Stock locate fees are fees charged to primarily broker-dealers for the confirmation that borrowable shares are available for
a proposed short sale.

Canaccord
Genuity serves as an investment banker for the placement of securities eligible for resale after the passage of an applicable holding
period or other compliance requirements. Canaccord Genuity executes trades for AtlasClearing that are not permitted in the United States.
AtlasClearing’s arrangement with Canaccord is to facilitate transactions with Canadian exchanges. The customers that are referred
by Canaccord Genuity under a commission sharing arrangement with AtlasClearing open customer cash accounts with AtlasClearing and deposit
with the firm their securities that are required to be sold in the Canadian securities markets via an omnibus account that AtlasClearing
maintains at a Canadian brokerage firm. AtlasClearing completes vetting of proposed sales, deposits securities in the omnibus account,
and executes the customer orders through the omnibus Canadian account. The transaction thereafter is non-cancelable.

AtlasClearing
had approximately 4,826 and 4,652 active customer accounts as of June 30, 2026 and 2025, respectively.

AtlasClearing
maintains its headquarters in Salt Lake City, Utah. It also has registered representatives who work remotely from California, New York,
Arizona, Nevada, Oklahoma, and Florida.

Securities
Liquidations

AtlasClearing
sells into the trading markets securities that have been acquired by customers through registration or in reliance on exemptions from
registration under the Securities Act or corresponding provisions of Canadian provincial securities laws. The liquidation process requires
depositing the securities in the customer’s account, obtaining detailed information and supporting documentation regarding the
details of the customer’s acquisition of the securities, reviewing the customer’s information and supporting documents by
AtlasClearing personnel and outside legal counsel, and if believed appropriate, selling the securities.

AtlasClearing
derives revenues, which it calls vetting fees, from fees charged to customers to deposit the securities, review the material submitted,
and determine the propriety of the sale as well as commissions on the securities sales.

Transactions
in U.S. traded securities are executed in the OTC or other principal market on which the securities are traded. Transactions in Canadian
traded securities are executed through a Canadian dealer and settled through AtlasClearing’s omnibus account with a Canadian broker-dealer.

AtlasClearing’s
customers predominantly consist of small individual investors or their private family or other closely held entities that frequently
and repeatedly purchase securities in private placements.

Clearing
Services

As
a member of the Depository Trust & Clearing Corporation, or “DTCC,” and the National Securities Clearing Corporation,
or “NSCC,” AtlasClearing clears securities transactions through these clearing firms. This includes AtlasClearing’s
own transactions and transactions cleared on a fully disclosed basis on behalf of Glendale, as introducing broker.

AtlasClearing
generates revenue from the service charges to Glendale for the clearing services provided by AtlasClearing. Under AtlasClearing’s
clearing agreement with Glendale Securities, AtlasClearing provides fully disclosed clearing services to Glendale Securities, as introducing
broker. Under this agreement, AtlasClearing (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.

6

The
clearing houses through which AtlasClearing 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, AtlasClearing maintains a margin deposit at NSCC larger than required. As of June 30, 2026 and
2025, AtlasClearing’s margin deposit at NSCC was $5.0 million and $4.3 million, respectively, which was well over the requirement
of $1.0 million and $2.3 million, 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, AtlasClearing could face liquidation of the clearing position and damages.
AtlasClearing attempts to manage margin call risk exposure by limiting the size of transactions and restricting transactions of securities
deemed to be too volatile. However, AtlasClearing cannot control or predict the nature, amount, or timing of additional NSCC margin calls.
Margin deposits are generally released within two business days of the transaction trade date.

From
time to time during its history, AtlasClearing has cleared transactions on behalf of several introducing brokers.

Fully
Paid Stock Lending

Eligible
customers of AtlasClearing can lend their fully paid securities to AtlasClearing, which in turn can lend them to other broker-dealers
in the industry. AtlasClearing derives revenue from the interest spread between the two legs of the transaction. Stock lending was introduced
in 2021 and continues only on a limited basis as operating and compliance systems are refined.

Margin
Accounts

AtlasClearing
acts as a fully disclosed introducing broker to customer margin accounts that are maintained at another firm under its requirements.
As a companion to the fully paid stock lending, AtlasClearing began offering its own margin accounts on a limited basis as operating
and compliance systems are refined. Under applicable Federal Reserve Regulation T requirements, AtlasClearing is authorized to extend
credit for up to 50% of the cost of new securities purchases. Credit is extended on equities over $5 with average 30-day trading volume
of 100,000 shares per day. Margin securities are collateral for the margin loan to the customer. Maintenance of the margin accounts is
based on individual securities collateralizing the loan based on the risk tolerance of the firm on each position as determined by senior
management. Maintenance requirements generally range from 25% to 60%. Exceptions to the policy may be authorized by senior management.
The customer may be required to deposit additional cash or securities collateral if the value of the margin securities fail to meet required
amounts. If additional collateral is not deposited as required, AtlasClearing may liquidate the margin position and hold the customer
liable for any deficiency.

Market
Making

AtlasClearing
regularly publishes quotations to purchase or sell securities in inter-dealer quotation services and buys and sells securities for its
own account, commonly referred to as market making. AtlasClearing believes that its market making activities principally facilitate obtaining
favorable execution terms for the securities liquidation transactions for its customers.

Underwriting

AtlasClearing
acts as an underwriter for securities offerings, offers led by AtlasClearing are generally limited to Best Effort
underwritings.

Other

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

Marketing

AtlasClearing
relies on its industry contacts and customer referrals to market its services.

7

Strategy

AtlasClearing’s
strategy is to:

●
expand
its principal securities liquidation activities through retail customer marketing;

●
identify
and pursue opportunities to provide and securities clearing services to additional broker-dealers, particularly those that deal in
micro-cap securities to address needs that AtlasClearing believes are under-served;

●
fully
market its recently introduced fully paid stock lending and margin capabilities with existing and potential new customers;

●
participate
as agent, and not as principal, in selected at-the-market equity offerings and private placements, including expanded REITs and mutual
funds; and

●
broaden
its range of services and products to reactivate historical offerings.

AtlasClearing
Competition

AtlasClearing
encounters intense competition in all aspects of its business and competes for clients directly with many national and regional full
service financial services firms, other independent brokerage firms, and other companies offering financial services in the United States,
globally, and through the Internet.

AtlasClearing
believes its principal direct competitors consist of other firms that liquidate investment and control securities in microcap stocks.
This includes firms that clear their own securities transactions and firms that clear transactions through another firm on a fully disclosed
basis. AtlasClearing believes that the number of broker-dealers that clear transactions in microcap stocks is declining. The level of
customer demand for micro-cap securities liquidations reflects the level of private investment in such securities. AtlasClearing 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 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 AtlasClearing, to maintain excess net capital as required
by the new rule may limit access of firms liquidating microcap stocks to clearing services.

AtlasClearing
does not offer a full array of financial services that may be offered by large, diversified financial services firms. Accordingly, AtlasClearing’s
customers typically withdraw proceeds from the liquidation of their securities for other uses, including perhaps deposit with full-service
firms. Many of AtlasClearing’s competitors have significantly greater financial, technical, marketing, and other resources than
AtlasClearing has. Also, many firms offer discount brokerage services and generally effect transactions at substantially lower commission
rates on an “execution only” basis, without offering other services such as financial planning, investment recommendations,
and research. Moreover, there is substantial commission discounting by full-service brokerage firms competing for institutional and retail
brokerage business.

AtlasClearing
believes that a limited number of securities firms liquidate restricted or control microcap stocks. Other firms with greater financial,
technical, managerial, and other resources may offer such services, either alone or as adjuncts to other full financial services.

There
is significant competition for qualified personnel in the financial services industry. AtlasClearing’s ability to compete effectively
depends on attracting, retaining, and motivating qualified operating and supervisory personnel and other revenue-producing or specialized
personnel.

Government
Regulation

The
securities industry, including AtlasClearing’s business, is subject to extensive regulation by the SEC, self-regulatory organizations,
or “SROs,” such as FINRA, DTCC, and NSCC, state securities regulators, and other governmental regulatory authorities. The
primary purpose of these regulations is the protection of customers and the securities markets. The SEC is the federal agency administering
and enforcing the federal securities laws. Much of the regulation of broker-dealers, however, has been delegated to the SROs, principally
FINRA. FINRA and other SROs adopt rules, subject to approval by the SEC, that govern their members. SROs, particularly FINRA, conduct
periodic detailed examinations of member firms’ operations.

Securities
firms are also subject to regulation by state securities commissions in the states in which they are registered. AtlasClearing is registered
in 50 states, District of Columbia, and Puerto Rico.

8

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

●
conduct
and supervision of operations;

●
capital
requirements;

●
qualifications
and licensing of supervisory and other personnel;

●
use
and protection of customer funds and securities;

●
recordkeeping;

●
communications
with current and prospective customers;

●
business
practices among broker-dealers; and

●
the
structure and operation of securities markets.

Changes
in rules promulgated by the SEC and by SROs and changes in the interpretation or enforcement of existing laws and rules often directly
affect the method of operation and profitability of broker-dealers.

Regulation
Best Interest, among other things, requires broker-dealers to act in the best interest of retail customers when making a recommendation
concerning a securities transaction or investment strategy involving securities, and to identify, disclose, and mitigate or eliminate
material conflicts of interest arising from financial incentives associated with such recommendations. Although AtlasClearing, as a matter
of policy, does not currently make recommendations concerning a securities transaction or investment strategy involving securities, this
rule has imposed new compliance responsibilities and costs, including enhanced disclosures. AtlasClearing cannot assess the full potential
costs or risk of Regulation Best Interest.

Several
states have adopted or are considering adopting and implementing laws and regulations that would impose a fiduciary duty on broker-dealers
under state law. Laws and regulations resulting from this trend may negatively impact AtlasClearing’s 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. Accordingly, AtlasClearing generally must have AML procedures in place, implement
specialized employee training programs, designate an AML compliance officer, and be subject to periodic audits by an independent party
to test the effectiveness of such compliance. AtlasClearing has established policies, procedures, and systems designed to comply with
these regulations.

Under
the Bank Secrecy Act (“BSA”), AtlasClearing is required to: develop and maintain internal AML policies, procedures, and controls;
maintain and update customer information and conduct ongoing monitoring of customers to identify and report suspicious transactions;
undergo independent testing of its compliance with AML laws; and conduct ongoing AML training of appropriate persons. AtlasClearing is
further required to maintain procedures for the verification of a customer’s identity. AtlasClearing is also obligated to file
confidential suspicious activity reports, or “SARS,” with the Financial Crimes Enforcement Network, or FinCEN, if it detects
evidence of any suspicious transaction relevant to a possible violation of AML laws, in addition to transactions in currency of more
than $10,000. SARs may need to be required by individual events or a series of apparently related events. SARs require important information
in summary form that is sometimes difficult to assemble reliably or quickly. AtlasClearing may be subject to adverse regulatory action
if it fails to develop or adhere to appropriate policies and procedures, has deficiencies highlighted by the firm’s independent
testing, fails to identify and report suspicious transactions, fails to properly verify customer identities, or fails to file SARs in
the manner or timeframe required or preferred by regulators.

Further,
the regulations relating to AML compliance policies and procedures are subject to revision, supplementation, or evolving interpretations
and application, and it can be difficult to predict how regulators will apply regulations to a given risk or situation. The National
Defense Authorization Act (“NDAA”) passed by Congress in 2021 included various changes to the AML regulatory regime.

9

For
example, the NDAA mandated FinCEN to establish an information exchange platform for financial institutions, law enforcement, and national
security agencies to share AML information. FinCEN will also revise customer due diligence standards. In addition, the NDAA expanded
the scope of BSA violations and increased penalties for BSA violations. When FinCEN passes the customer due diligence and information
sharing rules, AtlasClearing could incur substantial additional costs in complying with those rules.

Regulation
regarding privacy and data protection continues to increase worldwide and is generally driven by the growth of technology and related
concerns about the rapid and widespread dissemination and use of information. AtlasClearing must comply with applicable global, federal,
and state information-related laws and regulations, including, for example, those in the United States, such as the 1999 Gramm-Leach-Bliley
Act, SEC Regulation S-P, and the Fair Credit Reporting Act of 1970, as amended.

The
SEC and the SROs may conduct administrative proceedings that can result in censure, fine, suspension, or expulsion of a broker-dealer
and its supervisors, officers, or employees. AtlasClearing and its personnel have been and are subject to various such disciplinary proceedings.
See “Item 3 – Legal Proceedings”.

Net
Capital Requirements

AtlasClearing
is required under applicable rules of the SEC and FINRA to maintain net capital of at least $250,000. As of June 30, 2026 and 2025, AtlasClearing
had net capital, computed in accordance with the applicable detailed calculation requirements, of $14.4 million and $11.2 million, respectively
or excess net capital by $14.2 million and $10.9 million, respectively.

As
of June 30, 2026 and 2025, AtlasClearing’s net capital included $1,930,000 in subordinated loans. AtlasClearing has not applied
to repay these subordinated loans and expects to renew the subordinated loans in the 3rd calendar quarter of 2026.

Failure
to maintain the required net capital may subject AtlasClearing to fines, suspension, or expulsion by FINRA, the SEC, and other regulatory
bodies and may require its liquidation. There is currently no regulatory requirement to maintain excess net capital. However, as noted
above, under recently adopted NSCC rules, effective October 26, 2023, AtlasClearing must maintain excess net capital of at least $10.0
million to continue to clear securities transactions for any broker-dealer on a fully disclosed basis.

Human
Capital Resources

ATCH has 3 executive and 2 support full-time employees and 1 consulting executive. AtlasClearing has 46 full-time employees and consultants, consisting of 20 full-time registered representatives, or
consultants, 20 full-time operating personnel, and 6 executives and supervisors. No employees or consultants are represented by a collective
bargaining agreement. AtlasClearing emphasizes compliance and risk management principles to manage the day-to-day business. In recruiting,
training and retaining personnel, AtlasClearing relies on industry training and competitive compensation. AtlasClearing considers its
relationship with its employees and consultants to be good.

Facilities

Our
principal executive offices are located at 4350 West Cypress Street, Suite 270, Tampa, FL 33607 and our phone number is (727) 446 6660.
AtlasClearing’s office is located in Salt Lake City, Utah. AtlasClearing also has registered
representatives who work remotely from California, New York, Arizona, Nevada, Oklahoma, and Florida. Following our contemplated acquisition
of Commercial Bancorp, we expect to add its facility in Pine Bluffs, Wyoming.