AtlasClear: Addressing the Fintech Infrastructure Gap for Underserved Institutions

John Schaible:
It really comes down to focusing on fundamentals. Over the past year, we retired and converted more than $43 million of debt, cutting our de-SPAC liabilities by over 80 percent and strengthening stockholders’ equity by about the same amount. On the operating side, Wilson-Davis continues to deliver steady profitability through commissions, clearing, stock loans, and margin lending. Cleaning up the capital structure while running a profitable subsidiary gives us the flexibility to invest and scale in the right areas.

Craig Ridenhour:
For us, correspondent clearing is the gateway to scale. Smaller broker-dealers, RIAs, and family offices are often underserved by the big clearing houses. We give them institutional-grade infrastructure, automation, and compliance at a cost that makes sense for their business. When we bring a new introducing broker onto the platform, we don’t just add clearing revenue. We see increases in transaction volume, assets under custody, stock lending, and margin interest.

We now have three correspondent clients signed, with more in the pipeline. As those accounts ramp, the economics compound across multiple revenue streams.

John Schaible:
We’ve built everything on a unified architecture that ties together clearing, custody, and soon, banking. The advantage isn’t just about code quality. It’s about speed. The large incumbents have good technology, but they move slowly because of their size and legacy infrastructure. We can roll out product changes, automation, or new processes much faster. That agility lets us react to market or regulatory changes quickly, which translates into better efficiency and stronger margins.

Craig Ridenhour:
It’s a foundational move. Provided we receive Federal Reserve approval, and we are optimistic we will, based on executive leadership’s collective experience with the Company’s significantly improved balance sheet, we’ll be able to create an internal ecosystem. Client cash at Wilson-Davis can sweep into the bank, and we can extend credit back out for margin and other financing needs. Over time, a Fed member bank also gives us the ability to handle custody and payments capabilities in-house. It’s a combination that’s hard to replicate, a regulated broker-dealer and a bank under one umbrella. That structure directly supports our goal of giving smaller institutions access to the same full-service platform the big firms enjoy.

John Schaible:
That raise, led by Funicular Funds with insider participation, strengthens the balance sheet and gives us room to execute. It allows us to bring on more correspondent clients, hire selectively, and deploy automation that scales efficiently. It also gives us flexibility for targeted M&A where we can add technology, geography, or clients without stretching resources. The key is to grow deliberately, focus on high-margin, recurring services that build sustainable value.

John Schaible:
Digital assets are really just the next evolution of what we already do in trading, clearing, and custody. The same infrastructure that supports equities and fixed income can, under the right regulatory framework, handle digitized instruments. Our goal isn’t to become an exchange or take speculative risk. We want to operate within the existing regulatory perimeter, applying the same risk controls and transparency standards that govern traditional markets.

Once Commercial Bancorp is integrated, having a Fed member bank gives us the option to support regulated custody, faster settlement, and eventually, lending tied to tokenized assets. It’s a long-term play. We want AtlasClear to serve as a bridge between traditional finance and the next generation of regulated, technology-driven assets.

Hilltop is a good benchmark. Both companies operate correspondent clearing platforms for independent broker-dealers and mid-tier institutions, and the revenue mix, commissions, stock loans, margin interest, looks similar. The main difference is scale and maturity. Hilltop’s a $100 million-plus net capital operation. We’re still in the early innings with about $11 to $12 million of excess net capital at Wilson-Davis, a growing technology suite in FX, bonds, and automation, and a pending banking charter through Commercial Bancorp of Wyoming.

Right now, that excess net capital actually exceeds AtlasClear’s enterprise value, which tells you there’s a disconnect between our market price and the underlying regulated asset base. Hilltop trades like a mature franchise. We’re at the buildout phase, but as we onboard more correspondents and integrate banking, we think the operating leverage will start to look similar over time.

The strength of the flywheel comes from its foundation on a fixed-cost clearing platform. Wilson-Davis currently supports one active introducing broker. Dawson James is onboarding in phases and, once fully transitioned, could more than double revenue. The third signed broker adds another layer of transaction volume and balance-sheet activity. Each correspondent generates revenue from trade commissions, stock loans, margin interest, and custody, all using the same infrastructure.

Because expenses scale sub-linearly with volume, every new client contributes meaningfully to margins. We don’t need to double staff or systems to handle the next several correspondents. The combination of onboarding, technology automation, and our existing capital base gives us clear visibility into sustainable growth without requiring new equity.